Customers are a brands’ greatest asset, and soon it will be necessary to reward them – financially or otherwise. This is the conviction of the American investor Sari Azut and several other pioneers of this new participatory economy. Interview.
What if the web economy reinvents itself? This is the belief of some of the pioneers. In their opinion, a new era is dawning based on a more equitable distribution of wealth. In this way, creators as well as brands will learn to share value creation with their community of followers. Customers will no longer be mere consumers, they will invest in brands and communities they like and expect to be rewarded.
The move is already attracting interest from American investors. Sari Azut, investor at Level Ventures and author of the respected weekly newsletter Check Your Pulse, offers a new definition of the participatory economy. This new participatory economy is still in its infancy, but in his eyes represents new life for the tech sector. And not only.
You are talking about the emergence of new economic models on the Internet, which you call the “participatory economy.” Can you define this concept?
SARI AZOUT : The economy of participation is a logical extension of the platform economy à la Uber and even the economy of creators à la Patreon, Substack or OnlyFans. At Uber, work becomes a commodity, and the platform captures most of the value generated by drivers. The principle is the same on social media, where the platform captures most of the value generated by those who create the content. The economy of creators wanted to fix this by allowing artists and creators to create subscription systems and therefore regain some power and establish a direct relationship with their community. The problem with this model is that fans don’t have the ability to own what they help create. The value they bring to the community goes unrequited. Gold, fans and community members – Authors’ greatest financial legacyjust like drivers are Uber’s biggest financial asset. Where platforms have allowed creators to create an audience, a community, a unidirectional distribution model, then the participatory economy allows for a more universal way of sharing the values created by that community.
Does this mean that every consumer becomes an investor?
HER A: The participation I’m talking about can be expressed in different ways. One is to first make a financial contribution and then receive the financial reward associated with that contribution. But the consumer can also participate in the creation of a product or service; think about Roblox for example. This popular British teen video game allows players to create their own game units, much like LEGOs. And creators are paid for their work. For each content uploaded, the platform pays a virtual currency called “Robux”. In other cases, it is a service that democratizes the network of influence. For example, Robinhood, which allows anyone to invest in the stock market simply by using an app on their smartphone.
Are investors particularly interested in these new models?
HER : The topic is of interest to several investment funds. The Variant Fund, created by Jesse Walden (formerly Andreessen Horowitz, Silicon Valley Historical Foundation, editor’s note), is spearheading this movement in 2020. Recent fundraisers in this emerging sector include Braintrust, which was funded in the amount of $ 18 million. it a platform that brings together freelancers and companies… The peculiarity is that Braintrust does not take commission from the salary of self-employed. On the other hand, if they invite new talent or potential employers to the platform, freelancers are rewarded with Btrust, a cryptocurrency that gives them some power to make decisions regarding platform development.
Some creators and entrepreneurs are launching their own cryptocurrencies – social tokens – precisely to attract and then reward their community. Do you think this model can be democratized?
HER : I think we are at the beginning of the development of these cryptocurrency-based networks. Model social tokens is promising and will provide an opportunity for companies and creators to share their success with their fans and customers. However, this is still very experimental and the user experience of the apps that allow you to create and invest in cryptocurrencies leaves a lot to be desired. As with all technologies, as we move from the development phase to the application phase, we will begin to see applications that are more user-friendly and easier to access.
What other models of participatory economy are you particularly interested in?
HER : Participatory economics is something that all businesses should embrace. Just like cloud became Main streamand that mobile services have become mainstream have a strategy for give more power to your clients will soon become fundamental. This strategy will take many different forms from one business to another. In cosmetics, there is an example of Arfa, a brand that creates its products with its community, to which it pays 5% of the profits. In entertainment, the Ficto platform allows viewers to choose their own storytelling.
In your newsletter, you write that this new participatory economy fascinates you because it represents hope, “a twist on the post-apocalyptic headlines about the future of technology.” Can you explain this feeling?
HER : The concept of technology has changed a lot in recent years. And the tone becomes more and more hopeless and pessimistic. Economic inequality, decades of wealth amassed by centralized platforms, social media that digitally evaluated self-esteem … the evil of technology is great. But I think optimism – the belief that we can make things better – is a necessary precondition for action. And I am convinced that cryptocurrencies promise a sustainable distribution of wealth, capital and property among the majority of the population.
This article appeared in No. 26 of the magazine de DNA. To get your copy, it’s here!