Jun 10, 2020
How Entrepreneurs Can Build Product-Led Communities
Lessons from founder and community leaders who’ve built Product-Led Communities before.
Over the last few months, we’ve been exploring how startups can incorporate community into their product in a meaningful way. As we outlined our Product-Led Community (PLC) thesis, community and product building are closer today than ever.
What’s a Product-Led Community?
Within a true PLC, the community enhances the consumers’ experience with the product and helps them reach their desired outcome in a faster, cheaper, more enjoyable, or more accessible way. Community can also be a competitive advantage for startups as they build and improve their products.
This model can improve customer engagement and experience by 10X or more.
PLCs are typically found in areas that require a significant investment of time, energy, attention, money or identity from the consumer, and where feedback loops are otherwise few and far between (such as learning, improving your health, lifestyle shifts, career shifts, lifelong hobbies, etc. Examples include Peloton, Noom, Core Wellness, Duolingo, eBay, and Career Karma).
When founders in our portfolio started asking for specific advice about building PLCs, we called in the pros. We sought out experts who have built large-scale communities and entrepreneurs who are building communities now. They shared their stories, experiences, best practices, and the things they wished they knew.
This piece is intended to be a tool for startup founders who are evaluating if community is the right strategy for you and, if it is, what are the decisions you’ll have to make or best practices you should follow as you are launching your community.
TL;DR
- Start with the Why and Who. Communities are built around a shared why and made up of people.
- Align your community to business objectives, KPI’s, and metrics.
- Find a niche of super users who want the community and represent your customers at scale, build alongside them, and leverage different tools to meet them where they are.
- Your job as a community leader is to build trust. Creating norms and traditions, modeling your ideal user, and setting rules are some of the many tactics that community leaders can use to “hack trust”.
Where to Start: Why & Who?
Before launching a community, you need to make sure you and your company are in a strong position to do so. Two simple questions kept surfacing during our conversations — Why and who? Why does this community need to exist, and who will you be gathering?
David Spinks and CMX lead with why and who in their 7P’s framework. In their stellar book Get Together, the People & Company team outlines their approach. They start with the who — “it starts with people first” — and then the why. Although there is nuance in which question comes first, a combination of why and who was by far the most consistent theme we discovered when talking to countless leaders and founders who have built and scaled communities of all shapes and sizes.
Laura Nestler, Head of Community at Duolingo, emphasizes that before you even identify who will be a part of the community, you need to outline what value the community will create for its members. She contends that community must tap into some intrinsic motivator, an intrinsic “why” for the community members. It could be autonomy, mastery, and/or purpose. In Duolingo’s case, community likely taps into all three but most clearly helps language learners master a language. Laura emphasized that “you must start with the value add for the community members — NOT create a community around the value it will add to the business. Because it will fail.”
In my conversation with Bailey Richardson of People & Co., she shared an exercise she uses when she first starts working with founders that serves as a “bullshit detector.” She asks founders to write down the names of 10 people who would act as “kindling” for the community if it were started. “Your ‘kindling’ are the early allies who care about what you care about enough to manifest an idea for a community into reality.” Communities are built with, not for, other passionate people so if you can’t name 10 people who would show up to start this community with you, you probably aren’t (yet) ready to be starting it.
Sarah Lidgus and Julia Bernstein shared the story of Tempest, which is rooted in founder Holly Whitaker’s experience of building a new recovery model. At the outset, she built it because she wanted a recovery option that didn’t force her to assume the label of an alcoholic. She was also looking for a space that embraced a socially sober life. Holly was living the why. Along the way, she brought a collection of like-minded people together around her blog and, ultimately, the sobriety school that became Hip Sobriety and, finally, Tempest.
Community as a strategy
Before investing precious resources like time, energy, and capital into building a community, you have to understand how the community you build will improve your ability to deliver on your purpose, and thus grow your business.
Rei Wang, the former CEO of the Dorm Room fund and current founder of The Grand, a community-oriented platform to navigate life’s big decisions, shared a community strategy framework she uses. Community can serve one of three purposes:
- Marketing or brand, which can end up looking like a multi-tier marketing structure like Stella & Dot;
- User research, like the way Glossier builds communities around new products before launching, or the way eBay embraced buyer and seller communities to help define their product roadmap;
- Core value proposition of the platform, which looks like social networks or user-generated content platforms.
Laura Nestler argued that your community needs to align with some key KPI for the business. As with any business unit at an organization, you need to be able to show the value you are creating for the business in order to justify the investment. Community can align with customer satisfaction KPIs like NPS, directly drive retention numbers, and in some cases can be tied to growth and acquisition.
David Spinks argued that at this point, there should not be any question about whether or not a company should have community:
“Founders don’t have a choice, they have to build community from day 1. Before there’s product-market fit, the reason people will join your team and try your product is because you’ve earned their trust and sold them on the vision. That takes a lot of personal relationship building which is the foundation of community.
Build community around what people care about. If they don’t care about your product yet, focus on the topics they do care about. When you have customers who care about your product, then you have an opportunity to build a community for that segment too.”
At Spero, we outlined three ways we see community being deployed (see below). We are particularly excited about companies building marketplaces and/or products that incorporate community in a way that enhances the users’ experience or the effectiveness of the marketplace or product.
Community building principles
If you understand your “why” and “who”, and community makes sense strategically, then you can lean into building. This is when the hard work (and fun) begins! We’ve pulled thematic principles that bubbled up across our series of conversations. We hope these will help future founders and community builders get started.
Find the kindling
Find a niche of super users who want the community and also represent your customers at scale. As Bailey shared: “People who care are more powerful than people who don’t.” In the early days of Instagram, Bailey explained that the team didn’t go out and target photographers; they reached out to folks on Dribble that they thought represented Instagram. They wanted to break the perception that photography was for photographers, and plus, photographers didn’t want to use filters or give their work away for free! Instead of swimming upstream begging photographers to join the app, they reached out to designers already sharing visual inspiration on Dribble–a better product-market fit. They set out to find folks who shared that passion and belief and built a product and community around them.
Similarly, Laura Nestler recalled her days at Yelp. As they were launching in new markets, Yelp didn’t go after professional restaurant critics, they went after the “Mavens” of neighborhoods. They targeted passionate people who loved food and their community, and who also loved sharing.
When Ha Nguyen was hired to build a social network on top of a fast-growing betting platform, Betfair, she tapped the most active and engaged users on the platform to become community moderators. She homed in on the passionate users who saw betting as a hobby, a pastime, and let them shape the direction of the community… which brings us to our next principle.
Build alongside your community
When founders ask Rei Wang for advice about building communities, she encourages them to think, how can I build with my community members? She believes that real, strong, vibrant communities are built for the community and by the community. Claire Shorall & Brook Osborne, co-founders of Topknot, echoed Rei, add that it’s important to not only give your community members the opportunity to tell you what they want but to be intentional about honoring their feedback. You have to be willing to let go a bit and trust that your community knows best, which is easier said than done.
Building your community is a mindset that can shape not only your community, but also your entire product.
When Gin Lane, arguably the most important brand strategist of the DTC era, wound down and launched Pattern Brands, they announced they were launching a “Direct With Consumer” brand. This DWC brand would not only sell cookware products but would build its brand and future products alongside its community.
Geneva was born out of this same momentum. The founders not only see a title wave of direct with consumer brands coming but also believe community should be the default GTM and customer discovery strategy for early-stage internet and DTC businesses. Sam Liebeskind, Head of Community at Geneva, says community “helps prioritize what you are building and when you need to build it.” Geneva eats its own dog food. They launched their own community on Geneva where top community builders and “direct with consumer” founders can share tips and tricks.
Meet people where they are
Jacob Peters, co-founder Commsor and the affiliated Community Chat Slack group, contends that the biggest thing people get wrong is coupling the platform with the community itself. Your platform is a place to gather, it just happens to be on Slack or Facebook Groups or Discord. Jacob believes community leaders need to build where the community is already spending time. Build community in places that remove friction and make it easy to re-engage.
Claire Shorall & Brook Osborne, co-founders of Topknot, added that you need to be conscious of the medium on which you are building. Return to your why, and make sure the medium you pick best serves that why. After testing text, audio, in-person, and video, the Topknot team found that video created the best environment for shared and accelerated learning.
The Tempest team added that as their community grew, they needed a toolkit of different mediums in order to meet people where they were. That meant not only offering different formats in which people could convene, but also subgroups of people who could connect around a certain identity. As we will discuss, trust is key in community building.
Community managers should aim to design an experience that gets members to a place where they feel safe as soon as possible.
Packy McCormick, founder of the Not Boring Club, added one caveat — that in some cases, adding friction to community gatherings can help filter for the highest-quality community members and get to a place of trust fastest. Some community spaces should be easy to access, but for some events, it might be best to make people work for it a bit. Which brings us to our next principle.
Is your community a playground or a town square?
Alberto Arenaza, co-founder of Transcend Network, outlines a useful framework for mapping community structures. On one end of the spectrum, you have squares, and on the other, you have playgrounds:
A town square is a place where people can pass through and choose to interact with people because they’re passing by the same space as you.
A playground is a space that people can pass through that has specific tools that are intended to prompt engagement with others in the same space.
A town square, in the context of a community for your company, might look like a Slack channel with no prompts, or a Facebook group. A playground, on the other hand, might be a Slack group that facilitates one-on-one meetups, or a Facebook group that also does weekly book club meetings over Zoom.
When we ran this by Brook Osborne from Topknot, she insightfully added another axis to the framework. With “town square” to “playground” on the x axis, she added “participation required” to “consumption only is okay” to the y axis. Looking at it this way, you can get a good sense of how big your community engagements should be, how much direction they could require, and even the KPI’s the community could serve.
Is your community about your product or about the world around your product?
In the case of Peloton, the community convenes around the product specifically: you get high fives during your ride, a sense of co-presence, and competition in the session. Soul Cycle, on the other hand, built its community around wellness and strength, and it just happens to be that the core offering is a biking class. The same was the case for eBay in the early days. Pierre Omidyar, eBay founder (and Spero LP) summed it up perfectly: “What we’re doing is building a place where people can come together. They just happen to be coming together around trading.”
David Spinks added, “You probably won’t be able to build community around your product in the early days because no one cares about your product yet. So until they do, you can focus on building community around the category that your product exists in. Culture Amp did this with the People Geek community. Hubspot did it with Inbound. Branch did it with Mobile Growth. ”
Trust: Setting norms, traditions, and modeling your ideal user
At the conclusion of a recent Grand session, one of the participants shared with Rei that the team at The Grand were “trust hackers.” This is the ultimate goal of a community manager, create a space that allows community members to move past the base of Maslow’s hierarchy of needs, taking safety for granted, so the community members can instead connect to meet each other’s needs for love, belonging, esteem, and (hopefully eventually) self-actualization.
To hack their way to trust, community managers can use a variety of techniques in: specifically outlining norms, fostering traditions, elevating members of the community to leadership positions, and using community managers to model ideal users.
Depending on the goal of the community and the type of gathering facilitated, the degree to which you will have outline norms, expectations, and rules will vary. When the community members are responsible for creating utility for other community members, which is the case for The Grand and Topknot, we found specifically outlined expectations and roles to be valuable.
Claire from Topknot shared, “Setting norms and roles serve as guardrails, which remove friction for us to create value. They accelerate the process of creating trust for a small community.”
The Tempest team added that setting norms is important to establish trust, particularly in vulnerable environments, and it is important to model your desired behavior versus telling people how to behave.
Jacob from Commsor talked about the importance of creating traditions and modeling the desired behavior as a community leader. In Community Chat’s case, a tradition is as simple as asking new members to introduce themselves and having the community respond with emojis. The Tempest team echoed the notion of leading by example. In the spirit of meeting people where they are, the Tempest team models the types of engagement and sharing they would like members to feel comfortable with, but they don’t require or enforce commitments like sharing your full name or having a profile picture. It will vary from case to case but, most importantly, listen to your community.
Finally, for the Not Boring Club, the onboarding tradition is key, according to Packy McCormick. New members of the Not Boring Club join a small group dinner (except during COVID-19). This tradition of an intimate gathering of new Not Boring Club members sets the tempo for the Not Boring Club experience and creates that trust from day one.
As your company and community scale, where should community sit in the organization?
This goes back to what Bailey Richardson and Laura Nestler shared: Align your community to KPI’s. David Spinks says “It goes back to your goals. Look at the key objectives of your organization, and put community in a place where it can impact those goals.” He uses the SPACES model to help founders identify the business outcomes that community can drive: Support, Product, Acquisition, Contribution, Engagement, and Success.
David added, “At its best, community is its own department, and it works cross-functionally with other departments. If it lives in one department, there’s a good chance it will only drive impact for that one area of the business. But the power of community is that it can amplify every part of the business.”
Jacob from Commsor shared a similar vision for how community will evolve within organizations. He drew a parallel to the evolution of data science. Not so long ago, if organizations even had data science teams, they were often siloed as a small group on their own, or buried within a department. Over time, data science has evolved into its own core function, driving key insights across the organization. It now sits in the middle of organizations and works cross-functionally — serving as the quantitative feedback loop for sales, customer success, product, and engineering. Likewise, Jacob believes that community will end up sitting alongside data science teams at the center of the organization, serving as the qualitative feedback loop and counterbalance.
Bailey agreed with Jacob’s sentiment and added “data tells you how much, but it doesn’t tell you why.” She added, “not everything that matters can be measured, and not everything that can be measured matters.”
Community is incredibly powerful and we are excited to work with founders building in and around the space. If you are building a product-led community, I’d love to hear from you. Shoot me an email at stephen at spero dot vc. To dive deeper into the idea of product-led communities, check out our PLC thesis here!
A special thank you to Rei Wang, Bailey Richardson, Laura Nestler, Packy McCormick, Jacob Peters, Claire Shorall, Brook Osborne, Sam Liebeskind, David Spinks, Alberto Arenaza, Julia Bernstein, Sarah Lidgus, Minn Kim, Vernon Coleman, Ellen Fishbein, Sara Eshelman, and Ha Nguyen for your contributions and support!
