10 Hard Truths About Creator-Fan Relationships in Web3

Mags' top hot takes on fans & creator economy in web3: what’s working, what’s not and where we’re headed

The way web3 and the creator economy think about fandom is messed up. That’s why almost all of the current start-ups will fail. Here’s what you need to know about the dynamics between fans, creators and the future of web3.

1. Not all customers are fans. Not all fans are customers.

People use “fan” and “customer” interchangeably. But these are distinct categories that don’t always overlap. And it’s a mistake to think of fans as a subset of customers. 

A customer is someone who uses or pays for a product or a service. That’s it. That’s the definition. And it doesn’t require you being a “fan” or even liking a provider. Many of us are loyal customers of companies we absolutely hate. But sometimes, there’s no one else to plug in your cable or fly you to Austin. 

A fan is an individual who loves a product or a brand. That’s it. That’s the definition. And it doesn’t require you being a customer or ever intending to purchase anything. Just look at all the TikTok influencers pumping out content about Hermes bags they’ll never afford. Or die hard NFL fans who will watch illegal streams but never show up to a game. 

Being a customer is a practical relationship - it’s about business. Being a fan is an emotional relationship - it’s about connection. Customers get receipts, fans get tats. They have different needs and different value. And if you can turn fans into customers and customers into fans, you’ve created a flywheel to success.

2. Customer LTV is hard to measure. Marketing attribution is harder. Fan LTV is the hardest - which is why no one does it.

Common metrics don’t measure what’s important.

Or rather, most customer LTV numbers and marketing attribution numbers are completely made up. And fan LTV numbers don’t exist. Yet fan LTV is the key number to optimize for–even if only conceptually–to maximize long term creator or brand growth. So…what is it?

Fan LTV is the combination of a fan’s direct AND indirect economic impact. Direct impact is just customer LTV (i.e., the products, merch, tickets, subscriptions, and more that a fan buys over the course of their life). But top fans frequently have outsized indirect economic impact on the success of a creator or brand. Every Instagram post, Substack article, and recommendation has some marginal impact. And all businesses know that this network engagement and influence has tremendous value in the form of impressions and conversations.

Imagine you’re an up-and-coming musician. Who’s the more valuable fan over the long term? The busy parents who bought expensive tickets to your concert one time on date night but may completely forget your name? Or their teenage daughter who can’t afford tickets but spends their entire weekend generating viral TikToks about you? Total fan LTV takes into account all of that.

3. Web3 doesn’t really know how to think about fans.

We’re failing to conceptualize fans as long term assets.

Web3 today is mostly pay-to-play – you need to buy this NFT to get access to a creator or brand perks.

But what if we thought about it as a set of tools used to reward and incentivize total fan LTV across all revenue streams?

Let’s think about the actual customers and fans. Cash rich but time poor? Buy this access pass. Already spent a ton on merch and tickets? Here’s a claimable rewards pass based on that spend. Can’t afford to spend on the artist you love to death? Earn a rewards pass for the engagement and promotion you’re already doing.

Too many brands, creators, and startups are playing short-term games in a long-term world: monetizing fan engagement today rather than building genuine, strong fan relationships for far larger engagement of tomorrow.

4. It’s not the size (of your audience) that matters, it’s what you do with it (and your superfans).

Our attention is misdirected.

Size of audience is not a good measure of success. What matters more is the impact of superfans - who just happen to be the most underserved consumer segment.

They want to spend more time and/or money supporting their favorites - but are rarely given opportunities to do so that align with their interest. There is simply only so much merch you can buy and concerts you can attend. By offering new, high value engagement models for purchase as well as gently directing & rewarding high value fan activities, their total willingness to support a creator or a brand can be maximized - but it only works when it’s mutually beneficial to both fans & artists rather than extractive on either side.

5. Fans and creators don’t always want the same things.

Our approach does not appreciate the tension between fan and creator needs, and this is why many start-ups will fail.

Fans want more, more, more: more time, more exclusive access, more direct opportunities to engage.

Creators often want the opposite: fewer obligations that distract them from their core craft. Sure, many love interacting with their fans and desire more direct ways to engage - but only up to a (relatively low) point.

Any startup serving the creator economy is basically an emotional marketplace balancing fan desires and creator needs. It’s easy to overcharge or over-promise and make either, or both sides feel unheard, unserved, and even exploited. It’s why building a successful startup in the creator economy is so hard.

6. Fandom is not one size fits all, despite how many in web3 treat it.

We over-generalize both our treatment of creators and our treatment of fans.

Loving your dog is different than loving your job is different than loving chocolate - and being a fan of the Boston Celtics is different than being a fan of Bad Bunny is different than being a fan of Alo Yoga. Seems obvious, right?

Well, the single biggest red flag I see when a “creator economy” startup pitches me is the team saying “we serve all types of creators” - if you are building for everyone, you are solving real problems of no one. Sports fan are used to their hobby being financialized through cards flipping and sports betting - music fans not so much. TikTok creators are much more excited to receive creative direction from their fans - fashion designers not so much.

A product can only be as strong as your understanding of target users’ needs and wants - can’t do that while treating all types of creators and fans the same.

7. Brands and creators bragging about their community usually don’t have one.

Sure, you might have an audience. But that doesn’t mean you have a community.

An audience is passive. It can be comprised of either consumers or fans. But a community is inherently active and always made of fans. Audiences depend on brand-originated interactions. Communities depend on member-generated interactions. And only fans can make that wheel spin. 

Enabling a strong community is the single best way to balance fan desires & creator needs.

Communities are hard to start. They’re even harder to manage. But they generate outsized results from those member-to-member activities. A fan that feels pride from community belonging and gets value from fellow community members might be 10/10 happy before a single interaction with the underlying brand or creator even takes place! The creator gets credit without having to spend any time and the ability to pop into community gathering spots with low expectations.

8. There are more creator startups than there are scale creators.

Our creator goldrush has dug up a mountain of half-baked solutions and products.

There are more creators than ever. But few break through the noise and build sustainable businesses at scale. As of last year, there were ~40,000 TikTok users with more than 1M followers. These mega influencers rise fast but fall faster. This yields a growing but very unpredictable user base for startups to serve - even as the startups serving those creators rapidly multiplies. 

Which brings us to number 9:

9. Most creator economy startups will fail.

There are too many startups “serving creators” without any real value proposition. Often, their services are totally out of touch with what fans and creators actually want. And no, they don’t want another “metaverse” to “hang out in.”

Fans are fickle. Creators are constantly churning. Competition only rises. And great products aren’t just expensive to build, but incredibly difficult to monetize. But it gets worse. Because the underlying platforms upon which creators depend can shift at a moment’s notice. Twitter suspends users. YouTube deletes channels. And TikTok gets banned on a country-by-country basis. 

As it exists today, the creator economy services unstable users on unstable platforms. It’s a miracle any find success at all.

10. Forget the creator economy. Focus on the fan economy.

Attention must shift to serving fan needs across the entire fandom ecosystem. 

Revenue and control should go to the creators. But discovery, engagement, and ownership should be firmly in the hand of the fan. 

By reframing the relationship from creator economy (and associated demands on creators’ time) to the fan economy (and associated fan needs that then power the monetization engine), we can build a healthier and more sustainable startup ecosystem.

Contrary to what all this might suggest, I’m actually very bullish about the future of fandom and web3 because it opens up new engagement and monetization models. We just have to discover, embrace, and build the right ones for the right stakeholders.