🤼‍♀️ Collectives in the Creative and Business Worlds

Overlooked #46

Hi, it’s Alexandre from Idinvest. Overlooked is a weekly newsletter about underrated trends in the European tech industry. Today, with Maxime, we are sharing our work to define what is a collective getting our inspiration from French hip-hop’s history.

I'm sure that you have noticed that creators are often collaborating with their peers to work on punctual projects like a Youtube video, a specific featuring on a music album, a Twitch event etc. But some creators are going one step further and are starting to collaborate on a more recurring basis in what could be called collectives. These collectives differ from traditional corporations. Creators are free to leave whenever they want. They also partner with peers who share common values in an horizontal structure. They share with common resources and combine their expertise to work on projects that would have been otherwise impossible. Our western culture is increasingly powered by collectives. Just look at how the top streamers, music artists and youtubers are working in your country. You will discover many collectives.

We believe that collectives are going to expand from the creative world to the business world and that they will make up the next generation of organizations. It's the perfect synthesis, combining the advantages of solo freelancing without losing the main benefits of being in traditional corporations.

I - Collectives' Principles Through the History of French Hip-Hop

The French Hip-Hop culture probably gives one of the most eloquent pictures of the collective concept. As it grew and developed thanks to this kind of entity, we think this is a great way to draw the outline of what a collective can be.

We'll take a closer look at two structuring collectives in the history of the movement — Kourtrajmé (Matthieu Kassovitz, Romain Gavras, Vincent Cassel...) and L'Entourage (Nekfeu, 1995, Nepal...). Before that, here is an attempt to summarize the richness of this movement: 40 years of collective epics.

For Kourtrajmé, it all started in the 1980s with Kim, Romain and Toumani. Three guys shooting videos in their neighborhood of Montfermeil in the suburbs of Paris. Growing up, they started to bond with neighbors, friends of friends, and ended up forming Kourtarjmé - a slang version of "short movie". Together, they paved the way for a generation of talented individuals in the rap world, who were breaking all glass ceilings, as illustrated by Ladj Ly Oscar-nominated movie Les Misérables .

Today and after more than 30 years of activity, Kourtajmé is probably one of the most accurate definition of what a collective can be:

  • Shared values. Kourtajmé was set up around the importance of aesthetics in all its projects, whatever the format, but always without taking things too seriously. Just have a look at their manifesto.

  • A small group of key members with complementary skills and interests. Since the 1990s, Matthieu Kassovitz has been a leading film director (go watch La Haine which revealed Vincent Cassel) and actor, Gavras and Chapiron have directed multiple movies & video clips (including the classic Stress by Justice), Mouloud Achour has become a respected journalist, JR is one of the trendiest photographers in the world, Oxmo Puccino is one of the French rap godfathers... However the Collective now accounts for 100+ members, with unequal involvement.

  • Porous outlines. While Oxmo has his own classics (L'enfant seul,J'ai mal au mic) and has been an active member of Kourtrajmé, he was also part of the Time Bomb collective, also known for giving rise to the career of Booba, one of the most prolific rappers on the French scene. The latter also embodies very well this porosity: Booba was a dancer in La Cliqua collective, then integrated the Beat de Boule collective as a rapper and finally left for Time Bomb after a fight with one of its members.

  • Growing up together through education. AfterLes Misérables, Ladj Ly created l'École Kourtajmé where members of the collective regularly give classes to those who cannot afford traditional cinema schools. This initiative also demonstrates the importance given to make the community grow with the collective: bringing up the new comers.

L'Entourage is a much recent collective. It started at the end of the 2000s, also in the Paris area, and quickly became a springboard for artists like Nekfeu, Alpha Wann or Jazzy Bazz and groups like 1995 or S-Crew. Their path illustrates two other key features of collectives:

  • A drive for independence. Following the success of 1995 and other key members of the collective, many majors tried to sign deals with L'Entourage's artists. Their obsession was to maintain a strong artistic independence, without spoiling their commercial success. That's why they set up their own production structure, while signing a distribution agreement with Universal Music. Even if this type of deal was not new, they were able to leverage their commercial success to set up what would become a market practice in the French urban music industry. Until the early 2010s, "artist contracts” were all-pervasive within labels, who asked exclusivity to rappers and a minimum release of two or three albums. After L'Entourage and combined with the explosion of streaming, newcomers were able to sign more favorable distribution deals, leading to a new definition of independence in the music industry. As Booba used to say, "C'est bandant d'être indépendant".

  • Opportunities to create businesses around. Independence does not mean scrapping business opportunities. Apart from setting up a monetized brand around L'Entourage, Nekfeu's clique gave rise to several companies in and out of the collective, essentially music labels: 1995, S-Crew Records, Don Dada & Panenka Music. A proof that creative collectives can pervade the business world.

Collectives in the Business World

Why now in business?

Traditional companies are under criticism. It's no longer obvious to spend your time at work. People are now seeking alternative organizations in which they have more freedom to manage their time and in which relationships with peers are more horizontal than vertical.

At the first sight, freelancing appears to be the right solution to this problem. As a freelancer, you regain your geographical and time flexibility, you are free to decide what projects you want to work on and you escape from hierarchical organizations that are prevalent in most corporations. But freelancing is not the panacea. There are many disadvantages associated with being a freelancer: (i) you don't have any financial safety, (ii) freelancers feel alone, (iii) freelancers struggle to increase their skill sets.

We believe that collectives will become the prevalent organization in the next two decades as a collective is the most adapted structure to the aspirations of the upcoming generation and is solving most of the pain points associated with being a freelancer.

The current Covid crisis is a tipping point for collectives. It has been a key event for many people to experiment different working modes and to reconsider their career paths. We have also understood that we need social interactions at the core of our lives. Many people are no longer ready to make compromises for their jobs. They want the flexibility offered by freelancing without the related constraints.

Examples and benefits

We have started to gather examples of collective across both the creative and business worlds. It's still a work in progress. Collectives are hard to identify because it's an emerging concept. Organizations don't brand themselves as collectives. Moreover, most examples don't tick all the boxes of our ideal definition of collectives but are sufficiently noteworthy to be listed here. We would love to hear about other examples. Feel free to write us at ade@idinvest.com or maxime.fonsale@essec.edu

In the business world, a collective is the perfect balance between being a solo freelancer and being part of a traditional company in a structure that is trying to keep the advantages of both world:

  • Freedom: you are free to leave the collective anytime you want and have the possibility to decide for each new project whether you want to be involved.

  • Education: you are accessing a common pool of education resources and are benefiting from most experienced people who are able to take you under their wings.

  • Sense of belonging: you are evolving in an horizontal structure with people who share your values and who care about your personal development.

  • Combining professional and personal projects: you remove the frontier between the personal and professional worlds and you decide how you want to allocate you time.

  • Sharing costs and revenues: you have economies of scale when you are working in a collective and you can share revenues generated by projects across members depending on certain allocation rules.

  • Forming a squad of complementary expertise to work on projects: you can combine expertises to work on bigger projects that would not be reachable otherwise.

Finally and from a pure business perspective, collectives turning their purpose into a commercial activity also present appealing characteristics for their clients: price competitiveness, especially versus old-fashioned agencies and consulting firms, a better execution through smoother decision making processes, and a stronger value proposition than a mere sum of freelancers.

Open Questions

  • Collectives have no standard. On decision-making, some are fully horizontal, everyone having his/her say at the same level, while others are semi-horizontal with full-time members operating the structure. On the legal part, some collectives have a dedicated structure enabling them to invoice clients & partners, while others are much more like freelance communities. Finally, when some collectives are very diverse in terms of skills to offer end-to-end services to their clients (e.g. Lookoom), others are super consistent in their membership and value proposition (see Mozza).

  • Collectives don't scale. In most successful collectives, you have an anchor group composed of less than a dozen people who are super engaged. When you compare collectives to other social structures like communities, vertical social networks and social networks, you understand that collectives are trading numbers for engagement. If a collective grows above a certain threshold, it loses its super high degree of engagement and as a consequence its ethos.

  • There is a natural churn associated with the organic dimension of collectives. Collectives are built around shared values which differ from one collective to the other. Nonetheless, they all share freedom as a core principle. It's a flexible organization in which people are free to leave and have the possibility for each new project to opt-in or to opt-out.

  • There is not a pre-defined juridical structure to operate a collective. Everything is a company. Bayes Impact is a non-profit. Some collectives don't have any juridical structure. In the medium term, a legal framework for collectives could make sense but at this stage, we believe that we are still in an experimenting and defining mode.

  • If collectives become the dominant working organization in the next 30 years, we are expecting a new wave of tools to support them. Some startups are already building features in their products or full products dedicated to collectives.

    • Marketplaces and intermediation services. Players from the freelancing industry such as Malt or Comet will surely seize the trend and adapt their products to address the collective opportunity.

    • Business management SaaS, from both players of the freelance industry or newcomers. Here are a couple of examples:

      • Collective.work - an eFounders company - wants to build the go-to solution dedicated to collectives where anyone can join or create a collective and can legally and commercially offer services at scale, in a fully digitized workspace.

      • PandoPooling is a platform to set up and manage income pooling agreements for collectives. All the members will agree to give a small portion of their future earnings into a common pool that will be distributed evenly. It creates a financial tie between all the members. If somebody succeeds, everyone in the collective is benefiting from the upside and if the collective is successful, it can provide a minimum financial security for the members that are temporarily struggling more than others.

      • Stir is a toolbox to help creators manage their businesses including specific features for collectives. Creators are often collaborating on specific projects and Stir gives them a place to track the performance of their projects and share the revenues together.

Thanks to Julia (🦒), Jean and Paul for the feedback! Thanks for reading! See you next week for another issue! 👋 If you want to talk about this topic or want more resources, don’t hesitate to send us an email at ade@idinvest.com and maxime.fonsale@essec.edu.