The birth of a new market
The rise of the Passion Economy brings a new category that summarizes the underlying operating system - what we are dubbing passionware.
Software is defined as “the programs and other operating information used by a computer.”
Hardware as “tools, machinery, and other durable equipment”
Passionware: tools enabling the creation of products and services stemming from people’s own creativity.
Passionware represents the new wave of tools enabling anyone to be an entrepreneur, run a business to earn a living and, at the same time, chase one’s passions. Passionware enables passion plays to become real businesses emerge in various forms, including:
Do what you love — and get paid directly. Join a marketplace and sell your wares and knowledge. Thumbtack for contractors, Etsy for artisans, Substack for writers, Udemy and Outschool for teachers.
Create your own business and scale it. Small businesses can now easily create a store on Shopify, join Amazon Marketplace, build a website with Wix, and outsource to cloud services the marketing, financial and practically all other operating functions
As outlined in our post on The End of the Workforce Era & The Rise of the Passion Economy, the Passion Economy will both provide a safety net undergirding the end to the traditional workforce era for older generations as well a viable alternative for millennials considering how to earn a living.
Since I wrote that blog a few weeks ago, my friend who is a journalist writing as a contractor for a leading newspaper was the victim of corporate cost cutting - despite being one of its most popular with over 100,000 followers. He was bummed for 2 days and then discovered and dove into Substack. Within a few weeks, he has formulated a plan to launch a branded newsletter business on the back of the Substack infrastructure, providing a platform for his followers to pay him a monthly fee to receive similar content plus much more (interactive sessions, direct content and more) - a.k.a cut the middle man and run a business based on passion and earn even more money. But he can go one step further - hire people to write and provide even more content — a.k.a. actually own his own business!
The Passion Economy is here to stay — for scalable growth it requires an operating system revolving around business infrastructure (operate a passion-play business), marketplaces (a place for customers to find your passion business) and platforms/economies that combine business infrastructure with discovery mechanisms.
Marketplaces are where individuals can emphasize their own individuality, customize their products and directly discover and engage with their users
Passionware Infrastructure enables individuals to run a business, with specialized cloud-based services that cover a wide range of business operations, from building a website or running an e-commerce business, to promoting and marketing, managing and communicating with users, collecting payments and financing operations
Platforms are at their intersection, combining “running a business” with discovery mechanisms found in marketplaces. Amazon is an extreme example where you can fulfill practically all functions (Marketplace, AWS, Fulfillment by Amazon, etc) —- but be careful as it also competes! Social media sites enable one to be an influencer and earn money for that passion business directly - though just cents on the dollar due to ad-based business model. Patreon is more direct, providing the ecosystem for new artists and bloggers to charge customers directly, with some discovery element.
Shameless BOV plug alert — Kre8.TV is a place to “turn yourself into a digital business” around content creation. It combines a place to run your business (“Shopify for Content Creation”) with discovery (“Netflix for serious content”).
We expect more of these independent platforms emerging to drive both sides of the passion-based business, without the potential competitive tensions inherent in the tech giants.
The above picture depicts these three components of the passionware ecosystem, and reflects the rapidly increasing role Israeli startups are playing in the passionware market. Israel is certainly well-known for deep tech in cyber, business solutions and artificial intelligence and more. But Israeli founders have also been increasingly active in leveraging innovative ideas, technologies — combined with creative approaches and business models - to build global brands around B2C and Digital SMB and now, passionware!
A passion business can be fully operated on top of just Israeli start-ups - build a website on Wix, create a logo with TailorBrands, create a video and promote with Promo.com, outsource important activities from (passion-based) freelancers with Fiverr, collect payments with Payoneer, make payments to vendors with Melio, measure profitability with Become, and get funded by Fundbox. And judging from the deal flow we are seeing, this is only the beginning.
Benson Oak Ventures will soon be releasing our first PassionWare Landscape outlining the full array of Israeli start-ups in the passionware space - we believe the sheer number and scale will surprise you. Stay tuned.