NFX Podcast Transcript: Li Jin on the Passion Economy / Its Hidden Currency
James Currier from NFX recently posted a podcast interview with Li Jin on the expansion of the Passion Economy. They covered a number of interesting topics. The full transcript is included below.
Read their notes and highlights here.
James Currier 0:04
The effects podcast is about seeing what others do not and getting at the true mechanisms behind people and companies than door change in the world. Today, James curry is joined by Legion, former partner at a16z, and now Founder and Managing Partner at attilio, who focuses on investing in the passion economy, which makes it easier for people to monetize their individuality through unique creative work. They discuss how NF T's are changing the economics of the creative economy, what happens when everyone has to be a marketer, and how they look for ways to make platform participants in the platform owners. If you enjoyed this episode, let us know by leaving a rating a review in by sharing with friends you think should listen. You can also discover more content like other episodes, transcripts essays and videos by following us on Twitter at and effects in visiting and effects calm. And now on to the show.
So um, let's get going here. You, my friend have been talking about the passion economy since around 2019. And just to make sure that everybody understands where that came from, can you just go quickly through what you mean by that?
Li Jin 1:12
Yeah. When I talk about the passion economy, with my investor hat on, I'm referring to technology platforms that make it easier for people to monetize individuality and to earn income through work that feels more fulfilling and meaningful and creative. And where that came from is that I would say I've been a very creative person for my whole life, I studied art very intensively as a child. I was like, very online during my childhood, doing a lot of the things that are now jobs. But before were not considered to be good uses of time, like I was building websites, spending time writing fan fiction, participating in online communities, all of these things are things that people can do and earn money from now. But that wasn't the case before. Same with my passion for art and painting. And so it's always been this really lifelong desire to find a way to unite those passions and hobbies that I had with a way to monetize, like, there always seemed to be this binary choice between like you pursue your passions, or do you like opt for a practical career and decide to major in something that's actually useful?
James Currier 2:18
Right, follow your heart and your heart or go get a cube job at an insurance company.
Li Jin 2:22
Exactly, exactly.
James Currier 2:23
Yeah. It seems like such a stark decision. And it felt like with the internet, touching everything, and multiplying everything, it should be possible to solve that problem.
Li Jin 2:31
Absolutely. Yes. I think the internet uniquely unlocks this opportunity for the next generation and all subsequent generations of people versus what had been available to us before in a very local, IRL based world.
James Currier 2:45
God, what's the difference between the gig economy and the passion economy?
Li Jin 2:49
Yeah, so I have a really cool chart that I included in my original blog post about the passion economy over at the a16z website. But there's a few axes of differentiation. One is that the type of work is different. So in the gig economy, you're doing really rote, commoditized kind of repetitive work where the platform is telling you exactly what to do in the passion economy, workers are deciding for themselves, the types of services and products that they want to offer, the way that you scale, your earnings is also different in the gig economy, you just have to do more gigs do more work, put in more hours take on an additional task versus in the passion economy, it's much more about either growing your audience or intensifying the relationship that you have with your audience and your customers like that depth of fandom.
James Currier 3:35
So an example would be a Patreon where you put up one video, but you know, four months ago, you had five people subscribing or being a patron to your stuff, but now 1000 people and so you've scaled it up, but you still only had to make one video to earn more. So it's a sort of scaling factor.
Li Jin 3:49
Exactly. And I think of like there's these new types of products that creators can offer that allow you to scale yourself in completely new ways and allow you to price discriminate among your audience as well so that you don't need to just like scale your reach and reach more people, you can monetize your superfans to a higher degree such that you don't need to become mega famous.
James Currier 4:13
Like what would be an example.
Li Jin 4:14
An example is NFT's and how they enable creators to price discovery in a really powerful way. For instance, earlier last month, I sold my first ever NF t on a website called foundation. It's an NF t marketplace. I didn't really know how much it would sell for I set the reserve price for 1.5 eath, which at the time was about I think maybe like $3,000 or something. I thought the reserve price was quite high. I was afraid that it wouldn't sell and it ended up selling for 13.37 eath, which was about $25,000 at the time now about $50,000. But like that was just insane to me that there was someone out there who cared enough about me supporting me and supporting my work that they were willing to pay so much for this NFT. So I think I've jokingly called that the one true fan model, versus the Kevin Kelly 1000 true fans or this post that I wrote about 100 true fans, but I think NFT's allow you to identify that one true super fan who is willing to pay like a really high amount and allow a creator to earn a lot off of, you know, not that many followers,
James Currier 5:23
Right? And so not only can you identify them, but really you're allowing them to identify themselves.
Li Jin 5:28
Yes, exactly.
James Currier 5:30
And in this case, where this person paid this, they were not paying that amount of money, because they thought the artwork was going to give them some utility. They didn't anticipate they would sell it for more they were doing it because they were interested in supporting the person who was selling it and the work that they were doing maybe this work, this animated GIF was part of it. But there's also a lot of other work that you do in publishing that he might have been wanted to support. Is that right?
Li Jin 5:57
Yeah, I actually had a conversation with him afterwards, where I just wanted to understand what was going on. In his mind when he was participating in this bidding war, there was a bidding war between two bidders. And ultimately, his name is James young. And so I was asking James, like, why did you pay so much for this? What is your goal? What do you hope to do with this? And he told me something really interesting, which was that he said that for him, yeah, buying it was a form of activism. And it was a form of sending a message to the public, as well as to me that crypto can help be a solution to the creator middle class problem, that crypto should be and can be used as a way to build up the greater middle class, which I have talked about as being kind of non existent today. And so for him, it was really important for him to own this NFT because he wanted to communicate through his act of ownership. And so right now, we're actually in the process of talking about, like, how to leverage this NFT to fund more artists. So it's been an ongoing conversation,
James Currier 6:58
And did he then pitch you a startup idea? I mean, was that part of why he wanted to get to you,
Li Jin 7:02
It wasn't a startup idea. His idea was that we start a decentralized grant giving organization to fund emerging artists.
James Currier 7:10
Got it, got it. And so early on in this NFT, boom, which, you know, has been in the works now for three years, but really just took off in the last five months, you know, these sorts of acts can have a little more impact. And they will, you know, in a few years when this is more commonplace, but it's interesting that transactions in this passion economy are perceived as sorts of activism or social statements.
Li Jin 7:34
Yeah, I think it's super fascinating. I think zooming out from just this one example, I think, broadly speaking, I think the coverage of NFT's as just purchasing art, and investing in art, I think that kind of misses the mark. It's definitely true, some of it, but I think it's really just scratching the surface of what people are trying to accomplish when they purchase. I think there's NFT sales that function as relationship building. In this case, like I formed a relationship with this buyer, we're still talking about how to fund emerging creators, were thinking about setting up this like decentralized organization to do it. So there's that element, I think it's a way to capture the attention of a creator in a world in which the Creator is constantly being bombarded by tons of messages constantly. Like this is a way to dial up the volume of your message, in a way.
My friend, Patrick Rivera, he had this amazing tweet recently, where he said that currently on the internet, all likes are fungible. Everyone's like counts as the same like but I think NFT's are a form of a non fungible, like, bright. And is this some sort of an indication that perhaps we have a very immature attention economy where this person was willing to spend $25,000 to get your attention? Yeah, and that we are undervaluing attention dramatically, and that over the next few years, maybe that is going to get priced in and fixed. Yeah, I think this is such an interesting topic of discussion. And I still need to really clarify my own thoughts around it. But I think when people typically talk about the attention economy, they're referring to creators amassing the attention of an audience. And then after they have the attention, they're able to monetize that attention in all sorts of different ways.
I think what's really interesting about NFT's and some of the new creater economy, products that are coming into existence is that they're reversing that relationship. And they're flipping the economic transaction between attention, the direction that the attention is flowing, and the way that the money is flowing. And what I mean by that is, the audience member is purchasing attention from someone that they admire in the case of an NFT sale in the case of like a Cameo, a sale a cameo purchase, I think of the fan of that celebrity as purchasing their attention for a brief moment in time as well. Same with like the tipping behavior that you see on only fans which drives a ton of their GMV like people are sending large tips to creators as a way to get their attention. And so yeah, I think of it as not just monetizing the attention that you have, but potentially like paying for the attention of someone that you want to establish relationship with,
James Currier 10:12
Right. And in the sense of cameo I might buy that shout out for my son or for my wife, because I'm trying to get her attention. I'm essentially buying her attention by getting that person to give her attention. That's it.
Li Jin 10:24
Yeah
James Currier 10:25
There's all this attention going around. And it's gonna get increasingly monetized because we can measure it in the digital realm.
Li Jin 10:29
Right. And attention has become such a scarce thing to capture that people are willing to pay for it.
James Currier 10:35
Does that mean everyone has to become a marketer? I mean, because we have a person who was really good at getting attention through Twitter, and he ended up being president you can get to be president, if you're really good at this, is that the future world that the marketers are the winners?
Li Jin 10:47
I think, for better or worse, yes. And I think this relates to enemies in post that Paki. McCormack just put out the other day called the Great online game, where he describes how we are all participants in this huge, massive multiplayer online game, but not in the traditional sense of an online game. Rather, like this game spans the entire web, it spans the entire world, it bridges to the offline worlds, like our performance in this online game of Twitter and Social Media and blogging, etc. It bleeds into the opportunities that we have for making income and for progressing in our careers and for networking and connecting with people. And I think we're now in a world where you do have to play this game, you don't have an option anymore. Like, I think the notion that you could have one job forever, and it could be pretty secure. As long as you just did a good job in that position. I feel like those days are over in America. So you do have to play the game. And part of the game is being a good marketer.
James Currier 11:45
And isn't that going to be exhausting for certain personality types?
Li Jin 11:48
Yes.
James Currier 11:48
Yeah. I mean, certain personality types are going to be very disadvantaged in this new world, because they might not like tweeting, or they might not like getting that type of attention.
Li Jin 11:55
Yeah, I completely agree. Yeah, I don't think it's going to be this phenomenon. And it's not going to be welcomed with open arms by everyone. But I think it's happening regardless of whether or not we like it.
James Currier 12:06
Yeah, there's a blog post, I wrote a thing in 2007, or eight called the economics of creativity. And it details has different technologies sweep through different ages, different people's talents are rewarded more with money, like incredible amounts of money. Like my aunt who recorded music in the 50s, and distributed it on vinyl records. You know, she made hundreds of millions of dollars doing that, whereas my grandfather, who was a great cellist, and his parents had made money, he didn't make any money in the 30s. Because radio made it so that live music was was much less compensated. Yeah. And then you get, you know, a person like Michael birch, who designed Bebo and sold it for eight or $15 million. He was really good at interface design a creative act, he would have done for free. But in that moment, you know, he made hundreds of millions at that time, because that was the skill and the talent that was being rewarded by the technology of that time. And what I think we're saying here is that perhaps writing or marketing or figuring out how to get more attention is the talent for the current age and going forward.
Li Jin 13:04
And I think being good at memes is part of that being able to generate memes and memify things and get them to take off. Like, I think that is a really prized skill set. In today's day and age,
James Currier 13:16
Who's the best, you know, doing that?
Li Jin 13:18
I feel like this is a skill that is really native to Gen Z and all of the creators that I see on tik tok. It's all very like second nature to them to remix other's work and do at them and collaborate on videos together. And like that entire platform is like a huge generator on a daily basis of so many mediums. They're constantly trying to make their videos viral and take off. So I feel like that generation in its entirety is very good at it.
James Currier 13:46
Good to see yourself part of that generation.
Li Jin 13:48
No, you're what mouth just turned 30? Yeah, I'm a card carrying millennial. This is know, for founders out there. I get contacted by founders who are looking for Gen Z investors. And I have to break it to folks, I'm not a Gen Z investor.
You got it. You're a millennial, and well done. And you know, since 2019, certainly, I mean, how do you think about because you're a creator, like you've gotten raised? What, how big is the fund? 13 million,
James Currier 14:14
13 million, you've raised 13 million from a lot of great LPs, you've made how many investments so far?
Li Jin 14:19
Oh, my gosh, a lot. Like almost 30
James Currier 14:22
30 investments, and out of this $30 million fund, how many more will you make?
Li Jin 14:25
I will probably make about 15 to 20 more.
James Currier 14:28
Great. And you're investing anywhere from 100 to 400k?
Li Jin 14:33
Yeah,
James Currier 14:33
Okay. And at the same time, you are publishing at the same time you were involved in, you know, getting articles New York Times in New Yorker and others, how do you think about your creative act as an investor?
Li Jin 14:45
I think it's a really important part of my work. And I think it's a really important part of all investors work now. Just given the world that we live in and everything that we've described just now. I think it's a huge part of being able to be a good investor and to see the right deals today is that creative activity. But more than that, I think I do it more than just, you know, to drive deal flow and stuff. Like I genuinely love it. Like this is what I grew up doing.
James Currier 15:13
And it's clear,
Li Jin 15:13
Yes, it feels like second nature. And so even if it didn't really have as much use professionally, I think I would still do it.
James Currier 15:20
Right. Well, that's what's interesting about it is I mean, it resonates with me that this is the passion economy. And if you have a passion for startups, you have a passion for investing, a passion for the future of work and all the things that talk about, then you're going to be natural at it. I think people will be drawn to listen to folks who are really wearing their heart on their sleeve.
Li Jin 15:37
Yeah, I agree.
James Currier 15:38
I think I feel you doing that, but also adding in, you know, the intelligence to memeify it or to put it in a way that people can understand the core message?
Oh, thank you. That's very cool. Yeah, that's very cool.
Li Jin 15:49
I think also, I think everyone's a creator. I think everyone has a creative streak. Like when we're in kindergarten, everyone thinks of themselves as an artist. And we kind of lose that over time. And people stop thinking of themselves that way. And people start saying, like, I can't draw, like no one said that when they were five, everyone thought they could draw, I think everyone has a creator inside of them, to your point that like having to be a good marketer is not people don't all want that. I think there is a type of creativity that everyone enjoys. They just need to find it.
James Currier 16:16
Right. And some of its going to get more attention. Some of it won't.
Li Jin 16:19
Yeah, but the form that gets attention is going to be more monetizable. In the world we live in going for. Yes.
James Currier 16:26
Yeah. Interesting. So it's interesting. You made a comment that some people call you looking for Gen Z investors. What Why do you think they're looking for Gen Z investors?
Li Jin 16:33
I thought you were gonna ask why do they think Gen Z? Just probably because I behave in a really young way. But to your actual question, why do I think they're looking for Gen Z ambassadors? Honestly, I'm not entirely sure. And I would love to learn more about their rationale, because I think it's a bad move to select your investors based on their age and to artificially constrain yourself in that way. Because it's I don't know what the boundary is between Gen Z and millennial like maybe 25, or something. It's not like something magically happens overnight, where if you're, if you're born after a certain day, you're just like, not qualified to invest or add value to this company. And so I think it's like too rough of a constraint to impose on the way that people look for investors, I think what they're trying to use age as a proxy for is being plugged in to youth trends and youth culture, which I guess it correlates with your age. But it doesn't necessarily mean that someone who's Gen Z is necessarily an expert, or if someone's not a Gen Z, they're necessarily clueless. So I would encourage founders to be more open minded about the age of their investors, because I remember the days when all of this like online culture stuff, and like blogging, and YouTubers, and all of that it used to be so hyper associated with millennials, and somehow, like, Millennials are now over the hill, and the torch has been passed on Gen Z, and only Gen Z get to be online people
James Currier 17:59
Only they get it. Yeah,
Li Jin 18:01
I don't know how this happened. But I don't think it's actually accurate. Like millennials also grew up very online. A lot of my friends growing up were people that I'd never met in person. They were people I met on online forums and AIM. So yeah, I don't think one's age necessarily dictates how savvy they are.
James Currier 18:17
It does sound like maybe what they were saying was, I want someone who gets it. Yeah, you know, if you're out there pitching these investors, and they just don't get it. If you're pitching a biotech company, you want biotech investors who understand biotech, because otherwise, they're just not going to, I can relate to the feeling that you're just looking for someone who's going to get it. And that can take many forms, maybe it's age, or maybe it's that they're really into social media, or that they like biotech or whatever. But we've built that tool, you know, of signal data and effects, calm, let people find, like, Who's gonna get this idea. That's why I get that, I get that. But I think it's also the case that, you know, when you get a lot of attention, people are gonna call you up just because your name is they're hoping to find something that resonates with you.
Unknown Speaker 18:57
You're listening to the NFF x podcast. If you're enjoying this episode, feel free to rate and review our channel and share this conversation with someone you think would benefit from these insights, follow us on social and effects and visit end effects comm for more content. And now back to the show.
James Currier 19:15
So what are some of the passion economy companies that you think are most emblematic of what's happening with this ability for the internet to let us make scalable revenue generation from things we really care deeply about? Then after that, I wanted to just ask you, what do you think are the keys to getting these types of businesses going? And I say that because I have a suspicion that it's something about attention. It's something about network effects. It's something about viral effect that is going to be the key to differentiating one because, look, we probably see I don't know four companies a week that are figuring out some new form of, you know, passion economy platform, we're gonna get people paid, we're gonna get people notice we're gonna and it's very hard to distinguish between them because so many people have a passion about being passionate. And so it's like maybe 10 years ago when people were making these loyalty programs for restaurants and bars, right? Like everybody in New York had one of these startups because they thought would this be a great life if I could, you know, build platform, a marketplace for restaurants and bars. And right now we're seeing the same thing with the passion economy that some of these platforms are coming in. So I'm trying to dig in for our listeners, for the startup founders. What are those key things that make for great companies in this area?
Li Jin 20:27
Yeah, great question. So I'll start with the examples of companies that I think are really emblematic of this shift towards the fashion economy. I'll name two companies. This is just like, you know, tiny, small sample size, there's many others doing very cool stuff. But one of them is Mirror. Mirror dot XYZ. They're a blogging platform that's built on crypto that enables writers to monetize and all sorts of new interesting, crypto based ways. So one of those is potentially minting your essay as an NFT. And selling that through an auction. Another thing that's happening on the platform is that writers are crowdfunding for a piece that they're working on in advance of when it actually gets published. So this crowdfunding mechanism, it's been used to fund novels, it's been used to fund like really ambitious essays that require a bunch of time and research. Because I think zooming out a little bit from your there's a ton of people who love to write, there's a ton of people who have interesting pockets of knowledge and expertise that can be shared with the world. And to date, on the internet, the way to monetize if you are a great writer is either through putting ads on your blog, or I think substack did a lot to pioneer the subscription model of newsletters. But I think those two models leave a lot of writers still without a great business model. And those writers that are left without a great business model are perhaps publishing at a lower frequency, a lower cadence, they might publish like an amazing in depth piece like once a year or twice a year, they might be investing a ton of time into an investigative piece that requires months of research or relationship building, potentially that never even ends up turning into a finished piece.
James Currier 22:04
Substack is really subject to the same power law challenges that a place like YouTube and Twitter or just a few make a ton, and almost everybody else makes nothing.
Li Jin 22:12
Yes, that's right. And I think that's a symptom of how discovery works on the internet, which is that it's driven by these algorithmic discovery platforms, the social platforms, and those discovery platforms kind of determine what readers are able to find in terms of writers. So I don't think that's necessarily a challenge with the business model itself, that really with how attention is directed and allocated. But I think mirror is really interesting, because it's opening up this entirely new type of business model and creating business model innovation around writing online.
The second company I was going to mention is called me then they're a platform to create cohort based courses online. So if you're an expert in a certain topic before, you could monetize that through maybe consulting or getting a job in that industry, or writing a book, but it was really hard for you to teach a course to many people, especially if that expertise area is kind of esoteric or niche. And so Maven is giving these experts all of the tools and support to package that into an online cohort based course. And the idea is that a cohort based course can be monetized at a higher price point, it can be much more engaging for the end students as well, they would have a much better experience going through a cohort and experience than just consuming like a recorded video. So it's a better experience all around. And I offered a course on that platform earlier this year teaching about the creator economy two had a great time.
And I think the commonality of these two companies as well as getting to your second question of for founders, like what are kind of the commonalities of companies that find success and the passion economy, what I'm really interested in is a companies that are inviting, like new participants into types of creative work that had been previously inaccessible to people. So they're enfranchising, like a new segment of the population to do some type of work that hadn't really been easy or available to them before.
In the mirror case, that was like writers who aren't publishing frequently in the Maven case, that's experts who didn't really have a way to share that expertise and monetize it with the world. But like, for these companies, and for many others, they're creating the entire toolbox that a person would need to convert, like their skills or their interests or the passions into a product or service that can be easily offered and create a great consumer experience at the end of the day.
James Currier 24:30
So you're taking people from zero to one from I'm not making any money to I'm making some money.
Yes,
It's interesting, because you know, a lot of people make businesses to compete with tools that where people are already making money. In marketplaces, we often see people design marketplaces to try to intermediate or digitize transactions that are already happening. And the big mental breakthrough is to say, can we create something that creates transactions that aren't happening at all because now you have incredibly loyal people to your platform because you've taken them from nothing to something
Li Jin 25:02
Exactly. And I think this is what Clay Christensen would call new market disruption, like you're taking people who previously had not been productive in this way before, and enabling them to participate in this new type of work that hadn't been available. So it's creating a new market where previously the market had been much smaller, didn't used to exist. And for me, personally, I think that's just a lot more exciting as an investor and as a person in this world than just like intermediating every relationship that had already existed.
And I think it's also emblematic of the huge shift that's happening in work in this country. Like, I think we're moving from this world in which like, people just had a job at a company forever to a world in which more people are self employed and pursuing work with greater degrees of autonomy and self direction. And if that's the case, then what you really want to do is enable these new participants to be able to work in new ways, not just intermediating an existing transaction.
James Currier 26:02
Yeah. And I think we started to see that, you know, sort of in the 2000s, with World of Warcraft, where people are getting paid to kill pig and mined gold, and then sell it to people, there's a new job that they'd never been in before. And then we got to see it more as I'm thinking about it with Uber and Airbnb, where you have these assets that you own, yes. And you've basically digitized them by turning them into your profile on Uber or the profile of your home on airbnb.com. You've digitized them. And now people can pay you for them in ways they couldn't do before. Because they can one discover you and to pay you and compare them and all that. And now we've moved on to where we're creating new digital things like, you know, these NFT's where there's actually new assets, these new digital assets that can then be monetized that you can then create or something that you write infrequently, but wonderfully, now you can monetize that. It's interesting to see that evolution.
Li Jin 26:50
Yeah, exactly.
James Currier 26:52
Yeah. I thought about that one. And so what else should these passion economy type products businesses be doing?
Li Jin 26:58
Yeah, I would say another key element that I really look for is founder-market fit. And I know you had this amazing blog post on that topic, which I refer to often, but I think in the passion economy, the end users, the creators, or solopreneurs, or whatever, you want to call that the users of these platforms, they're sitting somewhere between like a consumer and an enterprise.
They're like a micro, SMB. And I think in the early days, the way that you acquire them is like hand holding them, identifying them, talking to them one on one, cultivating their trust, getting them to try this completely new platform. And so it's really important for the founder to have great founder market fit to have like, really deep customer empathy to be like, basically one of them such that they're able to earn the trust of those initial users and to get things going and to get traction on the platform.
I get nervous when you know, someone is building for a new type of work, but just like does not have relationships with the types of people who would be using the platform or connectivity to those communities. Because I think those initial users, whether they're writers or experts, or teachers or whatever, like they're making their decision to use this platform as a huge expression of trust in the founder.
James Currier 28:13
Yeah, it's interesting, who it's coming from does matter a lot now that that's become more transparent. Because of the internet, right?
Li Jin 28:20
Yes, exactly. I think people actually care a lot about this. They don't just think of, you know, the platform as like a company that is off in the distance.
James Currier 28:30
Does it have the functionality I need? Is it fast enough? That's not it? That's part of it.
Li Jin 28:34
Yeah. They care about who they're supporting by using the platform, like who the founders are?
James Currier 28:39
Who am I associating my own brand with?
Li Jin 28:41
Yes, exactly. Who am I building wealth for?
James Currier 28:44
Yeah, that's a little tough, though. Because if you're a founder, and you're not of the right age, or the right gender or the right, you know, group, you might not be suited to win the hearts of the people you hope to win the hearts of that would be a hard thing to swallow.
Yeah, I think that's right. But I think that's no different than, you know, like, there's many other sectors where it's also hard for the wrong type of founder to start a business in that sector. Like it's hard to do enterprise sales if you don't have those relationships, etc.
Yeah, that's really interesting. So finding that really strong product founder fit and getting that right from the beginning, we hear that story about Patreon with jack right, where he was the independent musician, and he was one of the first to do one of these creator, passion economy type platforms, would you call Patreon one of the earlier ones?
Li Jin 29:27
Yeah, I would I think they really paved the way for the passion economy. And I think they've had huge cultural influence in a way that like most people don't even think of or don't remember, which is that I think they gave permission to the entire world to ask for money directly and broke through the sense that everything should be free and to just the monetize through ads.
James Currier 29:49
Yeah, boy, I mean, since the 90s, we'd had so many attempts at micro payments. And those had never worked before and this work because it didn't say pay me for this content or pay me for this thing. It said, pay this human being.
Yes. Support me, if you care about my work. Yeah. And that made it so personal. That's such a positive direction for the internet to let us move, isn't it?
Li Jin 30:14
Yeah, it really is. And I think it's amazing to see there's Patreon pages out there that list various donation levels or patronage levels, and some of them are like hundreds of dollars per month, or 1000s of dollars a month. And I think that's only possible when you move away from, you know, pay me for this piece of content to pay me as a person, like support me as a human being.
James Currier 30:41
I agree. So most people would think that the real definition of happiness would be to do something you love, and the money will follow. Right? This is an old phrase from I don't know, where, and some people say do that, and most other people say, That's crap, that never happens. But we're starting to see that be potentially possible because, like, I gotta say, in the last three years, two years, the proliferation of ways to make money has never been greater, right? There was really no new ways of making money until you know, the late 2000s. And now just got the spike in these NFT's and fungible tokens, non fungible token color tokens and so many layers of new money emerging a new forms of payment and whatnot. And so now, it's going to start to be potentially possible to do what you love, and the money will follow. Do you think that could be a new social contract that our society can have with its people?
Li Jin 31:32
I hope that that's the case, although I acknowledged that perhaps it's a little too overly optimistic. So yeah, I think it's not as simple as that, as everyone can just be happy all the time and make money, I think you have to have true passion.
James Currier 31:49
And do you have to have talent?
Li Jin 31:50
Yeah, you have to have talent, you have to offer something different to the end consumer. Like, I think in the passion economy, every individual creator is trying to offer a product and trying to find product market fit for where the market is their target customer base, and they themselves are the product, just like in the startup world, I don't think every company, I don't think every creator gets there, there's going to be folks that tried to do this, but aren't able to make ends meet and aren't going to be able
James Currier 32:16
or find their niche, they won't be able to find their niche or that they won't have the charisma. And some people are born with it. And some people have less that they're born with and can only go so far in their development.
Li Jin 32:25
Yeah,
James Currier 32:25
There's gonna be some heartbreak around this. Because if I put out a piece of work, and you don't like the work, that's fine, but if I put myself out there, and you don't like me, that feels different.
Li Jin 32:34
Yes, exactly. It's like when you're a founder, and you get rejected for fundraising, and it feels really personal, because that company is an extension of yourself. I think creators go through that on a daily basis.
James Currier 32:47
Yeah. Because it's about their individuality. It's about the unique thing that's going on with them.
Li Jin 32:52
They're putting themselves into their content, their course or newsletter, or whatever it might be.
James Currier 32:57
Yeah. And this thing gets back to this bugaboo that the internet gives us which of these power laws?
Li Jin 33:02
Yeah
James Currier 33:02
Which is that some people are very charismatic, and other people just aren't? Some people are really fast and smart, interesting to listen to. And some people aren't the systems we've had to date has not allowed for there there be a middle class really, you did this great article for the HBR, listing 10 ways we might think about designing systems so that you can have a thicker middle of the power law,
Li Jin 33:24
Right
James Currier 33:25
Where there is some middle class, it might be, you know, percentile 90 to 98, because the top 2% will do fine. But whether it could be the top 30% making an OK living, it's not clear. But I thought you did a great job of thinking, what could we do from a design perspective to help make that with the power laws? So pernicious, right?
Li Jin 33:42
Yeah
James Currier 33:42
The internet just makes it more pernicious. The example I keep using is, you know, 30 years ago, you would want to sell your home in your town, and there were 30 agents, and you really had no information, you just went to the one that was at the PTA, that URL last week. And that person would get their fair share of listings and make their fair share of money and they would put food on the table. Now you can go online and have the 30 agents in your town, you can easily see who the best agent is. And don't you want to use the best agent,
Li Jin 34:07
Right
James Currier 34:08
And so the power law gets steeper in this case, because of the transparency that the internet gives us.
Li Jin 34:13
Yeah.
James Currier 34:14
And that is affecting people everywhere. As they struggle to realize where they are in the power law of life. It feels to me
Li Jin 34:21
I agree
James Currier 34:22
That there's frustration, there's anger, there's upset. I mean, it might be a lot of what we're seeing politically in the United States is just people realizing where they really are and not having the illusion anymore, that they're doing better than they really are.
Li Jin 34:32
Yes, I agree.
James Currier 34:34
And it's painful.
Li Jin 34:34
Yeah. And it relates to that piece about the great online game, because we are now all having to compete with each other in this online arena. And it's no longer the case that you just have to be the local best at something or like even locally, just decent in order to make a living, you know, have to be like one of the best people in the world at a certain niche in order to be successful. Because to your point like now as consumers we can go online and choose the best and do your research and like find the best possible provider for anything. And that means everyone is not the best ends up losing out.
And yeah, that piece that I wrote for HBR on a bunch of different proposals for how we could help to mitigate this. But yeah, I'm not entirely sure if it's like fully like think the cats out of the bag now. And we just aren't going to go back to this world in which you know, we had local monopolies on different types of services, and everyone could make like a decent middle class income just by being okay, that's something like, I think that era is over, for better or worse, and there's going to be beneficiaries of it. And there's going to be people who lose out because of this. And I'm not sure what that means for society and what we should do collectively as a society. Like I think there's been a lot of discussion, which, like we should continue to have about universal basic income, and like, how we can support the folks that maybe just don't have the skill set to be able to succeed
James Currier 35:58
Or to depressed. Yeah, or to actually Yeah, right.
Li Jin 36:01
Yeah, exactly. Or the skills that they once had that were useful, just are no longer the case anymore. I think we should consider those kinds of society wide policies. Yeah.
James Currier 36:12
And it's interesting, I think we also need to differentiate between doing well and feeling like you're doing well, because people might be earning enough to have an okay standard of living. But if they're constantly bombarded with this feeling of inadequacy that the overall internet throws at them right, then despite doing okay, or doing better than they were, then their parents did, they won't feel that way. And that will cause social unrest, and that will cause misery. Why do we want people to have money because it helps them be happier. And if they're just not going to be happy, no matter what that itself, I think, is a challenge in designing systems to help people feel smart, to feel successful, to feel connected to feel loved, or appreciated, or to get some attention to feel like they have somebody listening to them.
I remember this old story of daily strength as a website for health care years ago, raised about 4 million bucks and then died and died because it was like a Craigslist for people to talk about their different health concerns. And the depression and anxiety groups came onto the platform, and they weren't getting enough attention from each other. So they spread out at all the other groups, and then everybody else fled the website. They were desperate for attention. And that's what they wanted. And I get it. I totally get it.
Li Jin 37:16
Yeah, I remember when I used to speak to some of the company CEOs and founders, pre COVID. I remember the sentiment in Silicon Valley, what you probably remember too, was that like, you know, even for like, a really mediocre engineer, you had to pay so much just to be able to recruit talent, because people were local, and you only had this like small pool of talent. And now with remote work. Those are the people who like if you're a mediocre engineer, like there's nothing to stop this founder from hiring someone across the world who's much better engineer is like, Okay, well, maybe they should just get better. Maybe they can take a course by offer by an expert. And just like be better. I don't think that's necessarily like realistic to expect out of everyone. Yeah, so I'm not sure. I'm not sure what the solution is.
James Currier 38:02
Yeah, me neither. So So I got three more quick questions for you. I change the subject a little bit. Let's talk about the media for a second, going back to the attention of it. So you know, you've got a substack you've got this means of creation on your YouTube channel, what's going on behind the scenes there? How you thinking about building your own personal brand? And then how would you advise other founders and other creators to think about their personal brands?
Li Jin 38:23
Yeah, so I have a podcast called means of creation. We also export it as YouTube. I have a newsletter that I write myself, Li's newsletters, what it's called very original. And then I also work with the guys Every which is a media company, a media bundle of different writers to also publish another weekly newsletter called Means of Creation. I think that's pretty much it. I'm obviously on Twitter.
But in terms of like the strategy and my advice to folks, when it comes to brand building, I think it's really important to find creator, creator-content fit or creator-format fit, which is kind of the Creator version of product market fit. It's like what feels natural to you what feels the most authentic and like comes the easiest to you and I think it's really important to find that because otherwise, you're not going to enjoy creating that thing. And brand building in that way.
For me, writing comes really naturally. I love writing, it feels as natural to me as breathing.
James Currier 39:18
And it probably helps you think
Li Jin 39:20
Yeah, and it helps me think it helps me like clarify my own thinking. And I just really enjoy doing it. And so for me, it's just very natural to create a sub stack and to publish that way. But if you had to ask me to brand build on Tick tock, I would absolutely suck at that and be able to get anywhere and to not be able to build a brand at all, whereas that comes very naturally for other people. So I think just identifying what you enjoy creating is the first important thing. And then if you enjoy creating in that format, or that type of content, like you're naturally going to want to do it and do it as a hobby and then you're going to excel at it.
James Currier 39:55
That's great. And web three dot 0 Are we there? And then how would you define it if we are
Li Jin 40:01
Yeah, I think we're getting there. I'm really excited about like web three. And what comes after all of our current centralized platforms and companies? Yeah. So I'm doing a lot of investing in this space. I'm exploring kind of the intersection of web two and web three companies that are trying to build bridges between the two. And are we there yet? I think perhaps like the state of the world that we get to is never going to be like fully one or the other. But there's going to be probably a mix of services that make sense as web two companies and then other companies that make more sense like as completely decentralized services.
James Currier 40:39
And that's really the definition that we're using to apply to web three Dot 0 here. Is this decentralization.
Li Jin 40:44
Yes, exactly. decentralized applications and services that run on the blockchain.
James Currier 40:50
And what do you think people are not seeing clearly about that? I mean, you know, everyone is using words like crypto on blockchain and decentralized and whatnot, you know, are people seeing it clearly or not? Yeah.
Li Jin 41:00
Hmm. I would say like, I think it means different things to different people. And people emphasize like different elements of web three, I think there's a little bit probably like too much emphasis on the trustless nature and also being like uncensorable, I think most people are actually very trusting and don't mind trusting a third party. And I think also, most people probably aren't saying things that would need to be censored or removed from the centralized services. Like, obviously, there's notable exceptions to that. But for the most part, people aren't worried that Twitter is going to de-platform them or like, you know, suspend their account and not allow them to use the platform at all.
I think what's more interesting about web three, and the angle that I would love to explore more is, insofar as it serves as a vector for allowing platform participants to become the owners of the platforms themselves. So as a way of distributing ownership to the broader ecosystem, rather than just a small group of investors and employees of the company.
James Currier 42:01
Yeah, the ownership economy sort of thing, we're gonna have many more ways for people to participate in owning of the real estate, or the companies or the platforms or the art that they're involved with.
Li Jin 42:10
Yeah, exactly. I think that it just makes logical sense. It's kind of the next natural evolution. And I think as we move away from traditional employment, and to this world in which people are utilizing a variety of different tools and services, to create their own businesses, those individuals who are utilizing those platforms and services, they're just as meaningful to making that platform valuable as the employees who are like, you know, doing the engineering full time at that company, like I think of, you know, Patreon, equally being built by all of the creators who decided to use Patreon, especially in the early days, as it was the work of one single company and employees that work there. So I'm really interested in how we can involve all of the platform participants, as co owners and stakeholders in these platforms.
James Currier 43:02
Really interesting. And we're gonna end up seeing the development of some standards and benchmarks around that too, because it's unclear where the line should be drawn, right? I mean, iOS is trying to take 30% of all the revenue on their platform, is that the right numbers? Should it be 10? Should it be 20? Should it be variable, and we still haven't come to the conclusion of that. But that's been pretty stable for about a decade. And it'll be interesting to see what percentage of these entities get shared with the contributors or if it's going to be super variable, along with the power law.
Li Jin 43:28
Yeah, totally.
James Currier 43:29
Well, Li Jin, this is so fun talking with you, pal. And thank you for spending an hour with us. We're so pleased to have you and congratulations on Atelier, and all you've done so far and can't wait to see what's next.
Li Jin 43:39
Thanks so much. It's great to be here. Thanks for having me.
Unknown Speaker 43:45
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