Community Will Create Winners in the Age of AI

As you may know, in the past I’ve had issues with the current state of many startups, especially in fields like AI. To me, a lot of them are falling into the same trap that crypto companies did a couple of years ago?—?a fundamentally flawed business model based solely on generating traction from the use of a technology. While I go into detail about some of the fundamental business practices I believe founders should be keeping in mind, regardless, I think there’s a bigger underlying issue brewing in the background.

In this age of rapidly evolving, democratized technologies like AI combined with the open-source movement, the traditional advantage of having a technical moat is rapidly eroding. Many engineer-led startups are simply not prepared for this seismic shift.

Now, this isn’t some prescribed formula, but more of a general sentiment I’m sensing. There will still be some companies that benefit from having exclusive technical capabilities. But even they won’t be able to rely on that moat like they once could, for three key reasons:

Open-source has irreversibly changed the game. Cutting-edge frameworks, tools, and research findings are now out in the open for anyone to access and build upon. Almost anyone with some coding skills can quickly put together a solid, functional app or product. It’s becoming extremely difficult to sustain proprietary tech advantages or trade secrets.

The infrastructure playing field is utterly leveled. Thanks to cloud computing, even bootstrapped startups can tap into the same vast computing power as tech giants. The scene in “The Social Network” where they take down Harvard’s server is now outdated, because if Zuckerberg had AWS back when Facebook was starting out, they could’ve scaled infinitely just by ramping up cloud usage. His bill, on the other hand, might have proven to be another issue.?

The internet first enabled self-taught developers to contest for jobs once restricted to elite graduates. AI has completely blown open those doors, accelerating the democratization of technical skills to an unprecedented degree.

The reality is, most startups today, especially those centered around AI/ML like GPT apps, could have their core technical capabilities replicated within days by competent engineers and developers pulling from open-source. Some argue that was always possible, but AI has drastically compressed those rebuild timelines from months down to days or weeks.

So if technical differentiation is eroding, what will separate winners from losers? Exceptional business models, product design, and most critically, the ability to rapidly acquire, engage, and retain a passionate user community. These elements were always important, but as AI becomes more advanced, the value of the human touch in technology companies escalates. The nuances of human emotion, empathy, and connection become paramount in differentiating products and services that, on the surface, might appear similar in functionality and purpose.

The Community Imperative: Strategies for Success

We’re already seeing this play out. Look at Anthropic’s new Claude release?—?by many accounts, it outshines OpenAI’s GPT-4. People are proactively trying and advocating for Claude. Yet OpenAI isn’t panicking because they have the users and industry stature. Anthropic’s challenge lies not solely in technical superiority but in convincing users to migrate to their platform through compelling reasons beyond raw performance.

Recognizing this trend, numerous startups across various sectors are increasingly focusing their efforts on building vibrant communities around their products. Initiatives such as meetups, newsletters, online forums, and messaging channels serve as avenues for fostering user engagement and loyalty. These efforts aim to cultivate a profound sense of belonging and investment in the brand, transcending the product itself.

Successful community-building strategies often involve leveraging influencers, creating educational content, and gamifying the community experience. For instance, Notion has cultivated a thriving community of power users and content creators through its comprehensive knowledge base, active forums, and community-driven templates. Similarly, Mercury has invested a lot in tapping into the startup community, creating engaging events and now becoming the bank of choice. Just last week, I saw Bain Capital Ventures book out the whole AMC Metreon IMAX Theater to invite startup founders for an exclusive screening of Dune 2 on its release day. Community is the new battlefield that businesses will fight on going forward.

The Role of Trust and Transparency

Building a robust community can also serve as a powerful catalyst for establishing trust and transparency?—?essential factors in fostering long-term customer loyalty and brand advocacy. As products and services become increasingly complex, concerns surrounding data privacy, security, and ethical implications are mounting. A thriving community can function as an invaluable feedback loop, enabling organizations to proactively address these concerns and incorporate user insights into their development processes.

User-Centric Innovation through Co-Creation

Furthermore, an engaged community can serve as a driving force for user-centric innovation. By actively involving users in the product development process and embracing co-creation approaches, startups can gain invaluable insights and feedback, leading to more tailored and innovative solutions that resonate deeply with their target audiences. It is becoming such a compelling strategy that companies like Canny have built a platform to help companies leverage their community to provide targeted feedback to refine their user interface and feature set. This collaborative approach not only enhances the product but also fosters a stronger sense of ownership and loyalty among community members, ultimately contributing to the startup’s long-term success.

I truly believe that the next set of great entrepreneurs will be community builders. Belief in products has always elevated them to the next level. But in such a saturated market, belief in your product for more illogical reasons may be the difference between making a sale or losing it to your competitor.

So here’s some advice I have for building thriving communities:

1. Prioritize transparency and open communication: Foster open dialogues, share updates regularly, and actively solicit user feedback.

2. Create educational resources: Develop tutorials, documentation, and training materials to empower community members and encourage knowledge-sharing.

3. Leverage multiple platforms: Maintain a presence on various platforms (e.g., forums, social media, messaging apps) to cater to diverse user preferences.

4. Foster collaboration and co-creation: Involve community members in the product development process, crowdsource ideas, and embrace user-generated content.

5. Recognize and reward contributions: Acknowledge and celebrate community members’ contributions, whether through gamification, incentives, or public recognition.

6. Cultivate a welcoming and inclusive environment: Establish clear guidelines for respectful behavior and promote diversity within the community.

7. Host events: Establish clear avenues for your community to intermingle, and ultimately have your most passionate users become your biggest advocates.

You don’t necessarily have to do all of these, depending on your startup and its situation. However, some strategy involving some of these elements is going to be important going forward.

Acquiring and retaining dedicated user communities is no longer a nice-to-have?—?it’s an existential priority for startups and companies across every sector. Those who fail to make community a central strategic pillar alongside sales and marketing will inevitably be outmaneuvered by startups that get it right.

We’re entering a future where the companies that endure and scale into industry titans won’t be the ones with the best tech but rather those with the most passionate, engaged communities driving their growth from the ground up.

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Daivik Goel

Daivik Goel Defining the next generation of products → Founder of Stealth Startup→ Writer | Builder | Product → Ex-Tesla, Cisco…bento.me