Why Are Creators the Distributors of the Future?

Creators are the modern form of demand generation. By combining networks of creators and aligning them with the appropriate products, brands, and services, we have an opportunity to create new systems of distribution that can solve real problems.

Happy Tuesday Friends,

We believe creators are the modern form of demand generation that will go on to replace many types of advertising as well as traditional content. In today’s piece, we mention several market dynamics and trends that are coming together to support this thesis. We also share a few reasons why we think creators will enable meaningful forms of direct distribution across many parts of the economy. Let’s get to it!

Technology Does Not Follow a Linear Path 📈 

Humans are wired to think in a linear fashion. It's difficult for us to think beyond 3-5 years into the future. It’s rare to find people who have the capacity to think in terms of decades or longer periods of time. This is why we often find ourselves underestimating the exponential growth of transformational technologies. The chart below explains it all - it shows the amount of time it took for various modern-day technologies to reach 100 million users.

• Telephone = 75 years

• ChatGPT = 2 months 🫢🫢🫢 

Social media and the creator economy has followed a similar exponential path. No one would have predicted that nearly half of the global population would be using social media within a 20-year time period. Meta’s twitter/X competitor Threads launched in 2023 and only took five days to reach 100 million users. With billions of monthly active users, social media platform are just becoming the primary way people discover and learn about the products and services they buy. An interesting statistic from Hubspot’s 2022 State of Consumer Trends Report:

In conclusion:

• There are billions of monthly active users across social platforms

• The majority of the younger generation uses social media as their primary way to discover products.

This leads us to the creators and building new systems for direct distribution.

All Roads Lead to the Creator 🛣️ 👨‍🎨👩‍🎨 

Below are several market trends and dynamics that make the case for creators becoming modern day demand generators.

1. Data darkness - it used to be very easy for businesses to find audiences. But, with increased privacy laws and regulations around access to user data, users can no longer be easily tracked. This will make it much harder to find an audience if you do not have one. This will result in creators with existing audiences becoming more valuable.

2. Frictionless content creation - nearly all of the friction related to creating and editing content has been removed. With a phone and a few hundred bucks of equipment, just about anyone, including your grandma, can have a professional set up. This means anyone in the world can become a creator.

3. AI-based tools - these tools will accelerate the ability for creators to write scripts, edit videos, and do much more with less. This will usher in a new era of creativity among the creator class.

4. Consumers live in a world of abundance - consumers have an endless number of choices when searching for a specific product or service to purchase. As consumer choice and abundance continues to increase, it will make it more difficult for brands to get in front of customers. This will make creators more valuable as they provide direct access to sizable audiences.

5. We want to know how our products are made - many corporations, especially in more commoditized industries, operate in an opaque way. In some cases, the companies themselves do not even know how their own proverbial sausage is made. This makes it difficult for consumers to understand how the products they consume affect their health, the planet, and people involved in making the product. This creates an opportunity for creators to create more transparency around how products are made so consumers can make more informed, conscious purchase decisions.

6. AI-misinformation - we are at the beginning of what will be an explosion of fake and misleading AI-generated content. This will require new forms of digital trust to be developed with consumers. Creators are well-positioned for this AI-first world as they have already built trust with their audiences and can use new tools to enahnce their work.

Ok, so if the above trends lead us towards the creators, why should we take them seriously as a new form of distribution?

Creators are well-positioned to replace our institutions as a source of truth 🪪 

The public’s trust in traditional media and other institutions seems to be at an all-time low. Many so-called “experts” are increasingly being exposed for receiving compensation from special interests in exchange for providing research or an expert opinion on a specific issue or product. This has been well-documented across nearly all industries with deep pockets. Food, pharma, energy, the list goes on and on… The public’s distrust in institutions will continue to grow as more of this corruption related to special interests are exposed and shared by independent sources. This is where the independent creator comes in. Many of them work hard every day to share valuable information and knowledge in both educational and entertaining formats with their audiences. It’s only after multiple years of consistent content creation and continuous improvement where creators establish credibility and trust with their audiences. Once a creator establishes this trust, it translates into a powerful channel of direct distribution.

Creators represent the largest form of direct distribution that has ever existed 🚚 🚢 

The reach individual creators have amassed across social platforms can not be ignored. It is pretty remarkable that by simply sending out a text, email, or video, a creator can sell 10,000+ products or subscriptions in a matter of minutes. This is an insane amount of leverage. But, the scale of an individual creator’s audience is not enough when it comes to creating a new system of distribution. The scale becomes interesting when you start combining creators and their audiences around specific products or categories that are highly relevant to their content and brands. Creators often collaborate with their trusted peers to cross promote so they can expand their audiences and circles of influence. Mr. Beast, the OG YouTube creator (250+ million subscribers) has used this strategy over the years where he brings other creators together in his videos and competitions to cross-promote across their respective audiences. If you combine all of the creators out there and their respective audiences, this network represents the biggest form of direct distribution that has ever existed.

Creators will define the future of consumerism 🎁 

Corporations often have opaque business practices and complicated global supply chains. The reason for this:

Their business models are based on immense scale and lowest price at all costs. This makes it very difficult for them to change their supply chain and be more transparent. We will see this become front and center over the next 10-20 years as consumers and small businesses are increasingly choosing to purchase products that are closely aligned with their values and beliefs. They are demanding more transparency and want to know what is in their products, how they are made, and who is involved in making them. We call this, “values-based consumerism” and believe it is a mega-trend where companies that do their job mindfully and report transparently will be popular with the masses. This is where the creators come in. Many of them have built their audiences and brands around being honest, transparent, and independent in their thinking. Creators will define the future of consumerism around these values.

In closing…

Think of the creator economy as a decentralized network. By combining individual creators and their audiences in similar or adjacent categories, they start to become nodes or clusters on the network with significant distribution. The exciting part is that we can build systems of creator-led distribution to help solve real problems. We just need to think much bigger than alcohol, chocolate, and makeup. But, building a system like this is much easier said than done as each creator and community exists largely independent of one another. We will drill into many of these challenges in future pieces.

On to a few compelling examples of compelling creator-led brands that built meaningful trust before launching a product.

Buying From Someone You Already Trust

The, “DermDoctor” recently launched his own skincare brand after giving out free information on beauty-related topics for years and building an audience of 20 million.

🍿 Synopsis: Dermatologist Dr. Muneeb Shah started creating science-backed dermatology videos four years ago when very little information existed. His informative videos often went viral and covered practically every beauty-related topic you can think of. This has garnered him close to 20 million followers. In March 2024 he launched Remedy, his own skincare brand to continue his goal of making skincare more accessible. The brand launched with three products that were carefully selected after listening to Dr. Shah’s audience over the last few years to understand what they need most. They found consumers are overwhelmed when it comes to purchasing skin care products. They either don’t know if it's safe or don’t have the time to use six or seven products to achieve their skincare goals. Further, it’s difficult to find answers to common questions from trustworthy sources. That’s why they have created Skinpedia, a database of free articles to make dermatology information easily accessible. All the articles are evidence-based and reviewed by a dermatologist. Remedy’s strategy is to focus on education first so consumers can make more informed purchasing decisions around skincare.

📚 Learnings: Dr Muneeb Shah didn’t start with creating a brand and then sharing about this online. He started by using his knowledge and experience as a board-certified dermatologist to give out free advice for years. He identified a problem that he was well-positioned to solve as a dermatologist: skincare is confusing because it’s difficult to find trustworthy information that is easy to understand. He built an audience of 20 million people through a ton of hard work - sharing useful content several times per week for four years. You can bet that anyone in his audience that has experienced positive results after implementing his skincare tips will most likely become customers of Remedy. Dr. Muneeb Shah has established a level of trust with a large audience that would otherwise take a company 10-20 years to establish. He is a great example of how an individual creator can compete with an institution or corporation by being a source of truth for the consumer. Having this built-in audience before launching a product will allow him to start and build the Remedy brand much faster.

👀 Learn More: check out the announcement video of the launch of Remedy

@dermdoctor

Remedy is finally here @Remedy Science #remedy #skincare

Starting a Company By Solving Your Own Problem

Dani Austin’s haircare brand did $95M in revenue within the first two years of business by solving her own problem.

🍿 Synopsis: Dani Austin is a lifestyle influencer. She started to experience hair loss due to stress. It got to the point that she was almost bald. She didn’t feel comfortable being in front of the camera anymore. However, she felt inclined to share her journey online. That’s why she started to create content such as wig reviews to help others struggling with hair loss. It was through this experience she realized women needed more guidance. That’s why she started her quest to find a natural way to fight hair loss and launched Divi Hair in 2021. Divi Hair creates science-backed products to create healthy hair and scalp. The products are helping tens of thousands of people in their hair loss journey. When the company launched its debut product, Scalp Serum, it sold out in the matter of hours. It’s been reported that Divi Hair did $40 million in revenue in its first year and $55 million in year 2. Only time will tell if Divi’s products will continue to stand out in the highly competitive personal care market.

📚 Learnings: Dani’s journey wasn't just about creating a brand; it was about sharing a solution that had profoundly impacted her own life. She is a good example of how creators should approach launching their own company. Dani experienced a personal problem, built a following of 2.5+ million people around talking about her hair loss, and listened to her audience to determine how to create a solution to their problems. It’s a perfect example of founder-market fit. Dani built an authority on the topic because she experienced it herself and shared her journey for months with her followers. Dani was able to create meaningful direct distribution through her audience evidenced by selling out of the scalp serum within hours after launch. Most celebrity and creator-founded brands look to take shortcuts and/or don’t solve real problems. Divi Hair is different and why it has achieved early success.

👀 Learn More: check out the ‘My First Million’ podcast with Dani Austin and her husband telling more about Divi Hair:

Have a great week and remember to Go Direct!

Build with love,

Jordan & Scott