“I think that there’s always a pursuit. It’s relevant for a musician – how do you keep your music interesting?” Neistat said. “But what makes individuals like David Dobrik different is that their pursuit is not coming out with the next song or making the next movie. Their pursuit is, how can I be more sensationalist? And that is a very, very, very dangerous pursuit, because the minute you achieve something that was crazier than the last, you then have to go past that.”
How we covered the creator economy in 2022
This summer, I went straight from VidCon — the largest creator conference — to a labor journalism seminar with the Sidney Hillman Foundation. One day, I was chatting with famous TikTokers about their financial anxieties (what if they accidentally get banned from TikTok tomorrow?), and the next, I was learning about the history of American labor organizing.
These topics are not at all unrelated: at its core, writing about creator economy is labor journalism. The creator beat is a labor beat.
Creators are rebelling against the traditional route to making a living in artistic industries, taking control over their income to make money for themselves, rather than big media conglomerates. Consider creators like Brian David Gilbert, who built a devoted fanbase as a chaotically hilarious video producer for Polygon, the video game publication at Vox Media. Gilbert quit to work on other creative projects full time, likely because he realized that with his audience, he could make way more money independently than his media salary paid him. Then there’s YouTube channels like Defunctland and Swell Entertainment, which are basically investigative journalism outlets run by individual video producers. We see chefs building their brands by going viral on TikTok, or teachers who supplement their income by sharing educational content on Instagram. In artistic industries that notoriously underpay for the expertise that its laborers provide, YouTubers, Instagrammers and newsletter writers alike are proving that creativity is a monetizable skill — one that they deserve to make more than a living wage with.
This belief — that the creator economy is a labor beat — has guided my coverage of the industry this year. Below, I’ve rounded up some of our best stories about the state of the creator economy.
Like most teens, Chris McCarty spent a lot of time on YouTube, but they had a serious question. How can the children of influencers protect themselves when they’re too young to understand what it means to be a constant fixture in online videos? As part of their Girl Scouts Gold Award project, McCarty worked with Washington State Representative Emily Wicks to introduce a bill that seeks to protect and compensate children for their appearance in family vlogs.
As early as 2010, amateur YouTubers realized that “cute kid does stuff” is a genre prone to virality. David DeVore, then 7, became an internet sensation when his father posted a YouTube video of his reaction to anesthesia called “David After Dentist.” David’s father turned the public’s interest in his son into a small business, earning around $150,000 within five months through ad revenue, merch sales and a licensing deal with Vizio. He told The Wall Street Journal at the time that he would save the money for his children’s college costs, as well as charitable donations. Meanwhile, the family behind the “Charlie bit my finger” video made enough money to buy a new house.
Over a decade later, some of YouTube’s biggest stars are children who are too young to understand the life-changing responsibility of being an internet celebrity with millions of subscribers. Seven-year-old Nastya, whose parents run her YouTube channel, was the sixth-highest-earning YouTube creator in 2022, earning $28 million. Ryan Kaji, a 10-year-old who has been playing with toys on YouTube since he was 4, earned $27 million from a variety of licensing and brand deals.
I’m fascinated by MrBeast, but kind of in a “watching a car crash” way. MrBeast is still cruising comfortably along the highway, but I worry about the guy (… not too much. I mean. He’s doing fine). His business model just doesn’t seem sustainable to me, despite his immense riches and irreplaceable success. As he attempts to raise a unicorn-sized VC round, we’ll see if he can keep escalating his stunts without becoming yet another David Dobrik.
Is going bigger always better? MrBeast’s business model is like a snake eating its own tail — no one is making money like he is, but no one is spending it like him either. He described his margins as “razor-thin” in a conversation with Logan Paul, since he reinvests most of his profits back into his content. His viewers expect that each video will be more impressive than the last, and from the outside looking in, it seems like it’s only a matter of time before MrBeast can no longer up the ante (and for other creators, this has led to disaster). So, if MrBeast’s business really is a unicorn — I’d wager it is — then he has two choices. Will he use the cushion of $150 million to make his business more sustainable, so he doesn’t have to keep burying himself alive? Or will he keep pushing for more until nothing is left?
Speaking of David Dobrik, longtime YouTuber Casey Neistat debuted a documentary at SXSW this year about the 26-year-old YouTuber. When Neistat started working on the documentary, he wanted to capture the phenomenon that was Dobrik and his Vlog Squad, who used to be YouTube royalty. The documentary took a turn after Insider surfaced allegations of sexual assault on Dobrik’s film set — then, Dobrik nearly killed his friend Jeff Wittek in a stunt gone horribly wrong. Neistat does a brilliant job capturing the creator’s fall from grace, plus the way in which the lack of regulations on YouTube film sets can set the stage for disaster, especially when creators are incentivized to do crazier and crazier stunts to stay relevant.
Television series like “Hype House” and “The D’Amelio Show” dedicate entire plotlines to creators’ fear of being “cancelled,” but Dobrik is still doing okay, calling into question just how far a creator has to go to lose his fans. Dobrik just opened a pizza shop in LA and has his own Discovery TV show. Wittek has had at least nine surgeries to date as a result of his accident on Dobrik’s set.
The biggest open secret in short form video is that you can’t get rich on TikTok alone, because even the most viral creators earn a negligible portion of their income from the platform itself. TikTok has long been dominant in the short form scene, but YouTube Shorts could give TikTok a run for its money next year as it becomes the first platform to share ad revenue with short form creators. Ad revenue doesn’t seem that glamorous, but I couldn’t be more excited to see how this program will change the short form game in 2023.
A big reason why TikTok and other short-form video apps haven’t unveiled a similar revenue-sharing program yet is because it’s trickier to figure out how to fairly split ad revenue on an algorithmically-generated feed of short videos. You can’t embed an ad in the middle of a video — imagine watching a 30-second video with an eight-second ad in the middle — but if you place ads between two videos, who would get the revenue share? The creator whose video appeared directly before or after it? Or, would a creator whose video you watched earlier in the feed deserve a cut too, because their content encouraged you to keep scrolling?
At TechCrunch Disrupt, I interviewed OnlyFans CEO Ami Gan and Chief Strategy Officer Keily Blair about the platform’s future, especially in regard to sex workers. In large part due to the success of adult creators, OnlyFans has paid out over $8 billion to creators since 2016. For comparison, the mostly safe-for-work competitor Patreon has paid out $3.5 billion since 2013. Online sex workers are some of the savviest, highest-earning creators in the business, yet they are the most vulnerable. Changing credit card company regulations and internet privacy laws can wipe out their business, and last year, that almost happened on OnlyFans. The company said it would ban adult content, then walked back that ban — but even still, adult creators have been skeptical about how long they can keep making a living on the platform. On our stage, I asked Gan if adult content will still be on OnlyFans in 5 years. She said yes.
OnlyFans has been putting a lot of effort into upcycling its image from an adult content subscription platform to a Patreon-like home for all kinds of creators, but it’s far from moving away from them as users. Today CEO Ami Gan of the platform confirmed that adult content will still have a home on the site in five years, and those creators can continue to make a living on it.
The confirmation, made today on stage at TechCrunch Disrupt, is notable because of the rocky relationship OnlyFans has had with adult creators. Last year, the company announced it would ban adult content on the site after pressure from card payment companies and efforts it reportedly was making to raise outside funding. Then it abruptly suspended the decision less than a week later after an outcry from users.
Tesla more than tripled its Austin gigafactory workforce in 2022
Tesla’s 2,500-acre manufacturing hub in Austin, Texas tripled its workforce last year, according to the company’s annual compliance report filed with county officials. Bloomberg first reported on the news.
The report filed with Travis County’s Economic Development Program shows that Tesla increased its Austin workforce from just 3,523 contingent and permanent employees in 2021 to 12,277 by the end of 2022. Bloomberg reports that just over half of Tesla’s workers reside in the county, with the average full-time employee earning a salary of at least $47,147. Outside of Tesla’s factory, the average salary of an Austin worker is $68,060, according to data from ZipRecruiter.
TechCrunch was unable to acquire a copy of the report, so it’s not clear if those workers are all full-time. If they are, Tesla has hired a far cry more full-time employees than it is contracted to do. According to the agreement between Tesla and Travis County, the company is obligated to create 5,001 new full-time jobs over the next four years.
The contract also states that Tesla must invest about $1.1 billion in the county over the next five years. Tesla’s compliance report shows that the automaker last year invested $5.81 billion in Gigafactory Texas, which officially launched a year ago at a “Cyber Rodeo” event. In January, Tesla notified regulators that it plans to invest another $770 million into an expansion of the factory to include a battery cell testing site and cathode and drive unit manufacturing site. With that investment will come more jobs.
Tesla’s choice to move its headquarters to Texas and build a gigafactory there has helped the state lead the nation in job growth. The automaker builds its Model Y crossover there and plans to build its Cybertruck in Texas, as well. Giga Texas will also be a model for sustainable manufacturing, CEO Elon Musk has said. Last year, Tesla completed the first phase of what will become “the largest rooftop solar installation in the world,” according to the report, per Bloomberg. Tesla has begun on the second phase of installation, but already there are reports of being able to see the rooftop from space. The goal is to generate 27 megawatts of power.
Musk has also promised to turn the site into an “ecological paradise,” complete with a boardwalk and a hiking/biking trail that will open to the public. There haven’t been many updates on that front, and locals have been concerned that the site is actually more of an environmental nightmare that has led to noise and water pollution. The site, located at the intersection of State Highway 130 and Harold Green Road, east of Austin, is along the Colorado River and could create a climate catastrophe if the river overflows.
The site of Tesla’s gigafactory has also historically been the home of low-income households and has a large population of Spanish-speaking residents. It’s not clear if the jobs at the factory reflect the demographic population of the community in which it resides.
Launch startup Stoke Space rolls out software tool for complex hardware development
Stoke Space, a company that’s developing a fully reusable rocket, has unveiled a new tool to let hardware companies track the design, testing and integration of parts. The new tool, Fusion, is targeting an unsexy but essential aspect of the hardware workflow.
It’s a solution born out of “ubiquitous pain in the industry,” Stoke CEO Andy Lapsa said in a recent interview. The current parts tracking status quo is marked by cumbersome, balkanized solutions built on piles of paperwork and spreadsheets. Many of the existing tools are not optimized “for boots on the ground,” but for finance or procurement teams, or even the C-suite, Lapsa explained.
In contrast, Fusion is designed to optimize simple inventory transactions and parts organization, and it will continue to track parts through their lifespan: as they are built into larger assemblies and go through testing. In an extreme example, such as hardware failures, Fusion will help teams connect anomalous data to the exact serial numbers of the parts involved.
“If you think about aerospace in general, there’s a need and a desire to be able to understand the part pedigree of every single part number and serial number that’s in an assembly,” Lapsa said. “So not only do you understand the configuration, you understand the history of all of those parts dating back to forever.”
While Lapsa clarified that Fusion is the result of an organic in-house need for better parts management – designing a fully reusable rocket is complicated, after all – turning it into a sell-able product was a decision that the Stoke team made early on. It’s a notable example of a rocket startup generating pathways for revenue while their vehicle is still under development.
Fusion offers particular relevance to startups. Many existing tools are designed for production runs – not the fast-moving research and development environment that many hardware startups find themselves, Lapsa added. In these environments, speed and accuracy are paramount.
Brent Bradbury, Stoke’s head of software, echoed these comments.
“The parts are changing, the people are changing, the processes are changing,” he said. “This lets us capture all that as it happens without a whole lot of extra work.”
Amid a boom in AI accelerators, a UC Berkeley-focused outfit, House Fund, swings open its doors
Companies at the forefront of AI would naturally like to stay at the forefront, so it’s no surprise they want to stay close to smaller startups that are putting some of their newest advancements to work.
Last month, for example, Neo, a startup accelerator founded by Silicon Valley investor Ali Partovi, announced that OpenAI and Microsoft have offered to provide free software and advice to companies in a new track focused on artificial intelligence.
Now, another Bay Area outfit — House Fund, which invests in startups with ties to UC Berkeley — says it is launching an AI accelerator and that, similarly, OpenAI, Microsoft, Databricks, and Google’s Gradient Ventures are offering participating startups free and early access to tech from their companies, along with mentorship from top AI founders and executives at these companies.
We talked with House Fund founder Jeremy Fiance over the weekend to get a bit more color about the program, which will replace a broader-based accelerator program House Fund has run and whose alums include an additive manufacturing software company, Dyndrite, and the managed app development platform Chowbotics, whose most recent round in January brought the company’s total funding to more than $60 million.
For founders interested in learning more, the new AI accelerator program runs for two months, kicking off in early July and ending in early September. Six or so companies will be accepted, with the early application deadline coming up next week on April 13th. (The final application deadline is on June 1.) As for the time commitment involved across those two months, every startup could have a different experience, says Fiance. “We’re there when you need us, and we’re good at staying out of the way.”
There will be the requisite kickoff retreat to spark the program and founders to get to know one another. Candidates who are accepted will also have access to some of UC Berkeley’s renowned AI professors, including Michael Jordan, Ion Stoica, and Trevor Darrell. And they can opt into dinners and events in collaboration with these various constituents.
As for some of the financial dynamics, every startup that goes through the program will receive a $1 million investment on a $10 million post-money SAFE note. Importantly, too, as with the House Fund’s venture dollars, its AI accelerator is seeking startups that have at least one Berkeley-affiliated founder on the co-founding team. That includes alumni, faculty, PhDs, postdocs, staff, students, dropouts, and other affiliates.
There is no demo day. Instead, says Fiance, founders will receive “directed, personal introductions” to the VCs who best fit with their startups.
Given the buzz over AI, the new program could supercharge House Fund, the venture organization, which is already growing fast. Fiance launched it in 2016 with just $6 million and it now manages $300 million in assets, including on behalf of Berkeley Endowment Management Company and the University of California.
At the same time, the competition out there is fierce and growing more so by the day.
Though OpenAI has offered to partner with House Fund, for example, the San Francisco-based company announced its own accelerator back in November. Called Converge, the cohort was to be made up of 10 or so founders who received $1 million each and admission to five weeks of office hours, workshops and other events that ended and that received their funding from the OpenAI Startup Fund.
Y Combinator, the biggest accelerator in the world, is also oozing with AI startups right now, all of them part of a winter class that will be talking directly with investors this week via demo days that are taking place tomorrow, April 5th, and on Thursday.
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