On the Undeniable Influence of Black, Latino, Asians on Consumer Tech
& Why Crypto Might be the Answer to POC’s Creator’s Tech Problems
People of color over index as adopters of most social media platforms. Just look at Twitter, where (as of 2018) of the 67 million users on Twitter, 28% were Black, according to Nielson (compared to Black people accounting for 14% of the US population). By these numbers alone, Black Twitter has been incredibly important to Twitter’s success, even tweeting 50% more frequently. Hispanics are 38% more likely to use TikTok. In Vines’ early days (2015) — 31% of Black teens said they used the app compared to 22% white. Instagram also sees higher usage from people of color: 45% of Latinos use daily, 43% of Asians, and 38% of Blacks, compared to 35% total daily usage.
In fact these stats are so pronounced that there is only one major social media platform where people of color do not over index: Pinterest. Women and LGBTQ+ are also overrepresented as users of social media. The only platform where women do not over index? YouTube (men and women are tied as LinkedIn users).
This outsized early adoption and high-engagement trend is so well known that Clubhouse famously courted black, latino and asian influencers leading some to wonder if their high valuation was partially due to their use. Others like CNBC said black users helped save the app from being a drab vc product.
Vine was another consumer tech product whose rise to fame caused writers at Mashable, Wired and Mic to note that it was “black vine stars [who] altered the way the world sees and speaks.” One example of this is the popularization of the word “fleek” which rose to fame after Chicago teen Kayla Newman posted a Vine on June 21, 2014 saying the word. Her video’s massive success propelled the word into mainstream culture.
Consumer tech products have enabled pop culture trends to spread into mainstream culture faster than ever before. Language that started in communities of color expanded into popular vernacular through tech products. Who can forget when words like bling, trippin, lit, swag, boujiee, dough, fleek, vibe, bomb, papi, woke and more found their way into mainstream America (and often their meaning changed as they went mainstream)? Social media tech helped them spread like wildfire.
So when people say women and people of color drive the cultural conversation on social platforms in America, they’re not speaking in hyperbole. They’re referencing facts. My partner Jeremy Liew has been saying this for years.
So, why is this? Where does this penchant for being in the thick of social content, sharing, and networking come from? First, you must understand that social media sites are largely entertainment platforms. Unlike traditional entertainment (movies, music, plays), social media entertains by making your social network (friends) and your aspirational network (influencers) the directors of your entertainment experience.
It’s no surprise that the entertainment industry, an industry where Black people have historically had relatively stronger representation, is very closely tied to social media platforms. Black people were historically over-represented in entertainment because it was one of the only industries where Black people had consistent job opportunities the last 100 years. Most other industries and education institutions remained segregated until ~50 years ago. So let’s call that an accumulating advantage. Today, this over-representation continues: Drake was the most streamed artist of the decade and Bad Bunny the most streamed of 2021. Other communities are newer to the US but share in seeing their cultural foods, words, and jokes go mainstream.
On Influence without Ownership
Despite over indexing on social entertainment platforms, the ownership and leadership of these platforms is not reflective of its user base. A constant refrain in communities of colors is how to become not just creators, but owners.
The ongoing public celebration of the creator and culture economy often ignores a dark reality creators face: bereft of equity stakes, they are one algorithm change away from losing their livelihood. A NYTimes article from earlier this year chronicled the stress and burnout creators are experiencing knowing they don’t own their fame.
So we must ask ourselves a broader question, one that traverses all creators not just those of color: how should social media platforms reward the creators who helped give them relevance?
As an early stage consumer VC, I am often asked this question at the earliest stages. Sometimes more socially conscious founders ask it from the lens of knowing their cap table will likely not reflect the diversity of their early adopters (women and people of color). I absolutely love this question and I have a few ideas.
How to Build Wealth with, not on the Backs of, your Creators:
- Launch a crowd-funded campaign: Sites like Kickstarter, Republic, Angelist all make this possible and with limits newly increased from ~$1M to $5M, this is serious dough.
- Adopt diversity riders such as the CapTable Coalition or work with funds like Base 10’s Opportunity Fund if you want to benefit colleges that spawn creators.
- Setup Creator Funds: Pinterest, Tiktok, and Snapchat all have creator programs but they are more akin to stimulus programs, paying creators to build on their platform. It’s a good step but I’d like to see them take it a bit further and set aside a percentage of equity as Outschool* and Airbnb have.
- Adopt web3 community owned models like Friends with Benefits, Crypto, Culture and Society, and others that reward creators as owners through crypto-backed and blockchain based solutions
The hardest challenge in getting creators, the people of color driving the cultural conversation on new social media platforms, to become owners, is not tactical. I’ve listed several accessible ideas above. The biggest challenge? Winning the public mindshare of C-suite executives and founders on this topic.
Similar to the discussion on diversity, many leaders unfortunately think this is solely a “feel-good,” “charity” idea. CEOs often put their foot in their mouths setting up false dichotomies about needing to focus on business performance as an argument for why they can’t devote resources. The evidence suggests there’s nothing charitable about this.
Studies have shown that becoming owners actually drives consumers to spend even more on a platform. In fact the week after becoming owners, spending jumped by 40% by individuals at brands. Social media sites could use these insights to drive engagement and spend. Making creators equity holders ensures the platform and the creators win together.
It might even be an avenue that allows founders / C-suite to eschew institutional investors altogether. Just look at what AMC did with their retail investors: they released AMC Connect to reward investor-consumers. The CEO Adam Aron famously said “I work for them” when referring to his retail investors. The 3.2M individual investors own on average 140 shares each and represent 80% of the market cap.
What’s next: crypto & entrepreneurship
We’ve established that POCs are undeniable drivers of social media and discussed ways to reward them for that. The next frontier is ownership. I see 2 primary ways the future will unfold to allow more people of color to become owners: crypto and entrepreneurship.
On crypto, I’ve been thrilled and not at all surprised to see people of color people over index as crypto holders with 44% of crypto holders being people of color. The promise of decentralized blockchains to automatically verify ownership is appealing — creators can contribute knowing their efforts tie directly to increased value of the platform’s token and can’t be ripped off. There’s also the sense in communities of color that crypto is attractive because its non-sovereign, given minority have had trust issues with governments. So if cyrpto communities want to court influencers of color, they’ll have to give them a share in their project in exchange for posting. Unlike cash, the value of the creator’s token increases with the success of their efforts.We’ve seen celebrities wield their influence to create enormous Black and Latino led consumer businesses, from Dr. Dre’s Beats to Dwyane Johnson’s Teremana Tequila to Dr. Dre’s Beats to Rihanna’s Fenty to Jessica Alba’s Honest Company*.
On entrepreneurship, we’ve seen celebrities wield their influence to create enormous Black and Latino led consumer businesses, from Dr. Dre’s Beats to Dwyane Johnson’s Teremana Tequila to Dr. Dre’s Beats to Rihanna’s Fenty to Jessica Alba’s Honest Company*.
During the pandemic we continued to see an explosion of women and people of color starting businesses. As I pointed out in 2019, the fastest growing group of entrepreneurs were already Latinas and Black women. These entrepreneurs are full steam ahead, no brakes.
I’ve been excited to watch a number of founders go on to do just that. From Tony’s Marine Snow to Chamillionaire’s Convoz to Brittany’s ShopLatinx to Naj’s Ethel’s Club to Howard’s Locker Room, to Sarina’s Riya Colletive to Morgan and Aaron’s Blavity to Snigdha’s Juggernaut to Tobias’ Trading TV, to Josh’s Heart to Heart, and more, the next generation is coming.
I can’t wait to see what they build.
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