Stan's 2022 Shareholder Letter: Creators are the New Brands

This is the letter I sent to Stan’s investors. In it, I share how we scaled from $0 to $1.7M ARR as well as why I’m so excited for our future as Creators.

I hope it can help you in navigating your own journey as a Creator-Entrepreneur!

It seems like just yesterday I was filming TikToks alone in my Stanford dorm room—creating content, building a following, and laughing like an idiot on camera.

I had no idea how to make money as a Creator, but I sure as heck knew that I didn’t want to go back to a corporate job I hated.

Some of my early TikToks that my friends still tease me for.

So I did what any naïve 25-year-old would do — I “full sent” it.

And I am so glad that I did.

I still remember that feeling of making my first dollar as a Creator.

I had spent months trying to figure out how to build an email list, launch my first digital product, and generate passive income.

And when all of that hard work paid off with my first sale, I finally got why people loved “entrepreneurship”.

That first sale gave me hope that, “yes, I could actually become a fulltime Creator” — I could actually work for myself and make a living creating content about something I was genuinely passionate about.

But what I didn’t realize at the time was that the digital storefront that I had coded for my own account would one day become Stan.

We’ve come a loooong way since my mediocre coding skills :)

And that through Stan, I’d get to help all of my Creator friends enjoy that same feeling of making money for themselves.

But looking back 2 years later, I couldn’t be more grateful.

Stan has scaled significantly this year, growing from $0 to $1.7 million in Annual Recurring Revenue.

We’re also now a team of 15 hyper-talented folks (rather than just me, dancing alone on camera).

But the best part? We now serve over 4,000 Creators—and we help them make over one million dollars per month.

Isn’t that cool? Over four thousand people trust us to run their Creator business and look to us to help them convert their followers into customers.

This is what gets me and my team up every morning: helping Creators build the business of their dreams.

And I actually think that’s why we’ve been so successful so far.

I think it’s because we’re Creators ourselves.

We get just how difficult it is to be a Creator — to script, film, edit, manage, and post content on top of building a business.

We also get that the last thing a Creator wants to do is manage their ‘tech’: which is why we’ve built Stan to be the easiest-to-use, all-in-one Creator Store builder.

No longer do Creators need to patch together a web of 15 different software subscriptions.

Instead, they pay for just a single $29/mo subscription that enables them to build their email list, book their first client, and sell their digital products… all through their link-in-bio.

And because so many Creators use our tools to launch and test different products, it gives us a front row seat to where the Creator Economy is going…

And that front row seat has led us to the key insight of this letter - that Creators are the New Brands.

And we’re about to see a massive, multi-billion $ opportunity emerge.

To understand just how big the Creator opportunity is, we need to look back at the Boomers.

Back in the day, only the lucky few ever built an audience of millions.

Your fate as an artist was dependent on you getting lucky — getting plucked out by a single decisionmaker sitting atop a label like Fox or Sony.

And chances are, that decisionmaker didn’t look like you.

They’d run you through hundreds of auditions just for the slim chance that you might “make it” one day.

And even if you were selected, your power broker still had to move mountains to make sure you actually got distribution.

In order for an artist to go multiplatinum, you had to invest millions of dollars, hire hundreds of people, and work with dozens of companies to distribute your album, manage your PR, and get in front of fans.

But now, thanks to the internet, it takes just a single press of a button to go viral.

The rise of platforms like YouTube, Instagram, and TikTok has democratized the access to talent.

Now anyone, anywhere, can break out and build an audience, regardless of who they know or what they look like.

TL;DR? Content distribution is now permissionless. If you’re an artist, forget the dude at Sony Records. Drop that mixtape yourself and let the labels chase you instead.

The internet is bringing on a true meritocracy. And in fact, it’s rewarding people who aren’t your typical celebrity.

Case-in-point: the most popular person on TikTok isn’t a Kardashian.

It’s Khaby Lame, a 22-year-old from a small town in Italy.

After being laid off during COVID, Khaby started posting clever videos on TikTok—he now has a platform of 151 million followers with world class brands like Hugo Boss paying him millions of dollars.

But Khaby’s not the only Creator making life-changing money.

The Creative Renaissance has been accompanied by a new wave of wealth…

Especially for the Creators who have realized that they should launch their own brands, rather than rent out their hard-earned audiences to corporations.

The hard truth for Creators is that a corporate brand will only partner with you if they know that they’ll profit off of you. You’re not capturing your value…they are.

Celebrities in the 2010s were the first to realize this truth. The most notable examples include Kylie Jenner and George Clooney, who both leveraged their fame to build billion-dollar brands (Kylie Cosmetics and Casamigos respectively).

We’re now seeing the biggest Creators run that same playbook.

Creators are using their pre-built audiences as distribution channels to launch million dollar brands:

But it’s not just the Creators who are changing…

Welcome to The Creator-Entrepreneur! I share all of my lessons learned scaling as a Creator and a CEO, just once a month.

What’s really accelerating the shift of power from Corporations to Creators isn’t the changing media landscape—it’s the Consumer.

People don’t watch ads anymore.

In 2022, over two-thirds of viewers no longer actively watch TV ads. Why?

TikTok and short-form content have absolutely destroyed our attention spans.

Ask any Gen Z consumer today and they’ll tell you they have the attention span of a goldfish. They can barely finish a 30 minute TV show, let alone a corporate ad.

Especially in today’s age, we want to feel connected. We resonate with people, not robotic brands.

We’re significantly more likely to listen to a real human being (like MrBeast) than we are to Walmart.

You should think of Creators as the new ‘TV channels’. In the same way that I used to flip between Nickelodeon and MTV as a kid, kids nowadays flips between their favorite Creators on YouTube.

We don’t watch Food Network anymore, we watch Binging with Babish and Josh Weissman. And forget the MTV’s Real World. Nowadays, it’s all about following the drama of Charli and Bryce’s Hype House instead.

Consumers are beginning to resonate much more deeply with Creators than with monolithic brands.

Even looking at our own data at Stan speaks towards this trend: our Creators see email open rates of 60-70% — compare this to the paltry 10% open rates of legacy brands and it becomes very clear who’s going to win the distribution arms race.

This is the Stan Thesis in action—the most powerful brand is a living, breathing human being.

Branding agencies already seek to make their brands as humanlike as possible, so why not just short-circuit the whole process, and… say it with me…

Make Creators the New Brands.

The train’s left the station, and it’s time for you to hop on.

But with all this growth and potential, why hasn’t the Creator Economy lived up to its previous hype cycle?

We’re seeing massive layoffs across the Creator Economy—stalwarts that raised hundreds of millions like Jellysmack and Patreon are cutting budgets and hunkering down.

The simple answer is that the market is still too immature. There’s been too much VC hype chasing too few dollars.

In order to have a thriving economy, you have to have a thriving middle class.

And for the Creator Economy, the tale of the ‘Middle Class Creator’ has so far been a myth.

Why? Because it’s insanely difficult to build a business on top of consistently creating content.

I liken the average Creator’s career to that of an NFL player’s (3.3yrs). The burnout of scripting new content, chasing views, and mastering the social media algorithms is brutal on people.

Creators are essentially Solopreneurs. You’re asking a single human being to be a writer, producer, editor, social media manager, agent, business operator, and CEO.

Throw building a brand on top of that and it’s pretty much impossible.

This is exactly why so far, only the biggest Creators like MrBeast have been able to launch brands of meaningful scale. They can afford to hire a team of 100s to run the day-to-day operations while they focus on what they’re best at: creating content.

And yet this problem is also why we’ve seen so much early success here at Stan.

We focus specifically on empowering the Middle Class Creator.

By providing Creators with a one-stop-shop for everything they need to build their business (an easy-to-setup website, course hosting, mobile-optimized checkout, etc.), directly through their link-in-bio, we’re standing as a bright light in the Creator Economy.

The average Stan Creator generates 2.6x more income on Stan than they did before they joined us.

But our work doesn’t stop there. We have so much fun stuff planned for our Creators as I have deep conviction that we’re still in the earliest innings of the Creator Economy —especially because of the recession.

Corporate America is slated to lose 175,000 jobs per month during the recession—but people won’t just be losing work…

They’ll also be losing their faith in “institutions” (aka “the system”).

Why work 9-to-5 as a cog in the corporate wheel with no control over your own job security when instead you could work for yourself and do things you actually care about?

As more and more folks lose their jobs due to factors outside of their control and ‘quiet quitting’ continues to rise, we’re about to see a flood of new social media entrants looking for a side hustle.

Paired with the aftershocks of corporate brands pulling back on brand deals, Creators will realize that it’s time to build their own direct income streams.

And this is the next Gold Rush…

Fortunately, we’re the ones selling the picks and shovels.

The unrelenting growth of the Creator Economy doesn’t stop with just the recession however—the Creator Economy is the future of work, full stop.

Naval put it best:

Our greatest search for meaning as humans is for self-actualization, which we find through the pursuit of our creative passions.

Harkening back to Maslow’s Hierarchy of Needs—the Creator Economy represents a way to fulfill all of our needs.

I mean, who wouldn’t want to get paid to do something they’re actually passionate about?

Creating content hits every aspect of Maslow’s Hierarchy.

But to really speak to just how massive this opportunity is—I’ll ask you to take a look at the GDP of the US Services Economy (everything from healthcare to finance to consulting).

In recent years, the services sector totaled up to $13 trillion (or around 75% of GDP). On the other hand, the manufacturing of physical goods represented the other 25%.

The Creator Economy is just the first step in the entire knowledge economy moving online.

The Internet first moved the Physical Goods Economy online. We built monster companies like Amazon and Shopify to fulfill those needs.

Now, the Services Economy, which is already 3x the size of the physical economy, is moving online—and the Creator Economy is its driver.

Creators are really just the new-age version of service workers. From art, to education, to consulting—Creators are just individuals moving their business online.

They’re performing music and comedy online (rather than in a venue). They’re creating videos on how to workout (rather than training you in a gym). And they’re even educating you on how to grow your business (rather than sitting you down in a classroom).

When you compound this with the fact that 40% of Gen Z wants to become a YouTuber when they grow up (that’s even more than those who want to be astronauts!), this trend is even harder to ignore.

Here at Stan, I’m constantly blown away by the thousands of niches we support.

Yes, we have entertainers, artists, coaches, and course creators… but we also have lawyers, dog trainers, hair stylists, romantic matchmakers, and thousands of other cool long-tail niches using social media and Stan to generate leads for their businesses and make money.

Some Stan Creators have made $10K+ in some very fun and fascinating niches.

Instead of being chained to a corporate desk, people are realizing they can go out on their own and use social media to generate leads for their own business.

Social media creates a direct relationship between you and your customer. You no longer need a corporate gatekeeper to create distribution for you.

Your social media account is the distribution.

Just this week I onboarded a Creator who went from working a corporate 9-5 to teaching people how to quit smoking online — and she booked her first sale!

The best part of my day at Stan :)

Isn’t that cool? You can truly monetize anything.

In the same way that Shopify provided the digital rails for the physical goods economy, Stan will do the same for the services economy.

With all that being said, we’ve got a long way to go (and lots of fun to be had!).

I couldn’t be more grateful for how difficult the journey has been so far — being a Creator has forced me to look deep inside and figure out who I authentically am and how I want to help the world.

I look forward to the challenges to come, and I can’t wait to grow the #StanFam this year.

And to our Creators—we are always here for you.

Let’s crush 2023,

John (@jayhoovy)

Thanks for reading The Creator-Entrepreneur! I’ll share with you all of my private learnings scaling as a Creator and CEO.