This article was written by Tomoyuki Shikata, a partner of STRIVE, an independent venture capital firm. You can read the original text here and other articles here. Twitter account is @ tomo4kata.
Community / kəmjúːnəti [name] The condition of sharing or having certain attitudes and interests in common — Oxford dictionary
If you're in the startup community, you've probably heard of Product-led Growth (PLG), an alternative concept to Marketing / Sales-led Growth these days.
PLG is a GTM strategy that positions the product itself as the main axis of customer acquisition, has users find it, introduces it, and uses it. Click here to get an overview of PLG
On the other hand, PLG alone is weak in raising awareness and promoting the use of products, and it is difficult for users to complete the process from product selection to onboarding and utilization by self-serving. People are born with a desire for advice, and they seek input for judgment even before they look for a product.
We are constantly getting input from our surrounding communities, such as friends, colleagues and others on the internet, about what to eat, what to wear and where to live. The same is true for buying software.
I summarized the outline of Community-Led Growth and the measures to realize it.
Community-Led Growth is a Go-to-Market strategy in which a company actively supports interaction between users and provides the value of a community beyond the boundaries of products to grow the business.
And these users will be able to sell on behalf of the company (so-called champions), creating a flywheel that will further strengthen the community.
This CLG concept follows the trend of the times when end users are the authorizers, and is very compatible with PLG.
In conclusion, I don't think that emphasizing the community is a new way of thinking.
In the olden days, like Rotary clubs and religious groups, communities always existed in some way. "We still believe we need the experience of going to church on Sunday morning," said John Foley, CEO of Peloton, on YouTube:
Today, Apple is enthusiastic about cult followers with product launch events and attentive support forums, and Salesforce has brought hundreds of thousands of attendees to a Dreamforce conference that looks like a music festival. Held annually, GitHub allows developers to share their code with each other, forming a community of ideas and discoveries.
On the other hand, what has changed is that companies have deliberately taken the community as the main axis of brand building in order to attract people. We are investing in the community to encourage users to interact with each other, not just with the brand.
Why are companies so important?
Not only churches, but also companies and schools have functioned as strong catalysts to connect local people, but their relationship with such traditional "places" has diminished in recent years.
However, the desire to connect with others for common interests and purposes is always present in the human mind. There is no doubt that this year of quarantine by Corona has further strengthened our thirst for collective connection.
Also, the world of software is now more fragmented than ever, and there are countless tools that offer similar functionality. Users are frustrated by the variety of choices and are increasingly relying on friends, peers and influencers to obtain information in order to reduce the cost of gathering information and making decisions.
Coupled with the saturation of traditional content marketing and lead acquisition methods such as advertising, the major trends of the times such as software fragmentation and homogenization and corona have become a factor for many companies to pay attention to the power of the community. increase.
“Come for the tool, stay for the network” “Come for the tool, stay for the network”
This is a GTM strategy advocated by his a16z partner Chris Dixon in 2015, where software companies acquire users by providing useful products and retain users by providing networks ≒ communities. The idea is that you can.
Taking Instagram as an example, I think it's easy to get an image of continuing to use it for social interaction after coming for a retro filter.
In 2021, Chris Dixon's quote was updated as follows:
“Come for the community and tool, stay for the community and tool” “Come for the community and tools, stay for the community and tools”
Today's businesses are beginning to realize that the community is too powerful a weapon to limit its use to only the second half of the customer journey.
Bringing the community to the forefront can be more than just a retention strategy, it can also help with customer acquisition channels, product feedback mechanisms, and brand differentiation. Let's take a look at each.
① Customer acquisition: User-led organic growth
Community growth will be an organic channel that joins the business's TOFU (Top of the funnel). As the community matures, acquisition costs may be virtually zero.
In Notion, where I wrote the article I wrote earlier, high-energy users form a community, and they are selected as "ambassadors" by region, acting like a marketing team closer to the field. With users acting as presales in this way, sales teams have a highly engaged potential customer pipeline.
② Continuation rate: From onboard to customer success
As the number of nodes in the network increases, community members have more opportunities to gain new insights and feel higher value. By supporting each other, you can also reduce your reliance on customer success features to keep your customers onboard.
In addition, abandoning the network of peers who can share knowledge is extremely expensive for users, and as a result, the retention rate is greatly improved.
Our investee, Hasura, has been using Discord for onboarding and guiding for years. Most customers come from this Discord community, and the expansion of the community has led to the company's remarkable retention and ARR growth.
③ Feedback: For insights on product improvement
The community is a great way to get direct feedback on a product in the growth phase (in the case of seed / early, it's generally better to get deep insights from a small number of users). ..
Product Hunt founder Ryan Hoover actually collects user feedback on Product Hunt to help improve the product.
Also, in a mature community, users answer questions, solve problems, and share best practices, even in the middle of the night. In that process, you may come up with a solution that you never thought of.
“It doesn't matter how excellent the community tool is, if the person running the community doesn't make it feel like a community, it won't work. Throwing people into a Slack group chat isn't building a community.” "No matter how good the tool is, it won't work unless the operator makes the user feel like a community. For example, just throwing people into Slack's group chat doesn't build a community." Sarah Wood, Head of Growth & Community Upstream
Building a high-energy community is not a simple matter.
Although the playbook for realizing CLG has not been established yet, there are currently the following four approaches.
1. 1.Create a community where practices are shared
Of the four, I personally think that this measure is of particular importance. There are two main types of communities: product communities and practice communities.
A) Product community: A place where users can ask questions about a product, share their knowledge with each other, and connect with the company. B) Practice community: A place to connect with users who have a common purpose, such as learning use cases in a particular area.
Companies are embracing the idea of creating a space that goes beyond their products and involves everyone involved in their profession or industry. This is because it can form a much larger community than dealing only with specific products.
For example, Funl can create a community called "RevOps Co-op" that anyone in her RevOps profession can participate in and learn about Funl's GTM products designed specifically for these users. ..
Twine has built a community for all CPOs while providing software specifically for CPOs (Chief People Officers).
It's up to the community manager and sales team to get interested in the use cases of their products and to sell directly to potential users as needed.
2. Design incentives for "champions"
"Champion" means a supporter, advocate, or flag waving when introducing a new technology or new project within the company.
Creating a "certification program" is one of the effective ways to get members of the community to provide content and become supporters of their products.
For the most successful companies, they are enthusiastic followers but generate "free" sales force. In return, they can put a certificate on their resume or LinkedIn and get certified to be useful for their careers.
That said, accreditation programs are not easy to implement because they rely on a balance between not diluting their value and creating enough interest and topicality to attract talented people.
Typical success stories include:
● Postscript Partner Certification / SMS Marketing Certification ● Snowflake Data Super Heroes ● Alteryx Ace ● Salesforce Trailblazers
3. 3.Involve stakeholders in company content creation
Content marketing isn't new, of course, but what's changing is that users are taking on new roles in creating and participating in content. This has two effects.
The first is an opportunity to "educate" users about the markets in which they operate and the many use cases of their tools. The second is the network effect created by expanding the circle of "creators."
The two main media are as follows.
● Podcasts: The number of companies starting podcasts on markets and specific tools is increasing year by year, and we are inviting users and experts in that field to build “Thought Partnerships”.
● Blog / Newsletter: Strong community-driven content marketing encourages companies not only to interview key stakeholders, but also to provide their users with content about how to best use their products (). Writing a blog post is a requirement of many "certification programs").
Four.Leverage user-created templates and tutorials
Finally, it's common to provide steps, ideas, and templates to get your product up and running as a way to increase community engagement. However, at a certain service scale, the amount of content to be created exceeds the speed at which it can be created. If you have a love for the product, users may share the tutorial themselves.
If anyone is DIY posting how to use your product on YouTube, you should create a community around it. Creating a place for them to share such insights publicly not only further inspires creativity, but also centralizes the "repository" for your prospects. Here are some successful examples:
● Figma Design ● Coda Product Management ● Notion Everything ● Zapier Tips and Inspiration
With CLG, users aren't just buying the product, they're buying a community of people who are passionate about the product and enthusiastically talk about how it can be used. A revitalized community will be the best Moat for a company and can transform a product into more than just a product.
It's a community that needs to be seeded, watered diligently, and carefully grown, but once it bears fruit, it will bring fruit for many years.
While there is no doubt that expectations for the community in the tech world are rising, there are also hurdles to achieving CLG. Frequently mentioned are lack of resources and time, and lack of management approval.
Underlying is the characteristic that it is difficult to quantify the success of the community and how it will affect the business. It is expected that the science of CLG will advance and its importance can be shown by data.