Welcome to the Passion Economy

You can make money doing what you love.

Last fall, Li Jin (partner at Andreessen Horowitz) wrote an extremely insightful blog post about how the “passion economy” will transform what we call “work”. In case you haven’t read it, I highly recommend you check it out.

The first generation of digital platforms like Uber, Amazon, Shopify, and marketplaces like UpWork, Fiverr, and TaskRabbit created the “gig economy.” In this world, you don’t have to work full-time. You can sell your time (i.e., by designing a website through Fiverr), mileage (Uber), skill, or physical products.

Now we have a new economy on the horizon. The “passion economy”. Unlike its older brother – “gig economy” – it’s designed for creatives who want to monetize their unique talents and passions (thus, the name).

Your individuality becomes a feature, not a bug. For example, you don’t really care who drives your Uber as long as you get from point A to point B. But you do care a lot about who you subscribe to on Substack. (Which is to say, thank you for choosing me.)

But the “gig economy” isn’t going anywhere. There will still be people who make money by performing one-time tasks, and as more work becomes remote, we now need those people more than ever.

The “passion economy” is growing fast. Nevermind the influencer on Instagram making money from ads, I am talking about creatives who build a direct relationship model with their audience. The highest-paying Substack writer is earning $500,000 per year from their newsletter. On Medium, the highest-earning writers make $100,000 per year. And you can easily make well into $1M from selling online courses on platforms like Podia.

And I think it’s absolutely amazing.

Not only is the distribution model of content is changing – i.e., you don’t have to sell ads to make money, but can instead use Patreon or platforms like Medium, where you’re paid based on the reading time – we also have completely new professions invented from scratch.

Nobody laughs at someone calling themselves a “YouTuber” anymore. For Casey Neistat and hundreds of thousands of other YouTubers, it’s a legitimate career.

Now you can be a “Medium writer.” Or a “Newsletter author.” Or a “podcaster”. An “online course teacher.” A “self-published author.”

And there’s virtually no upside to how much money you can make.

People who become creatives often have some kind of skill, talent, or specific knowledge. But you can also just build a business out of your passion.

Take me, for example. I don’t have any specific talent or skill. Really. But for as long as I remember, I was interested in media and content. When I came to Medium, I immediately started writing about it and publishing into publications like Better Marketing, which got me my initial following. Then I launched this newsletter, wrote an eBook, and recently, started a publication.

I am not making even close the amount of money that I mentioned above, but I am making something. Plus, it’s just a matter of time, audience size, and content quality (which improves with time).

And that’s the best strategy to become successful in the “passion economy”:

  1. Use platforms like Medium to build an audience (you don’t need to have an audience beforehand).

  2. Get curated and publish almost exclusively in existing publications.

  3. Then take that audience away from Medium to a SaaS like Substack to build a more direct relationship with your audience.

Marketplaces allow creators to build an audience initially, while SaaS products allow them to build more direct relationships with their audience.

How To Make Money In The Passion Economy

The first newspapers cost a lot of money. Then somebody figured out that if you sell newspapers at a loss (i.e., for ten cents instead of $1), you can sell more newspapers and make up for the losses through advertising. This transition happened in the 19th century and has been the basis of how media companies – TV, radio, internet media –do business ever since.

All of that is about to change.

Patreon was created by an ex-YouTuber, who struggled to pay the bills after literally having millions of views on his music clips (and getting paid $150/video). He realized that if you allow the audience to support the creator – and get additional, extra, premium content – you can turn art into a business.

Substack – the platform on which I am writing this newsletter – went a similar route: they allow anybody to launch a newsletter for free. And then, once you’ve got an engaged audience, charge them a little money for extra content.

Creators don’t need to rely solely on ad revenue to survive anymore.

100 True Fans

Unlike the “gig economy”, where to make more money, you have to do more (e.g., sell more time, drive more miles, do more work), in the “passion economy”, your goal is to either:

a) maximize audience size;

b) maximize the quality of your product (e.g., newsletter) and audience engagement.

I suggest you read Li’s second post on “100 true fans”, where she argues that you don’t need 1,000, as Kevin Kelly initially suggested.

If you make your offering (online course, book, paid newsletter) transformational enough for a small number of engaged users, you can still make a living.

For example, if you sell 100 courses on Udemy for $1,000 each, you make $100,000 per year.

And I find this idea relaxing.

It now matters less how many followers you’ve got. Chasing the “number” is a thing of the past – of YouTubers/Instagramers/and first-generation of influencers.

The successful influencers of today (and tomorrow) build engaged communities and provide high-quality content consistently and then sell additional (premium) content to people who want more.

The Passion Economy Is Here

All the tools are here. Everything you need to make a living doing what you love is there. Now it’s up to you to research, figure out what you’d like to do, and make it happen.

Thank you for reading. Go make something meaningful.

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In case you didn’t know, I also have a book out – Blog Is a Platform: What Blogging Can Do For You and Your CareerA lot of my readers found it valuable.

If you have any questions, comments or just want to chat, just drop me an email at faldin.sergey@gmail.com

We also have a brand new Medium publication – The Honest Creative – where you can share your personal stories and insights about content, blogging, art, and living a creative life. Shoot me an email in case you want to become a contributor!