Let’s talk a little bit about startups. It is always interesting because it helps predict trends. If something turned out to be popular among startups, it will either become mass and successful one day, or it will turn out to be a market obsession (but in that case such a trend goes down very quickly).
The startup industry is going through some very strange times right now. On the one hand, everything on the surface has already been invented and tested. On the other hand, young entrepreneurs still feel that there is a demand in the market for something new, people are ready to use new services (if they offer something valuable), and investors are ready to invest venture capital in startups.
The only problem is the crisis of ideas. I could see this very clearly in 2019-2020, when so many startups were absolutely idealess and it was obvious from the outside that they would fail (and they did).
However, today it seems that the industry has found a new foundation, which has turned out to be very interesting for the audience.
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What is a community-oriented startup?
How most startups work in the traditional sense. It is just a small company with big ambitions. That is, the ideal startup in a vacuum is focused on the maximum number of people. However, there are not so many mass ideas that every startup can use.
How most startups work in the traditional sense: they’re just small companies with big ambitions. That is, the ideal startup in a vacuum is focused on the maximum number of people. However, there aren’t so many mass ideas that every startup can use.
And that’s where community startups come on the scene, and damn it, I’m sure this is the new trend for the next 5 years. Just think, we are tired of mass-market in everything: in clothes, in food, in travel and even in services. And community startups are what offer a new approach to how we consume.
Are community-oriented startups a new trend?
According to CrunchBase, 104 of the 1,168 companies founded in 2021 that have already raised investments use the word ‘community’ in their description. This is a clear trend and a new business opportunity recognized by the investors.
The investments in these startups vary significantly. Some have received as little as 1.2 million (like Brightly), while others have already received over $100 million (like Venn). Of course, many of these startups have completely unviable models (or so far seem to have), but many of them did prompt the thought “I would use this, I’m ready’.
How community-based startups can make money?
There are only a few ways community-based businesses can make money, here they are:
Way #1 – Create a community and start selling something to its members. There are many startups that work this way. The founders create a community around a certain idea (hobby, interest) and monetize it in different ways: paid subscriptions, merchandise, closed marketplaces, and so on.
Way #2 – Create and sell a convenient environment in which multiple communities can exist. This can include various all-in-one platforms with member-only networks, distribution of palatable content, video and podcast hosting, and community-only podcasts. All so creators don’t have to worry about cross-authoring and chapeauing from different systems
Way #3 – Create and sell specialized tools for communities. For example, content delivery services, communication plugins/widgets, AI-matching for network participants, specialized payment systems. Here we want to especially mention tools for community analytics, whose members’ activity can take place simultaneously in different places, such as Instagram, YouTube, Telegram, Twitter, Discord, or even Slack (or anywhere else for that matter). The startup can help measure and compare not only views and likes, but even help identify trends, the dynamics of member or group activity.
Instead of conclusion
If we look at how investments in community-based startups are growing, we can conclude that this is already an established industry that it is foolish to ignore.
Yes, there are still questions about how such startups can make money, but in general I am sure that many of these startups can be successful, at least because they are much easier to retain customers, as they initially assume a more personalized approach.
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