What’s the news?
Investors are interested in the creator economy. Mighty Networks, a platform designed to help creators build communities (and a business), closed on a $50 million round, according to TechCrunch.
The single deal is only the latest news. The 2021 Creator Economy List from Contrary’s Startup Search includes 30 startups that have raised $1B recently. “Startups are powering this creative revolution by making it easy for creators to find an audience, manage their income, sell products, and engage with their communities,” the site says.
The allure of these big-dollar investments indicates a strong market for content creators seeking to become content entrepreneurs. That’s the good news.
What’s the downside?
You aren’t likely to see investors clamoring to invest in your business. The big money is going to the supporter platforms for content creators like Stir, Discord, Substack, Karat, Linktree, Rarible, and others.
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Why does that matter to a content entrepreneur?
You need to identify how to finance your content business startup without the involvement of venture capitalists and other big-time investment vehicles.
Where do you find the money?
We’re big fans of bootstrapping because you retain ownership of your content business. And content entrepreneurs are perfect for bootstrapping.
“Bootstrappers take an idea – and, using talent or professionalism – build a worthwhile business without the backing from investors and having little or no starting capital,” explains Investopedia. “(Bootstrapping) encourages simplicity and flexibility during the early growth phase.”.
What should you do first?
Save whatever money you can. At the same time, identify how much money you really need. Unlike other startups, content creators can launch with a minimal budget. You don’t have to build a tangible product, pay to ship it to customers, etc.
You will need equipment, domain names, front- and back-end services, such as web hosting, email services, etc.
If you’re growing your business, detail what’s needed to improve it. If you’re a YouTuber, for example, do you need better lighting or an audio mixer to take it next level? Or are your subscribers growing so you’ll have to jump up to your email service’s pricier plans?
What if you don’t have the necessary savings?
Consider launching a pilot program using third-party services like Substack, Ghost, Patreon, and others. You can make some money while building your audience. (Emphasis on “pilot” is intentional as it isn’t a long-term solution.)
Look at the pros and cons of each platform to pick the right one for your business model. For example, one platform may not charge any commission fees, but you may need to pay to operate from its server. Another may take a cut but forego any additional fees for operating on its platform. Read the fine print to find the best fit.
Anything else you should know about these platforms?
We say it often: Don’t build your content business solely on these third-party providers. You may not do it early on but have a plan to diversify onto platforms you own and control.
Are there other options?
Given your business has no valuable tangible assets, banks aren’t eager to give you a loan. If your audience is large enough, look into a credit line with Karat, which exists to work with content creators.
Content business owners should look to your local small business development office and research business-accelerator programs in your area. You may find small startup grants are available. More importantly, you likely will be able to reduce some projected costs by using their free programming and advisory services. And you’ll expand your networking base too.
The Tilt founder Joe Pulizzi kept the Content Marketing Institute going in the early days by selling sponsorships to partners who believed in his vision. Those sponsors kept the company afloat until a larger audience was built and other products could be developed.
We like these two pieces of advice from bootstrapper Jackie Hermes who ultimately built a $1M annual revenue SaaS business: (1) Be OK with going slow. (2) Reinvest your profits back into the business.
About the author
Ann regularly combines words and strategy for B2B, B2C, and nonprofits, continuing to live up to her high school nickname, Editor Ann. Former college adjunct faculty, Ann also helps train professionals in content so they can do it themselves.