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Community-driven businesses are fundamentally different from traditional businesses. Learn why.

What is a Community-driven Company?

Jonathan Reimer
Jonathan Reimer
Founder & CEO

According to a study, 80% of startup founders report that building a community of users was important to their business. 28% described it as their competitive advantage and critical to their success. This underlines that communities are booming and that they provide profound opportunities for companies.

“Community-driven companies will always win.”

- Chris Anderson (NYT Bestselling Author)

One example here is Stripe. The payment API provider has created a community of more than 2 million websites (and its developers) and reached a valuation of almost $100 bn. The developers support each other, organize events, produce content, and are a critical part of its success.

But Stripe is just one of many companies building a business around their community and profiting from it in many different ways. The following part of this blog explains why a community is much more than just a social media following and what community-driven companies are.

What is a community? 

A community is often confused with a group or a network. The first thing we have to learn here is that groups, networks, and communities are not the same:

According to Merriam-Webster, a group is “a number of individuals assembled together or having some unifying relationship”. Therefore a group is defined by the sense of belonging and identity of its members. 

In contrast, a network is much more impersonal. On LinkedIn for example, your network consists of your connections, the connections of your connections, and so on. There it becomes clear that there is no real sense of belonging as you per definition do not even know everyone from your network.

Now, what is a community? Shortly, communities happen at the intersection of networks and groups. The individuals in a community share a set of common beliefs and behavior and take on an identity. Although identity and belonging are essential, it is not strictly necessary for all the individuals from a community to agree on the same definition of their shared identity.

Communities, Groups & Networks

Now that we know what a community is on a more philosophical level, it is important to understand what communities are in a practical environment. Although content and social media itself are part of a strong community, community is much more than creating content and being active on social media; that would be more of a network. In a community, interaction is key! Community is about getting people together to talk about topics they care.

Imagine being on a forum or a Slack chat where people are discussing a specific topic. This is an environment where interaction is lived. Connect this with a social media channel where all of your community members are indicated as followers and you get the perfect picture of a strong community. 

Almost every developer visits Stackoverflow daily and finds valuable insights that help him solve technical challenges. You had a question on how to program a specific feature with Python and you came across a question of someone on Stackoverflow that had the same problem. In the answers, you saw how other developers interacted with the question telling their experiences and solutions to this issue. This is an example that shows how social interaction can lead to valuable content. Engaging on websites like Stackoverflow with valuable content leads to more awareness which then can lead to community growth. A growing community can lead to more answers to community-related questions which again means that even more content and unique insights are produced through interaction.

Community Loop

What usually drives companies

In the past, every company made a decision, conscious or not, to be either product-, sales- or marketing-driven. A product-driven company looks to solve a specific problem by investigating and anticipating potential market needs. With the primary goal to generate a lot of sales in a short amount of time, a sales-driven company's motto is “revenue-first”. And last but not least, a marketing-driven company develops its activities, product offerings, and business strategies around the needs and wants of consumers in its target areas.

What becomes clear is that each type of company has a way of defining success through business goals, and the strategies put into place to achieve those objectives. Of course, the main long-term goal of every company is to be profitable, but the way they pursue those goals differs depending on its driver. 

In the past years, another main driver has entered the market: community. For many modern companies, building a community around products or services is the modern way of creating a successful and sustainable business.

What is a community-driven company?

A community-driven company makes building a vivid community of users a primary business goal. If you take a look at organograms of both startups and mature companies you will see that DevRels / Community Managers / etc. are often positioned in the marketing department, being just one ingredient of the marketing mix. This has nothing to do with a community-driven organization. Rather, community-driven companies are characterized by a very holistic approach that involves all (!) teams in building and supporting the companies community.

You can check whether your organization is community-driven using the following indicators:

  1. You do not sell to customers but work with members.
    Every member within your community is a potential influencer and partner, not just a customer. Therefore, you treat your members more like freelancers than customers.
  2. Members take care of your customer support, marketing, and sales.       
    Your community knows your products better than some of your actual employees in your company. Through sharing their experiences with your product, giving their feedback, and interacting with other community members, they do make parts of your customer support, sales, and marketing redundant.
  3. Members can not just engage with your brand but also with other members.
    Again, through sharing content on your social media you are not a community-driven company. The key is that you give your community the opportunity and incentivication to interact with other community members. This also includes that you have to interact with them, for example by commenting on tweets or answering questions on Stackoverflow.


Stay tuned!

Now that you know what a community-driven company is it might be interesting for you to know how to build it. While building a community can be very profitable for your company, founders and executives also need to remember that community building efforts can be painful.

“Communities feel magical, but they don't appear out of nowhere. Just as when you’re building a fire, there are certain ingredients you need to assemble and an order of operations you need to follow to generate a spark, fan the flames, and keep it going.”

- Bailey Richardson (Head of Community, Substack)

In the upcoming blogs, we want to tell you what the exact benefits of communities are, what challenges you might face, and how you can effectively build a community. Follow us on Twitter to never miss a blog post and learn more about building vivid communities.

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