4 Compelling Reasons to Build a Community Driven Business
It may sound strange, but, I’m proud of the fact that Sixty and Me didn’t make any money in the first 6 months. Taking the time to nurture and understand my community, instead of jumping into product development, allowed me to build a solid foundation for my business.
As a new business owner, you are under constant pressure to validate and quantify the success of your idea. Some of this pressure comes from friends, family and investors, but, most of it comes from yourself.
In many ways, older entrepreneurs feel this pressure more acutely, as we perceive that we have less time ahead of us to make our ideas work. As a result, many of us rush headfirst into product creation, desperate to show the world, and ourselves, what we can do.
I too felt conflicted when I set out to build a community-driven business instead of creating a product and looking for customers. On the one hand, I knew that I couldn’t help my customers until I understood their practical and emotional needs. On the other hand, I felt frustrated pouring my time, energy and money into a project that I knew would take months, or even years, to start paying me back. I didn’t have a huge saving’s account to draw on, so, I knew that every day would count.
Looking back, building my community first and products second, was the single best decision that I made when starting Sixty and Me. Now, 18 months later, we have a successful product in market and several more in development – all of them validated by the members of our community. Facebook even highlighted Sixty and Me as an example of a business that is using a community model to get results.
There are many ways to create a community using forums, Facebook pages, Google hangouts and membership sites. I’ll cover these in detail in a future article, but, in the meantime, here are 4 reasons to build a community before creating products.
Take the Guesswork Out of Product Design
One of the most frustrating aspects of starting a business is trying to find your profitable idea. Without a community to validate your ideas, you are left with a difficult choice – Russian roulette or analysis paralysis. Some entrepreneurs trust their gut (and their luck) and charge forward without validating their product or service idea. Others spend their time analyzing market trends, watching their competitors, asking friends and creating lists of pros and cons for each idea. You might get lucky and succeed with either approach, but, I wouldn’t bet my future on it.
Building a community allows you to take the guesswork out of product creation. For example, here’s a screenshot from an email that I sent to my community a few weeks ago, asking for their feedback on the video courses that we were considering. 394 people took the time to participate in the survey. Not only did they rank my existing ideas, but, 112 people added their own ideas for topics that I could cover.
I feel blessed to have a community that believes in Sixty and Me and is willing to help it be successful. With help from our members, we now have more ideas in the pipeline than we could possibly execute. If you build and nurture your community, I’m sure that you will experience the same.
Build a Passionate Army of Advocates
Another mistake that entrepreneurs make is to treat community management like a popularity contest. It doesn’t matter if you have 100,000 Facebook “fans” if none of them are advocates for your business. In fact, it is sometimes easier to create an army of advocates from a smaller community, since you will be able to give each member more attention.
If you take the time to build relationships with your community members, they will become the soul of your business. From initial product testing to word-of-mouth marketing, your true fans can help you with every aspect of your marketing plan. They will tell you what they value, where they shop and who your competitors are.
Of course, authenticity is essential. If your fans feel like they are being manipulated, you may face a backlash. But, if your actions reflect a genuine concern for improving the lives of your community members, they will support you in more ways than you can imagine.
Use Community Driven Financing to Launch Your Idea
Crowdfunding can be a powerful option for funding your business idea, but, only if you have a community that believes in your mission and is willing to support you. With so many multi-million dollar projects in the news, it’s easy to forget that 57% of Kickstarter projects fail to reach their funding goals.
The good news is that building a strong community can help you to tip the odds in your favor. Specifically, community driven business have two advantages when it comes to crowdfunding. First, since they have a direct relationship with their potential customers, they are able to get feedback on potential products before starting a fundraising campaign. Second, community driven businesses are able to rely on their advocates to spread the word.
Stay Motivated by Redefining “Success” in Terms of Your Community
Starting a business is hard. I love Tim Ferriss’ book, The Four Hour Workweek, but, for many small business owners and entrepreneurs, calling it The One-Hundred-Four Hour Workweek, would have been more accurate. If you define your success based only on how many units you sell, your motivation will rise and fall with each commercial success and failure. Sooner or later, you will begin to question whether all those 60+ hour weeks are really worth it.
The alternative is to measure your success based on the value that you provide to your community and the value that they give you in return. Revenue is important. Without money, you won’t be able to afford the lifestyle that you deserve or be able to continue to invest in your business. But, if you are like me, money won’t be your primary motivation.
The Sixty and Me community and I are on a journey together. Our members keep me motivated every single day. Yes, I still get excited about launches. But, I have learned to define my own success in larger terms and so have many of the entrepreneurs that I respect the most. Now, with Boomerly on the way, I am glad that I took the time to build a solid community first.
If you are thinking about starting a business, I encourage you to start by building your community. Work with your followers to identify opportunities for value creation. Then, when you are ready to launch your first product, you will have an army of supporters behind you. It may not be as fun as jumping in feet first, but, it will almost certainly be more profitable.
Have you developed a community driven business? What did you learn from the experience? Which communities do you participate in as a consumer and why? Please join the discussion and “like” and share this article to keep the conversation going.