1.
J A N U A R Y 2 0 2 1
The Community
Playbook for
Founders
Jeff Bussgang
General Partner & Co-Founder
Senior Lecturer, HBS

2.
Confidential Presentation
Community = Outsized value
Notes: AirBnB value as of mid-2020, VRBO as of 2015 HomeAway acquisition. Peloton value as of Sept 2020, LifeFitness as of 2019 acquisition.
$110B Value $3.9B Value
VS
$45B Value $0.5B Value
VS
2

3.
Confidential Presentation 3
Confidential Presentation
Now is the moment
for community
Confidential Presentation
Humans crave community
now more than ever.
1
Traditional ways of attracting, retaining, and
growing customers are too expensive and
crowded.
3
New platforms make creating, managing &
scaling communities easier than ever.
2
3

4.
Confidential Presentation 4
We created a guide for founders to building an engaged and
passionate Community ecosystem
Formation &
Engagement
1
Business
Model
3
Product Feedback,
Experience & Support
2
Measuring
ROI
4

5.
Confidential Presentation 5
Focus on the “Who”
1
Set Clear Objectives
2
Create engagement activities
3
Three critical
principles of
community building:
Formation & Engagement
1

6.
Confidential Presentation 6
P E R S O N A S
Start Narrow to form from a
“Cold Start”
Communities need unifying
theme to come together
All exec
women in the
world
C-Levels, US
C-Levels,
NYC
C-Level exec
women, NYC
in retail media
or tech
Define who you
are building the
community for
FORMATION & ENGAGEMENT: FOCUS ON THE “WHO”
1
Confidential Presentation

7.
Confidential Presentation 7
Product support and success
Source of new customers
Product innovation and feedback
Community as the product itself
Why do you want
to form a
community?
Focus and prioritize your key objectives:
FORMATION & ENGAGEMENT: SET CLEAR OBJECTIVES
1

8.
Confidential Presentation 8
Lay the groundwork for community success
with 7 key elements:
FORMATION & ENGAGEMENT: SUCCESS ELEMENTS
1
A shared purpose
and values
1
Simple, easily
accessible value
consumption
2
Simple, easily
navigable value
creation
3
Clearly defined
incentives and
rewards
4
Carefully crafted
accountability
5
Healthy diverse
participation
driven by good
leadership
6
Open, objective
governance and
evolution
7

9.
Confidential Presentation 9
Craft an engagement strategy across
a set of fluid, well-defined stages
Example: educational nonprofit Facing History
FORMATION & ENGAGEMENT: PORTFOLIO OF ENGAGEMENT
1
L E V E L O F C O M M U N I T Y E N G A G E M E N T

10.
Confidential Presentation 10
As a product
development resource
1
Community as the product
2
To support itself
Considerations for
communities and
product development
What part of the organization?
PRODUCT FEEDBACK, EXPERIENCE & SUPPORT
2
3
4

11.
Confidential Presentation 11
Communities are
powerful sources of
information to inform
customer discovery and
product development
Assign community leads for
product teams
Lean into critical
feedback
Prioritize product roadmap
based on community needs
PRODUCT FEEDBACK, EXPERIENCE & SUPPORT: COMMUNITY AS PRODUCT DEVELOPMENT RESOURCE
2

12.
Confidential Presentation 12
Creating a community
as the product
• 5,000 names on wait-list
• Get: advice to advance your career
• Give: peer-to-peer coaching
• Community as a formidable competitive moat
for scaling
Private network supporting exceptional
professional women
Launched 2019
C A S E S T U D Y
PRODUCT FEEDBACK, EXPERIENCE & SUPPORT: COMMUNITY AS THE PRODUCT
2

13.
Confidential Presentation 13
Where does
the community function
sit in the organization?
COMMUNITY MANAGERS SKILLS:
> Marketing
> Product
> Under CEO
Customer
Support
Branding/PR
Social
Media
Content
EQ
PRODUCT FEEDBACK, EXPERIENCE & SUPPORT: ORGANIZATIONAL DESIGN
2

14.
Confidential Presentation 14
Business Model Components
1
3
Network Effects
2
Community Effects
BUSINESS MODEL
3
A strong community
has an extraordinary
impact on the
company’s business
model.

15.
Confidential Presentation
15
Startup
Business
Model:
BUSINESS MODEL: COMPONENTS
3
How the organization
makes money
Profit Formula
Set of operational methods to
fulfill the value prop
Technology
Operations Model
Differentiated solution for an
unmet customer need
Customer
Value Prop
How potential customers are
made aware of the offering
Go To Market

16.
Confidential Presentation 16
The value of
the product increases
with every new user
Network effect drives success:
• Codecademy Pro users meet & share best
practices in Slack
• Access to events with industry professionals and
peers.
• Advanced learners mentor the novices
50 million learners to date
Founded 2011
C A S E S T U D Y
BUSINESS MODEL: NETWORK EFFECTS
3

17.
Confidential Presentation 17
BUSINESS MODEL: NETWORK EFFECTS
3
Communities as superchargers of network effects
The Power of
Communities
Drive
Customer
Acquisition
Support
Other Community
Members
Increased Customer
Retention
Improved
Value Proposition
“Community members
show up for the Meetup
but come back for the
people”
Scott Heiferman,
founder of Meetup

18.
Confidential Presentation 18
CROI
You can’t manage
what you can’t measure.
MEASURING COMMUNITY ROI: CROI & TRACKING
4
= (Value Gained – Cost)
Cost
Areas to track when building a
community initiative
Community Consumption &
Value Creation
Delivery and Execution
Organizational Experience

19.
Confidential Presentation
19
Show financial impact
of community
through:
MEASURING COMMUNITY ROI: COMMUNITYS FINANCIAL IMPACT
4
Increased
deal size
Lowered support
ticket costs
Higher product
adoption
Added features
into product
Increased
sales pipeline

20.
Confidential Presentation 20
Measuring
financial impact
from Community
C A S E S T U D Y
MEASURING COMMUNITY ROI: CROI & TRACKING
4
Sophisticated community-based software company
Community team staff 10+
Attendees at Atlassian
Community events:
• 81% free trial
• 34% purchased
INCREMENTAL VALUE PER ATTENDEE: $1,632
Financial Metrics
• $6K Avg rev per customer
• 80% Gross Margin
• $100 CAC
(VALUE GAINED – COST) / COST = CROI
($1632-$100) / $100 = 15.3x

21.
Confidential Presentation 21
Bringing it all together
Formation &
Engagement
1
• Start with Who
• Define business
objectives
• Define success
Product Feedback,
Experience & Support
2
Leverage community as
product development
resource
Business
Model
3
Build strong
“community effects”
to help scale
Measuring
ROI
4
Measure community
ROI to justify more
spend

22.
Confidential Presentation 22
Confidential Presentation
Now is your moment
for community.
Confidential Presentation 22

23.
J A N U A R Y 2 0 2 1
The Community
Playbook for
Founders
Jeff Bussgang
General Partner & Co-Founder
Senior Lecturer, HBS