Passion Economy: Will Passions Really Free People Financially?

When gig economy emerged, it brought the revolution of a new dimensional freedom that the workers around the world have always wanted: to work whenever they want, to do whatever they want. The Uber for X wave rippled throughout the globe and showed us how the 9-to-6 bound work life is not our obligation anymore.

But with the passage of time, we witnessed the loopholes in the gig economy dynamics. We saw how the tech giants, the power companies who hired workers on short term for gig works, exploited the workers. The absence of income security, improper and inadequate health security and insurance policies, the lower rates of wage/hour as a result of supply surplus in the labor market of gig workers but the demand shortage in the gig employers : all accumulated to create a rather disappointing and pitiful scenario of how the gig workers were pushing themselves to do extra hours to meet ends. We realized the revolutionary new age that gig economy promised was far from the reality.

Gig economy failed to give the freedom we have all wanted in our work life but it sure did trigger another new scope: passion economy. Blogger and co-founder of Variant Fund Li Jin first brought up this new era of economic dynamic by defining passion economy to be the place where people can monetize their passions and individuality. Passion economy allows people to create tangible products, services, contents, digital media, creative goods or anything they love to do and sell those products or services to their audiences or followers who are all connected by a community that follows a particular niche. The dynamics of passion economy heavily depends on how the entrepreneur- who is dubbed a creator because of creating new things of value- is at the center of a community that is built on one shared common interest or preference or passion.

The structure of passion economy is based on online interaction that is enabled by market based or SaaS powered platforms where a creator can post or share his or her passion-fueled creations and build a dedicated audience who pay for these creations. Some of the successful platforms are Substack which is an online newsletter hub, Podia which monetizes on video courses, Twitch which is one of the leading streaming platforms where mostly game lovers are earning money by interacting with a game loving audience, Spotify which has created ample opportunities for music producers and singers and thus we can name many more. The number of platforms which are utilizing the gaps in services needed for passion economy and bringing solutions for them are increasing day by day. Thus increases the scope for people to get engaged in passion driven financial stability.

The passion economy is showing a huge potential to become the next system of worldwide economy. The COVID-19 pandemic has accelerated the way passion economy is spreading. People in lockdown have discovered that they can work easily from home doing things they love and now most of them are reluctant to return to the traditional work environment. Disciple Media, a reputed software company has tried to give an estimation about the spread of passion economy. According to their studies, passion economy is harboring a $38bn-sized industry only build on SaaS. Of course, if other non-SaaS platforms were also considered, this amount would have been even greater.

There’s no denying that passion economy is spreading fast and wide. It’s creating options for making money in a non-traditional and innovative way that’s creating a professional satisfaction for the people. Yet, the soaring fame of passion economy shouldn’t overwhelm us. Otherwise, we might see a repetition of what we witnessed with the gig economy. Whether passion economy can really unlock the opportunity to financial freedom in the way we want has to be checked by the problems that people face in the passion economy.

This is an era of technology and almost everyone has access to internet and digital device. However, innovative and creative talent is what hasn’t been seen to be equally divided among everyone. Sure, everyone has their own fields where they are better than others, but to be able to create something that has no substitute is sometimes a challenge for even the best of the best. But this is what passion economy requires. To thrive in this economy, one has to be prepped with unending creation of unique contents to present to the audience. This is definitely a challenge.

Passion economy generates income from a community. The size of the community, the dedication of the members determine how much the creator will earn. Again, it is not so easy to create a community or audience even if someone creates extraordinary contents. It takes time. During this period, the creator is left to keep on trying and creating contents to show his or her perseverance and dedication. Even in the platforms where creators are presented to a big audience, it is hard and it takes a while to gather a following audience. This time gap can often discourage the creator to stop pursuing the passion job and heading back to the office.

Even after securing the audience, the challenges don’t end. How well a creator will earn depends on how well the community interactions are. Understanding the need of the community is at core to provide unique solutions to the community demands. Smooth, flexible and spontaneous connection and communication with the community ensures that the community members will stick for a long period bringing in good amount of revenues.

The platforms that are enabling passion economy to happen do pose a threat. We can’t be sure that the exploitation that we saw with the gig workers will not repeat here in the passion economy as well. Platforms already charge a percentage of the revenues the creators get. Although this is necessary, the percentage often can become so high that the creators are in fact left with little of their revenues. Especially for the creators who are new to the platforms, it might become the first strain and hindrance to enjoying a passion-inspired job.

The work insecurity that we saw in gig economy, to a certain extent, is applicable here as well. We’ve already explored the stress and difficulties creators may face in the beginning when they haven’t secured an audience yet. The volatility that’s created by the type of product or service that they sell or how well they manage the community limits the security that comes with the passion economy income setting.

Once we take into consideration the problems and hurdle that lie with the passion economy systems, we realize that it might not be the panacea that we have been looking for to minimize and eliminate the drudgery of our robotic work life. We can never deny the scopes that this new system has opened and the newer ways that this economy will bring to us in the future, but, the passion economy, as it is now, is not sustainable to afford the weight of the work force that is increasing day by day. Since this new economy has already taken off, its loopholes have to be identified immediately and solutions and policies have to be introduced. Only then we can see how passion economy will be the key to our financial freedom.