The final sentence delivered by a charismatic, tongue in cheek keynote that I listened to pre-covid was:
Now if you only remember one thing folks, make sure it's this.... net-work equals net worth
The audience chuckled and left. But what are the levers available to those looking to turn their followers into cash?
Over the last 10 years, savvy entrepreneurs have created enormous wealth by leveraging platforms, firstly bringing audiences into their world and then monetizing them. You might think of the Youtube, Snap and Insta famous influencers who have done very well by selling their own beauty products and marketing them at scale.
But there is a less well known longer tail of highly effective influencer entrepreneurs (including small companies) that leverage different types of platforms to connect their audiences to services or products they value.
You won’t find these influencers nestled between Bieber, Obama and Taylor Swift in the top 10 on Twitter, but some of them are more effective in terms of revenue generated per follower.
Platforms work by facilitating interactions between consumers and producers, reducing search and transaction costs and enabling innovation by third-party producers.
An important element of a platform used by aspiring influencers is that it allows them to build and scale an audience or following in search of their ideal consumers. Large, free platforms are typically the best venues to get started.
Platforms then need the functionality to enable innovation; providing an infrastructure that empowers individuals where previously they may have needed an entire organisation or specialised support team to be successful.
Platforms should enable the behaviors that promote the exchange of value. Both sides of the exchange should be able to enjoy a consistent user experience as well as being able to trust both the platform and the other users they interact with. The platform should encourage users to engage and bring newcomers.
Let's look at some success stories of entrepreneurs who have captured an audience, and then brought them to innovative, economically fruitful platforms:
Benedict Evans is a former partner at a16z who has steadily grown a presence on Twitter where he now has over 300k followers. His newsletter, covering technology, media and finance, launched on mailchimp in 2013, and has 175k engaged subscribers. Last year he turned on taps, offering a ‘premium’ version of his newsletter which costs $10/ month.
And there are many other creators who use platforms to run their own personal media empire; the top 10 writers on Substack make $15m a year between them.
In the world of venture, the net-work to net-worth game is perhaps best exemplified by Harry Stebbings. In 2015 aged 18, he launched his podcast The 20 Minute VC which is now the largest media asset in the venture space with 100+ million plays. He’s interviewed the “who’s whos” of VCs including partners from Sequoia, Benchmark and entrepreneurs from Daniel Ek to Nikolay Storonsky. Even Rishi Sunak is going to be on a show in the near future! He’s also the most followed user on Clubhouse.
Its all about the network..
On the back of the network he’s built, he’s just raised two funds; totaling a whopping £120m . The funds are backed by those he’s met along the way as he’s recorded 2,600+ podcast episodes. His network of investors which include founders, prominent VCs and angels don’t want to miss any of his top quality deal flow. He is reportedly also looking at syndicating his investment opportunities with retail investors.
Anthony Pompliano or ‘Pomp’ is another phenomenal content creator and alternative asset evangelist. He makes 600 million monthly social media impressions a month without having ever raised a dollar. This is achieved through his 1m twitter followers, a very popular podcast and a paid newsletter on Substack, “The Pomp Letter,” which is released five times every week to over 150,000 paid subscribers paying $2.50 per week. And last year he invited investors to join him in his ‘rolling funds’ on Angelist. With a mere $100k or $10k/ quarter you can subscribe to his deals and own a piece of Pomp’s deal flow that his wide reaching network affords him.
There is also an emerging group of ‘influencer investors’ using private investment platforms to leverage their deal flow, and run their own investment empire.
A great example is Chris Adelsbach, the most prolific fintech angel investor in the UK. He has built an attentive following by investing in over 100 companies, typically early stage, from Railsbank to Marshmallow and Monese. He is now providing opportunities for his network to invest in the follow-on rounds of his best deals by leveraging the Vauban platform.
Within a matter of days, they’ve been able to facilitate the funding of early stage innovative companies, where previously it may have taken weeks and teams of service providers.
There are many other platforms that allow creators and influencers to build their own economy and capture value, but some of them demand a very high level of output which may not be sustainable. Is there a risk of ‘burn out’ from content that audiences on Patreon, OnlyFans and Twitch require? Ninja lost 10% of his subscribers when he stopped streaming for just 48 hours back in 2018!