As society changes and we live more of our lives online, companies are discovering new ways to forge community. (Clockwise from top left: a church congregation singing; a virtual Peloton spinning class; a photo from the Tempest website; a group of players in Fortnite).

A Sense of Belonging

Product-led communities foster authentic connection and the pursuit of shared goals, which can be valuable to companies, as well as society.

Shripriya Mahesh
Feb 27, 2020 · 5 min read

Part 1 of 3: What is a product-led community and why is this happening?

By Shripriya Mahesh, Sara Eshelman, and Stephen Wemple

When I was growing up, my community was made up of the people I saw physically — at school, around my neighborhood or at a temple. But these days, I’m less comfortable sharing my personal life with my neighbor than I am sharing my Jessica Jingle obsession on Letterboxd or Instagram with a stranger on the other side of the world (who also loves Parasite and knows that Bong Joon-ho wrote out a whole song and not just the two stanzas that Jessica sings).

Our collective idea of “community” has changed dramatically over the past couple of decades. Tectonic societal and economic shifts, as well as blindingly fast advances in technology, have caused each of us to periodically erase and redraw our own definitions and expectations of the communities around us.

At Spero Ventures, we invest in the things that make life worth living. We believe genuine human connection and community are integral to our thesis. Authentic communities provide a sense of trust, safety, and belonging; they are critical for the health of individuals, neighborhoods, companies and democracies. We’ve been tracking the emergence of tech-driven startups, which, as part of their core offering, are providing something we call product-led community.

For the first 40,000+ years of human existence, our communities were constrained by where we lived. But mass global adoption of mobile phones and the internet has delivered unprecedented access to knowledge, markets, opportunities and people. As we’ve been exposed to more ideas and possibilities, we’ve reimagined our relationships to work, family, friendship, beliefs — even our own identities.

Throughout all this change, however, we still greatly value the personal and societal contributions of communities — we just think about them differently than before. This evolution has led to an enormous opportunity for organizations that are able to deliver a feeling of authentic connection.

“It used to be that people were born as part of a community, and had to find their place as individuals. Now people are born as individuals, and have to find their community.”

— Bill Bishop

In general, communities arise organically over time around shared experiences, struggles, aspirations and/or history. In most cases, they’re marked by a sense of shared ownership — over a future outcome, a place, a belief, a concept or even an identity.

What’s unique about product-led communities is that they orient around a product or service that helps people achieve a valuable future outcome. These future outcomes can be individual (better health, professional advancement, cultivation of skills or hobbies, or overcoming a struggle, such as an illness, divorce, loss of a loved one, etc.); team-centric (sports, startups, nonprofits, etc.); or societal (changing norms, mainstreaming marginalized ideas or identities, enacting legislative change, etc.). Through the shared experience and vulnerability, comes authentic connections.

The demand for product-led communities can be traced to multiple societal shifts:

As commitment to religion wanes, people are looking for other forms of belief and belonging.

Participation in organized religion has been declining for decades in western societies: 36% of 18–24 year olds described their religion as “nothing in particular.” Only 42% of Millennials are members of a church, compared to 52% of Gen Xers and 57% of Boomers.

The definition of civic engagement is evolving.

Millennials and Gen Zers volunteer and participate in civic organizations less frequently than their predecessors: 28% of millenials volunteered in 2017 compared to >35% for Boomers and Gen Xers. Participation in fraternal organizations and civic groups such as the Masons, Elks, Kiwanis, Rotary and Lions Club are declining. The Elks, whose average age is 65, is losing 19,000 members per year according to the organization. The Rotary Club has seen membership decline by ~5,000 per year since the mid 2000’s.

Consumers are searching for ways to truly connect with others online.

Internet addiction is correlated with feelings of isolation, loneliness and depression. High frequency users of social media (50+ visits/week) are three times more likely to experience isolation compared to those who go online fewer than nine times each week.

Young people are comfortable forging online-only or online-first relationships.

Digitally native Millennials and Gen Zers are accustomed to sharing “private” details of their lives on public platforms. From childhood on, they chatted with their friends on WhatsApp and Snap, shared photos and videos of themselves in their messy bedrooms and bathrooms on YouTube, Instagram and TikTok, and met up online to play Minecraft and Fortnight.

Today’s consumers want to buy from brands that take a stand on social issues they care about and share a similar sense of purpose.

The younger generation is more culturally ambiguous, crossing previous ethnic and gender boundaries to carve out identities and personal brands that feel more authentic. Rather than choosing one broad group to belong to, they’re identifying with multiple groups that connect with different facets of their lives, which may change depending on what they’re going through at the time. As Whitman said, we contain multitudes — and they are beginning to live in multitudes of communities, each built around a specific aspect of their lives that is subject to change.

Misaligned incentives have led to trust issues

Many traditional social media sites are losing trust, resulting in lower user engagement among young people. Ad-based platforms inevitably face tradeoffs between revenue growth and customer experience: Advertising interrupts the user experience; design choices maximize frequency of use and number clicks; and platforms will seek to capture more and more user data over time. Product-led communities, on the other hand, don’t face the same tradeoffs between creating an authentic community and serving and monetizing it. Alignment of incentives is critical to the success of product-led communities.

As investors, we believe technology companies will play a meaningful role in addressing the the gaps in community that exist today, but the models will look different from the broad social media platforms that most people currently think of as “internet communities.” We’ll examine some of these new models in our next piece in this series.

Read Part 2 of 3: A breakdown of existing models; how companies are building product-led communities.

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