How community based startups could potentially dominate the startup space.
Community-based startups are attracting the attention of investors and the audience more than before owing to the spectacular benefits they have over the traditional startups that don’t lay any emphasis on building a community. This is because humans enjoy discussions on their favourite topics and tend to keep coming back to continue engaging in such discussions. What this converts to from a business standpoint is higher customer engagement and a larger use case as well. The members of a community are highly likely to come online and have a chat with co-members without the need to transact on the application. It also gives users a platform to interact with one another, form new connections and network, which can add value to their professional and personal life as well.
In the current market scenario, a community-based startup has a significant positive effect on the mental health and lives of the users. Interaction with people is a necessity for humans and this form of startup provides a platform for people to do just this.
Moreover, building a meaningful community helps the founders and the company grow and scale to new heights as it provides a medium for the users to discuss how the application can be made better.
Community startups ensure that the engagement time of the users is high since they are likely to go through the thoughts, posts and other content put out by the other members out there. This indirectly has a positive effect on the business cycle of the organization. When we spend time on a certain application, we tend to explore the different features, concepts that it brings to the table. Let’s take an example of a fintech startup that has a community side to it as well. While engaging with the people and content put out in the community discussions, the users might be inclined towards understanding what the company does and this will spark a discussion based on the company. As they speak and discuss this, more people are likely to understand the company and what they are trying to do, which is basically serving as a means of free marketing and promotion.
Social startups have been doing very well for a large number of reasons, some of which we have seen above, but here’s some more to understand the idea and thought process behind their formation.
Growth loops- When a startup provides real value to the user, in the case of a community-based startup the value provided can include the platform for meaningful communication, networking and social outreach, they tend to spread the word and bring in more users to come on board and live the experience. It is basically a form of word-of-mouth marketing but at a larger scale because the number of people grow exponentially. Apart from just the increase in numbers, it also helps add value to the community and in turn, the business as well since the users joining the community have been introduced to it due to their interest in that sector.
Engagement- this form of a system is bound to produce a higher engagement rate when compared to traditional businesses since the engagement is free and, on many occasions, rewarding (in the case of gamification of the community). What the user gets from engaging in the content and communicating with others is extremely beneficial for him. This sort of community engagement is a key factor in brand growth and helps with scaling as well.
Retention- When a brand builds a good community for its members to talk, interact and host worthy discussions, people are naturally going to be inclined towards staying on the platform and making the best use of it. That’s retention. The user finds value in the product and continues to use it as it’s helping him be social, it’s fun and provides him with a good platform to discuss something that matters to him.
As mentioned above, building communities has a hugely positive effect on the brand and the image they create. But there are a few downsides to this as well.
Community startups need good moderating. High-intensity discussions tend to go out of hand at times, and this might lead to threats of cyberbullying and other forms of illegal online activities which can cause more harm than good to the brand image.
To actually make use of the community from a business standpoint, a lot of effort has to be put in to ensure that the users are engaging with the brands content as well. An easy solution for this would be conducting activities that provide some form of rewards that can be used by them to buy your products. Even product giveaways of sorts could help with this campaign. This would involve a reasonable amount of time and capital investment, and need not necessarily go in the right direction as well.
All in all, the community concept has some great pros up its sleeve and some cons as well. This is a concept that has been getting a reasonable amount of traction now and will continue to do so as it capitalizes on the social aspects, which is a key factor to attract the younger audience and customer base. ITSMYNE is combining the pros of a community-based startup along with the concepts of gamification, providing an NFT marketplace and a lot more. Reddit for the buying and selling of officially licensed digital collectables-ITSMYNE