#011 - 🔒 Private Communities

Gymkhanas of the modern age.

Hi 👋, Siddharth here.

The Indian Dream hits your inbox every week with business trends, ideas and opportunities to build new businesses.

Sign up below for free. 👇

Let’s go ahead and get started:

🥡 Takeaways

1. Traditional communities built around religion, physical location and trade are being disrupted by new age digital first communities focused on hobbies and learning interests.

2. Private Communities create friction to membership -> only motivated people will join.

   • Money is not the only friction to join a private community - Ascent conducts thorough interviews of potential members.

---

Big thanks to Saumya Kedia for helping with this Newsletter.

Have you ever joined free Facebook groups with generic names like ‘Startups in Mumbai’ or ‘India Networking’. Did any of you actually derive significant value from these groups?

These groups had 100k+ members and there was a lot of information but I could never find what I needed - these groups were noisy.

(btw, content curation around niche topics is still a big business opportunity)

In the past few years, I’ve joined several private communities - both online & offline. I no longer face the problem of noise because everything is curated, including content & the members with whom I interact.

My experience so far has shown me that the value I derive from these private communities far exceeds the money that I paid to join. My worldview about my own business completely changed because of the content & people curated by the Ascent Foundation. In this newsletter, we’ll explore the business opportunities around building private communities in India.

---

What is a Private Community?

Generally, a private community is a paid community that promises to offer more value to the consumer than a free community. The added value can be access to high level members, special content or events tailor-made for the members.

The idea is that if people are willing to pay for entrance within a community, they are likely to be more engaged. The desire to justify one’s membership ensures that the private club is a matter of priority for the individual.

Now that Covid has forced digitisation on everyone, private communities are no longer restricted to physical spaces and have digitised immensely. Leap.Club was initially envisioned as a physical community in Delhi. They quickly pivoted to digital once the pandemic hit and now they have 1000’s of members across India and the world.

🧐 Market Gap

• Religiosity is declining quickly amongst India’s urban youth.

  • Along with this, religious & caste-based communities are also declining.

  • Despite this, most people still have an innate desire to be part of a larger community.

• Upwardly mobile Indians have no place to go as most gymkhanas closed membership decades ago.

  • I don’t know a single gymkhana in Mumbai where you can get a membership without inheriting it.

  • Additionally, most gymkhanas are old, colonial era buildings that are often falling apart and don’t appeal to young Indians.

  • Delhi Gymkhana even went through NCLT proceedings.

• Free communities have proliferated through platforms like Facebook but suffer from a high noise to signal ratio.

  • Paid communities provide value by reducing the opportunity cost of your time. You will get access to curated content, connections that will respond to you, and members who are actively interested in your growth.

• The internet allows large groups to form around niche topics.

  • Financially viable private communities can thus be built for topics/interests that would not be possible physically.

  • Imagine trying to set up a physical community for rare house plants where each piece costs 100’s of dollars - how will you find enough members in a small geographical area? But these communities are flourishing on the internet.

    • If you clicked on the first link above, we have two samples of that first plant at home - the Variegated Monstera Deliciosa Albo which sells for $1000 on Etsy - we just got free cuttings from well meaning people.

    • Perhaps someone can build a private community of rare houseplant owners where members share free cuttings with each other.

• Social Media platforms have become a dangerous place for people with strong opinions - we recently witnessed a potential client getting fired for remarks on Twitter.

  • Private Communities with strong barriers to entry and group cohesion become a safe space for discussion of otherwise incendiary opinions.

🥊 Players

Physical Spaces Driven

1. Quorum

   • Delhi & coming soon to Mumbai

2. Soho House

   • Mumbai & international

   • I have strong opinions of this place which I will not voice here.

Commodity Buy Driven

1. Harley Owner’s Group - Probably the most successful club in this category

2. BMW Excellence Club

3. CRED

Work Related

1. Ascent Foundation - “an ecosystem of high potential, growth ready, non-competing entrepreneurs who will be your Trusted Board of Directors.”

   • Sahil has been a member for 2 years and has derived immense value.

2. Leap.Club - “a powerful, private network for women.”

   • Watch out for our upcoming interview with Ragini Das, the founder of Leap.Club

3. MakerPad - “Join thousands learning to build software. No coding required.”

   • Siddharth is a member - great place to learn more about No Code.

   • They recently got acquired by Zapier. There’s a trend of SaaS companies buying media companies or communities - The Hustle bought by Hubspot, Indie Hackers bought by Stripe. Do you want to buy us?

4. Everything Marketplaces - “community that's sharing our experiences, insights, and talking about everything marketplaces.”

5. Newsletter Crew - “community helping you become a more successful newsletter creator.”

6. Visualise Value - “We build things that help you build things.”

7. Freelance Writer’s Den

8. Study Hall - “A media newsletter & online support network for media workers.”

Investment Communities

1. ISB Alumni Angel Network

2. Mumbai Angels Network

3. Indian Angel Network

4. “Bullish markets make investment clubs the flavour of the season” - from 2008, a great year for investors.

Social Good Communities

1. Rotary International

2. Lions Club

3. Round Table

🧗 Process

This is a good article for building Online Communities.

1. Define your Community’s Purpose

Is your community for:

1. Learning

2. Social Networking

3. Brand

4. Interest

5. Action

6. Place

7. Practice or Profession

A strong purpose is what all your members will rally behind. Remember, your purpose has to be strong enough that someone will be willing to pay you for it. You can see strong purposes defined by the private communities mentioned above.

For example, we eventually want to create a Community for “knowledge-seeking entrepreneurs to build profitable businesses”. Our purpose clearly defines the kind of people we would like to join us.

2. Choose your Community’s Location

Will it be Online or Offline? If online, what platform are you going to use? Here’s a list to help you out.

Online Platforms for Community Building

• Tribe - “A powerful community platform, integrated into your product”

• Circle - “The modern community platform for creators”

• Discord

• Slack - “Discord for Boomers”

• Peer Board - “Bring together your content, community, online courses, memberships, and more all in one place, under your brand, available on every platform.”

• Facebook Groups - “A powerful religious offering to our Lord Zuckerberg”

• Reddit

• WhatsApp

3. Attract Members to your Community

Content Creator Led Community Building

A slow but effective method to build a community strongly aligned to the purpose. Creators need to be careful though not to conflate audience with community.

Sam Parr used content creation in the form of The Hustle newsletter & the My First Million podcast to build an audience interested in side hustles & entrepreneurship. He used this audience to build a private community with 11k+ members called Trends for which he charges $300/yr. He recently sold his company to Hubspot for a rumoured $27 million.

Scarcity Led Community Building

Get 5/10/15 high quality individuals from your network as your first set of members - these members need to embody the purpose of the community along with being highly engaged. Then you create a high friction membership process by making it invite-only, expensive or any other way. The quality of individual members ensures engagement and a desire by outsiders to join this high quality community.

Leap.Club’s initial cohort of 30 - 50 members were the cream of the crop as per Leap.Club’s purpose - high level executives of top companies & other highly accomplished women. Leap.Club leveraged the quality of this initial cohort so effectively that 1 year after launching, they have a waiting list of 8,000 women who want to join.

Entrepreneur’s Organisation is another example - EO Mumbai has an “one-time new member chapter initiation fee of Rs. 25,00,000.” People pay this money because EO Mumbai boasts some of India’s top business people as its Members.

(my uncle avoided these high fees by joining an African chapter where he had an office).

Physical Space Led Community Building

Quorum and Soho house built amazing physical spaces while simultaneously making membership scarce. This is a capital intensive strategy.

Course Led Community Building

Individuals taking a course are clearly interested in that topic. A learning based community around that topic would provide continuous learning to those people along with regular revenue to the course & community owner.

4. Provide Value to Your Community

This could be:

• Personalised welcomes & introductions

• Exclusive content

• Networking

• Priority News

• Access to physical spaces

• Coaching

• Events

• Social Projects

• Much much more

Just make sure it ties back to the community’s core purpose.

Tools to Engage with Your Community

• Commsor - “The Community Operating System. Commsor integrates with all the tools you already use, tying your community data together and enabling you to unlock insights, measure impact, and build a community-led company.”

• Hopin - “Create virtual events people love”

• Icebreaker - “Online Events That Build Community. Help people in your group get to know one another with guided conversation games.”

Create Sub Communities

If your community is getting large - create sub communities to improve engagement. For example, a large SaaS community can have sub communities for PropTech, FinTech, PartyTech etc..

5. Grow your Community

Incentive based referral campaigns can be pretty effective at growing private communities - Morning Brew’s referral programme is seen as a Gold Standard.

Here are a few tools to help with referral programmes:

1. Viral Loops - Very expensive.

2. Nodal - the founders seem to have gone MIA, please let me know if you can get me in touch with them.

3. Grow Surf - Wasn’t a fan of their design features.

4. Spark Loop

Other ways to grow your community:

1. Contests - The Hustle is currently doing a referral campaign where it will give a $25k business to the person with the most referrals.

2. Gamifaction & Rewards

WARNING

Scale may be counter productive to the success of your private community. Engagement drops & noise increases as you scale up - a disengaged member is less likely to renew their membership.

Source - really interesting report

🙏 Our Predictions

• The selling point of social media apps so far has been accessibility.

  • Expect new, niche, paid social media websites or subscription options on existing social media apps. Twitter has already introduced Super Follows.

  • These will be digitally gated private communities.

• SaaS & D2C companies will continue to buy highly engaged online & offline communities.

  • Like Hubspot buying The Hustle, Zapier buying Makerpad, Stripe buying Indie Hackers.

  • These communities will provide constant touchpoints with potential customers & thus build a top of the funnel for the SaaS & D2C companies.

• Private communities will build multiple revenue streams by building products & services based on their deep understanding of customer needs in that niche.

  • Private communities can be used as testing grounds for new products & services before rolling it out to the public.

  • This can be marketed as member-first access.

• Content creators will leverage private communities to build relationships with their audience instead of doing it via platforms like Facebook, Instagram, etc.

  • Lenny Rachitsky is building a private community of product managers who subscribe to his newsletter.

🛒 Opportunities

• Start content creation with a strong point of view on a topic.

  • Audience-to-community is easier than starting from scratch.

  • You can convert to a paid community when your audience is large enough.

• Build a private community for a group that has traditionally lacked access to strong networks.

  • Leap.Club is a great example here.

• Bundling of private communities.

  • For example, bundling memberships at Writing, Marketing & Freelance communities.

  • The best article you’ll ever read about bundling.

• Build Community Management Softwares around different niches.

  • Example: Writing & investing communities will have really different needs.

• Build an agency for Community Management as a service.

  • Community management is still a misunderstood process - fast growing communities will require help to manage their members.

  • Modernise already existing professional communities.

    • Digital first & new age communities for lawyers, doctors, entrepreneurs, CA’s, etc.

    • I’m sure Gen Z CA’s wouldn’t mind a revamp of ICAI.

• List of private community ideas:

  • Personal Finance - you can further break this down by demographics (age, sex, location, etc.)

  • Creator led businesses - Influencers, Newsletter Writers, Podcasters, etc.

  • Skin & Hair Health for a niche - Curly hair, 30+ women, etc.

  • Rare Houseplants

  • New Age Farming - People currently struggle to find good resources for Hydroponics, Aquaponics, etc.

🔗 Links

1. How to Build and Profit from a Hyperlocal Community Sit‪e‬

2. Should you use a Forum or Facebook Group for your community?

3. The 2020 Engagement Trends Report