Small Business Labs

The Tilt's 2022 Creator Economy Benchmark Research Report

Started and run by content marketing expert Joe Pulizzi, we've found The Tilt to be a valuable source of information on the creator economy and content entrepreneurs.  

They just released their 2022 Creator Economy Benchmark Research report. Key quote on one of their key attitudinal findings on content creators:

"... 90% say they are inspired to create to achieve "financial freedom on their own terms."

This is consistent with our research on the creator economy.

But as the report chart below (click to enlarge) shows, many creators have a ways to go to achieve this goal. Only 51% of full-time content creators report earning enough to support at least one person.

Our favorite part of the report is their advice to content creators and would-be creators. Key report quote on the advice: 

Build an entrepreneur's mindset: Many creators view content as a passion project. In our experience — and according to the research — successful content creators are also effective business owners. These content entrepreneurs are savvy about finances, operations, sales, negotiations, and time management. Are you willing to learn quickly and devote at least half your time to these tasks?

Plan your runway: It will take roughly 17 months to become self-sufficient as a content entrepreneur. Do you have the support you need to weather that period?

Moderate your financial expectations: Do you want to become a content creator to get rich? Are you aiming for the million-dollar lifestyle? Or do you see the creator journey as a path to build a well-rounded life and satisfying career? Those who stick with the content creator path are not motivated primarily by money, but by the thrill of independence and control. Wealth isn't off the table; 19% of full-time content entrepreneurs tell us they earn substantial money and support multiple people.

Take a master class in monetization: The content creator's ability to monetize is the single biggest factor determining longevity and success. There are dozens of ways to monetize your efforts. Consider joining a class or community to supercharge your tactics.

Embrace Web3 channels and strategies: Content creators must build channels they own to ensure all their invested time and money cannot be pulled away overnight. This is a mission-critical activity for all creators regardless of longevity, profitability, or industry.

Anyone interested in the creator economy - including existing content creators, and those considering becoming content creators, will find the report useful.

We also recommend subscribing to The Tilt newsletter. It has excellent stuff on the business of content creation.

Ecommerce's Post Pandemic Regression Toward the Mean

The Wall Street Journal's Amazon CEO Andy Jassy's First Year on the Job: Undoing Bezos-Led Overexpansion covers Amazon's over-forecasting of the post-pandemic growth of ecommerce. Key quote:

"Mr. Bezos and other executives had greenlighted a strategy, guided by a revered internal forecasting tool, that overshot the long-term projections for demand from Amazon. Instead, despite early ideas among industry observers about a permanent shift in consumer behavior, the pandemic-fueled growth in online shopping has slowed as in-person shopping has bounced back."

Amazon wasn't the only one who over forecasted the shift to ecommerce.

The Information's Welcome to the E-Commerce Winter focuses on the impact of the slower-than-expected growth of ecommerce sales on startups, VCs and investors. Their key takeaway is:

"Investors and founders seized on the idea that the pandemic would permanently transform how people shop and pay. Those expectations aren't exactly living up to reality."

The chart below (click to enlarge) illustrates the cause of the ecommerce winter. The ecommerce share of retail sales has fallen from a pandemic high of 16.34 in Q1 of 2020. to 14.3% in the last quarter.

And the trend line indicates that e-commerce's share will likely continue to fall, at least in the short term.

This is an example of regression toward the mean.

While regression toward the mean has a specific statistical meaning, the concept also applies to trends.  

With trends, regression happens after a shock (a pandemic, for example) accelerates a trend. After the shock ends, the trend tends to decelerate toward the original trend line.  

This doesn't always happen, but with ecommerce, it seems clear in retrospect that regression would happen.

Once pandemic restrictions were lifted and the probability of catching COVID decreased, people started shopping in stores again.

Also, because people were no longer couped up in their homes, they started spending more money on services and less on products.

This combination reduced e-commerce's share of retail sales.

Going forward, we expect e-commerce's share of retail sales to level off in the 13.8% range and then start growing at a pace faster than its growth rate from 2011 to 2020.

This pattern - regression towards the prior mean but starting a new trendline above the previous level - is also common.

And many of the trend shifts accelerated by the pandemic will likely also follow this pattern.

McKinsey Says the Metaverse Could Create $5 Trillion in Value by 2030

It's clear that the global consulting giant McKinsey believes in the Metaverse. Their Value Creation in the Metaverse study forecasts that the Metaverse could generate $5 billion in value by 2030,

They have four key reasons they think the Metaverse will become big fast.

1. There's a lot of investment going into the Metaverse. Key quote from the report:

"Corporations, VC, and PE have already invested more than $120 billion in the metaverse in the first five months of 2022, more than double the $57 billion invested in all of 2021 …."

2. Their research indicates much interest in the Metaverse. Key quote:

"Our survey of more than 3,400 consumers and executives found significant excitement about the potential of the metaverse."

3. Current market acceptance of metaverse-like services. Key quote:

"increasing marketplace readiness as users explore today's early version of the metaverse largely driven by gaming (with some games boasting tens of millions of active players) with applications emerging that span socializing, fitness, commerce, virtual learning, and others."

4. They believe that technology will soon be in place to support the Metaverse.

McKinsey thinks that companies should get aggressive with their metaverse activities in response to this opportunity. Key quote:

"Business leaders should develop a strategic stance by defining metaverse goals and the role they want to play; testing, learning, and adopting by launching initial activities, monitoring results, and examining user behavior; and preparing to scale by identifying necessary capabilities and embedding the metaverse in their operating model."

The biggest Metaverse impact, according to McKinsey, will be on ecommerce.

They estimate the metaverse "may have a market impact of between $2 trillion and $2.6 trillion on e-commerce by 2030."

They also think few industries will be untouched by the Metaverse and that most industries will be significantly impacted by the changes it brings.

The study report, which is 77 pages long, covers these topics in more detail.

Meaning Matters to Workers

PWC's Global Workforce Hopes and Fears Survey 2022 asked 52,000 employees about work-related issues and the Great Resignation.

One area they dug into is the factors employees consider when considering changing jobs.

As the report chart below shows (click to enlarge), pay is the most important factor.

But closely following pay are a series of intangible factors related to meaning. And after these, control and autonomy rounded out the top factors.

We found this chart interesting because these factors are similar to the reasons the self-employed give for becoming self-employed.

This isn't surprising. Everyone would like fulfilling work, the ability to be themselves at work and be creative and innovative.

And everyone would like to have work autonomy, control, and flexibility.

For many, becoming self-employed is how they achieve these work attributes.

But with the Great Resignation (or Great Realization, or Great Realignment, of whatever you want to call it), employers are starting to offer these work attributes to larger shares of their employees.

We see this as a countervailing trend relative to more people becoming independent workers.

More simply, if employers provide the benefits of independent work as part of their employee value proposition, fewer workers will likely choose to become independent.

We've been digging into this topic and will have more on it in the near future.

The Pandemic Accelerated Bleisure Travel

The trend toward combining business and leisure travel is not new. 

We first covered it in 2009, and it wasn't new then.  

But now that travel is returning from the COVID-induced slowdown, it's clear the pandemic accelerated the long-term trend towards what the travel industry site Skift calls "that awful moniker bleisure travel".   

Skift's recent essay The Great Merging looks at the broader trend of work/life integration and focuses on what it means for travel.

Key quote:

"How we live, work, socialize, and travel has merged into each other, with profound implications for the global industry at the center of selling this dream. How will travel respond?"

Skift's provides data that bleisure travel has accelerated via the CEO of American Airlines. Key quote:

"For example, historically, only about 20 percent to 25 percent of the trips in the airline were something that we call blended, where somebody was traveling for both business and leisure. "Now, for about five to six months, about 50 percent to 55 percent of the trips in the airline are blended…."

This is a huge shift in a relatively short period of time.

Skift also points to the rapid growth of companies providing longer stay options, which cater to bleisure travelers, as evidence of the growing bleisure travel trend, 

These include startups like Sonder, Selina, Blueground, Habitas, and Life House. Many major hotel chains are also adding longer-term stay properties - Skift mentions Accor, Marriott, and Hyatt as examples.

As with most trends accelerated by the pandemic, bleisure travel's growth rate will likely slow from its current lofty levels. 

Reversion towards prior growth rates is common after an accelerating shock. 

But we agree with Skift that bleisure travel will continue to grow faster than in the past.  

BCG on Tapping Into Fluid Talent

The global "Big Three" strategy consulting firm BCG recently released Tapping Into Fluid Talent. It covers their view that companies need to turn to new and diverse talent sources - including various forms of nonemployee labor.

The BCG chart below (click to enlarge) shows the alternative talent sources BGC suggests companies tap.

As with a recent MIT-Deloitte study, the BCG report suggests that companies need to develop new work processes, procedures, and management systems to support the shift to fluid talent. Key quote from the BCG report:

"Support fluid talent with a new operating model. Companies that have experimented with fluid talent understand the need to adapt legal and procurement frameworks, rewire HR processes like performance management, build cross-functional project teams, and invest in change management. But to really unlock value from fluid talent, companies also need to rethink their ways of working and how they deploy and onboard talent."

This study again shows that the debate around whether or not nonemployee labor is an important and growing source of corporate talent is over. 

The focus now is on how to effectively build and manage workforces combining traditional employees and external talent.

This means greater of use of what BCG calls fluid talent.  

BTW, we already have too many buzzwords describing the various types of talent businesses employ.  So we hope "fluid talent" doesn't catch on.  

The Rise of Fairy Tale Farms

The New York Times article How 'Fairy Tale' Farms Are Ruining Hudson Valley Agriculture covers the growing trend of wealthy urbanites from New York city buying Hudson Valley farms as second homes.

This has raised the cost of farmland and made it much harder for those farming the land to find affordable places to live.  

It's also resulted in inexperienced, new farm owners wanting a working farm due to tax benefits and bragging rights when they're back in the city.

But they don't want to own a real farm. 

Instead, they want a "storybook version of a farm, minus the manure and the noise, and one that fits within their agendas and schedules."

Key article quote describing one farmer's discussion with new farm owners:

"... when she described rotational grazing practices to the owners, which involve moving clusters of animals around the pasture using portable fencing, they were put off by the idea, saying they preferred for the livestock to dot the landscape. "We walked around the property, and they were talking about their vision of, basically, a petting zoo.""

I grew up in a small town in Kansas and have owned two small farms for many years.

Here's my advice to new, part-time, urbanite farm owners:

1. Find an experienced and capable farmer to lease your farmland.

2. Lease the land under a crop or revenue sharing agreement. This aligns the farmer's incentives with yours.

3. Make sure the lease terms allow the farmer to make a reasonable profit. You're much better off in the long run if your farmer-partner makes decent money from your farm.

4. Leave all farming-related decisions to the farmer.  

The last point is very important, and not one many of the new Hudson Valley owners are following. 

Farming is hard, challenging, and complex work. And unless you're a real farmer, you have no idea what's involved.  

So leave the farming decisions to a real farmer.

The trend toward increasing numbers of small and part-time farms existed before the pandemic. We first wrote about it in 2007.

But it's been accelerated by the pandemic due to growing numbers of people wanting to move to desirable rural areas like the Hudson Valley.  

This is leading to even faster growth in the number of small farms.  

See our Small Farms section for more on this topic.

The Worker Classification Debate Comes to Professional Golf

The world of professional golf has been upended by the new LIV  tour that will compete with the PGA Tour and other existing tours worldwide.  

LIV is funded by the Saudi Arabian government, which is backing the new tour with $2 billion.  

Their pitch to attract pro golfers to their tour is straightforward.  They're offering what the Yahoo Sports article LIV Golf: How a new league is upending the entire world of golf describes as "Vast, phenomenal, life-changing piles of cash."

According to reports, they guaranteed golfer Dustin Johnson more than $100 million, plus any prize money he wins, to join the new tour (which he did).

And LIV’s chief executive reported they offered Tiger Woods “mind-blowingly enormous amounts of money” to join. Woods, so far, has turned LIV down.

Professional golfers are not employees of the PGA.

They’re independent contractors who earn the right to play in PGA tour events.  

However, PGA pro golfers need special permission from the PGA to play in non-PGA tour events. And the PGA is not granting permission to PGA Tour pros to play in LIV events.  

Because of this, several pros have resigned their membership in the PGA, including Dustin Johnson. More are expected to follow, drawn by the large amounts of money offered by the Saudis.

This is also leading to questions about how professional golfers are classified and what rights they have as independent contractors. Key quote by pro golfer Rickie Fowler from Yahoo Sports What Dustin Johnson’s leap to Saudi-backed LIV means for golf:

“Are we independent contractors or not?” Rickie Fowler asked prior to the PGA Championship. “I feel like there needs to be some clarity between if you’re an independent contractor or ... basically an employee.”

The work-related issues pro golfers face are, obviously, very different than those of the average independent contractor or gig worker.

But at the core of this dispute is an issue that often comes up with independent workers, which is how much control an organization can exert over independent contractors.  

And this will, like other gig worker classification issues, be decided by the courts.

But it's an interesting example of how all professions and industries are being impacted by the changing nature of work.  

This dispute introduced us to a new buzzword - sportswashing.  The Washington Post has a good article on this topic.  

What is the Internet of Plants?

Emerging Tech Brew's Behold: the internet of plants covers the rapidly growing precision agriculture industry. Key quote:

"And just like bamboo, these companies are growing fast: According to Pitchbook, the precision agriculture market reached $7.8 billion in 2021 and is expected to nearly double to $13.9 billion by 2026."

According to Pitchbook, precision agriculture companies fall into four categories:

• Farm management software: Software and other devices that help with farm operations, including data collection.
• Robotics and smart field equipment: Advanced machinery that helps automate or optimize fieldwork.
• Field IoT: Internet of things sensors and software used to monitor and analyze crops, water, weather, and pests.
• Drones and imagery analytics: Tools used to gather crop health information, such as disease and pest detection. They also utilize predictive analytics to help guide decisions and maximize productivity.

The Emerging Tech Brew article covers several interesting ag-tech startups. But our favorite is SupPlant, which recently raised $27 million in funding. Key quote on their products:

"The company uses five different sensors—deep soil, shallow soil, trunk, leaf, and fruit—placed in and around a fruit tree to gather real-time data on plant stress, growth patterns, weather conditions, and soil water content. The data gained from one tree is then extrapolated to all trees within an average of 20 acres, giving farmers insight into ideal crop irrigation for the days ahead."

   
Precision farming means less use of water and fertilizers, higher crop yields, and better land management.  And due to the disruptions being caused by climate change, all of these benefits are needed.

See our small farms section for more on ag tech.  

MIT and Deloitte on Managing Workforces Comprised of Employee and Nonemployee Labor

MIT and Deloitte recently released Orchestrating Workforce Ecosystems, which is the 3rd year in their ongoing study of how corporations are managing work across organizational boundaries. Key quote on the project:

"This research finds that as organizations increasingly rely on both internal and external contributors, successful leaders are recognizing the complexity of these workforce ecosystems and adapting their management practices to support these new systems."

In other words, organizations are figuring out how to build and manage teams that increasingly include nonemployee participants, such as freelancers, independent contractors, and other forms of nonemployee labor.  

MIT and Deloitte identify the most advanced firms at managing workforce ecosystems of employee and nonemployee labor as "Intentional Orchestrators."

As the report chart below shows (click to enlarge), Intentional Orchestrators comprise 22% of the firms sampled in this study.

According to the report, Intentional Orchestrators have five common characteristics. They are far more likely than other organizations to:

• Closely coordinate cross-functional management of internal and external workers.
• Hire and engage the internal and external talent they need.
• Support managers seeking to hire external workers.
• Have leadership that understands how to allocate work for internal and external contributors.
• Align their workforce approach with their business strategy.

Our big takeaway from this study is that the debate around whether or not nonemployee labor is an important and growing component of corporate workforces is over.

As the chart above shows, only 18% of organizations surveyed aren't taking steps to improve how they integrate and manage external talent as part of their workforces.

The vast majority of Organizations (82%) are now focused on effectively building and managing workforces combining traditional employees and external talent.

See the report for more details.