The rise of community-based startups

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The world of startups is currently experiencing strange times. On one hand, everything that seems possible on the surface has already been invented and tested. On the other hand, young entrepreneurs still feel that there is demand in the market for something new. People are willing to embrace new services as long as they offer something valuable. Additionally, investors remain ready to invest venture capital in promising startups.

The Idea Crisis

A clear example of this idea crisis was evident in 2019-2020, when an abundance of startups emerged that appeared utterly devoid of ideas. It was clear from the outside that they were destined to fail, and indeed, they did. However, today it seems that the industry has found a new foundation that is interesting to the public.

What is a Community-Oriented Startup?

Traditionally, most startups are simply small businesses with big ambitions. The ideal startup, in a vacuum, is focused on reaching as large an audience as possible. However, there are not many mass ideas that every startup can utilize. This is where community-oriented startups come into play. I am convinced that this will be the new trend for the next five years. We are tired of mass-produced items in everything from clothing to food and from travel to services. Community startups offer a new approach to how we consume.

Are Community-Oriented Startups a New Trend?

According to CrunchBase, 104 out of the 1,168 companies founded in 2021 that have secured funding use the word ‘community’ in their description. This indicates a clear trend and a new business opportunity that investors recognize. The investments in these startups vary widely. Some have received as little as $1.2 million (like Brightly), while others have raised over $100 million (like Venn). Of course, many of these startups have entirely unviable models, or at least seem to at this stage. However, many of them evoke the thought: “I would use this; I’m ready for it.”

How Can Community-Oriented Startups Make Money?

There are a few ways in which community-oriented companies can generate revenue. Here they are:

Method #1: Create a Community and Sell to Members

Many startups operate this way. Founders create a community around a particular idea or hobby and generate revenue through various means, such as paid subscriptions, merchandise, and closed marketplaces.

Method #2: Create and Sell a Suitable Environment

This can consist of various all-in-one platforms that facilitate networking for members, as well as the distribution of valuable content and video and podcast hosting. This allows creators to focus on their content without worrying about cross-authoring and managing different systems.

Method #3: Create and Sell Specialized Tools for Communities

For example, content delivery services, communication plugins, and AI matching for network participants. It is particularly important to emphasize that tools for community analytics are crucial. These tools can simultaneously track member activity across different platforms, such as Instagram, YouTube, Telegram, Twitter, Discord, or even Slack. A startup can assist in measuring and comparing not only views and likes but also in identifying trends and the dynamics of member or group activity.

Conclusion

When we look at the growth of investments in community-oriented startups, we can conclude that this is already an established industry that would be foolish to ignore. Yes, there are still questions about how such startups can generate revenue, but in general, I am convinced that many of these startups can be successful. They can attract customers much more easily, as they start from a more personalized approach.

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