Evaluating Open Source Startups: Community Discussion Forums
In a previous blog post, The Open Source Metrics That Grand Ventures Looks For, I laid out the various dimensions Grand Ventures looks at when evaluating open source companies. One of those dimensions is an OSS company's online discussion forum, typically Discord or Slack, and more specifically what’s happening within this forum. Since that previous post, Since that post, I’ve had a number of founders ask me to provide more color on exactly what we look at within the community forum, and this short blog is intended to provide clarity on the topic.
A vibrant, fast-growing Discord, Slack, or GitHub Discussions community is one dimension we examine closely when evaluating an investment in an OSS focused startup.
During our initial intro call with a company, we will ask you how big your Discord / Slack community is and how fast has it been growing. We may also ask a couple other open-ended questions about the community, such as “How about engagement are you seeing from end-users” and/or “How important is your Discord/Slack forum to your community building efforts”. If after our first meeting we are interested in a company, I or someone on the GV team is going to signup for your Discord or Slack community forum so we can log in directly and do firsthand research on your community involvement / engagement.
These are broadly 4 categories we are evaluating when looking at your Discord or Slack to get a sense of engagement:
- Number (member count) of users in the community (for Discord or Slack)
- Number (count) of active users logged in when we log into the community
- What channels activity occurring in & who is posting in those channels (Employees vs non-employees)
- Tenor / excitement / enthusiasm of the discussions
Note: We’ll also take a look at the GitHub Discussion section of your GitHub page to see the types and tenor of activity occurring there.
Number of users in the community (for Discord or Slack) and growth rate
We’ve invested in OSS companies with >100 users in Discord or Slack and we’ve invested in OSS companies with over 1000+ users. There isn’t any “right” number per se, as it is highly dependent on stage, maturity, etc. That said, it would be disingenuous to say that higher numbers don’t catch our attention.
The growth rate (MoM, YoY if possible) of the number of users in your community is something we are particularly interested in as it provides a strong signal and velocity. During our intro discussions with founders we’ll ask “What is user count today and what was it a year (or quarter, or month, etc) ago?” to get a quick sense of growth rate of the community. In a perfect world, the member count somewhat mirrors the revenue/ARR growth that — at the Seed Stage, we like to see 100% YoY or more.
Number of users logged in when I log into the community
We see companies with discussion forums with 1000s of registered users with very low active (online) users, and we see forums with 100 registered users and 50 of them are active. There is exact answer here, and we factor in the maturity (how long has it been around) of the forum into our analysis. With more successful / high growth companies we’ve seen, typically a couple of years or less old, it’s not unusual to see 10–20% of the forum members ‘online’ at any given time.
Which channels are posting activity occurring in and who is posting in those channels (employees vs non-employees)?
What percentage of the posts are by the company itself in channels <like> ‘Announcements’ / etc? While employee engagement is necessary within the forum, we index more heavily on the channels where end-users post much more heavily on posts by users, developers, etc asking about use cases, posting bugs, making suggestions, suggesting feature enhancements, etc.
Tenor / excitement / enthusiasm
This is difficult to define; however, falls into the bucket of ‘You know it when you see it’. When it’s good you typically see users extolling the virtues of the product, often expressed in technical terms. You’ll see a volume of end-users highly engaged in multiple conversations, often daily. You’ll see questions posted that have a high number of replies. In general, you are looking for enthusiasm, engagement, generally positive sentiment, etc.
Summary
So, what was the point of this blog post? To give you the low-down on how Grand Ventures takes a good, hard look at your Discord or Slack community when we’re sizing up community engagement for your OSS project-based company.
Are you a founder of an OSS company preparing to raise venture capital? We’d love to talk to you. Reach out to us at Grand Ventures, and let’s talk.
