The Passion Economy— like Putting Lipstick on a Pig
Creative Startups CEO Alice Loy and Lead Faculty Lena Ramfelt discuss creator platforms and the future of creative industries
“If you love what you do, you’ll never work a day in your life.” We’ve all heard this phrase countless times— so much so that when you start to type it in a google doc, the words will automatically generate (even our computers are a little sick of it). But is this true? Can passion give you a life with livable income that’s devoid of hard work?
When we’re talking about the Passion Economy (check out this Forbes article for a good general definition), we do so with hopefulness. We want to break out of outdated modes of working— staying with an office job that might not necessarily be your dream line of work for 40 years and hoping to one day retire. Considering how much time we spend at work, we all want to find means of income that create lives worth living, and for many, especially for Millennials and Gen Z, this means working for yourself and within your passion. Many have turned to platforms that pay popular creators (like Youtube, Patreon, Tik Tok, Spotify, etc), but it’s not much of a secret that only the top tier creators (who are often already celebrities) actually make enough money to live off of.
In the inaugural episode of Creative Startup’s new discussion series, Making the Case, Creative Startups CEO Alice Loy and Lead Faculty Lena Ramfelt discussed the pros and cons of the Passion Economy and the changes that need to be made in order for it to truly be the equitable, inclusive future of work we all want it to be.
Alice Loy: In talking about the Passion Economy, Lena and I joke that it may be true that the Passion Economy is putting lipstick on a pig. What do we mean by that? Well, people say that in the Passion Economy, you can make a living or you can have a gig or side hustle that brings in some serious money, but we’re not really sure that’s true.
We’re going to dive into that a bit today with one of my favorite people in the world. Lena is Lead Faculty for Creative Startups. She is an angel investor. She is an entrepreneurship educator, author, etc. Thank you Lena for joining me to have this argument.
Lena Ramfelt: Thanks for having me.
Alice: Ok, so let’s first talk about definitions because we’ve been doing this work for a long time. Creative Startups has been around since 2007, which means we’re a dinosaur in the world of entrepreneurship ecosystems. The term that was common was “Cultural Economy.” You worked in the Cultural Economy, for example, if you were a photographer. If you were a designer of museum exhibits, a dancer, theater musician, filmmaker, you worked in the cultural economy, but that has changed. Now people talk about the Creative Economy, but we’re also moving into what some call the Creator, Influencer, or Passion Economy. I think it’s interesting to think about who are the people filling those spaces.
I’ll give you an example. “Creative” might be referring to a filmmaker. You could argue that Steven Spielberg is a creative entrepreneur, right? He’s a filmmaker, he makes money doing it, he has businesses, etc. What’s the difference between that and a creator, like our friend Benjamin Von Wong, who is a photographer that creates immersive, amazing scenes you can become a part of that deal with issues like climate change? So Benjamin is a creator. Is he an influencer?
Lena, you sent me a Visual Capitalist diagram this morning of the most famous influencers in the world, which included celebrities like The Rock, Shakira, or Jennifer Lopez. They’re all famous, but you could say they’re creators in that they are actors and musicians. But they aren’t creators in the sense that we’re talking about today. So, when we talk about creators Lena, what are we talking about?
Lena: It’s people who have a passion for something, and they really want to bring that to the world. Platforms like Thinkific or Patreon make it possible for them to do that, and that’s kind of cool. But influencers or celebrities don’t necessarily need that. Like Spielberg, he doesn’t need that.
Alice: No, exactly. He doesn’t need Instagram or Patreon to put out a new movie or go raise the money. So the Passion Economy then is a place where creatives or cultural creators can all make money. They can turn their passion into at least a side hustle. When you hear that, what does that make you think?
Lena: I get a little bit worried about it honestly. I don’t want people to be deceived into thinking “I have a passion; therefore, I can make money using one of these platforms.”
Alice: Are people making money on these platforms?
Lena: I read in a recent Harvard Business Review article that just 1.4% of artists on Spotify make a living off of it. The rest of the artists were making on average $36 per artist per quarter. On Patreon, only 2% of creators made the federal minimum wage per month in 2017.
Alice: So you aren’t really making money unless you’re an influencer or a celebrity. Is that true?
Lena: Yes, exactly. But I do still find the Passion Economy interesting because we have to remember that up to 85% of the jobs that the next generation are going to have are not yet invented yet.
Alice: Yeah, a whole new economy is coming, and we don’t really know where it’s coming from or what it will be.
Lena: Exactly. By being on these platforms, they might be exposed to totally new job opportunities. Thinking about the trends in the Passion Economy also makes me think that maybe the next generation is not going to have just one job. Maybe in the future, we won’t say “that’s my side hustle.” Maybe the next generation will have two or more side hustles, and that’s their job.
Alice: So, this is a philosophical question. You live in Sweden where a lot of needs, like healthcare and education, are paid for through the tax base, right? And in the US, we’re not there yet, and that makes the sort of future we’re talking about hard. How do you have a side hustle or three and make that add up to a good, living wage if you can’t easily get healthcare or have access to affordable education?
These are some of the questions that I think the current thinking about the Passion Economy doesn’t cover yet. It will have to because we’re talking about transforming the economy from someone having a job for 20 to 50 years at the plant down the road to someone having a collection of activities that they hopefully get paid well to do. But where is the social base of support for when things go wrong? That’s something that we don’t talk about yet when we discuss the Passion Economy, so how do we make that shift? What are things that could work to help creators become more successful if the Passion Economy really becomes a viable economic engine?
Lena: People who are or want to be part of the Passion Economy need to realize that they are entrepreneurs, not just creators. This is something we’ve seen when we work with creatives, that they only identify themselves as creatives. They might say “I’m a photographer” or “I’m a chef,” and they have to make a transition to say they are not only a photographer, they are a business person. They are entrepreneurs.
But sometimes it’s really boring to be an entrepreneur, even in the Passion Economy. You have to do the same thing over and over again, and you can’t always do exactly what you envision because being an entrepreneur means pleasing your customers, not pleasing yourself. It has its challenges, but if creators on these platforms realize they are also entrepreneurs and take that seriously, maybe more could be making an actual living. There is an additional skill set that people with passion need to have in order to succeed. I think there is a huge potential for platforms like Spotify to realize that if they support their users and perhaps provide entrepreneurial resources, like Creative Startup’s programs, they could actually make more money.
Alice: You’re right! As people start to define themselves as entrepreneurs and take on the “I’m a business person” mentality, they will become much more likely to succeed, and it’s not that hard to learn how to run your business. It’s hard to be an entrepreneur, but it’s not hard to learn. These are not complicated things. Creators that come through Creative Startups programs feel empowered and confident because we boil it down to brass tacks. People learn what they need, and they have a community of people who support them.
There is a lot of space for hope in the Passion Economy. I think we need to call on these platforms, Patreon, Spotify, Tik Tok, Youtube, Thinkific, and ask what they are doing to support their creators as entrepreneurs. How can they help the people who put their content on their platforms to become more savvy and earn more money, which is actually good for the platforms too. It’s a win-win.
Lena: I really look forward to seeing the next wave in the Passion Economy because I think these platforms will be challenged because new business models and new platforms will evolve. The more passionate people that get involved in this economy, the more innovation we will see. There is some real potential for game-changing.
Alice: And hopefully it will bring about more community and connections among human beings. At the end of the day, that’s why we do the work we do. The mission behind Creative Startups is to connect people around the world who are passionate about creativity, human expression, and moving past the boundaries that keep us apart.
Without any doubt, incubators are missing tremendous opportunities to support the growth of the next generation of successful and impactful companies— Are you? Join us for the next Making the Case today, May 24th at 10am MST when Lena and Alice will make the case for Frontier Incubation— an idea that incubators need to leave behind the tech-incubator models if their ecosystems look nothing like Silicon Valley’s and instead revolutionize their approach to supporting entrepreneurs.
Creative Startups works with co-working centers, incubation hubs, and educational institutions around the world to host acceleration programs designed by and for creative entrepreneurs. Want to chat with Alice about your current projects? Find a time here.