How to Build a Community Business
5 min read

How to Build a Community Business

A framework that explores the who, why, what and how of building a community that is also a business.
How to Build a Community Business

My working definition of community is: a group of people interested in nurturing their own and one another's growth (inspired by bell hooks).

If that definition fits, then a Community Business would be an organization that makes money from facilitating interactions that nurture individual and collective growth.

Below are the who, why, what and how that I recommend thinking about if you’re building a business that fits into the above definition.

A note that your knowledge of these 4 aspects of your community will likely happen in layers. You might have just a shallow understanding of your who before developing your why. Once you go deeper in your why, it might inform a deeper layer of your who and a start of your what, for example.

The idea is to isolate these variables when you’re evaluating them, but in practice you’ll be learning about all 4 at once.

You may already know that building community is not a straight line. You’ll probably (hopefully) never fully be done exploring any one of these pieces, so don’t think of this as a list of things to check off.

1. Who — Who you want to gather?

Before starting a business and before building community, figuring out who it’s for is the most important step.

If your goal is to both build community AND a successful business, you may encounter some red herrings in the process. You may find success in one aspect and not in the other which will cause you to think you’ve found your people when you might not yet be there. It’s important to test early and often on both community and profitability.

You can go with your gut at first by guessing your who, and then seeing where your interests converge. The best way to test whether you’re right, is by finding and talking to your target members. As you learn about them, your target might get less or more specific or even shift in different ways.

Here are some questions to explore about your who:

  • Who do I personally want to connect with?
  • Where do these people hang out (online or in person)?
  • What’s a shared goal this group has in common?
  • Are these people interested in being in community with others? How are they already doing this?

2. Why — Why are you here?

What communities and organizations have in common is that they tend to be a reflection of their founder, sometimes unintentionally. This is why it’s important to do some reflecting early on if you’re leading a Community Business.

A statement of purpose will usually be an extension or extrapolation of the founder’s own purpose. Think of yourself as the center of a web. As you grow, this web of connections should be able to exist and grow without you being personally involved in everything. But the purpose that you’ve defined is present in every connection regardless of your involvement.

It’s important to distinguish this statement from a marketing message. This might end up as an external message but as you’re developing it, you just need to land on a statement that really resonates with YOU and why you’re building this.

Why questions to explore:

  • Why do I want to start a community business?
  • What’s the change I most want to see in the world and how does this connect to it?
  • What are my values?
  • In what life areas am I most interested in seeing my own and others’ growth?

3. What — What will you do?

Communities involve people coming together to do... something. Routines are important in community and though they may evolve, your goal should be to start finding some that your members can count on. For a paid membership community, the what is tangible value your members can point to. It justifies the monetary and time investment they’re making.

Start with finding one routine, ritual, event that you can repeat. The format of your first what should feel familiar to those who keep coming back. The more people get familiar with it, the more the logistics and details fade into the background. And the more that happens, the more they can focus on why they’re there, to nurture their own and one another’s growth.

Ideas for this are:

  • Regular events or Zoom calls.
  • In online community forums, finding themes that you can repeat like monthly expert AMAs (ask-me-anythings), or weekly themed posts like Share your Wins.
  • Learning content like classes, articles and videos that invite conversations and connection.
  • Ways to safely connect with others one-on-one like via direct message or breakout groups in Zoom.

4. How — How will you make money?

Many communities are free. Online, places like Reddit and Facebook Groups enable many of these and provide a lot of value of members. I strongly believe not everything should have a business model and you can get a lot of joy from leading a community as a hobby.

I find that communities that are paid, or included in a paid offer, feel very different from free ones, in a good way. First because the founder is more invested and can give more time and effort. The members are also more invested and tend to stick around longer. So a paid community is not just about making money, it can also enable you to better live up to your why.

If you’re starting a community business, you should think about your business model as early as possible. Here’s a simple framework for determining yours:

We help [customer] do [problem you solve] by [your solution]. We’ll find most of our customers [your main channel] and will make money by [your revenue].

Customer Who will pay for your offer?
Problem What pain is your customer feeling that you want to address?
Solution Describe your proposed community in a few words.
Channels How will your members find you?
Revenue How will you make money?

This is inspired by questions asked in the Business Model Canvas originally created by Alex Osterwalder.

Whether you sell an online course with community included as part of the learning experience, charge for monthly or annual memberships to participate in an online forum, or any other ways to make money, here’s what to keep in mind when brainstorming business models:

  • Are the incentives of my business model aligned with the community vibe I want to encourage?
  • How much are people currently spending to solve the problem this community addresses?
  • How can I test member interest and willingness to pay before I’ve built a community to offer them?

Putting it together

You might find it helpful to refer to these either when you’re starting out, when you want to plan your next phase, or when you see what you’re building heading in a direction that doesn’t feel right. For example, when you have an engaged community, but you’re not making money. Or when you’re making money, but something is off with the community.

In the short-term, community is not the most efficient way to build a profitable business. It’s a slow learning process that requires as much reflection and growth on the leader’s part as on the community itself. It’s the opposite of transactional. At different points in the process of building a Community Business, you might feel like you’re back at the drawing board, that you need a refresh or a new perspective. That’s when thinking through the lens I present here might help.

In the coming weeks I’ll continue to share more about what this looks like in practice, including some examples from established communities. In the meantime, I’d love to hear what questions this brings up for you. Send me a note with your thoughts or questions.

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