What is the Passion Economy and What are the Rules?

This post will explain what is the Passion Economy and why so many people are pivoting their careers and entering into this entrepreneurial world.

People are pivoting out of their corporate careers and becoming entrepreneurs. Or experimenting with a new business through a side hustle or making passive income from their home or anywhere where there is Wifi. 

People changing their careers is nothing new, but the transition from employee to business owner is on the rise. All thanks to the Passion Economy. 

People can monetize their unique take on a subject, hobby, or activity by using their smartphone or laptop and with their choice of the wide range of distribution of their content online. This low barrier of entry into this entrepreneurial world is what makes being a contributor to the passion economy so appealing. 

But, this type of business is not made for everyone. There are fundamental rules that apply to this economy, according to Adam Davidson (follow him on Twitter), author of The Passion Economy.

I list Adam Davidson’s 8 rules for the Passion Economy with a quick explanation of each rule. Find out if you can see your business being a part of this new type of economy. 

1.  Pursue Intimacy at Scale

To say you are a bit obsessed with your passion may sound dramatic, but isn’t a false statement either. Your unique take on a hobby, activity, or subject matter doesn’t only spark joy for you but attracts a subset of people who are equally as passionate. This creates an instant bond between service provider to client or buyer. 

And thanks to social media, there are many ways this relationship can be solidified through public profiles on social media platforms like Instagram, Twitter, or even Clubhouse.

You can openly share your point of view, opinion and showcase your work daily. And your like-minded follower can connect with you through DMs or comment on your posts. You are building a group of followers attracted by your personal brand and passion. 

2.  Only Create Value That Can't Easily be Scaled

You are the secret sauce to this operation.

Your unique point of view and personality is the value produced. Your continuous drive to learn more, improve, and strive for excellence has value within itself. 

Your customers can pick up on your intense energy for this particular craft or how your service solves a unique problem (that only you saw as an issue). This is what draws your customers to support your business. 

There could be over a dozen of other competitors in the same space, but it’s the mix of your personality, abilities, and skills that sets your business apart.

3.  The Price You Charge Should Match the Value  you Provide 

The cost to make the product or to produce the content/service shouldn’t drive the price. In this economy, standard retail math doesn’t apply here. 

The pricing is not based on the market value or set by your competitors. The pricing should be clearly articulated and communicated to the customer of the value you can deliver. 

And on the flip side- passion pricing isn’t based on whatever you want but based on the price that aligns with your internal passion and skills. 

4.  Fewer Passionate Customers are Better than a lot of Indifferent Ones 

If you are trying to serve everyone then you are not in a passion business. Not everyone will understand or appreciate your passion. Not everyone will pay the price you set forth. It matters to you that you find the customers who can appreciate the unique value of your business than people who are looking for the best deal. You shouldn’t water down your product or service to capture more customers. 

5.  Passion is a Story

At the core of your passion is a backstory of why you spend sleepless nights reading and learning. Or why you continue to invest money to improve the product or service.

The story you carry inside your passion is a part of the DNA of your business and brand’s identity. The communication to the customer is not just by talking about the product but sharing a story on how the product or service came to life. And why it is being offered.

6.  Technology Should Always Support Your Business Not Drive It

The beauty of the passion economy is the suite of technology tools and platforms that is user-friendly and accessible to anyone. Technology plays a key role to distribute at scale, but should never be used as a way to replace your unique offering or abandon the connection with your niche customer.

7.  Know what Business You are in, it's Probably Not What You Think

The reason why a person decides to pivot into the passion economy is that they deeply understand their customer.

You have faced the same frustrations and disappointments of not being heard or seen. A successful passion-driven business can clearly articulate to the customer what is missing in the industry or marketplace.

And what you offer as a solution meets the customer's specific set of needs. This offering is exactly why you went into this passion business. 

8.  Never be in the Commodity Business, Even if you Sell What People Consider a Commodity

A commodity product or service is defined as a replicated product at a value price. The intention of a commodity type business is based on volume, not quality.

This is the exact opposite intention of a passion-driven business. 

A passion-driven business is built on the foundation of high standards and developed with unique qualities that support the reasons why the business stands out from the crowd. 

Conclusion

As I am writing this post, we are entering a post-pandemic era with people starting to reevaluate what they spend their time on. Is it staying in their corporate job working on someone else’s business? Or take a leap of faith by starting a business that aligns with their priorities and core values? 

I am going to make a bold prediction that we will see a boom of small businesses emerge based on someone’s unique perspective. 

I am the perfect example of this new emergence of a passion0driven business.

I lost my job in the Spring of 2020 and discovered my passion in writing this blog. I wanted to offer career pivoting readers an easy-to-read blog that supports their decision to start a side hustle or online business. 

I hope this post helps explains what the Passion Economy is and thanks to Adam Davidson for outlining the rules for a passion-driven business. 

We want to hear from you! Are you thinking about starting a new side hustle or business? Does your business align wit the rules of the passion economy? Share your thoughts below.