Vehicle thinking – How to win in the creator economy

Down with the platforms! Power back to the creators!

Chants of the rise of the creator economy have grown increasingly more strident over the last couple of years. And there are undeniable shifts that are underway which will drive greater power back to creators.

However, a lot of anti-platform, pro-creator activists/thinkers focus on one single issue – extraction of huge rents by large platforms for organizing the market. The opportunity in the creator economy, then, is framed as a redistribution of power back to the creator in the form of smaller rents and greater agency.

This narrative misses possibly the greatest opportunity for the creator economy – the opportunity to leverage, what I call, ‘vehicle thinking’ and benefit from compounding returns.

This article is about ‘vehicle thinking’, why it’s important for creators, and why creators repeatedly sell themselves short when they don’t understand this mental model.

Vehicle thinking

Vehicle thinking is a mental model for creating scale and leverage in the creator economy, with the assets and agency of others.

I borrow the term vehicle from ‘investment vehicles’, which create a mechanism to accumulate third party assets towards investment. Funds, as investment vehicles, allow fund managers to benefit from an asset base contributed by others, and share in the returns of compounding on that asset base. These principles can be extended rather powerfully beyond ‘money’ and fund management to think about scale and leverage at a much broader scale for the creator economy.

Using ‘vehicle thinking’, all types of creators can benefit from the powers of compounding, leveraging some of the principles that fund managers use.

But to really situate the concept of vehicle thinking, let’s start with a quick primer on the creator economy.

What is the creator economy?

The creator economy refers to the sum total of economic activity originated by independent creative businesses and individuals running side hustles, who leverage their skills to create IP of some form, grow a following, and monetize the activity that ensues.

 

The promise of the creator economy isn’t entirely new. Books like Wikinomics, Cognitive Surplus, and the Long Tail spoke of the rise of the creator economy before it was cool to talk about it, back in the early-to-mid 2000s.

What followed over the course of the next decade was the rise of platforms, something I’ve written about extensively in my books Platform Revolution and Platform Scale. The creators certainly showed up but instead of building their own little empires, they were resident on multi-sided platforms that organized attention and economic markets between creators and consumers.

So what’s changing now?

Four things have changed towards the late 2010s.

First, we’ve all finally gotten sick of the extraction power of platforms and the bait and switch tactics they regularly employ to stymie the very creators who help them gain early adoption.

Second, token economics now allows us to build decentralised infrastructure where economic value can be shared across a larger ecosystem of value creators rather than centralized and hoarded by a bunch of venture-backed college dropouts.

Third, improvements in hosted infrastructure towards the latter half of the 2010s now allow many new types of Saas tools to be created and operated at scale. Zoom is one example. Meanwhile the rise of API-based coordination allows these tools to interoperate in a manner that wasn’t possible merely a decade back.

Finally, as creators built social media following through the rise of the platform economy, it has increasingly become more economically viable for tool providers to gain scale by offering tools to creators. The same tools existed back in the early 2010s but tool creators gained scale by targeting businesses rather than individual creators. Back then, businesses provided scale, creators did not. Consider how Mailchimp and Aweber made almost all their money on B2B while using individual accounts to drive viral adoption. In contrast, ConvertKit, and eventually Substack, almost exclusively monetize with individual creators who now can leverage large platforms to gain a following and port them to these tools. This would not have been possible 10 years back when audience building was still scarce.

A common theme across these four shifts is a shift away from extraction by platforms and a shift towards empowerment of creators by tools that enable them to participate in the trade of attention and eventually money.

However, this overt emphasis on shifting extraction power away from platforms misses out on the biggest opportunity for creators in the creator economy: the opportunity to compound through Vehicle thinking.

Learn more about the big shifts defining today’s economy in the State of the Platform Revolution 2021 report. Get your copy of the report.

 

Get the deep-dive report here