Are community startups venture-backable? What are the opportunities for founders building membership-driven communities and the software to enable them?
Are community startups venture-backable? What are the opportunities for founders building membership-driven communities and the software to enable them?
Brands like Modern Fertility and Glossier are building communities. Small, interest-based digital micro-communities like Wana and Diem are being birthed every day. IRL member clubs like Ethel’s Club and The Wonder are growing. And a big wave of startups to support these communities is emerging.
Broadly speaking, I segment them into three archetypes:
With so much activity in this space, the question I keep coming back to is: should community businesses be venture backable?
I wrote a post about it here and would love to hear your thoughts on the future of communities, IRL member clubs, digital micro-communities, and any related thoughts (including the long-term impact of COVID19 on IRL communities).
I love How we Gather (a short book available in PDF: https://caspertk.files.wordpress.com/2015/04/how-we-gather.pdf) where Angie Thurston and Casper ter Kuile point to the rise of non-secular institutions that serve some of the functions that organized religion once served.
Opinion: Communities, if built right can overpower trends that may shift millenials attention to fancy products that come and go.
As people, I think we fundamentally want to live meaningful lives and will over the course of our lives veer towards that. Communities are one of the best ways to live a meaningful life.
For gatekeepers who operate these communities, they're like the equivalent of a village chief / mayor. They are usually paid to administrate things to make sure the community remains conducive for those who belong to it for the reasons they joined in the first place.
As the community grows, the startup that administrates the community would of course grow – just as how government services grow when countries grow right?
So yes, it's very possible. This space is changing very quickly and something I'd love to watch out for. I'm on Twitter if you want to chat about it – https://twitter.com/gabrielchuan
I agree that open communities get worse as they scale, but that's not the only option.
Something like Chief can ensure that all members have a tight-knit core group of 10, while utilizing their larger member base to attract resources (like celebrity fireside chats).
I'm working on this with https://www.thevioletsociety.com/ -- I think that communities can leverage the benefits of both "Communities" (groups of people gathering around a specific identity who feel emotionally connected) & "Network Effects" (as more and more people are a network, the network value increases -- in this case, because there's a higher chance that a fellow member has what you need)
Great issue with a lot of platforms I heard about the first time. All what you have written is 💯 but I was wondering if there is any platform provide a localisation services; cross-cultural transactions to the existing communities? (Not talking about ordinary LSP or translation agency)
For example based that we are living in globalized world, one can launch an English or French speaking newsletter/community about Robinhood app and financial literacy. But the folks in Africa and MENA won't be able to access it (coz they speak different languages).
I hope you get my point.
This example approach to what I meant but don't reflect it entirely:
We've launched a mobile app to connect people to themselves and others, anonymously, through a practice of self-reflection and sharing. We thought we were creating a daily shared experience but our participants feel like a community, a human community.
We are committed to digital wellness and not selling our participants' attention to the highest bidder - so no ad model. And we do not have a network effect, although the experience is not diminished with more participation.
So no, likely we are not venture backable, at least not now. But we do have something magical that can help existing communities feel more connected to each other and we are going to explore that further. Is that perhaps another category? Tools to help communities and the platforms that host them to create closeness in the community?
Key quote - "Sometimes quality isn’t meant to scale." (maybe alluding to his Study Club project? or Lambda?)
It's funny - the need for new communities is definitely massive and whatever we do in the future is going to have software in mind... but communities seem to have "anti-network effects" (worsen with scale), and venture capital is a perfect pairing for businesses with network effects.
With this framing, "Should community businesses be venture backable?" sounds like a Zen koan...
One thought that I sometimes have - visiting online communities often feels like visiting an "Internet City/Village". Each has its own rules (anonymous, semi-anonymous, non), culture, etc. Using this analogy as a springboard for questions: What does it take for the founding of more of these Internet cities/villages? What do each of these need to thrive?
We’re building an online meditation community—beta launches next week, although our combined follower count is over 30k already—using MN (the platform is not perfect but to test a business, the price / feature mix can’t be beat.)
I have a hard time imagining wanting to take on venture money. First, the value-add that most VC’s offer seems, frankly, close to nil (present company excluded ;) etc.) but that’s just VC in general. And secondly, because the community model itself seems, when done in a quality way, a bit antithetical to the goals of VC. A *true* value add to my community and 10x growth just don’t seem compatible.
I’m self-funded so far with a small team, and can imagine raising F&F / seed when the time comes for scaling, but VC.... not so much. :)
I love How we Gather (a short book available in PDF: https://caspertk.files.wordpress.com/2015/04/how-we-gather.pdf) where Angie Thurston and Casper ter Kuile point to the rise of non-secular institutions that serve some of the functions that organized religion once served.
Opinion: Communities, if built right can overpower trends that may shift millenials attention to fancy products that come and go.
As people, I think we fundamentally want to live meaningful lives and will over the course of our lives veer towards that. Communities are one of the best ways to live a meaningful life.
For gatekeepers who operate these communities, they're like the equivalent of a village chief / mayor. They are usually paid to administrate things to make sure the community remains conducive for those who belong to it for the reasons they joined in the first place.
As the community grows, the startup that administrates the community would of course grow – just as how government services grow when countries grow right?
There are really interesting communities out there that have already raised money (elpha.com) and even bootstrapped to 5 digit MRR (https://www.indiehackers.com/article/how-i-modernized-the-book-club-to-reach-10k-mrr-1c332c8cac)
So yes, it's very possible. This space is changing very quickly and something I'd love to watch out for. I'm on Twitter if you want to chat about it – https://twitter.com/gabrielchuan
I agree that open communities get worse as they scale, but that's not the only option.
Something like Chief can ensure that all members have a tight-knit core group of 10, while utilizing their larger member base to attract resources (like celebrity fireside chats).
I'm working on this with https://www.thevioletsociety.com/ -- I think that communities can leverage the benefits of both "Communities" (groups of people gathering around a specific identity who feel emotionally connected) & "Network Effects" (as more and more people are a network, the network value increases -- in this case, because there's a higher chance that a fellow member has what you need)
Great issue with a lot of platforms I heard about the first time. All what you have written is 💯 but I was wondering if there is any platform provide a localisation services; cross-cultural transactions to the existing communities? (Not talking about ordinary LSP or translation agency)
For example based that we are living in globalized world, one can launch an English or French speaking newsletter/community about Robinhood app and financial literacy. But the folks in Africa and MENA won't be able to access it (coz they speak different languages).
I hope you get my point.
This example approach to what I meant but don't reflect it entirely:
https://ochentastudio.com/
We've launched a mobile app to connect people to themselves and others, anonymously, through a practice of self-reflection and sharing. We thought we were creating a daily shared experience but our participants feel like a community, a human community.
https://dailyhaloha.com/
We are committed to digital wellness and not selling our participants' attention to the highest bidder - so no ad model. And we do not have a network effect, although the experience is not diminished with more participation.
So no, likely we are not venture backable, at least not now. But we do have something magical that can help existing communities feel more connected to each other and we are going to explore that further. Is that perhaps another category? Tools to help communities and the platforms that host them to create closeness in the community?
I like JMJ's tweet on quality: https://twitter.com/jmj/status/1229907677867700225?s=20
Key quote - "Sometimes quality isn’t meant to scale." (maybe alluding to his Study Club project? or Lambda?)
It's funny - the need for new communities is definitely massive and whatever we do in the future is going to have software in mind... but communities seem to have "anti-network effects" (worsen with scale), and venture capital is a perfect pairing for businesses with network effects.
With this framing, "Should community businesses be venture backable?" sounds like a Zen koan...
One thought that I sometimes have - visiting online communities often feels like visiting an "Internet City/Village". Each has its own rules (anonymous, semi-anonymous, non), culture, etc. Using this analogy as a springboard for questions: What does it take for the founding of more of these Internet cities/villages? What do each of these need to thrive?
We’re building an online meditation community—beta launches next week, although our combined follower count is over 30k already—using MN (the platform is not perfect but to test a business, the price / feature mix can’t be beat.)
I have a hard time imagining wanting to take on venture money. First, the value-add that most VC’s offer seems, frankly, close to nil (present company excluded ;) etc.) but that’s just VC in general. And secondly, because the community model itself seems, when done in a quality way, a bit antithetical to the goals of VC. A *true* value add to my community and 10x growth just don’t seem compatible.
I’m self-funded so far with a small team, and can imagine raising F&F / seed when the time comes for scaling, but VC.... not so much. :)
/my $.02