Everybody knows communities are important in Web3, but how does a founder build one from scratch? If you are a founder reading this, you can expect to take away the following:
- The different approaches to building communities
- How the journey of a community member should look like
- Qualities to look for while hiring a great community manager
Why Community
With the end goal of any Web3 project being decentralization, the community becomes an integral part of achieving the project’s vision and mission. When you decentralize control of the project, who are the recipients of this decentralized control over the project?
A community is a set of individuals with an aligned interest or a goal. A Web3 project will only succeed if all the members of the community are aligned on the success of the project. A true community member must have the alignment of “The success of the project is my success too”. Think of the community as an army that will fight for the success of the mission and vision of your project. How does one start building this army?
We spoke to some of the top community managers in our circle, and this is a collation of their thought processes and how they’ve been building communities successfully.
Building an Early Community
Value Direction
It is understandable for the founders to expect participation from the community, but why will a community participate? An individual will participate only when they feel that the value they are obtaining is greater than or equal to the value the project provides them with. As a project, the team has to provide value (not incentive) to the members for long-term participation in and contribution to the project.
This is a clear example of the Principal-Agent problem where both the parties’ incentives are misaligned. The Founder may want the community to be beta testers for the early product, while the community is looking for other incentives such as airdrops. The founding team must first focus on giving value to the community and expect nothing in return at the beginning.
Examples:
CoinSwitch provides their closed HNI community with impeccable content over which the community engages organically. This community then trades over the platform.
SuperteamDAO provides its members with earning opportunities that can help them earn money and grow their careers. The members later help grow the DAO by creating subDAOs, running events, starting new projects
TLDR: Create an ecosystem of value generators for members which in turn makes the members feel like contributing.
Building Approaches
Before we get to the approaches, let us first understand the concept of critical mass. According to the Network Effects Bible by NFX: “The critical mass of a network refers to the point at which the value produced by the network exceeds the value of the product itself and competing products. This can happen at different times depending on the type of a network.”
Achieving critical mass is key to building great communities
There is no way one can calculate the critical mass of the community, but any founder would agree that having 100 great community members is much more valuable than having 1 million lurkers on your discord. There are great communities of less than 50 members that create immense value for each other.
For the sake of simplicity, let us look at obtaining 100 true community members. There are two approaches to building a formidable community: The “Pyramid Approach” approach and the “Inverted Pyramid” approach. Very much like marketing.
Diagram 1 shows the inverted pyramid approach. In this approach, the founders will initially reach out to a wide audience and reach their 100 true fans by a process of filtering. This works exactly like a marketing funnel and this approach is best suited for a founder who is excellent at marketing. If a founder is a better marketer than a salesperson, this is the way to go. The downside of this approach is that a founder will have to spend a little more time in the filtering process, but the upside is that the community will have more members, and it’s a good sight to see for investors, especially while fundraising.
Diagram 2 shows you the pyramid approach. This is where a founder starts small with the segment he or she chooses and then slowly starts building on size. This is a very sustainable approach especially when the founders are still figuring out how the community should be, how they can add value loops, and also allow the community to figure out the culture along with the founding team. This approach is great for founders who aren’t very great marketers or the ones who don’t have much reach. This approach also helps control the quality of the community with minimum moderation. The only drawback of this approach is that it will take a longer time to achieve a high community member count.
There is no right way to build a community. We have seen successes with both approaches.
SuperteamDAO achieved its 150 core members through the inverted pyramid approach (although the core members started small in mid-2021) while Questbook and CoinSwitch (HNI community) built their communities via the Pyramid approach.
Culture
Culture setting is very tricky for communities. Does the founder decide the culture? Does the community decide the culture? If the founder decides the culture, does it become sort of a monarchy? If the community sets the culture, can the culture stray away from the main objective of the community?
Kash Dhandha from SuperteamDAO had the best answer when I asked him who sets the culture for a community. He gave me a brilliant analogy of The Oyster and the Pearl. The Oyster gives a home for the pearl to be formed using the sand inside of it. It can take a while for the pearl to be formed, but the oyster must remain closed for its formation. The founders and the team are the oysters here, the community is the sand in the oyster, and the culture of the community is the pearl. The founder and the team must provide the community with a framework to operate in (toward a goal), and the community will find its way to come together and form the pearl, i.e. the culture.
I know that this can sound very vague, but hey, so is culture!
Member Journey
A member of the community must be guided to first derive and henceforth provide value to the community. A community will work only when the Principal-Agent problem is solved, i.e. the incentives of both parties are aligned. Let us look at the 4 different stages of a Member’s journey in the community:
Onboarding
This is a potential member’s first step into the community. Consider this as important if not more important than company onboarding. The experience for a community member must be smooth, quick, and warm. Why should it be this way? A potential community member at this stage will be both excited and clueless. As a part of the onboarding experience, you have to live up to their excitement as well as guide them to the community that they want to be a part of.
The best early communities I’ve joined which I joined were ones where the community manager (in most cases, the founders themselves) guided me through each initiative and made me meet the leads of the initiatives I cared about. In a nutshell, they made me feel valued and more importantly “at home”
TLDR: The Onboarding stage is to set “Context” for the member
Activation
Once the excitement of a member is catered to and the member has reached the location/ working group that they want to be a part of, the member is usually shy and wouldn’t know how or where to start. This is where an additional step of activation is required. Raj Karia, Founder of Truts and Ex- Community Manager at Questbook gave the best analogy: When a guest comes to your house for the first time, you don’t just open the door and go do whatever you are doing. You ask them to come in, make them sit down, and offer them a beverage. Essentially, make them comfortable in a new environment.
In the context of communities, a founder or a community manager has to introduce the new members to the other members and break the ice. This in turn enables the new member to overcome shyness or any pending cluelessness so that they can start deriving value from one another.
Drawing another parallel to how companies are run, the HR (community manager) does the initial company onboarding and then introduces the new hire (the new community member) to the team (value pool/working group) and the new hire (new member) starts learning and contributing.
Raj Karia at Questbook would make member intros in channels and moderated the ice breaking and activation. This may not be scalable (without people) but it sure is the most personable and memorable experience a new member can have, as compared to choosing roles with a series of emojis on a #start-here Discord channel.
Engagement
This is the phase where the new member is actively participating in any initiatives of the community. This happens only when incentives are aligned among the members of the community. They know what the community is doing and what they have to do for the community to succeed. Engagement can be measured in many different ways, but the focus must be on the quality of engagement over the quantity of engagement. The interactions in a community should never be limited to a gm channel, project shilling, and most importantly just being a support channel. A founder and the founding team must decide what quality engagement is for the community and find a way to measure it. Quality Engagement must always have a direct correlation to the value absorbed by the community members.
CoinSwitch does this very well by providing high-quality content daily around market conditions from which the HNI community interacts and derives value. The value the members derive is both from the seeded content and the interactions that they have with each other. These metrics then correlated to the volumes of trades the community members carry out on the platform.
Retention
Retention in a community only happens when the community members are deriving value from the community in one or more of the following ways:
- Access to knowledge/information
- Access to a Network
- Access to Capital
- Access to Opportunities
- Access to Distribution
This also relates to the concept of Intrinsic motivation by Daniel Pink. This suggests that humans are motivated by autonomy (the ability to direct their path), mastery (the ability to get better at something one values), and/or purpose (the want to do something for the greater good). If a community member can be motivated by either one of these intrinsic factors, retention is inevitable.
The Community Manager Checklist
Understandably, a founder cannot do community management full time after the community starts growing past the early stages. The founder then has to hire an able community manager who understands what the community wants. How does one go about finding a great community manager for the community that the founders have nurtured? Here is a list of all the qualities of the top community managers that we interviewed and what they look for when they hire community managers themselves:
Empathy
This is the most important quality a community manager must have to manage a community. A decentralized community by nature can have conflicts arising between members, with members not receiving value, etc. A community manager must always be able to put oneself in the shoes of the community members to service them with the best experience and also help them extract maximum value from the community.
Patience
Not all members of the community are the same, but all of them have to be treated the same. There will always be members bugging the community with the smallest of issues. There is a high degree of patience involved here. Community Managers also do a lot for the community members and there is nothing they receive in return. The Community manager’s job can be very unfulfilling at times. Patience is not only useful in the issue resolution of the members but also signals long-term thinking for the growth and direction of the community. Patient community managers will always have longer-term visions for the community.
Communication Skills
A community manager is going to be the face of the community and sometimes becomes more popular than the founder. A community manager has to be both efficient and effective with his/her communication. Articulate written and verbal communication is critical while building a community. A community manager is the bridge between the community and the project itself and must be a great conductor in his/her own right.
Systems Thinking
A community manager is never just someone who interacts with the community. They have to be master strategists in building out a roadmap for the community and also act as a feedback loop to the team on improving the project. Community managers are not just bridges but also a part of the core team who act as feedback loops for achieving the mission and vision of the project.
Industry Knowledge
A community manager will always be the first point of contact for the members of the community and also a representative of the company. A good community manager shouldn’t just be a facilitator, but also be a problem solver at the first interaction with members. If a project is building core tech, it must hire a community manager who has some idea about the underlying technology and can solve a member’s doubt instantly.
A Proven Track Record
The best community managers generally come with a track record of previously running communities, events, meetups, etc. themselves. This shows that they have an inherent quality of being in and running a community. They generally possess most of the above-mentioned skills and are very “people” oriented. This is a great indicator of whether a person could potentially be a great community manager.
Closing Words
It’s always about providing value to the community first. Founders eat last. The tightest-knit communities always have sustained when the members derive value from each other which is initially seeded with the value the founding team provides initially. If you are a founder, put yourself last. Provide a service of value to the community first.