16 key indicators for measuring “enthusiastic economy” startup companies

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Editor’s note: A16Z, a well-known venture capital firm, believes that Passion Economy is a new way of working and is becoming more and more popular. So what is “enthusiastic economy”? Generally speaking, creators produce certain content and products through their own enthusiasm and preferences, and fans pay for their output. Such economic models are not unfamiliar in China, such as paid courses produced by some lecturers on the “get” platform, live bloggers, etc. . A16Z’s investment partner, Li Jin, has conducted in-depth research on passionate economy and such startups. “Passionate economy” and the future of work “article, she wrote a blog post 16 Key Metrics for the Passion Economy “, from the perspective of investors, the article has conducted a more in-depth analysis of various measures of enthusiastic economic startups , the following enjoy:

Passionate economy is growing day by day. From authors on paid newsletter platform Substack to designers on Pietra, more and more people are using digital platforms to realize their unique skills. A study of nine digital platforms, including Etsy, YouTube, and Twitch, showed that approximately 17 million Americans earned nearly $ 6 billion in revenue through their independent creations in 2017.

If you are a creator, the indicators to determine your success on the platform are relatively simple, such as the number of fans, income or subscriptions. But if you are creating a startup and want to create a platform for people to use it to train virtual courses, create online communities, or get rewards for creative work, how do you judge the success of such companies? / p>

For startups monetizing through advertising, the most important metrics are scale and user data (registration volume, frequency of visits, and length of visits). The better these data, the better it is for advertising. But when creators ’income is rewarded through fans rather than through advertising or sponsorship, the metrics are different.

Each platform is different, so for entrepreneurial companiesAs far as the company is concerned, there is no comprehensive and universal indicator. However, this list below can be used as a reference to help startups understand their business performance and company health.

The measurement indicators for enthusiastic economic startups are as follows:

1. Success indicators

2. Revenue indicator

3. Participation Indicators

4. Growth indicators

5. Community indicators

Success indicators

The success metric is a measure of whether a creator has gained value from the platform. For enthusiastic economic startups, this is linked to income.

1. Conversion rate of free fans to paying users

Passionate and economical creators often use free publishing platforms such as Facebook, Instagram, YouTube or free podcasts and newsletters to attract fans, and then convert some free users into paying users. There are platforms that can turn fans into revenue, such as paid course startups Kajabi, Teachable, and Podia, membership platforms Patreon and Buy Me A Coffee, community platforms Mighty Networks, and more.

Measuring the conversion rate from free users to purchasers or subscribers, you can judge the effectiveness of the platform for creators to turn their fans into paying users. For its part, this indicator can only reflect part of the situation-no matter how high or low the indicator is, it may not reflect the health of the business. Some creators may want to pay a small percentage of fans at a higher price, while some creators want to pay the majority of fans at a lower price.

2. The number of creators with sales performance (total and number in a certain period)

The total number of creators with sales performance is an indicator of the health of the entire platform. In addition, this metric should be measured over a specific period of time, such as the number of creators with sales performance in a week or month.

Most enthusiastic economic platforms let creators decide for themselves whether to charge users. For example, authors of the Substack platform can choose to let users receive content or subscribe for free. The business models of most enthusiastic economic platforms are to draw a certain percentage of the commission from the creator’s income, or to charge a SaaS fee, so it is important to understand how many creators actually earn income. At the same time, earning creators will become more sticky to the platform because they gain tangible value. Finally, another indicator is the time it takes to first close a deal-the shorter the creator ’s time to complete the first transaction, the more likely it is that the platform will feelThe value is high, so it continues to be used.

3. The number of creators who have reached a certain amount of revenue on the platform

Measuring the number of creators with more than a certain amount of revenue on the platform is a way to evaluate the importance of the platform as a source of revenue. Although the threshold for creator income varies by platform and job type (the income I have seen ranges from $ 10,000 to $ 100,000 per year), for creators, this amount should be a considerable amount of income . After all, the goal of the Passionate Economic Platform is to enable individuals to realize their creativity and skills, and to measure the number of creators whose annual income exceeds a certain amount, this goal can be quantified.

A KPI for Patreon is “1K Creators”, which means that the number of creators who can earn at least $ 1,000 per month on the Patreon platform. This is also one of the indicators Amazon uses to measure the success of third-party market sellers.

“Entrepreneurs and small business owners have succeeded on Amazon-half of the products purchased by Amazon customers come from them. In 2017, more than 140,000 SMEs sold more than 10 on Amazon. Ten Thousand Dollars .—— Peter Faricy, Former Vice President of Amazon Marketing

Income indicator

Revenue metrics can help startups understand and predict the amount of user demand for products sold by creators.

4. Total transaction amount (GTV) or total subscription amount (GSV)

This indicator refers to the total transaction volume received by the platform system (commonly known as the total amount of commodity transactions, or GMV), and is used to measure the total demand of users.

If the platform’s business model is to collect payment fees or other fees, GTV is also an important factor in measuring platform revenue. For example, Shopify’s main source of profit is not SaaS, but rather revenue through Shopify payments. Similarly, Teachable’s payments business has grown to account for one-third of the company’s revenue.

5. Monthly recurring income (MRR) and annual recurring income (ARR)

In a passionate economy, two main business models are common: SaaS or revenue sharing (GTV) with creators.

For platforms that make money through SaaS, what are the company’s MRR and ARR? When judging the business model of SaaS, there are many important sub-indicators to consider, such as New MRR Revenue from existing), Expansion MRR (regular revenue from existing customer renewal), ContractionMRR (profit tightening due to customer downgrade) and Churned MRR (profit loss due to non-renewal), we recommend that SaaS companies serving creators also track these metrics.

6. Average selling price (ASP)

ASP determines whether a creator needs 1,000 or 100 real followers.

In 2017, creators on the Patreon platform received an average monthly payment of $ 12 from fans. The smaller the amount, the creator needs more fans to get a considerable income; on the other hand, the unit price is lower and the creator needs to pay less effort and energy. In contrast, higher ASP creators can rely on fewer fans to get the same income, but this also requires creators to provide more valuable products or services to justify the price. Some creators on Patreon charge higher fees-for example, the humorous podcast “This Might Get Weird” has set a price of $ 500, which includes quarterly personal tutoring sessions.

7. Proportion of creators ’revenue on this platform

Today, the essence of a passionate economy is that platforms are becoming more fragmented, and creators ’incomes are becoming more fragmented. Creators often earn a variety of income from different platforms. They may use vertical social platforms for marketing, distribution, and advertising revenue, or by receiving rewards from another platform, or another revenue through paid courses and personalized videos.

Although it is difficult to evaluate the income of creators on multiple different platforms, you can investigate the source of creators ’income and understand the proportion of the income that creators get on your platform, so that Determine how important your platform is in generating revenue for creators.

8. Revenue retention (creator and consumer)

This indicator also draws on the practice of the SaaS industry: among users who bought products, how does the 6th or 12th month’s spending compare to the 1st month? Over time, Are users spending more money?

In terms of creators, what does GMV retention mean? Ideally, you would like to see creators make more money on your platform and become more successful and active.

Participation Index

Like enthusiasm platforms, enthusiastic economic platforms should also pay attention to participation indicators, but the focus is different: participation is the main indicator of whether users have a strong willingness to pay, and it is also a measure of whether creators are right.The main indicator of platform stickiness.

9. Fan engagement

User engagement with content is a major indicator of subscription retention. For example, the average open rate for newsletters across industries by Newletter is 21%. The average completion rate of large open online courses (MOOCs) is 5% -15%. For this type of paid product, fans are paying directly to the creator, and ideally, participation should be higher.

10. Fan loyalty and retention

Fan support is divided into many types: it may be a lifetime customer, or it may only pay for a specified time or a certain product. There will always be a loss of fans, sometimes the fans decide to cancel the subscription, and sometimes the creators decide to stop the service. Even the best subscription business will lose fans. Let’s take a look at the data. According to the analysis of the data from the analysis platform Second Measure, about two-thirds of Netflix’s monthly paying users will continue to subscribe after 12 months after the first registration. On the Hulu platform, 53% of users will continue to use it after 12 months of registration.

It is important to focus on user churn. The reason for user churn may be that creators do not create content as often as subscribers expect. If the user churn rate is high, the platform can provide creators with guidance on best practices, or the creator can adjust the product itself to generate continuous value, not one-time value.

11. Creator retention and loss

Creator retention and sales on the platform is also one of the important indicators. According to the different working methods of the platform, the loss of creators mainly means that the creators close the paid products on the platform, are inactive, or leave the platform completely.

The reasons for the loss of creators should be analyzed next. Is the creator turning to a different SaaS platform? Is this new platform more complete or less expensive? Is the creator not making money?

Growth indicator

Many enthusiastic economic platforms acquire customers through creators who bring their own fans. Through the growth indicators, we can see that the platform uses this method to obtain customers, and that new creators bring user growth, which in turn brings more creators’ flywheel effect.

12. Flywheel: the proportion of fans converted to creators, the proportion of old creators bringing new creators, the proportion of old fans bringing new fans

Successful creator platforms often have a powerful internal growth engine. Its main form is: First, fans discovered the platform and became customers.After registering as a creator. Old creators may also bring new ones, and many platforms encourage creators to make internal recommendations. In 2016, Patreon’s report showed that 55% of creators learned about Patreon through another creator, and some followed the platform on social media.

13. Affinity and value of creators

For any new passionate economic platform, it is necessary to find the creators who are most likely to successfully monetize their fans. This indicator does not measure the health of the platform itself, but it can serve as an important signal to help the platform determine which creators should be targeted and provide support. It’s about engagement and creator affinity, not just fan numbers. For example, if there are two creators, one is a creator who offers fitness or diet courses, and one is a celebrity with a large number of fans but low fan engagement, then the former is more likely to convert fans to paid course users than the latter. The probability is much higher.

In the media industry, the Financial Times took the lead in adopting a measure called RFV, which judges users with high engagement based on the reader ’s latest visit time, frequency of visits, and number of readings The number, not just the number of readers.

14. Acquisition costs and channels for creators and users

What is the cost of acquiring creators and users? This indicator can be used to understand the scalability and efficiency of different customer acquisition channels.

For platforms, the first few hundred creators are usually obtained by doing something of a small scale, such as attending a conference or party. Later, you may need to find creators through other customer acquisition channels, such as paid advertising, content marketing, and affiliate marketing.

About customer acquisition: Some platforms, especially transaction platforms, are responsible for customer acquisition on the demand side, and many creator SaaS tools require creators to develop their own users. If the creators on the platform have a huge fan base, the cost of acquiring customers will be lower or no cost. However, in our experience, even creators with a large free fan base may not be easily converted into paying users.

Community indicators

The following metrics apply to platforms with social networking features for fans. Social functions enhance user stickiness. By communicating and connecting with like-minded people, users can get more value after purchasing products.

15. Interactions among users

Except for paid content, what is the degree of interaction between users? Although there is currently no universal method to measure it, you can refer to it.Consider the indicators: user engagement (comments, likes, friend relationships), the proportion of content contributed by the user in the community, and content contributed by the creator, and so on.

16. Network effects

I have written a blog on quantifying network effects. In the creator world, there are several types of network effects. For a trading platform where new creators can be found, network effects can be used to determine whether an activity or transaction comes from the platform itself or outside the platform.

For socially enabled platforms, measure active groups. Generally, users become more active (and get more value from the community) when more fans participate.


Passionate Economics aims to help creative individuals realize their unique skills and experience new forms of work. These indicators can be used to measure the effectiveness and success of a platform. By analyzing these key indicators, startups can provide value to the creators of the platform and, in turn, create value for users.

Translator: Zhifang