The Creator Economy Has a Glut of Finance Tools but Lacks What Creators Actually Need

Social media influencers looking for basic financial tools like sending invoices, managing budgets and getting advanced payments can find more than a dozen resources. Companies like Willa, Stir and Lumanu cater to content creators. Some businesses service other industries but also market to influencers, including Stripe and Wave. Other creator economy companies aren’t financial by nature but offer invoicing tools, like Beacons and Moe Assist. But the demand for so many banking tools is uncertain, especially when there are few resources helping creators build lasting revenue streams.

While there’s been a flurry of new companies building tools for creators, many may go under this year, experts are predicting. Venture capital funding declined 50 percent from 2021 to 2022, and economists are anticipating worsening economic conditions that could put pressure on startups. Big Tech and internet companies are potential buyers for creator economy companies, but many have implemented cost cuts and layoffs in recent months due to the economy, which might make strain acquisition plans.

The venture capital funding that poured into creator-focused startups in 2021 seemed to support companies solving the same problem, said Mae Karwowski, CEO of Obviously, an influencer marketing company founded in 2013.

“There was excitement around the creator economy, and everyone was looking for a deal to get in,” she said. “A lot of people ended up choosing the same problems to solve, because they were the easiest problems to solve.” In addition to a surplus of financial tools, there are more than 25 companies offering “Link in Bio” services. Some of these niche financial tools will likely be consolidated, she said.

Investors look to fund companies that can acquire the most customers—in this case, creators—in a cost effective manner, said Connie Chan, a venture capitalist at Andreessen Horowitz. It’s expensive to acquire new creators to use a product, which is why companies that offer multiple services, including invoicing, are well-positioned. Beacons, a company Chan invested in, has a “link in bio” product—something many people search for online—so they can gain customers with that tool and broadcast their invoicing service to those users without paying to advertise it, she said.

There is value in creators having access to these basic tools, but there are other acute needs that aren’t being met. If they remain unaddressed, the health of the creator economy could falter, Karwowski said.

Creators have needs that aren’t being met

There’s more that can be done to diversify income streams for creators, Karwowski said. Sponsorships are an entry point, but creators are missing an “income runway” of opportunities that guarantee continued future payouts. For influencers looking to make content full-time, they should try to ensure their income stems from a multiple sources, she said.

Few companies are addressing the issues of mental health and burnout with creators, she said. “The sheer volume of quality content they need to be producing is increasing, and I don’t think there’s many good solutions to that,” she said. “There are only so many hours in a day and so many creative ideas you have.” Social media apps fueled by individual creators compete with entertainment sources like streaming platforms and movie studios, which produce multi-mullion dollar films and have dozens of people working on them.

There are also creators who make content that can find an audience but aren’t entrepreneurial, so they need help building and managing a business, she said. When creators have multiple revenue streams from selling merchandise, subscriptions and advertisements, they can become like small businesses.

“There are a lot of people who wanted to start companies in the creator economy because it was a really big opportunity, but not because they understood the creator space or the problems creators face when trying to build a robust career,” Karwowski said.