Leveraging the community for startup success
Leveraging the community for startup success
...and does Batman have anything to do with it?
Did you know that the iconic toy that captivated the imaginations of countless children; was taken over by an unexpected group of dedicated enthusiasts in 1998?
No, it was not Batman!
It was LEGO!
In 1998, the company released a new product called LEGO Mindstorms. The core of it was a yellow microchip that made all sorts of movements and behaviors possible. The product became an instant hit – 80,000 sets had changed hands within three months.
There was a tiny problem: despite the targeted marketing, the buyers were not children but adults!
Adults who took pride in creating innovative applications far more sophisticated than what LEGO had developed!
Naturally, the company was caught off guard and reacted negatively. But they soon realized the value this new set of customers brought to LEGO as a brand, ultimately leading to the emergence of the AFOL [Adult Fans Of LEGO] Community.
The company actively sought ways to leverage the passionate community around its products and engage with them through initiatives like LEGO Idea, BrickCon, BickFair, and many more.
LEGO established a thriving ecosystem where the community feels valued, establishing brand loyalty and inducing positive word-of-mouth.
The community served as a pool of talent to bounce ideas off of and as a direct communication channel to ensure the products resonated with the user base. The validation and feedback helped them refine their marketing strategies and expand their target market.
According to the 2022 Community Industry Report by CMX, 87% of executives agree communities are critical for the growth of their organization, and 79% believe communities did have a positive impact on their organization’s objectives.
Now that we know how critical community building is for a business's growth: Let's dive deeper and explore how startups fit into the equation!
The initial stage of a startup’s growth involves conceptualizing and validating a business idea.
To successfully thrive and achieve their goals, startups must attract investors, gain market share, increase revenue and expand their customer base, or develop new products/services.
All these growth milestones can seem daunting but achievable when you involve a diverse range of people giving you feedback at every step of the way, like a community.
So how does a community help startups?
Validation and Feedback: A community can provide startups with invaluable insights and feedback on their products, services, business models, and marketing strategies.
This can help startups identify areas for improvement and refine their offerings to meet the needs of their target audience efficiently.
Brand Loyalty: A strong community can create brand advocates. These advocates can help you increase brand awareness, customer retention, and revenue.
According to the Meta and GroupM’s Report, people who consider themselves loyal are 1.5X more likely to share their go-to brands and products. The report also mentions how a 5% increase in customer retention increases business profits by 25%-95%.
Customer Acquisition: LEGO’s example demonstrates how despite primarily targeting children, it recognized the potential of its AFOL community and leveraged it as a valuable source for attracting new customers.
As a result, the community became an integral part of the brand's success and growth. Similarly, by providing value to your community and meeting them halfway, you can definitely expand your customer base.
Networking and Partnerships: Building a community can also lead to valuable networking opportunities and partnerships. By connecting with individuals who share your interests, you can establish relationships that help your startup grow and succeed.
“Your network really is your net worth,” writes Alp Mimaroglu in his Entrepreneur article. He explains how Eloqua was sold to Oracle for $871 million seamlessly, only because the co-founder had built strong shared relationships with Oracle.
How to build a community around your startup?
Define your vision and values: Building a personality for your business can help you attract individuals who share your line of thought and are passionate about what you are trying to achieve.
Identify your target audience: Determine who your target audience is and where they spend their time online. It will help you identify the platforms and channels you can use to reach and engage with them.
Create valuable content: Develop content that provides value to your target audience. Use blog posts, videos, social media posts, etc., to your advantage. By providing value, you can build trust and credibility with your community.
Engage with your community: Engage with your community regularly by responding to comments and hosting events like Q&A sessions, webinars, etc. In her interview with Entrepreneur, co-founder, and CMO of Binance, Yi He says, “Community engagement gives companies authenticity and loyalty.”
Provide incentives: This stimulates a reward system amongst the community members and leads to them engaging with your startup. Incentives can include exclusive behind-the-scenes content, discounts, early access to products or services, or real-time interaction with their favorite creator.
Measure your success: Use analytics to track the growth and engagement of your community. It helps you identify areas for improvement and refine your community-building strategies over time.
Closing Thoughts
In addition to being an invaluable resource for collaboration and knowledge sharing, communities can help you find new customers and partners. They are an excellent way to build brand awareness, gain feedback on your product or service offerings and increase trust among potential clients.
LEGO's approach of prioritizing community engagement, utilizing online platforms, and leveraging passionate advocates to create brand loyalty and generate organic marketing can serve as an example for startups.
What do you think? Is building a startup community worth it? Share your experiences or thoughts in the comments below!