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The term “entrepreneur” used to conjure images of traditional small business owners, self-employed at brick-and-mortar stores or inventors of new, world-changing ideas. Now, with millennials and Gen Z leading the charge, entrepreneurs can be anyone from the lifestyle influencer earning money through social media affiliate marketing programs to co-founders of a virtual personal finance clinic.
New business ventures increased during the COVID-19 pandemic, some out of necessity and some out of the opportunity presented by many hours spent at home. The explosion in online creators across social media has reshaped entrepreneurship as we know it. Squarespace’s flagship report, 2023 Outlook: Entrepreneurship and the Creator Class, offers exclusive insight into consumer sentiment about the creator economy and an inside look into how every entrepreneur can use creator strategies to expand their empires.
What defines an entrepreneur?
Traditional entrepreneurs set out with the intent to enter the business world. They often already have a business plan ready for their entrepreneurial venture and watch emerging business trends to understand when to turn their passion project into full-time work.
Creators, on the other hand, start by publishing content on social media platforms or their own websites often without considering metrics that would influence their income. Though they may not consider themselves entrepreneurs at first, the most successful creators discover ways to earn money for the content and value they provide for their audience.
Business owners who consider themselves traditional entrepreneurs can learn a lot from content creators, who operate at the front lines of internet culture and trends. Based on the 2023 Outlook Report, here are the top 5 trends all entrepreneurs should be aware of. Download the full 2023 Outlook Report for access to the complete set of findings.
1. Social media platform algorithms will expand access to niche markets
Most creators and entrepreneurs have a social media presence that helps them reach their target audience. Social media app algorithms, in turn, are growing more attuned to consumers’ unique and niche preferences. Entrepreneurs should focus on the social media platforms where algorithms give them the most advantage.
Squarespace’s 2023 Outlook Report found that among U.S. consumers who spent money on creator content in 2022, 52% of those surveyed said they spent money to support work they consume or value. Entrepreneurs can adopt this creator mindset and create experiences consumers value and feel inclined to pay for.
Many legacy social media companies are now adapting their algorithms to prioritize content over followers and likes. Social media users will start seeing more and more content from outside their traditional feed, which used to be for content from family and friends. This gives entrepreneurs and small businesses another opportunity to reach their audience organically without relying on a follow from a target client or spending on paid social media advertising.
Going forward, entrepreneurs and creators should invest time in understanding where their ideal customers are spending the most time and what social media channels will help drive the most value.
2. New business will come from diverse revenue streams
Becoming a successful creator or entrepreneur is almost like launching and scaling a startup. Keeping a new venture afloat requires consistent revenue. The 2023 Outlook Report suggests that entrepreneurs will need multiple streams of income to turn their passion project into a business.
One way to maintain a steady income stream is to engage with and provide consistent value for your target audience. More traditional entrepreneurs can look to content creators for inspiration about how different content formats can drive engagement and loyalty among audiences.
According to Squarespace’s 2023 Outlook Report, most people in the U.S. who purchase from creators (55%) plan to increase their spending on creator content in 2023. As pandemic-era “creator funds,” or donations aimed at providing creators with a steady income from supporters, are on the decline, entrepreneurs of all kinds should focus on earning customer loyalty through valuable brand experiences online.
Many traditional entrepreneurs employ an e-commerce business model, selling a product online directly to their consumers. There are a few popular ways creators diversify their income streams that traditional entrepreneurs can adopt, including:
Selling services or time
Recurring subscriptions or newsletters
Digital products, such as PDF template resources, and
Community group memberships
A Squarespace website is the easiest way for entrepreneurs to test and explore different sources of income. With expansive e-commerce, scheduling, and digital marketing features, Squarespace makes it easy for entrepreneurs to create and launch different revenue streams from a single system.
3. More consumers and brands will invest in virtual and in-person communities
Everyone is eager to reconnect in the wake of pandemic isolation. The rise in remote work, however, still leaves many feeling disconnected from traditional in-person communities and spaces.
This has led to a rise in virtual communities over the past two years, some entirely online and some with in-person components, where individuals can connect over a shared interest.
Though the 2023 Outlook Report found just 11% of U.S. consumers who purchased or plan to purchase from a creator spent money on a community or group membership, emerging subscription platforms are making it easier for individual creators to monetize exclusive experiences.
Say, for example, a popular chef known for their unique cooking videos on social media notices an uptick in comments asking for recipe write-ups. That chef can create a gated section of their website, such as a Squarespace Member Site, where followers can access exclusive recipe write-ups and private video content with a $5 monthly subscription. They also can expand their community ecosystem by connecting apps that allow for real-time chat between community members or creating special subscriber-only newsletters.
Entrepreneurs looking to build a following and connect members of their audience should investigate these different paths to community creation.
4. Entrepreneurs should invest in disruptive technology with care
Many entrepreneurs want to be early adopters of emerging trends, but it’s best to proceed with caution. Disruptive technology, such as the metaverse and cryptocurrencies, have the potential to expand business opportunities for creators and entrepreneurs, but their volatility in uncertain economic times could have the opposite effect.
The technologies that make up the Web3 internet era, such as non-fungible tokens (NFTs), have the potential to democratize creative ownership through blockchain technology. If a digital artist wants to increase their ownership over their work, for example, they can start creating NFTs that can’t be duplicated to bypass traditional channels for art sales.
Still, despite the promise of NFTs for creators in particular, many consumers are hesitant to spend money on NFTs. Just 11% of U.S. consumers have purchased or plan to purchase an NFT from a creator, according to the 2023 Outlook Report. This reluctance could be due to the volatility of the cryptocurrency market, confusion over the technology itself, or even concerns over NFTs’ energy use and impact on climate change.
Entrepreneurs at any stage should ensure their business has a solid foundation of revenue before investing in emerging technology. As consumer education around Web3 technology grows, so will opportunities for entrepreneurs to expand their offerings.
The metaverse could be a new frontier for bespoke communities
The metaverse is one technological advancement in recent years that could provide a cutting-edge way for entrepreneurs to connect with their audiences and build communities around their brands and content.
Remote work and digital nomadism allow people to live and work from anywhere, but for some companies and communities, chat rooms and video conferencing don’t go far enough to replicate the experience of in-person connection and collaboration.
Legacy tech companies have made significant investments in extended reality (XR) technology that will enable individuals and groups to more closely replicate an in-person environment. As the technology evolves, entrepreneurs and creators will be able to leverage it as a tool to cultivate unique membership-based communities.
5. Venture capital and enterprise business investments will make content creation more accessible
Venture capital and enterprise organizations have invested in many aspects of the creator economy in the last year. This expansion shows that monetizing content has real staying power for larger businesses and entrepreneurs alike.
Many of these financial investments have come through infusions of cash or outright acquisitions of smaller software companies that specialize in creator tools. This influx of cash will make it easier for entrepreneurs in any niche to find tech tools to streamline their creative process and stay ahead of current content trends.
Automation and machine-learning tools are also poised to help entrepreneurs create content more efficiently. A private practice dermatologist, for example, who has a wealth of knowledge to share but doesn’t have the time to start a skincare blog can now leverage AI writing tools to automate the creation of blog content that can expand their reach online. As more of these creator-focused technologies attract funding, savvy entrepreneurs will also experience the benefits.
Entrepreneurs should expand creative horizons next year
The creator economy holds a lot of opportunities for more traditional entrepreneurs. It’s never been easier to become a creator, with many platforms and content formats to explore to reach the right people at the right time.
Any entrepreneur can learn from content creators about how to build community, invest in emerging technology, and expand opportunities for revenue and income.
For even more data and insights into the creator economy and entrepreneurship in 2023, download our flagship white paper report, 2023 Outlook: Entrepreneurship and the Creator Class.