How to stress-test your income concentration in one afternoon

How to stress-test your income concentration in one afternoon

Context: "diversify your income" is advice without a measurement. Borrow a concentration metric from finance and make it concrete.

Procedure:
— List every revenue source and its share of trailing-12-month income.
— Compute the Herfindahl index: sum the squared shares. A creator earning 90% from one platform scores ~0.81; an evenly-split four-source creator scores ~0.25. Lower is more resilient.
— Run a kill-test on your top source: if it dropped 50% overnight (a demonetization, an algorithm change), what remains? Multiple platform-fund collapses (2023-2024) made this scenario empirical, not theoretical.
— Flag any single platform above 60% of revenue as a documented risk.

Caveat: concentration is not inherently bad — a specialist may out-earn a diversified generalist. The index measures fragility, not optimality.

Implication: track this quarterly; it moves slowly but decisively.

What we still don't know: the empirical relationship between concentration scores and creator-business survival rates, since longitudinal creator datasets barely exist.