Your job shouldn’t be your life, but your life can be your job — Adam Davidson, author of the Passion Economy
You may need to get creative and experimental and be willing to reach out to a lot of people, who may, at first, seem uninterested in whatever it is you have to offer. But once you put your passions and abilities together with the right kind of customers, you’ll be amazed at the opportunities available to carve out a profitable niche.
Create value that can’t be easily copied
This requires you to passionately pursue problem solving for your niche market and to be creative and innovative which can lead to much greater satisfaction in your business and personal life.
Your value should be created slowly and carefully, focusing your attention on those things that reach a relatively small and strongly opinionated customer base, things that are hard to do, will be worth your while. This is precisely why passion matters so much in this economy. Fortunately, our passions enable us to spend time doing things that we love but others would find hard, even maddening, to focus on.
The Passion Economy is about quality and the conversation you have with your clients.
Pursue intimacy at scale.
The beauty of the long game is that there’s less competition because the overwhelming majority of people (millions) are playing the short game
The paradox of prioritizing mastery over metrics is that it makes what you’ve created much more scalable. When you commit to mastery, you increase the likelihood of producing something with emotional resonance. If it has emotional resonance, it will continue to spread without hacks and tactics.
Find a product or service that you can uniquely do — or is so personal to you that by default it cannot be copied as it is so intrinsically part of you. Use the internet to find people who really crave what you do. An engaged but niche audience, not only makes you more happy, but it can also make you money.
The goal of the smallest viable audience is to find people who will understand you and will fall in love with where you hope to take them. — Seth Godin
The 20th century was about sameness and homogeneity. Coca Cola is the same product for everyone on Earth. The Passion Economy is about creating unique things that only few people want, but they WANT ALOT!
Technology and interlocked global markets bring this specialized knowledge to the world in ways that could only have been dreamed of in the past. Technological innovation amplifies power such that the most obscure node is only one click away from the most popular node. In other words the most niche under-selling book, song, or idea, is only one click away from the best selling book, song or idea.
This makes the ‘time for money’ dynamic, which is an essential part of the gig economy, obsolete. They told individuals they could ‘be their own bosses’, but the reality was freelancers tied to hours sheets, trading time for money in the tough ‘gig economy’. The reaction to this state of affairs led to the creation of new digital platforms that emphasize users’ individuality. These platforms let users earn money in a way that highlights and celebrates their individual skills and personality instead of squashing them.
The internet can also give us tools more narrowly to target specific demographics and we can better use its powers to assist the broadening of personal expression, to assist minority interests to make a better living by communicating directly with an audience, to create tools that help people discover the surprising and iconoclastic.
This provides creatives with passive income and allows people to pursue their passions and positively change their environment. In a world where the concept of the ‘steady job’ is disappearing. Manual jobs and repetitive tasks are being phased out of existence: they’re being replaced with robots and algorithms.
In several ways, Passion Economy workers remain close to the gig economy in the sense that they are lacking job security and safety nets. Inherent challenges to digital platforms remain such as harassment in many ways, protection of children, moderation, addiction, psychological troubles … However, increasingly, the lines between hobbies, careers and personal brands are blurring’. What you need is a highly engaged niche of people who you provide a service for. If you’re the only person who can help this small niche of people then you’ll always have an active and real customer base. Defining your niche is an essential part of becoming a member of the Passion Economy. You cannot succeed without it. By better catering to a smaller audience, creators can increase engagement and monetization.
People are now technology-empowered to financially sustain themselves through a set of broader skills they have, we name it “passion”. This is at the foundation of the Passion Economy. — Li Jin
Take notice of the change from the traditional donation model — in which users pay to benefit the creator — to a value model, in which users are willing to pay more for something that benefits themselves.
The key to the new economics is there: people are keener to expense more for targeted services that are constructive in their lives, whether it’s related to health, finances, education, or work.
You will not be asked your degree either your gender, your race, your religion or your social background when venturing into the Passion Economy. Your economic success will only depend on how much value-add you are providing to your audience and how good you are to interact with them to finally convert a paying fraction into your own customers or to drive enough traffic for affiliation.
Whereas until today, the underlying platforms are considered the economic value adding component to the consumer experience, think about the market value of YouTube, TikTok and Twitch, such platforms run the risk of becoming commoditized over time. All else being equal, demand for a product increases when the prices of its complements decrease. The X factor, will remain the creative personas that attract the fans to the platforms, loyalty to a platform will decrease over time.
At this point in time, the Passion Economy to many is nothing more than living their business and personal life one TikTok, Insta, Twitch or YouTube share at a time. It does not yet represent a sustainable lifestyle, to Clay Christensen’s observation, its nothing more than a toy.
Yet there already exist many ways to earn off digital platforms as enablers of passion-led businesses:
A study conducted by ReCreate in 2017 allowed us to peak at the emerging numbers. Some platforms like Instagram are yet to skew away from product-led economics towards creative-led economics whereas emerging platforms like Twitch optimize better for content creators.
At the top 1% of the spectrum, we have success stories such as “Ryan ToysReview”, a young American YouTube star with 16.5 million subscribers who earned an estimated $11 million in 2017 from his videos reviewing toys and video game streamer Sabiq Zahid earned nearly $200,000 in 2017 from his Twitch subscriptions.
As time goes by, the ability for users to build audiences at scale and turn their passions into livelihoods, whether that’s playing video games or producing video content will only increase each passing generation. This has huge implications for entrepreneurship and what we’ll think of as a “job” in the future.
These new platforms share a few commonalities:
- They’re accessible to everyone, not only existing businesses and professionals
- They view individuality as a feature, not a bug
- They focus on digital products and virtual services — or at least digital delivery channels
- They provide holistic tools to grow and operate a business
- They open doors to new forms of work
Now the ability to make a living off creative skills has trickled down to individuals at scale, helping everyday people to launch and grow businesses
Look to China. On the microblogging site Weibo, for instance, users sell content such as Q&As, exclusive chat groups, and invite-only live streams through memberships or a la carte purchases. This has spawned a wave of non-traditional influencers — financial advisors, bloggers, and professors — beyond typical beauty and fashion tastemakers.
In the marketplace model, writers count on Medium to drive reader traffic and subscriptions. On the SaaS platform (Substack), writers drive their own direct traffic and subscriptions;
Marketplaces bring value for creators looking to be discovered and attract customers over time. SaaS tools often make sense for more established creators who already have a customer base.
Furthermore, they enable content creators to measure success metrics like never before, indicators of real value that lead to monetisation. Some creators may want to monetize a smaller portion of their audience at higher dollar amounts, while other creators may want to monetize a larger portion of their audience at low dollar values.
time to first sale — the idea being that the sooner a creator sees a sale, the more likely they are to see the value of the platform and continue using it.
Loyalty and retention of fans — The nature of fan support can vary widely: they may be lifelong customers, or only pay during a set timeframe or program.
RFV — which captures recency of the reader’s last visit, frequency of visits, and volume of content read, to target quality engagement, rather than sheer audience numbers.
What does it take?
Building an audience for your work is easier and harder than it’s ever been. It’s easier because we have the tools and resources to create our work, and the distribution channels to spread that work. It’s harder than ever to build an audience because there’s a scarcity of attention. We became obsessed with reverse engineering virality, and the internet got littered with clickbait.
This is not an easy shift because as a society we are programmed to seek out status. And more is the ultimate indicator of status: more followers, more money, more traffic. Your message will be revealed through the work that you do, and will also evolve with time.
When people feel you’ve seen their humanity, they connect at a much deeper level to everything you’re up to in the world. You want someone to have an emotional response to your work. If somebody feels something, they’re much more likely to do something.
An article on the Passion Economy will however be void without reference to the seminal piece written by Kevin Kelly on “1,000 True Fans”. A true fan is defined as a fan that will buy anything you produce. Simplifying, If even only one out of million people were interested, that’s potentially 7,000 people on the planet. That means that any 1-in-a-million appeal can find 1,000 true fans. The trick is to practically find those fans, or more accurately, to have them find you.
You need to meet two criteria. First, you have to create enough each year that you can earn, on average, $100 profit from each true fan. It is always easier and better to give your existing customers more, than it is to find new fans. Second, you must have a direct relationship with your fans. That is, they must pay you directly. You get to keep all of their support. If you keep the full $100 of each true fan, then you need only 1,000 of them to earn $100,000 per year.
That’s a living for most folks.
Millions of paying fans is not a realistic goal to shoot for, especially when you are starting out. But a thousand fans is doable. You might even be able to remember a thousand names. If you added one new true fan per day, it’d only take a few years to gain a thousand.
Instead of trying to reach the narrow and unlikely peaks of platinum bestseller hits, blockbusters, and celebrity status, you can aim for direct connection with a thousand true fans. On your way, no matter how many fans you actually succeed in gaining, your life will be filled with genuine and true appreciation. It’s a much saner destiny to hope for.
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