Memmo.me: The Amazon of Talent For the Creator Economy
Hyper-local moat building, creator virality and talent marketplaces
Welcome back to The Innovation Armory! I’m excited to announce that The Innovation Armory has launched a new website. This is in addition to using Substack to manage the newsletter. Check it out below:
https://www.theinnovationarmory.com/
This website will power a new referral program I’ll be launching over the next couple of weeks. I’ll be following up with additional details, but it will work as follows:
Each subscriber will receive a personalized link they can share with friends, colleagues, family members
For each person you share your personal link with who subscribes, you will receive 1 credit towards unlocking some sweet prizes and rewards
This is the current rewards scheme I’m thinking of, but would welcome feedback from you all about what you want to see and win!
I really appreciate all of the support I have gotten to-date from folks to share the newsletter within their networks. I am launching the referral program to actively reward The Innovation Armory’s most loyal subscribers. :)
Today’s piece profiles Memmo.me, a Stockholm-based provider of creator to consumer personalized video messages. Thanks to Gustav Lundberg Torreson, CEO of Memmo.me, for sharing his perspectives for the piece. This is a long post so if your email gets clipped at the bottom make sure to click unclip / visit The Innovation Armory to check out the full read. Based on my interview with Gustav, I breakdown:
The importance of a hyper-local approach to liquidity in driving differentiation in consumer marketplaces
Primary catalysts of creator virality
How digital talent marketplaces are disrupting traditional media value chains
Composable and open-source monetization application opportunities for creators
For more real-time investing insights and meme content you can follow @SamNatbony on Twitter. If you are one of the first three people to share this piece and @ me or DM me the share on Twitter or Linkedin, I’ll ask a question on your behalf to a founder in one of my upcoming pieces. You can share with the link below:
If you’re not already a subscriber you can subscribe below for future updates:
The topic du jour is on emerging infrastructure for the creator economy. With so many tech newsletters writing about this sector, I know what you’re thinking:
This week’s piece profiles a David and Goliath battle between a titan in the OG pre-pandemic creator economy and a formidable foreign rival. Cameo is the creator-to-consumer pre-recorded video messaging platform that you probably used to buy your dad a Bachelor TV shoutout father’s day present (or at least I did). Cameo has already raised $160M+ but is being taken on by a highly differentiated competitor named Memmo.me, based out of Sweden. While Cameo had a head start in planting its flag in the consumer video segment of the creator economy, Memmo.me is building a unique moat that can dismantle its head start and lay the groundwork to create substantial value for the creator economy:
Beyond space monster videos, it’s important to establish the core competencies of creator economy network companies: sourcing, creator talent development and monetization.
Creator networks live and die off of their ability to originate and retain talent. Network growth comes from sourcing and originating new creators and it is critical to maintain a competitive edge in the data and organizational / system design driving sourcing gains. To retain top creators, these platforms need to help these creators grow their audiences or hone their craft through and also help those creators earn money off their passions. Therefore, the software tools and marketplace built around the creator network must be sufficient to generate meaningful ROI in attention or monetization dollars.
To learn more about how Memmo.me approaches these key pillars, I caught up with Memmo.me CEO, Gustav Lundberg Toresson. Please enjoy a snapshot of our conversation below.
A Snapshot of My Conversation with Gustav Lundberg Toresson (CEO of Memmo.me)
SN: What is Memmo.me’s mission and could you talk about the founding story?
GLT: I started my first company when I was 18 in the media space. I’ve always had a really personal fascination with the entertainment industry and celebrity culture overall. We started Memmo.me 1.5 years ago with the vision of connecting famous individuals with their fans and also with SMBs. Our goal is do that through building out multiple products and services that will comprise the Amazon of talent for creators. It started out with an idea I had after attending a wedding in the South of France seeing a video shout out, but not seeing a robust marketplace built out for similar services on the European continent. We are very execution driven and have been able to scale Memmo.me quite quickly. 3 months later we launched at the end of 2019 and now we have been growing on average 45% MoM. We are at over 5,000 creators on the platform. 25% of them make at least one video every week. We are focused on building out both on the creator side and geographically. Memmo.me is probably the largest celebrity platform in Europe.
SN: In the B2C celebrity video segment, how do you differentiate vs. Cameo? Could you talk about the importance of localization in driving your barriers to entry?
GLT: The main differentiator from the outside is that we focus on creators and influencers of all status. We have both famous soccer players but also more importantly, the local musician from the pub down the road. We want to be very relevant for local consumers based on who is famous in their local area, whether it be their geography or their culture. It is a very local business that is about being relevant for the users that are interested in niche creators. We are in Canada, Europe and the UK and each user has a totally different experience depending on the geography they are in. From a team perspective, that is why we have also brought on some of the best talent from couponing, classifieds and food delivery where you win effectively with hyper-localization. We don’t really focus on our competition because the market is so big and there is such an ocean of opportunity. Operationally, we are also focused on launching some different products to help creators monetize.
SN: How does the localization focus operationally impact your creator on-boarding strategy and your go-to-market strategy of recruiting new creators? Do you take a city-by-city vertical approach or a horizontal approach of attacking multiple cities at a time?
GLT: The strategy is dependent on the vertical and the type of creator you are trying to bring in. If you want to bring athletes on board, it makes a lot of sense to do city by city because each city has its own club. There, you build critical mass very locally. In the TikTok vertical, it is very different because of the more global distribution of talent. You definitely need to understand the nuances between local markets, which are very distinct in Europe. On TikTok, you might have a lot of exchange between Norway and Sweden because these are small markets and there is more shared content. But when you look at soccer, there might be more flow between France and Spain due to the nature of soccer leagues. There are verticals on the y-axis that have overlap with geographies on the x-axis and it is important to plot them out one-by-one to really understand the differences. Sometimes it does make a lot of sense to do city-by-city but we look first at creator categories.
SN: As you have built out your brand, how has this creator onboarding strategy changed?
GLT: Now we get a lot of in-bound applications. We have really built up the brand in Europe and even in markets where we aren’t active, we have local famous creators / those with followers that have heard of Memmo.me and submit inbound applications. A lot of these are driven by referrals from top performing creators already on our platform.
SN: As you think about your strategy over the medium-to-long term, what other opportunities are there for creators to monetize and what infrastructure still needs to be developed to build out the Amazon of talent?
GLT: For us, it is all about helping this talent to be able to live off of their passions, whether they are retired football players or TikTokkers who got famous overnight. We are building out infrastructure to make it very simple for these creators to be able to monetize their brands. Very similarly to what we are doing with videos on the D2C side, we are able to connect creators with businesses. We have beta launched our B2B product. Instead of struggling to generate or create impactful content on Twitter or other channels, SMBs can collaborate with local celebrities to get those with reach and impact talking about their product. This creates a cost efficient way for brands to spread awareness for their products or to market for specific initiatives / product drops. We are really excited about that and we have seen great traction since launch. We have seen great adoption because we make the relationship seamless and transactional and remove barriers to connecting with talent such as influencer agencies or other middlemen. For brands that want to be dynamic in their marketing strategies, they can also get the video next day vs. longer lead times that can cause pricing inefficiencies, waste time and risk the initiative going stale. Another initiative coming up that hasn’t been launched yet is 1x1 live calls with celebrities.
The Importance of Hyper-Localization
Memmo.me drives meaningful competitive differentiation by emphasizing hyper-localization in its business model vs. Cameo. This hyper-localization is both geographical in terms of sourcing creators that have deep local roots, but also specialized with regards to very precise, vertical niche preferences. Hyperlocalization has the potential to afford numerous business benefits to Memmo.me:
User Retention Advantage - a hyper-local focus creates a couple of different retention advantages. First, for creator networks, their marketplace retention metrics are transitively an aggregate of the strength of each creator’s connection with their fanbase. Each individual creator has their own unique fan / audience retention. The marketplace (Memmo.me) cares both about its creator and aggregate user retention. However, it’s user retention is effectively the weighted average of each creator’s fan-level retention.
By focusing on hyper-local markets, Memmo.me’s effective user retention has a higher potential ceiling because hyper-local creators have higher fan retention rates. Hyper-local creators have more loyal fanbases that consist of more authentic and genuine relationships with the creators. Often it is because these relationships are more likely to have an offline component and because users have a closer direct personal connection to the creator. These relationships are most likely to harness community effects as I discussed in Beyond Network Effects: The Power of Community. From a dollar retention perspective, hyper-local user cohorts also have a higher willingness to pay to meet their more specific preferences. If you are a fan of EDM DJs with roots in Shoreditch, London, you would probably regularly pay more over time for a personalized engagement with an EDM DJ from Shoreditch vs. a mainstream DJ. Further and more saliently, much churn inherently results from lack of hyper-locality. I would argue many product / market fit issues are reducible to issues over lack of hyper-specificity. The market you are developing in is always reducible to smaller sub-segments. For example, if you build a business in the construction technology industry and your product features specifically relate to materials procurement, you have mediocre product market fit in serving the end-to-end needs of construction contractors across a jobsite and probably have lower retention for contractors trying to use the platform to meet this broader need. However, if you reframe your market as the materials sub-vertical specifically, you may have excellent product market fit and likely higher retention. Putting aside budgetary / financial constraints at the user level, each fan will seek to engage with the creator that most ties into the particular niche preference they hold dearly. User churn broadly results from the company (or creator) being forced to develop their product or content for a broader market / audience, which leads to more generic content that is not precise enough to retain users that have more specific preferences / needs and then seek more bespoke options. Hyper-local creator targeting solves this problem by re-orienting the creator to their optimal audience level of creation so they can focus on their true fans who they have the greatest chance of retaining.
Further, good creator networks take user retention as a given and try to merely aggregate the best creators. Exceptional creator networks drive an outsized advantage by giving creators the tools to improve their own fan retention in a way that is exportable to that creator’s other platforms. The value of that primary platform to the creator then becomes not only the creative earnings originating from said platform, but also includes the incremental exportable earnings a creator is able to achieve across the board through cross-platform improvements in fan engagement.
Niche Liquidity Moat - a hyper-local strategy creates differentiated liquidity that becomes increasingly difficult to replicate as each unique local node is added to the network. The type of customer demand that is met by this liquidity method is stronger and is a totally different approach from broad-based liquidity market making. Some illustrative examples below:
When your customer profile is hyper-local, it is much tougher to match creator talent in a way that more clearly makes the market. For networks that think about high level category interests like generic “pop music”, there are likely multiple high profile artists for whom they would buy a pre-recorded video. Smarter networks like Memmo.me create highly specialized clusters for which the probability of finding the right talent is lower. However, it is precisely that lower sourcing probability that creates the business’ competitive moat as it makes the model harder to replicate. As you stack very specific customer profiles on top of one another to aggregate to a market, Memmo.me’s market view becomes statistically more and more difficult to replicate. See below an illustrative breakdown for a couple of specific creator clusters in London:
Core Competency Flywheel - mapping and constructing the creator network from a hyper-local perspective creatives distinct competitive advantages in the creator core competency framework and drives a flywheel across the three pillars.
a) Sourcing - because the creator communities on a hyper-local platform are highly specific, one can view these communities as composable building blocks that stack on top of one another to aggregate to more general topics and geographies that define the market. More prominent creators higher up in the value chain inspire those lower down to create and often can help recruit even more specific creators to reinforce their own communities. Moreover, specificity expands the definition of creator to include those who previously would not have considered themselves creators and increases the overall size of the sourcing pool.
b) Creator Talent Development - Netflix’s matching algorithm works by recommending content from users who have similar movie / TV media preferences who might come from very different demographics. Global platforms with hyper-local operational models benefit from the ability to connect dots across geographies to match clusters with similar preferences even if one cluster is located in South Korea and one in Argentina. This creates an opportunity to leverage a “Netflix-like” recommendation model to connect like-minded preference clusters and drive audience gains for growing creators.
c) Monetization - the way to improve monetization opportunities for creators is by investing in R&D to generate new creator software tools surrounding the core marketplace. The hyper-local model allows Memmo.me to solicit feedback from creators on bespoke monetization options demanded across geographies. Creators are actively incentivized to give this feedback unlike a traditional software business because they directly gain financial upside from new paths to monetize their own personal brands.
All three of these competencies create a strong flywheel effect. A stronger and more diverse pool of sourced talent brings a more diverse user base and compounds the audience expansion opportunities that fuel talent development initiatives. The more creators are on the platform and the greater audience strength grows, the more demand there is for more diverse monetization opportunities. These new opportunities attract more creators into the flywheel.
Creating Virality (The good kind, not the Covid kind)
Memmo.me’s model harnesses numerous features that I believe enable it to more cost effectively drive towards virality as it builds out its product suite further. What are these structural characteristics that have the potential to supercharge virality?
These creator-consumer networks have three primary virality advantages over other consumer product companies: velocity, stakeholder engagement and proprietary access.
Stakeholder Engagement - First, stakeholder hierarchies in these networks are like hub & spoke models with the creator as the hub and the fans as the spokes. Each power fan though can effectively become a hub in their own right. After Memmo.me acquires each creator, those creators are incentivized to make their fan networks aware of their presence on Memmo.me to drive transaction volumes, which helps Memmo.me reduce its effective customer acquisition costs, as creators become their own evangelists. Second, the C2C video model is very gifting heavy whereby each purchase of a video is inherently not only seen by the buyer, but also by the individual to whom the video is gifted. This category generates brand awareness that benefits from a one-to-many model.
Velocity - if stakeholders are the hubs and spokes of the network, the content (videos in this case) represent the connections between the hubs and spokes. The more content that is created, the more randomness with the way that video is distributed that can ultimately create more connections that ultimately drive awareness of both each hub (creators) and of Memmo.me’s business (network). Unlike other types of media made by creators, these consumer videos are easy to create and can be done without disrupting a creator’s traditional daily routine. This allows creators to make these videos in high frequency which significantly increases the potential touchpoints with consumers to market Memmo.me’s brand. Moreover, because these videos are quick and easy to make, it is easy for creators to “rinse and repeat” this formula to earn income while avoiding burnout from long form content creation on the “creation treadmill”.
Proprietary Marketing Advantage - creator networks with direct access to creator influencers have an unfair marketing advantage by being able to leverage these networks and the consumer data behind their bookings to optimize their own influencer marketing. Many successful businesses sell tools that they themselves use internally in a bespoke manner to gain a competitive advantage. Amazon Web Services (AWS), for example, started as an internal tool for Amazon when it needed to invest in its own IT infrastructure services to support its rapid growth and scale. With regards to influencers and creators, many businesses leverage third party influencer marketing services and increasingly startups are involving big name celebrities in their funding rounds to stir up buzz around a consumer product. Memmo.me has its owned network to use as an internal tool to use for a similar purpose that it can leverage in a very tailored way to customize its marketing message by region and by vertical with the exact right influencer.
Implications for Traditional Talent and Media Ecosystems
In traditional media talent ecosystems like Hollywood movies and TV or in sponsorships, the most famous celebrities make more money in deals because they have greater leverage from being able to point to past precedent about how much value they added to a particular project. Less experienced and less prominent celebrities struggle to make money because they can’t justify a market clearing price for their talent services that will provide a relatively knowable ROI that Hollywood producers can have conviction in. Talent marketplaces like Memmo.me will rewrite the economics for less prominent talent by empowering them to establish and monetize a market clearing price for their services at a micro-level. If a London-based reality TV influencer on Memmo.me charges $50 for a direct-to-consumer video, their value to a traditional media project can be calculated as follows:
Over time each creator talent figure will gauge his / her own demand with the help of Memmo.me to price their video to an efficient market clearing price. There is an observable premium that consumers pay for these videos to be personalized that Memmo.me is in a position to observe across its aggregate dataset. Stripping away this premium gets you to a price for a more public form of media. This normalized price times the forecast reach of that influencer determines the incremental value that influencer could add to a traditional media project or campaign. Memmo.me likely has the ability across its rich, localized dataset to be able to determine how much larger that creator could grow their audience (comparable magnification factor) by considering the preferences of the base they currently reach and how creators tied to similar preferences have performed in other geographies. I believe Memmo.me is in a good position to help Hollywood figure out how to price and source less prominent (but highly niche) creator talent to enhance projects. However, over the long-term, Memmo.me’s talent marketplace model could displace much of the traditionalHollywood value chain.
Take talent agencies, for example. Most talent agencies are primarily middlemen who take extractive rents on talent for placing them with studios. Most earn 10% commission, but almost none are as value-additive as Ari Gold from HBO’s TV Show Entourage:
Seriously, creator economy talent marketplaces can displace these agencies through a combination of better economics to creators and increased monetization opportunities. Talent agents typically have exclusivity agreements with their clients to lock them into subpar economics as the talent / creator grows in popularity. In the 21st century creator economy, the creators have more leverage and I believe platforms like Memmo.me will retain creators not by trying to lock them in with exclusivity arrangement but by delivering a better creator experience by layering on value-added monetization opportunities.
Layers of the Talent Marketplace
While Memmo.me currently monetizes primarily through a creator-to-consumer model (C2Co), it is also experimenting with a creator-to-business (C2B) model. There is a third potential vector of the talent marketplace to be built for creator-to-creator (C2Cr) services. With scarce consumer attention and more creators than ever, lesser known creators may want to leverage the services of more prominent creators to boost their own brand. It is similar to the C2B model, but the business unit is a corporation of one individual, the creator.
Similar to other marketplaces, Memmo.me could proceed with a closed network where it builds captive applications or build an open network on which other businesses can build applications. I believe a composable network where open source applications can be stacked on top of one another will help it better retain creators as a truly free, open source system will generate the most diverse monetization opportunities for creators by harnessing the power of developer creators to build. There are endless examples of the types of applications that could be layered onto this marketplace, but here are a couple of examples across travel, gaming, retail and digital exchanges:
All Innovation Armory publications and the views and opinions expressed at, or through, this site belong solely to the blog owner and do not represent those of people, employers, institutions or organizations that the owner may or may not be associated with in a professional or personal capacity. All liability with respect to the actions taken or not taken based on the contents of this site are hereby expressly disclaimed. These publications are the blog owners’ personal opinions and are not meant to be relied upon as a basis for investment decisions.