How does a Community help with your SaaS growth (2023)

How does a Community help with your SaaS growth (2023)

Note: SaaSwrites is a curated growth marketing hub and resource built to help SaaS founders grow their products. We sincerely thank all our experts for their constant value addition to this world.
Busy now? Download this PDF, Save to Kindle and read later while you sip warm coffee!

What is a Community?

A community is a group of more than two people with a common sense of identity, who participate in ongoing, shared experiences to meet their needs, and build relationships with each other in the process.
Most people mistake an "audience" for a "community"
       █                    █

community        audience
Audiences are one-to-many
Communities are many-to-many
An audience sits in rows in an auditorium. A community sits in a circle. Martin
It’s not a community if people don’t interact with each other.
The community interacts within themselves and helps each other and you the community creator are a mutual point of connection for them. The audience interacts with you. Noman Shaikh
Sahil has an interesting view on communities when you are building products:
Communities and networks are not the same.
In a community, everyone sees everything. This means every newcomer has a chance of being noticed.
In a network, users and algorithms determine what gets seen. This means that large voices are amplified while newcomers are quietened.
Building a product?
Make your users feel like they're part of something larger than themselves, but small enough that they get a sense of everyone within their group!
Pinterest was a community first. The homepage was literally "everything."

Why does your SaaS need a Community?

“Community-led companies are the new "lean startup"
  • Lean startup: build software, then find community
  • Community-led: build community, then build software
The next wave of big consumer companies will be community-led.
How a community-driven SaaS looks like.
How a community-driven SaaS looks like.
A community-driven company has a community that:
  1. has shared values
  1. provides value by solving problems of its members
  1. members identify with the community, trust it, and give to it
  1. sets off a marketing and sales flywheel that informs the company’s product development

A Community-driven company increases:

  • retention
  • LTV
  • Sales lead
  • Organic word of mouth
  • Membership
  • Margins
  • Sticky factor
  • Difficulty in replicating the business
  • Ease to recruit talent
They decrease
  • CAC
  • Churn
  • Marketing costs

How does a community help build business for your SaaS?

In business, you do market research. In a community, you do people research. ~ Rosie Sherry
Greg Isenberg lays out a business plan and holds community as the key factor for growth and sustenance
The evolution of the business plan:
  1. Business plan
  1. Deck
  1. Prototype
  1. Community
Companies that don’t invest in community, are already paying for it.

What makes a great community?

Great communities are aligned around value and values.
Value - members get some utility that helps them solve a core problem
Values - members build their identity around common mission or interest and bond w/ others who share it
A person becomes a member of a community when four things happen:
  • The community aligns with their identity
  • They trust that the community will bring them value
  • They know how to participate
  • There is a reward (intrinsic or extrinsic) for their participation” - CMX
When does a member join a community?
When does a member join a community?

What's the business case for building a community?

  • increase retention of existing customers, esp. high-value ones
  • increase repeat purchases
  • reduce marketing costs
  • feedback/idea generation
  • reduce customer service costs
  • new sales leads
  • employee recruiting / retention

Why are communities valuable more broadly?

  • members help acquire new members, resulting in lower customer acquisition costs and a tight viral loop
  • members stay longer and spend more
  • members help each other, resulting in high gross margins due to a lower cost of service.
  • A community can be a wedge to bootstrap a network
  • A community can provide defensibility (especially when data is commoditized) which is partially why community is the new scarcity

What are some benefits of building a community for your SaaS?

Whether you are shipping a side project, building a startup, working on a SaaS product, launching a course, creating a collection of NFTs, betting on the future in web3, doing anything on the Internet you can't escape community building.
Benefits of building a SaaS community.
Benefits of building a SaaS community.

A community will give your SaaS a tight feedback loop

Irrespective of what you are doing, getting first-hand feedback always helps you to become better. And community enables you to get that. With different perspectives, you get different takes which make feedback solid and tight.

A community will bring your SaaS to some early believers

Perks of forming a community is where you can find a tribe full of people who root for you to win. Their support is priceless, and it feels like an army backing up.

A community will help with Hiring for your SaaS

If you ever want to hire people that fit right into your ecosystem, you should do it from your community. These people are the ones who are passionate, who understand your value, and are champions who stayed with you.

A community provides social proof engine

People buy from people. Having a strong community makes your marketing easy. Provide value to the community, and they will take care of spreading the word. They will become an indirect voice to your brand!

A community is a Network

The beauty of having a community is everyone gets to reap the benefits: the ones who started it and the ones who are part of it. Peer-to-peer networking is one of them and it works the best in a community, where everyone roots for each other by helping each other.

You should build a community and not just an audience:

Ryan Hoover shares:
In communities, members interact with each other. This is what makes communities potentially more scalable and efficient than audience platforms.
The platform (this includes SaaS) doesn’t have to do all the work. Sometimes starting with an audience is easier and a smart first step toward building a community later on.
An obvious example here is Slack. Some SaaS products have a private Slack group for their paid subscribers. I expect many broadcast platforms (i.e. tools used to communicate with an audience) will vertically integrate community-building functionality in the coming months.
People also confuse community and networks- Communities are abt identity, loyalty, service, commitment, and active participation.
Networks are abt utility, inoperability, flexibility, people with common interests but not necessarily common values, history, or memory.

How to build a community for your SaaS?

Ethan Brooks shares a community-building framework
I hate the term "community building." It used to mean something before it was popular. Now it's just a buzzword. It's also poorly defined.
So here's a framework that takes the mystery out of it. I call it the "Pyramid of Priority" (PoP).
It works like this:
The Pyramid of Priority framework to build a community.
The Pyramid of Priority framework to build a community.
First, let's take the mystery out of it.
I've shared this before, but at its core, community building is just connecting people in a way that's helpful to them. That's it.
Still, it can help to have a framework to think through, which is where PoP comes in handy.
From bottom to top, the pyramid goes from least to most flexible:
  1. Mission: The specific change you want to make
  1. Members: Who you're creating change for
  1. Medium: How you reach people
  1. Metrics: How you measure success
  1. Messaging: How you talk to/about members
Your community is always evolving.
You don't need to figure out each level of the pyramid before moving up.
Just use this to help think through things as you go.

1. Mission

As Simon Sinek says, people don't buy WHAT you do, they buy WHY you do it.
Your mission is your why. The signal beacon that attracts like-minded people.
Patagonia is my favorite example. WHAT they do is sell shirts. But their WHY goes far deeper.
Mission for a community is always about one thing: Change.
You're trying to create some kind of change in the lives of your members.
What is it specifically? What will you give them that they don't have now? Why do they need that?
Dig deep, and avoid jargon.
How do you know when you've found your WHY?
When you can change your WHAT and your members stay.
E.g. The Hustle started as an events company, not a newsletter. Patagonia makes shirts, but also beer, food, documentaries, and more.
In both cases, mission supersedes product.

2. Members:

A community is a group of people with something in common.
To be strong, that means you need to know who belongs, and who doesn't.
One of the BEST experts on the concept of belonging is Douglas Atkin, who ran community for Meetup and Airbnb
It's crucial to develop a clear idea of who your members are.
Forget user personas.
Instead, go talk to real people who are already part of your community. Even if it's very small. If you have 3 people, you have a community.

3. Medium:

The platform you use to host your community.
Should answer 3 questions:
  • How will you keep track of all members?
  • How will you communicate with members?
  • How will they communicate with each other?
These are crucial to day-to-day success.
So what's the best platform?
My best tip: Meet people where they are.
The BEST platform is the one your type of people are already using. That often means picking the LEAST BAD one, rather than the "best".

4. Metrics:

Let me ask you something...
How much does your dog love you? Can you give me a number?
Of course not. And yet, you somehow you know your dog is a bigger fan of you than your mailman.
We are social creatures. We're built to intuit the strength of social connections.
There are some metrics you can use (NPS, growth, daily active users).
But the most important thing: You need a MIX of qualitative and quantitative measures.
As the old saying goes: "Not everything that can be counted counts, and not everything that counts can be counted."

5. Messaging:

How you talk to and about your community.
This is where you'll do most of your experimenting on things like:
  • Marketing
    • Onboarding flow
    • Community initiatives & opportunities
Biggest opportunity: The welcome message.

Bring people around value - some common utility that solves their problem.
And then hook them with values - get them open up to each other so they feel connected. Vulnerability is huge.
Value is the acquisition, Values are retention.
The most popular discussion in forums is often: "If you knew everything that you knew now, would you do or become X again?"
Onboard all community members with friendly self-disclosure rituals
  • create unique shared experiences & rituals
  • have a narrative about why the community started and share that story
  • create avenues for person to person shared knowledge exchange
  • ask early on: "what can you offer this group?" & "what do you want to get from that group?
  • positivity floods: don't have ppl introduce themselves, have ppl introduce each other
  • identify the active members to who you can later distribute control to, otherwise, you can't scale
Before creating a community answer the following questions:
  • what the community is about
  • who are you targeting
  • what type of community is it
  • what's the goal of the community

A big mistakes SaaS community leaders make is scaling too fast.

Don't focus on the number of members as much as the activity of those members and the sense of community they feel. Too much demand? Have a waitlist.
That'll make people feel even more special. Or break into sub-groups. Communities take time.
Not all communities are meant to scale.

The best content for a community is content about the community!

  • Create a community newsletter:
  • Community announcements
  • Interviews & AMAs
  • Recognize great community contributions in the community
  • Spotlight community members in real world
  • UGC guest columns
How to create content for the community.
How to create content for the community.

Always keep a check on the community

  • Community health metrics - how healthy is your community? (growth, churn, post/comment activity, NPS, network density)
  • Business metrics - how is community impacting your business?
  • How the internet affects communities: Strengthens both mega communities and long-tail niche communities. Aggregates and fragments simultaneously.

What’s a Community Life Cycle:

A community life cycle is mainly about four parts:
  1. Inception (ends when 50% of the activity is generated by the community, then you have critical mass)
  1. establishment (ends when 90% of the activity is generated by the community)
  1. maturity (community is maturely helping each other out)
  1. mitosis (community begins to split into smaller subgroups or in separate communities entirely)
Four stages of a community life-cycle.
Four stages of a community life-cycle.
At the Inception stage:
  • Invite everyone yourself, one at a time
  • Don't ask "want to join", ask for a specific engagement that solves a problem or gives them the status "Can I feature you? Want to be a founding member?"
  • Get to know everyone individually, until you can't
  • Set an example
  • Fake it till you make it: when someone engages, make sure they have a great response (ideally from others)
  • Make it as easy/attractive as possible for others to engage (suggest topics, remove friction, celebrate people who engage, help solve their problems

Best Practices of a Successful Community:

  • meet regularly
  • distribute ownership
  • create identity
  • give early users status
  • transition early users into new roles (or alumni) overtime
  • build community in public!

Why you should start investing in Community for your SaaS?

The Future of community

Software is eating the world, and community is eating software.
  • Community will continue to be a broad term, but finally people and companies will fully grasp that an audience does not mean the same thing as a community.
  • Community will finally get a seat at the table, following in the footsteps of customer success from a decade ago.
  • Community will become its own department within more orgs, leading to more Heads of Community, Chief Community Officers, and other community leadership roles.
  • There will be continued specialization of roles in community.
  • Community Manager will turn into Community Engagement, Community Marketing, Community Support, Community Success, etc. And then we'll see other roles start to merge under community.
  • Community, customer support, and customer success will overlap and start to blend together. Traditional CS roles will still exist, but more 'low-level' support will be offloaded to communities and community teams.

The unbundling of LinkedIn

What Dribbble is to designers, we'll see for nurses, marketers, community managers, and every other career vertical, providing community, 'portfolios', and better job hunting experiences tailored to the specific type.

The unbundling of Reddit

Every subreddit will get its own dedicated community app, built specifically to serve the unique needs of that vertical. Vertical specificity will win out over general community platforms.

Community-driven versions

of existing products and services will continue to be built, eventually taking over those who build without any community focus. See Public vs Robinhood.

Interactive audio and audio communities

They will continue to grow. Spotify will enter the market with their own offering, likely acquiring an existing player, similarly to when they initially entered podcasting.

Innovation in the community platform space

Everything right now looks like some form of forum or 'Slack for community'. We'll see platforms that rethink the idea of community from the ground up, in less structured ways than 'forums'.

Explosion of remote work

It will continue to drive a greater need for community at every level, online and offline, locally and globally. Expect more companies to build verticals in Nextdoor's space.

Companies will continue to acquire communities as starting points for their own

See Outreach +@SalesHacker, Stripe +@IndieHackers, and DigitalOcean +@scotch_io
Companies will also continue to build communities of interest, rather than just customer/support communities.
More and more companies will build communities of interest, rather than just customer & support communities.
This will enable their communities to reach a wider audience, and ultimately be seen as revenue generators rather than cost centers.

Independent communities

They will turn into full-fledged businesses and media 'empires' as they grow beyond the community they started with.

Consolidation of tools

We're currently in a golden age of community, engagement and event tools, but over the next decade we'll see major players start to acquire competitors, and ultimately 'win' verticals.

Increased innovation will occur in the moderation space

As community gets elevated in organizations, companies will finally want to invest in tools to help make moderation easier and less dependent on pure manpower.

Companies will treat their internal teams more like communities

There will be an expansion of internal community teams, especially at cos with 1,000+ employees. Remote-first companies will set this trend, needing to be more intentional about fostering internal community.

Continued normalization of online communities

of internet friends, people that you met in online communities rather than in-person. This has been normal for a decade or more in the gaming world, but it will bleed over to professional friends and relationships.

Companies will continue to invest in online events and engagement

As they realize how much larger of a reach they can achieve for lower cost and overhead. In-person conferences will adopt hybrid models, offering virtual access in addition to their physical locations.

Conclusion: What’s our take on Communities for SaaS?

  1. Start building a community for your SaaS, even before you build your product
  1. Your community growth can help you become explosive
  1. You are never late to begin building a community for your SaaS
  1. We are still early on understanding the full potential of communities
  1. Build a community only when you can help members support each other