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Interactive Communities: the next big thing in the creator economy

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Community is the latest buzz word in tech. Communities are crowning new influencers, driving Github projects to global adoption, replacing formal education, & propelling D2C brands to tens of millions in sales. In fact, community builders are disrupting the online world everywhere. 80% founders report building a community of users to be important for their business, with 28% describing it as their moat. A LinkedIn search for “community manager” today churned out ~10M profiles!

While the hype is recent, the fundamental concept of the power of community isn’t exactly new. At its simplest, a community is a group of people having something in common (location, religion, profession, interests, etc). Community participation has been the natural mode of human interaction for as old as time. From hunter-gatherer tribes to medieval villages to modern-age corporations, the concept of community keeps manifesting itself in novel forms. What has dramatically changed with the proliferation of the internet, though, is the rise of digital communities; taking away the need for physical proximity for community formation. The most engaged communities of today aren’t based on shared neighbourhoods, but shared interests. 

There could be three types of interest-based digital communities: 

  • P2P Communities
  • Broadcast Communities
  • (creator led) Interactive Communities 

A P2P (peer to peer) community gets formed when a group of people join the same online destination, say a Whatsapp group or a Slack channel, to interact over an extended period of time. P2P Communities are characterized by many (if not all) participants actively posting content and engaging in discussions, with no central figure leading the narrative. 

The other two types of communities rely on a central glue in the form of a creator to organize the group as well as lead content generation. A broadcast community is characterized primarily by a single creator reaching out to their followers via their content (e.g., on Instagram or TikTok). Interactive communities, on the other hand, are still led by a creator but have extensive two-way interactions between the creator and followers and/or regular follower-to-follower conversations.

As the creator economy rises on the internet, creator-led digital communities (both broadcast & interactive) are witnessing an exciting phase of growth. Creators bring powerful advantages to the process of community building:

  1. Member acquisition: Popular creators can leverage their followership on large digital platforms to efficiently acquire community members.
  2. Member curation: Creator-led communities, to a good extent, are able to self-select an interest based group by virtue of all members following the same creator. The best creator-led communities let members bond over what’s common among them, rather than disengage over what separates them. 
  3. Engagement: Creators can keep interest based communities alive by generating recurring content. They keep everyone engaged, while taking the pressure off many members who prefer to be passive consumers/occasional contributors.

From a creator’s perspective, both broadcast & interactive communities are valuable, but for different reasons. 

Broadcast communities on large platforms like Instagram, Youtube, TikTok, etc. are great for creators to build top-of-the-funnel distribution. But they often feel impersonal to members & are very hard to monetize directly. While broadcast platforms have already created trillions of dollars in combined market cap, most of the revenue generated so far by them has flowed to advertising engines instead of content creators.

On the other hand, interactive communities, like a cohort based course or an influencer’s chat group on daily nutrition, are meant to cater to a filtered subset of a creator’s followers – people who are willing to interact deeply with the creator and potentially also with each other. They are designed to be personal & more engaging, and in turn, more monetizable. 

As creator identities become stronger and their appeal to followers becomes less dependent on platforms, creators across verticals are increasingly finding interactive communities attractive for building sustainable full-time careers. At Stellaris, we find the rise of interactive communities to be one of the most exciting global trends in the creator economy. 

Creating interactive communities: a need for new tools & platforms

Creators need to look beyond social media and other broadcast oriented platforms to be able to build sustainable, rewarding interactive communities. 

That is because, firstly, broadcast oriented platforms have been built from a content demand & supply aggregation perspective, instead of a creator-led community building perspective. 

They lack specialized tools for interactive community functions like two-way messaging, p2p discussions, community management, short courses, gated events, and so on. 

Secondly, users of such platforms generally pay creators via their attention (e.g., ad-revenue on Youtube or promotional posts on Instagram) instead of their wallet. Moreover, since the platform often owns the demand side, creators can find themselves with no practical leverage to negotiate earnings. Creators hence need to move their true fans elsewhere to be able to directly monetize their followership. 

Lastly, creators run the “platform risk” if their primary broadcast platform goes down in usage. They thus need to find alternative direct channels to their most loyal followers as well. 

Where’s the startup opportunity?

Building interactive communities holds great promise for creators, but it can be tedious and time consuming. Our thesis is that content creators will adopt 3rd party tools & platforms that make it easier to build sustainable, rewarding interactive communities. 

We are equally excited about both creator-side tools and end-to-end platforms here, and believe that the interesting ones would be built around some of the following features:

  • Entwined P2P interactions: If the only form of interaction in a creator-led community is that between the creator and an individual member, there is no incremental advantage to members of having one more member in the community. To build successful communities, creators should encourage extensive p2p (member-to-member) interactions, which can inherently lead to network effects.. If p2p interactions in a community are healthy, the (n+1)th member has more to gain from joining the community than the (n)th did, paving the way for lasting growth. User behavior on Piazza, a popular LMS among colleges, illustrates the point well. While the teacher (analogous to the “creator”) manages the class and posts notes & assignments (the “content”), the most engaged Piazza classes have healthy student-to-student discussions. 
  • Seamless community management: Content creation & community management are unfortunately separate sets of skills. The often right-brained creators doubling up as left-brained community managers for their followers need to learn how to keep their audience engaged, segment audience by usage/interest levels, retarget churned members, moderate p2p conversations, and so on. Circle provides sophisticated CRM-esque tools for community management on its platform, in addition to integrations with other important platforms in the creator’s world (Mailchimp, Shopify, WordPress, etc). Commosr doesn’t offer its own platform for hosting communities but is building a “community operating system” for managing communities on other platforms.
  • Continuous engagement: To retain follower interest over time, creators need to create content which has value in being novel/fresh (livestreams, QnA sessions, etc) instead of just focusing on content with high replay value (music album, e-book, etc). The most successful creators on Patreon regularly engage with their followers with fresh content instead of pushing static feeds. Furthermore, to gamify the experience and reward the more loyal followers, creators can think about building tiered systems of continual/one time access. The most involved followers of a creator (“superfans”) are often willing to pay a premium for exclusive content or “behind the scenes” conversations with them. Cracking tiered access is also arguably the secret sauce behind OnlyFans’ $2B+ in sales last year.
  • Help with discovery: Community tools typically enable creators to create & run communities, while not getting into member acquisition directly. However, increasingly more startups are also supplementing acquisition by creating centralized platforms that let users discover new communities. AminoApps, Maven, and, to some extent, India-based Graphy let creators launch new communities & get a chance to be discovered by the platform’s user base. Companies like OnDeck, on the other end, are examples of a full-stack approach to building a house of communities.

Our take

At Stellaris, we are excited about businesses that let creators create, run, and grow interactive communities. We are excited about startups creating self-serve community management/monetization tools for creators globally, as well as those building an India-first communities platform for the large & underserved Indian creator population. 

If you are ideating/building in the space or just have thoughts to share on the article, my inbox is always open at anagh@stellarisvp.com to set up a chat. 

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