The Creator Hype Cycle
Where we are, what we’ve learned, and how we keep going
Hi, everyone! I’ve seen all of your DMs, and yes—I did get wind of USA Today hiring a Taylor Swift reporter. As qualified as I might be for the position, I remain committed to Smooth and our mission to build generation-defining media companies. I will continue to reference Taylor in every single newsletter we publish with no regard for subtlety for many years to come, but I’ll be doing so here at Smooth.
—Kinsey, cofounder and head of editorial
The Next Creator Hype Cycle Will Be Different
Early into my tenure at my first startup, which I won’t name but definitely rhymes with Shmorning Blue, I started to hear all sorts of words I’d never once encountered in traditional newsrooms: “iterate,” “ideate,” “we’re making money,” and most importantly? The “hype cycle.” More specifically, the Gartner hype cycle:
The Gartner Hype Cycle
I became fascinated with the pattern and predictability of this simple graphic display of human behavior. And as it were, I learned about the hype cycle just as innovation triggers were beginning to take place for what would become one of the most interesting, overinflated hype cycles in modern memory: the creator hype cycle.
Around 2018, when it became clear that “influencer” was a pejorative term and creators were making content that turned traditional media even more obsolete, I was hooked. We were all hooked. And Covid only accelerated that widespread understanding that creators weren’t going anywhere—pair that with the economic reshuffling of 2020 and some major developments in tech accessibility and you’re cookin’ with gas. So under the (correct) assumption that creators were eating the world, VCs jumped in head first.
From the beginning of 2021 through the end of 2022, some $500 million was invested in the creator space every quarter. Countless startups emerged to cater to creators’ needs—link in bio tools, editing software, subscription platforms, you name it.
Welcome to the peak of inflated expectations…
Which almost always leads us down to a trough of disillusionment. By Q2 of this year, creator business investment dropped 86% to $123 million—to be fair, the broader market weathered a pullback in investment, too, but only to the tune of about 50% (it’s all relative).
Even the creator startups that seemed to have graduated to sustainability—the so-called safe bets—struggled.
Patreon laid off 17% of its staff.
Linktree did the same, followed by another round of layoffs that cut 27% of its workforce.
Cameo cut its workforce by about a third.
Substack laid off 14% of its workers.
So what happened? Creator economy tech startups outkicked their coverage. This was enabled by a mix of factors:
Venture capitalists flocked to an opportunity that they wanted to believe could be more massive than it actually was—because that’s how VCs are incentivized.
It was the ZIRP (zero interest rate policy) era.
There was a prominent (and misguided) belief that all creators were in need of brand new tools to publish their content—but the truth is that creators are SMBs who already had plenty of small biz SaaS on the market.
These new firms fundamentally misunderstood what it takes to both be and serve a creator.
I think link in bio tools are the perfect example of the critical lack of foresight.
These tools served a purpose—for many creators, the bio space has been the singular moment of potential conversion to off-platform content or business. So it matters, a lot.
There were almost 20 companies offering link in bio solutions as of earlier this year. About half of those companies raised venture funding. Collectively, 10 link in bio companies accumulated $260 million of raised capital.
And just about all of that investment was washed out when the platforms themselves—YouTube and Instagram, especially—decided to prioritize creator needs and ship their own link in bio tools.
The concept of a link in bio tool is not a bad one, but the execution of betting the whole farm on a tool that an intern at a Big Tech platform has been assigned to ship? That’s where we got lost.
The good news is that it wasn’t all for naught. As creator startups weathered a rebalancing, creators themselves ramped up. And those of us lucky enough to stick around for the next hype cycle got to learn a great deal (she types from the slope of enlightenment).
We learned no two creators are built the same, so engineering tools as cure-alls is short-sighted.
We learned that having a niche as a creator services or creator tech company is as vital to your success as having a niche is for a creator themselves. Specificity is survival.
We learned that creators have two simple, primary needs: 1) save time and 2) make more money.
We weren’t the only creator-focused startup to realize those truths. We think many of our peers have also come to recognize that creator tech is great, but it requires creator services to thrive long-term. Because that’s what we’re optimizing for—the long-term. And that requires us to understand the needs of creators at every point in their journeys—creator startups have to know what creator market they’re serving in order to survive.
The opportunity in building for creators at the beginning:
There’s a long tail effect for startups like Voila, which is ideal for creators who want to make money on, say, affiliate marketing without committing to building a generational media business. That sector of the creator space is massive and important.
“It might be harder than ever to earn $1 million/year as a creative but it’s never been easier to make $50,000,” investor Hunter Walk wrote recently. And these tools are motoring that reality, in a good way.
The opportunity in building for creators regardless of size, from part-time to career:
Admittedly, this is the hardest one to nail—remember all that about building for everyone? But there are businesses pulling it off—think Riverside, Descript, or or beehiiv. Tools that can provide as much deep utility for a creator with 5,000 fans as they can for a creator with 5 million. They add new features constantly and they’ve excelled at pricing appropriately for creators from entry to enterprise.
They’re powering businesses for the growing creator middle class. Because not everyone is going to be MrBeast or Airrack, and thank goodness for that.
The opportunity in building for creators who have made it:
This is the top tier of creator services providers helping creatives build (pardon my French) whole ass companies. Empowering the cream of the crop to forge empires. To grow, hire a team, become legitimate. Be a contender—all that.
The reality check of the last few years? We lost some good men out there. But we also gained tremendous insight into what not to do this time around—because the hype cycle doesn’t ever really end, does it?
So who wins in the next go-round? We think it’s creators. And that’s truthfully better for the world! We’re not talking about one venture-backed creator SaaS company being valued at $1 zillion, but instead tons of creators building and owning sustainable 7- or 8-figure businesses with solid teams and deep audience relationships.
So in this next cycle, we’re both building brands with creators and betting on creators—on creativity, on community, and on the democratization of information.
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Today’s edition of @nocontextsmooth won’t just feature a silly message from our company Slack. Instead, we’re honoring the best among us—Ms. Jennifer Rothenberg, who will be celebrating a very special birthday this weekend! 🎂
Jenny is, really and truly, the brains of this whole operation. We’re the luckiest to have her leading us through everything from operational undertakings to new Taylor Swift releases. And often both at the same time.
Jenny, congratulations on beating 30 Under 30. We can’t thank you enough for sparing us from those uncannily increased chances of engaging in fraud. We’re so grateful for you! Happy Birthday from your Smoothies.
Thanks for reading! Email Jenny to tell her happy birthday right here and have a fabulous rest of the week! We most certainly will.