The Intersection of Fintech & the Creator Economy
How Creative Juice Is Building for Creators
This is a weekly newsletter about how people and technology intersect. To receive this newsletter in your inbox each week, subscribe here:
Hi Everyone 👋,
Last month, we announced our investment at Index Ventures into Creative Juice, which is building the financial infrastructure for the creator economy. My partner Mark and I wrote a blog post about it, and MrBeast (who co-invested alongside us) spoke with The Information about the launch.
This week, I wanted to dive deeper into what Sima and Ezra are building at Creative Juice and why it’s so fascinating and important. I’ll start with an (abbreviated) overview of how we got to this moment, and then I’ll dig into how Juice is building for creators and for the future 🚀
The Intersection of Fintech & the Creator Economy
In July 2000, an unlikely guest spoke to the Senate Judiciary Committee: Metallica’s drummer, Lars Ulrich. Ulrich spoke about Napster and how rampant online piracy was destroying Metallica’s income. Metallica sued Napster and two years later, Napster filed for bankruptcy.
But piracy persisted: from 2004 to 2009, Americans illegally downloaded 30 billion songs; in 2009, consumers paid for only 37% of all the music they acquired. In these early days of the internet, there was a widely-held belief that the internet would destroy creative work. How could artists make a living when the internet made their works instantly shareable and reproducible?
This hand-wringing turned out to be unnecessary: over the last decade, the internet has unlocked an incredible amount of creativity and talent. Barriers to creation have fallen and a new class of creators has emerged. To extend the music example, the internet (and internet-born platforms like iTunes, Spotify, and SoundCloud) allowed people to easily discover new artists, bolstering the long tail of artists. In 2000, the top 100 music tours captured 90% of all revenue; by 2015, that share had shrunk to 43%.
Few anticipated the speed and scale with which the internet would change creative work—least of all legacy media. In 2005, Barry Diller—who, as the ex-CEO of both Paramount and Fox, embodied legacy media—confidently declared:
“There is not that much talent in the world. There are very few people in very few closets in very few rooms that are really talented and can’t get out.
“People with talent and expertise at making entertainment products are not going to be displaced by 1,800 people coming up with their videos that they think are going to have an appeal.”
It turned out that there was a lot of talent in the world—many people in many closets in many rooms—and the internet just needed to remove the gatekeepers. And crucially, it turned out that removing gatekeepers not only unleashed more talent, but more diverse talent. (One longtime media executive once said, “I’m a gatekeeper, and the gatekeepers all used to be old, white men.”)
The same year that Barry Diller made his declaration, YouTube was born in a small room above a pizzeria in San Mateo. I’ll give a brief history of YouTube, since its origins are 1) fascinating, 2) the inception of the creator economy, and 3) relevant to Creative Juice’s first products.
From Star to Creator: The Origins of YouTube
YouTube was founded on Valentine’s Day in 2005. The idea had been born the year before, when three friends—Chad Hurley, Steve Chen, and Jawed Karim—realized that there was no good way to find or share videos online. The concept was partly inspired by Janet Jackson’s wardrobe malfunction at the 2004 Super Bowl Halftime Show, which had prompted the world to search for the clip online. (Fun fact: that incident was actually the origin of the term “wardrobe malfunction”—Justin Timberlake first used the term in his statement following the events and *voilà* it became part of pop culture vernacular.)
On April 23, 2005, the very first YouTube video was posted. The video is titled “Me at the zoo” and features YouTube cofounder Jawed Karim…at the zoo. In the 18-second clip, he talks about elephants and their trunks 🐘
By September of 2005, YouTube had its first viral video with a Nike ad, the first video to hit one million views. YouTube quickly embedded itself in culture, and the YouTube era you grew up in likely shaped your childhood. (I’ll always be a child of Charlie the Unicorn, Leave Britney Alone, and “Shoes…let’s get some shoes.”)
Today’s most-viewed YouTube video is Baby Shark, with 8.3 billion views. To give us all a walk down pop culture memory lane, here’s the progression of the most-viewed YouTube videos:
👶🏼 Charlie Bit My Finger (2009 - 2010)
👸🏼 Bad Romance music video, Lady Gaga (2010)
🎤 Baby music video, Justin Bieber (2010 - 2012)
🇰🇷 Gangnam Style music video, Psy (2012 - 2017, and the first to 1 billion views)
🇵🇷 Despacito music video (2017 - 2020)
🦈 Baby Shark (2020 - Present)
As a fun fact, I wrote my first paper in college on Lady Gaga’s Bad Romance video 💁🏼♂️
Today, YouTube is the world’s second-largest search engine (after Google, also owned by YouTube’s parent company, Alphabet). Its 2 billion monthly active users consume 4 billion hours of video each month and upload 500 hours of video every minute.
YouTube transformed culture by letting anyone produce and distribute online video. The floodgates were open, and a new creative class seized the opportunity. This moment was the inception of the creator economy—the birth of the creator and the death (or, at least, growing irrelevance) of the star.
Before being called creators, YouTubers were actually called “YouTube Stars”, borrowing the term Hollywood used for its talent. But that rang hollow. YouTubers weren’t just the talent on screen; they were the director, the writer, the producer. They weren’t the vessel through which art was delivered, but the creator manifesting it.
In the early 2010s, the moniker “creator” caught on internally at YouTube and was soon adopted by other social platforms. Being a creator was now a formal career. In 2015, Steven Johnson presciently wrote:
“It has never been easier to start making money from creative work, for your passion to undertake that critical leap from pure hobby to part-time income source...Widening the pool means that more people are earning income by doing what they love.”
He elegantly tied this movement to how technology lowered the costs of creation:
“The cost of consuming culture may have declined, though not as much as we feared. But the cost of producing it has dropped far more drastically. Authors are writing and publishing novels to a global audience without ever requiring the service of a printing press or an international distributor. For indie filmmakers, a helicopter aerial shot that could cost tens of thousands of dollars a few years ago can now be filmed with a GoPro and a drone for under $1,000; some directors are shooting entire HD-quality films on their iPhones. Apple’s editing software, Final Cut Pro X, costs $299 and has been used to edit Oscar-winning films. A musician running software from Native Instruments can recreate, with astonishing fidelity, the sound of a Steinway grand piano played in a Vienna concert hall, or hundreds of different guitar-amplifier sounds, or the Mellotron proto-synthesizer that the Beatles used on ‘‘Strawberry Fields Forever.’’ These sounds could have cost millions to assemble 15 years ago; today, you can have all of them for a few thousand dollars.”
The creator economy was born, and technology was fueling its continued growth.
Creative Juice & Building for Creators
But traditional businesses have access to a suite of tools that help them understand their metrics, take out loans, and effectively scale their businesses. Creators don’t. In MrBeast’s words, “Can you even imagine trying to explain the value of your YouTube channel to a bank?” The infrastructure of the creator economy is nascent.
Enter Creative Juice 🧃
At Index, we’ve invested in several companies digitizing workflows for massive industries. Shopmonkey provides software for auto repair shops; ServiceTitan is the hub for home services professionals like plumbers and electricians; Boulevard serves salons and spas.
One way to think about Creative Juice is doing the same for the creator economy: building the one-stop-shop for creators to run and grow their businesses. Just like repairmen and hairstylists, creators have existed for thousands of years—as entertainers, teachers, comedians, actors, filmmakers. The internet has just made being a creator more accessible.
Just as many auto repair shops run on pen-and-paper workflows, many creators stitch together payments from brands and various internet platforms with some combination of Gmail, Excel, PayPal, and the Notes section on their phone. Juice becomes the nucleus of their business, giving them a clear understanding of their income and how to grow it.
Sima is one of the sharpest minds in fintech today. She was an early hire at Plaid, running business development and strategy for five years. In addition to this being an opportune moment for Juice through the creator’s lens, this is also an opportune moment on the fintech side. Stripe and Plaid make building a fintech company faster and easier than ever, and fintech is shifting from being the product to being in service of other industries. Sima understands this better than anyone.
Ezra comes from the creator world. He was co-founder and CEO of Maker Studios, a media network that Disney acquired for $675 million. Ezra went on to found Night Media, a talent management company that manages creators like MrBeast. I recently listened to a podcast that Ezra recorded six years ago—way before the creator economy was in vogue—and thought his words were as relevant today:
“The whole thesis for my career is the exploration of this new world order where creators are empowered by technology to make stuff that was once only in the hands of a few, and they can now distribute it globally to everyone in the way that only a few historically have had ownership of that distribution.”
Creative Juice’s first product is Juice Funds, which let creators invest in other creators. Back in December, MrBeast tweeted about this problem, and Juice Funds are the answer.
As part of Juice Funds, MrBeast will invest in up-and-coming YouTubers.
MrBeast, who spent years diligently studying how to go viral on YouTube, is already a frequent mentor to creators. He gives an example:
“There’s this guy who is pulling 10,000 views a video. He asked me for some advice. I was like, ‘Fine, I’ll help you get a viral video.’ So we gave him a video idea. I told him how to film it. You know, he filmed it multiple times.
I shit on the thumbnail after he did it. And he had to keep making the thumbnail. And he got mad at me because he’s like, “This is good.” I’m like, “No, it’s not there yet.”
So I made him put like four times the amount of effort in a video. It was an idea I gave him because I knew it was just a very clickable one. And that video went on to get 10 million views, which was more views than his entire channel had.”
Before Juice Funds, MrBeast wouldn’t share in that success. Now, he can take a vested interest in greener talent.
Over time, Juice will layer in more financial tools to help creators understand their worth and grow that worth.
One key product is Juicetimate. Similar to how Zillow’s Zestimate lets you know the value of your home, Juicestimate lets creators know the value of their platform.
Creators simply link up their YouTube channel, for example, and get data on their projected ad revenue and the value of that future revenue. This knowledge will be key as they take out loans, make financial decisions, and invest in their future.
The phrase “creator economy” has become more popular over the last year—fueled by COVID and by the coming-of-age of Gen Z—but this isn’t a new phenomenon. From the earliest days of YouTube, creators have been hustling and innovating. One of the most exciting parts of Creative Juice’s fundraise is that it includes many of the YouTubers who paved the way. In addition to MrBeast, people like Shelby Church and Preston Arsement also participated.
These people were the pioneers of this new economy, but the future’s explosive growth will come from the long tail. Anyone with an online following will be able to earn income in new ways. One example: the NCAA just changed its likeness rules, meaning that athletes can now earn income as creators. Big-name college stars—many with hundreds of thousands or even millions of fans—can earn income through YouTube, TikTok, Instagram, Patreon, and other platforms.
One of the biggest misconceptions about the creator economy is that it’s solely a consumer trend. But if creators are the new businesses, they need the same B2B infrastructure. Juice is proving this out.
The company is laying the groundwork for a more disaggregated and more digital workforce. Hopefully it becomes the infrastructure underlying a Renaissance in content, talent, and creativity.
Sources & Additional Reading
YouTube’s History and Its Impact on the Internet | Interesting Engineering
MrBeast Explains His Plans to Help YouTube Creators Raise Equity Finance | The Information
The Real Difference Between Creators and Influencers | Taylor Lorenz
The Creator Economy Market Map | SignalFire
The Creative Apocalypse That Wasn’t | Steven Johnson, NYT Magazine
Thanks for reading! Subscribe here to receive this newsletter in your inbox each week: