By now, we can fully agree that passion sells. This is the core of the passion economy — digital creators are coming together to turn their own skills, their own passions, and a variety of hobbies into money.
This presents us with a new economic reality — an emerging market where people or creators rake in not only passive income, but a main source of livelihood. Creators make it happen by displaying their talents and individuality to their niche audiences.
That’s a win-win situation for the passion economy creators: they get to leverage on things that interest them, and in the process, they get to experience a more passionate life.
Just How Big is the Passion Economy Now?
The passion economy marketplace is now worth a whopping $38 billion. This number alone is clear proof that the passion economy is an exciting adventure story in the pages of modern economy.
In this post, we’ll walk you through a comprehensive guide on passion economy and why industry leaders tout this as a gamechanger in the future of work.
Utilizing New Digital Platforms
Let’s admit it: there can be no passion economy to speak of without the presence of innovative and new digital platforms. These channels are where digital creators put out their premium content. In the passion economy realm, most of this content is useful and inspiring insights into the creator’s life and/or passions.
To reiterate the point made by Li Jin — the owner of a passion economy venture capital firm, — “users can now build audiences at scale and turn their passions into livelihoods, whether that’s playing video games or producing video content.”
Now, in order for a creator’s personal passion to translate into a living, we need platforms to allow anyone to monetize their skillsets. Such digital platforms enable people to make a living in a way that not only allows, but encourages people to highlight their individuality.
In the twenty first century, there are a lot of platforms that offer these virtual services. There’s Patreon, Twitch, and — of course — so.fa.dog.
The internet’s ever-growing digital infrastructure means that anyone has the means to become a passion economy creator. Whether you’re a gardener, a yoga instructor, a teacher, a musician, a reporter who covers economics, or even a New Yorker staff writer —all you have to do is share your passion with like-minded followers through virtual services. These new platforms are exactly what you need to build a monetizable online audience.
Utilizing passion economy platforms helps not only match your talent and passion with the people who are genuinely interested in it, but also gives pretty much anyone the opportunity to create great businesses online. Gone are the days of the twentieth century economy where you had to rely on physical machines to make a living. In the current economy, virtual work platforms are the next big thing.
Passion Economy and the Future of Work
Li Jin has extensively written about passion economy. We here at so.fa.dog share the view that in terms of employment trends, the passion economy is the next big thing of the twenty first century. Passion economy has the power to disrupt not only conventional thinking about work, but also established businesses in the current economy.
Gone are the days of the industrial economy where machines do most of the work and both working and middle class employees need to toil long hours just to make a decent wage.
As we stated in one of our earlier posts, the COVID-19 pandemic has prompted many, if not most companies across the world to implement furloughs to save on operational costs. Some of those who were laid off from their jobs have shifted gears and rediscovered the hobbies and activities they are passionate about. In the process, they have managed to monetize their passions from the comfort of their own homes.
Many successful careers are the product of the passion economy, thanks to digital products and services that are shaping today’s economy.
Adam Davidson: A Passion Economy Thought Leader
Adam Davidson’s book, The Passion Economy discusses the nitty-gritty of this new kind of entrepreneurship and employment. Davidson is an authority in the field, him being a journalist — a New Yorker staff writer at that — and co-founder of NPR’s Planet Money Podcast. He is a prolific economics writer, having also worked on Adam McKay’s Academy Award-winning film The Big Short as a consultant in economics. He also pens the weekly “It’s the Economy” column for the New York Times Magazine.
The Passion Economy extensively discusses Davidson’s observation of how entrepreneurs in the United States carried out their work in the past few years. The book is a guide to professional success in the twenty first century.
If you love Adam Davidson’s book and you want those insights to be complemented with more thoughts, you may want to check out his Planet Money podcast, or his webpage.
Passion Economy in the Eyes and Thoughts of Adam Davidson
Last year, Jon Jachimovicz, a Harvard professor for organizational behavior and a leading authority on business school curriculum, met with Adam Davidson to discuss The Passion Economy.
Jachimovicz asked about Davidson’s case studies, and how and what exactly he thinks about passion.
Below is the exact transcript of his answer culled from Jachimovicz’s article, and it clearly shows the wisdom Davidson conveys, as well as his crystal clear explanations of the subject matter.
The core idea is a contrast with what I call the widget economy of the twentieth century. In the twentieth century, there are external metrics of success. If you think of the development of the modern corporation, the modern job, and the modern career path, lots of signals tell people to get rid of things that are unlike the requirements of being a worker in this field and to adopt these external metrics instead. A ton of both academic literature and just literature talks about suppressing your own nature for the sake of your work. The idea that this [new] economy rewards or can reward the opposite—that you can look inward and find or develop those things that drive you forward, and specifically those things that make you different from other people—that was the idea I originally was heading toward.
As I was writing the book, I kept noticing that there are a lot of religious people who follow what I’m describing. I’m not religious, but I noted some of these people have a period in their life, every Sunday or whatever, when they’re forced to think about questions like “How do I fit in the world?” “What is my broader sense of myself?” That seems to be a good practice. I liked that passion also has a religious valence. But to me the economy part of the passion economy is equally important. It has to match an inward process, and there has to very much be an outward process, too, connecting your internal self with a market, with people who actually want to pay money for whatever it is you do or make.
Again, Adam Davidson regularly shares his thoughts on the Planet Money podcast. So if you want to listen to Adam Davidson directly, check out NPR’s Planet Money Podcast here.
Passion Economy vs. Gig Economy: What’s the Difference?
Circling back to one of the points we have made earlier, the passion economy has thrived during the pandemic. However, passion economy is not the only non-conventional work scheme that has flourished since the onset of the COVID-19 crisis.
There’s also the gig economy, where the exponential growth could be attributed to the increased reliance on gig workers to deliver foods (such as an amazing ice cream — hey, we’re hungry!), as well as other goods and services right to the customer’s doorsteps.
At a glance, the two may look to be just one and the same thing, but we’re telling you that they are not.
To be clear, passion economy and gig economy both use new platforms, and workers of both are often self employed. However, there are striking differences between the two.
Passion economy utilizes the convergence of technology, entertainment, and media. There’s a wide variety of creative products and services available — such as online courses, — so there’s also a lot of skills and passions for people to monetize. This also means that there’s an engaging mix of digital products and services in the passion economy marketplace.
In contrast, the gig economy lets people work in so-called narrow services, such as food delivery, parking, or transportation.
Let’s look at examples. On Patreon, passion economy creators can post exclusive content in exchange for a subscription fee from their patrons and subscribers.
For gig work, there’s Uber, UberEats, DoorDash, InstaCart, Getaround, and Lyft, among others. The key feature among these apps is that they are all delivery or transport services.
Gig and Hustle Environment: Where’s the Money?
We previously wrote that as for monetization schemes, freelancers in the gig economy are most of the time limited to one-time revenue or pay-per-trip payments.
What exactly does this say about gig work and the gig economy in general?
With food delivery apps, gig workers only earn a portion for every delivery they make. This puts pressure on gig workers to successfully score a considerable number of bookings or deliveries and earn an adequate amount of money. If they don’t manage to get any bookings, they could earn nothing for a day.
On passion economy platforms, workers can get ongoing revenue from building a loyal fanbase or audience. Here, the worker — or creator, rather — puts out exclusive content all to do with their passion, in exchange for a subscription fee from their audience.
Passion Economy vs. Gig Economy: Relationship Between Consumer and Provider
In the gig economy, there is limited ability for consumer engagement. The consumer books a ride and the gig worker picks them up and transports them to their destination. The customer orders food via a mobile app, and the gig worker just delivers the food to the customer. You get the gist.
In the passion economy, platforms encourage direct interaction and loyalty between the provider (the creator) and the consumer (the follower). The creator can hold live chats with their subscribers, or they can hold other virtual or even live activities.
Passion Economy vs. Creator Economy: What’s the Difference?
We also have to spell out the key differences between the passion economy and creator economy.
We talked about these differences in an earlier post, but we’ll reiterate the key points.
In terms of content creation, it can be said that in the realm of creator economy, the creator is primarily a social media personality, or what we better know as an “influencer.” They can be a YouTuber, a Facebook star with a large following, an Instagram A-lister, a TikToker, or a gamer — and oftentimes they leverage on social media trends for their content.
Are you not wondering why on YouTube, Facebook, and even on TikTok, videos about pranks—both the *actually* funny ones, but also those trying too hard—sell and rake in so many views? Why do gaming videos streamed on Facebook, YouTube, and Twitch amass a huge following? Why do short-form vertical videos featuring the hippest sounds earn millions of likes? Why do curated Instagram feeds attract thousands and thousands of followers?
Well, it’s simple: these are the trends across those platforms. The content creator has to keep up with the demands of the trends and hot stuff just to stay relevant and for their businesses to remain afloat.
On the other side of the spectrum is the worker in the passion economy space. In this space, creators do not necessarily need to rely on social media for the type of content they produce.
This is what’s also been pointed out by writer Andrew Chen, who has been extensively writing about startups and the digital economy. He says that the people who work in the passion economy may not have any involvement in social media at all.
Passion Economy vs. Creator Economy: Who’s the audience?
Now, this brings us to the next point. Who’s the audience in these two business models?
Let’s take a look at one of so.fa.dog’s early birds, Nini — a budding creator on so.fa.dog. Her audience is not the general public; her audience are the people who share her passion, the ones who are genuinely interested in her stories of conquering the mountains.
It can be said that in the passion economy, the audience is a tight-knit group, but that does not preclude the creator from venturing into a larger crowd.
In passion economy, the creator typically starts small by offering something valuable to a niche audience.
This is how they build a loyal fanbase, and in one of our previous posts, we mentioned that a passion economy creator just needs to find 1,000 — or even just a hundred — fans for them to sustain their business and make a living out of their passion. Bid goodbye to passive income and say hello to a main source of livelihood.
Again, passion economy presents a new ideology in the future of work — and that is you can earn money directly from your loyal fans.
Building a Loyal Fanbase
It may feel daunting, or even impossible, for a creator to find that 1,000—or okay, 100—true fans and create a solid fan base, considering that the current digital media landscape remains segmented yet very diverse.
There are certain steps a creator can take to build a solid fan base. These are not in any way new rules, but we hope these tips can help.
First, create valuable work people would be excited to pay for. Your content needs to provide better value than all other relevant content your potential audience might find. Passion economy creators should understand that content is king; that content is and will (most probably) always be the key reason why fans are subscribing to them.
Once you have come up with the type of content that is worth subscribing to, the next step is to find the people who are interested in your work. Remember: you should always target the kind of followers who can easily be turned into fans. Turning that audience into fans and patrons will be your golden moment in your passion economy journey.
It’s not enough to just attract an audience: the challenge is to keep and grow with them. To do this, you have to get on a personal level with your fans. Try to answer their questions and emails, and try meeting them virtually or in person. Just keep it safe!
Remember to build an authentic and lasting human connection with your fans. Develop the trust you’ve earned into loyalty.
Passion Economy vs. Creator Economy: Income Streams
In the creator economy, the ones who pay the creator are primarily the platforms themselves.
Again, YouTube is the primary example. YouTube has a multi-tiered payment scheme for creators, depending on the number of hours the subscribers have consumed, the creators’ number of subscribers, and the number of views generated by the content creators’ videos.
Facebook has the same approach. A creator who maintains a page must meet certain monetization eligibility criteria before they can earn from their creations or digital products, and the one that pays the creator is Facebook.
The creator in the creator economy can also earn money through brand partnerships and sponsorships, given that the creator has a considerable number of subscribers or followers.
Talk about return of investment: the creator earns money from the sponsor, and the sponsor can boost its sales or services through the campaign made by the content creator.
Don’t Forget Your True Fans
Now, remember the 1,000 True Fans model in the passion economy space that we mentioned above? That’s the core of how the creator in this space gets to earn.
There is no middle man — meaning, the creator gets paid directly by their subscribers or loyal fans. The creator does not not need to rely on the number of fans to earn; they just have to set the subscription price their fans are willing to shell out.
But again, the creators have to take into account that in exchange for the subscription fee, they have to create valuable content so they could genuinely connect with their fans.
We here at so.fa.dog are enthusiastic believers that passion economy will be the future of work. It’s still in its early stages, so hop on the passion economy train to become an early adopter and join us on this journey. It’s enormously fun – we promise.