Side Hustle or Job Replacement? What Platforms Like Poshmark Are Really Providing

Welcome to Issue #13 of the Means of Creation weekly news roundup where we break down the latest news on the passion economy, including the happenings related to platforms, creators, startups, and trends.

Happy Holidays!

Happy holidays everyone! We are taking a couple weeks off from the news roundup after this one. We’ll see you all in the New Year!

This Week’s Interview: Nadia Eghbal

This week we interviewed Nadia Eghbal! Nadia’s work focuses on reputation-based economies that drive content creator and open-source software developer communities. She is currently the Head of Writer Experience at Substack and previously helped build open-source developer experiences (both independently and at GitHub).

Find it as a podcast on Apple Podcasts, Spotify, Overcast, Breaker or wherever you listen to podcasts, or as a video on YouTube here. Or subscribe to the Means of Creation YouTube Channel. On to this week’s news.

The Economic Realities of Poshmark Creators

What Happened?

• Wired recently profiled a number of Poshmark sellers who revealed the hard economic realities of working as a ‘Posher’. 
• Despite the empowering scripting used by the platform, the sheer time and effort that creators have to invest is significant. Successful creators on the platform are working 40 hour weeks and effectively earning $12.50 an hour—or less.

👧 Li’s Take:

• It’s tough to balance the benefits of these platforms (flexibility, entrepreneurship, creativity) with the reality that it is hard work, and not everyone will succeed. 
• As an investor who focused on the Passion Economy, I sometimes get pushback that many creators on these platforms won’t be able to support themselves. It’s true on Poshmark, as well as on other creator platforms like Patreon, Substack, OnlyFans, etc. People love to hear success stories and that’s what companies market (logically and rightly), but success is not a walk in the park.
• I think we need to acknowledge that some of these platforms are designed to be used as side hustles, rather than being full-time ventures. Side hustles are great! You don’t have to put all your eggs in one platform’s basket! It can be one of many things that someone does, and an outlet for expressing one’s style. I think the disillusionment arises from the expectation that it can be one’s full time job, versus the reality of low earnings. 
• In particular, resale is a hard vertical to work in. There’s a limit on how much you can charge for each item, and there’s fixed and marginal costs, so margins are thin. It’s very different from selling a digital good, where you can make something once and sell it infinite times without marginal costs.

👦 Nathan’s Take

• I agree with Li — the resale category is hard. Typically, if a clothing brand makes a hit item, they can make a bunch of that SKU and cover costs for the less popular items. With resale, you can’t really capitalize on your winners. Volume is limited because they are often one of a kind.
• There’s also increased costs to find inventory because you can’t continue buying from the same supplier over and over.
• An interesting test for any passion economy business — What does the base success case look like for a creator? Some businesses are inherently easier or harder for creators to be successful. If you are thinking about joining a platform, it’s important to consider.

David Dobrik’s ‘Hundred Thousand Dollar Puzzle’ grosses $510,000 in 1 Hour

What Happened?

• David Dobrik launched a ‘Hundred Thousand Dollar Puzzle’ which sold 17,000 units in the first hour after release. 
• The puzzles each cost $30 with a total prize pool of $251,125 which will be distributed amongst purchasers who solve it. Majority of them will be paid out amounts between $0.25 to $1, while one of them will win $100,000.

👧 Li’s Take:

• David Dobrik is reinventing the lottery, so it’s no surprise that it’s doing well :). I’d love to see creators applying human desire for variable rewards and excitement to something better, though — perhaps prize-linked savings?

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