February 22, 2022
·
12 min

Community is the New Moat

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In a world where anyone can build a product — distribution is how you win. Leveraging the community is how you keep winning. 


Take Notion as an example - the all-in-one workspace tool, now valued at $10 billion. Up 5x from early 2020 (seems like yesterday, huh?). 


What changed? It...uh... went viral on TikTok. With each video of Gen-Z showing off their Notion set up, thousands of unexpected signups poured in. 


But wait, what's so special about Notion? There are hundreds of minimalist notetaking tools out there; just a google search away. 


Not quite. 


158,463 members on Reddit, 13,229 members on Discord & 200,000+ members on Facebook Groups across languages like English, Korean & Arabic - all run by the users. 


Notion, as a company, is active & supportive across the communities, but they don't run the community.  


Think it's safe to say, Community is their moat. 


And Notion is just one example, there's Figma, Webflow & several other community-led businesses redefining the distribution layer. 


Now, let's come to the hard part - how can you build your moat?


Successful communities have seven key elements:


1. A shared purpose and values. As former Instagram executive Bailey Richardson puts it, the community must be able to answer the question “Why are we coming together?”

2. Simple, easily accessible value consumption. Prospective and existing members can easily see what they’re getting:  support, events, documentation, the ability to download and use technology, etc. This value is not hidden or buried, it is clearly organized and available.

3. Simple, easily navigable value creation. Members can easily create new value for others in the group to consume. This contribution process is (a) crisply defined, (b) simple and intuitive, and (c) provides almost-immediate gratification.

4. Clearly defined incentives and rewards. Quality contributions (e.g. content, support, technology, etc.) and community-centric behavior (e.g. mentoring, leadership, and growth) are acknowledged and applauded to build a sense of belonging, unity, and satisfaction.

5. Carefully crafted accountability.  There is a clearly defined, objective peer review and workflow — for example, reviewing content, code, and events. This doesn’t just produce better, more diverse results, it also increases collaboration and skills development.

6. Healthy, diverse participation driven by good leadership. When you are intentional about diversity and good conduct and have leaders who embody and empower these important principles, you reduce toxicity and increase value.

7. Open, objective, governance and evolution. There is clear, objective governance, and community members can play an active role in reshaping its structure and operational dynamics together, giving them “skin in the game” and, thus, a sense of ownership and responsibility.


Chief is an interesting case study of an emerging community seeking to embody these patterns of success. The company is a private network designed to support exceptional professional women with a core set of services such as coaching, peer learning and network building. Since its launch in January 2019, the company has grown rapidly and has more than 5,000 names on its wait-list. Value consumption (advice to advance your career) and value creation (peer-to-peer coaching) are obvious and clear, as is the healthy, diverse participation of community members that feel a sense of mutual accountability for their individual and collective success. As the company scales to cities throughout the United States, its community presents a formidable competitive moat, organized around the mission of professional advancement and support for female executives who are members.


Measuring Success


While there is no silver bullet for building a community, success is delivered by tracking a crisp, focused set of metrics and regularly evaluating and making adjustments based on those evaluations. This process is an evolutionary one, where your cross-functional team should repeatedly ask questions about the results they see and hypothesize changes to drive improvements. These changes are then delivered as a series of small experiments that will both move the needle and build internal experience.


For companies building a community initiative, the areas you track should be:


1. Community Consumption and Creation.  This means tracking active participation and the value that members consume and produce. For example, measuring community traffic, sign-ups, individual contributions (e.g. answering questions, running events, improving content), and other areas.

2. Delivery and Execution.  This means looking at how well your company is building community strategy, estimating work, and executing effectively. This is important to ensure planning and execution are aligned and avoid spinning your wheels.

3. Organizational Experience. This involves following the incubation and evolution of community skills and expertise in your business (e.g. reading and reacting to data, mentoring, moderation, conflict resolution, building and delivering incentives, etc.). This is important to ensure the company is what it needs to foster and grow the community, especially as it scales up.


We are in the early stages of truly harnessing the potential of carefully crafted, productive communities. Done well, and when intentionally woven into the fabric of the business, communities can offer a sustainable competitive advantage and drive brand awareness, value production, and therefore overall commercial valuation (oh, and delivering a world-class, personal, gratifying member experience.)


The future of business is a more open, connected, engaging one, and communities are going to change the nature of how we interact with brands, products, and other people.

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Vikas Bobuwa
Designer, EPYC
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