Building for Creators: Are Community Tools the New Panacea?

Social interactions form the basis of human society. It comes as no surprise that humans prefer clans and groups to staying alone. In communities, humans find themselves. The only difference lies in the fact that fifty years back communities often meant physical gatherings and today communities are flat and across the globe. It is said that over 60% companies that are valued over $1 billion (globally) have one thing in common: communities. 

Why?

• Businesses build communities because they are scalable marketing tools that can spread word and influence about the brand. They drive referrals and FOMO too. 
• The community formed is of the greatest and most highly engaged critiques/ evangelists. They help improve the product offerings and provide the most genuine feedback.
• Loyal communities help create a movement. Take for example, Instagram, Pinterest or even Facebook. They started small, but have scaled to the large companies they are today due to community effects.
• The cutting edge. It is said that a competitor can replicate anything, but never your community or your experience. That says a lot, does n’t it?

However, slowly, communities have moved from being ‘marketing strategy’ to ‘business strategy’. It means that startups are no longer using communities to leverage their products, instead, they are building products communities can use and thrive in.

What has led to this shift?

Taking from Li Jin’s (formerly of Andreesen Horowitz) post here there are multiple reasons a) communities are outgrowing social platforms b) lack of viable options for creators to monetize on existing platforms c) limited distribution on existing platforms. 

According to Niklas Lohmann, Founder, Haaartland, a community and passion economy startup Sweden, “There is a slow, but sure shift where people prefer being in private communities and not big social networks,” discussed in a closed door roundtable for Community-tool-builders that Axilor held recently.

Closer home, platforms like ScrollStack are building platforms for creators that cater to both their existing followers and help them be discovered by new audiences. “Social platforms cannot put creators and their communities first because then the platform loses power and relevance. For example, Facebook or YouTube can enable monetization of individual videos tomorrow for every creator, if they want to. But then, they might lose ad revenue that they thrive on. This is just one of the many conflicts,” Ritesh Mehta, CoFounder of ScrollStack said in a closed door roundtable for Community-tool-builders that Axilor held recently. 

Building for creators. What should startups know?

“The internet revolution has made India the world’s second-largest internet user base ( ~650 million users from India; 4.5 billion users globally) and has piqued interest for a lot of community-based platforms to build scalable online communities similar to the ones we see offline. Yet unfortunately, a large portion of the content universe and functionalities are still too westernized. We used that insight to start Trell, and are building communities around interests and passion, where content can help people gather more knowledge and awareness to improve their lifestyles in their own languages. Focusing on regional Indian languages and respecting the cultural nuances of our country has made the internet more accessible to all of us," shares Pulkit Agarwal, CEO, and Co-founder at Trell. 

Rahul Singh Cofounder and CEO of Winkl said,  “The end goal of any community is to reach a point where users of the community themselves become passionate moderators of the community and keep it active. Once this starts to happen, it is a lot easier to monetize and scale. By definition, a community is a group of people with a common motive, so the end goal is to continuously attract similar people to the community. If that is happening at a very low CAC (customer acquisition cost) for community platforms, scaling is easy and monetization inevitable, provided users are willing to pay - to avail perks/benefits or via commerce. Even for businesses for whom the core isn't the community itself, creating an engaged community around overlapping interests can result in a low cost user acquisition and highly efficient unit economics.” 

Another observation is that creator platforms today are moving from creating engagement to building sustainable and monetizable communities, shares Praveen Dorna, Cofounder of SocioHub.io. 

Monetisation and Scale.

In a nutshell, if anyone is building for a community to sustain for the long term, they have to focus on a common agenda. Once that is done, more topics can be added to keep the community together. 

(In a B2B scenario), large enterprises use community software when there is a deeper purpose. For example, The Sterling College, Vermont, has built EcoGather, an online higher education platform to upend the traditional online delivery model of education common among colleges and universities by co-designing courses with communities around the world. Communities in Vermont, Bhutan, India, Puerto Rico and England will collaborate with EcoGather staff to co-create online educational courses and tools that can best serve their specific needs and audiences. This platform is powered by SocioHub.io. 

What are investors looking for?

“Building communities is not an entirely new practice, as we have seen with either Hardley Davidson or Nike. What is new is the understanding that building communities leads to super large outcomes and people are trying to understand the best-practices and platforms that can help them build it,” says Pratik Poddar, Principal, Nexus Venture Partners.

The value of the platform is two-fold: 1) it can help enterprises better understand how they can work with their communities 2) it provides the necessary workflow and communication tools that can ensure seamless community management. 

He believes that any community platform has to be a global product from day one and typically that is what he looks for in this space. While India does not have a market share issue, any better global product can be formidable he says. He concludes that he would like to see more original global community products coming out of India. 

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