Mastering community building and Google's expertise in deal making
💡JC's Newsletter #116
Dear friends,
In JC’s Newsletter, I share the articles, documentaries, and books that I enjoyed the most in the last week, with some comments on how we relate to them at Alan. I do not endorse all the articles I share, they are up for debate.
I’m doing it because a) I love reading, it is the way that I get most of my ideas, b) I’m already sharing those ideas with my team, and c) I would love to get your perspective on those.
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💡Must-read
👉 A founder’s guide to the community (Lenny’s Newsletter)
To build a community, you help people help each other.
Great examples:
Duolingo is able to run 2,600 events every month with a community team of three people.
➡️ Can we study how they do it?
83% of questions asked by Salesforce customers are answered by other customers.
➡️ Wow! It should inspire us.
How a subreddit with 155,000 members helps Notion users exchange ideas for how to be more successful with the product. They all empower their community members to contribute.
Other examples:
Support: Create spaces for customers to answer questions and solve problems for each other. Example: Autodesk support community
Product: Example: Atlassian feedback section
Contribution: Example: Notion Template Gallery
Success: Example: Salesforce’s Trailblazer program
➡️ What can we learn from those? Could we create a forum for company admins accessible in the app?
How to do it?
You have to talk to your potential members and identify their needs and motivations.
The number one thing you can start doing today is talking to your members.
Your customers are going to join your community because of benefits, not belonging. Belonging comes after someone has been a part of a community and formed relationships. What’s going to get them in the door in the first place is a clear understanding of how the community will help them solve a problem or achieve a goal.
1. Activity: Are your members participating regularly?
2. Value: Are your members getting the benefits that they came for?
3. Belonging: Do your members feel connected, safe, and included?
All community programs have some of the same fundamental elements, what we call the 7Ps of community:
1. People: Who the program is focused on
2. Purpose: Why they need this program
3. Place: Where members will gather
4. Participation: What members will do
5. Policy: Guidelines and rules that will shape the experience
6. Promotion: How members will learn about the program
7. Performance: What success looks like
Start small: recommend starting with 10 to 50 members.
Events:
Take Finimize, for example. Its team of three community professionals are leading a program where an event is hosted almost every day of the year. They’re able to run more than 200 events annually by empowering members of the community to host events under their brand.
Once you’ve identified an event format that works, turn it into a repeatable model that others can copy. You do this by creating a host playbook that maps out everything from:
Community mission and values
How to launch a chapter
How to promote an event
How to find a venue
Where to find design assets and resources
How to select speakers
The community code of conduct
Anything else that your hosts need to succeed
➡️ People tend to like our culture - we could do that.
Compensation:
Businesses usually reward these volunteers with swag, access to perks, invitations to exclusive events, speaker training, and other benefits. Some brands offer them a budget for their events, and some will compensate them too.
🏯 Building a company
👉 Sridhar Ramaswamy - The Past, Present, and Future of Search (Join Colossus)
Partnerships were always a really important part of Google. I talked about the Yahoo deal, I talked about the AOL deal. Not that many people also know that some of these deals were money-losing. Getting market share was definitely really, really important. I think the remarkable thing about Google's partnerships is how much of a long-term view that the management team brought into the picture.
I would say, in some ways, the magnificent culmination of Google's deal-making ability was the Yahoo Japan deal. Yahoo Japan, which was owned by SoftBank at the time, had more market share in Japan than Google did, and we struck a deal with them where we would power both their search and their ads.
Distribution partnerships are very nice because they are win-win. Our browser maker gets to have a great option and we share our revenue with them. And it's a very efficient cost per acquisition model for us where we are not spending ahead of time.
➡️ Should we be the default option of some tools? The market is very different, but being there by default without people having to subscribe is really powerful. I don’t know if there is something else than the States where it applies to us.
I think of product development: whether it's for an engineer, or a product manager, or a founder, as the art of imagining what should be. But much more importantly, being able to create a path for how you go from here.
➡️ Daring to think about the future, and how to connect it with today, is the most important skill of innovation in my opinion.
👉 Solana Summer (NotBoring)
➡️ Inspire ourselves from Crypto Hackathons that have been good at gathering ideas (not saying we should do crypto!). Would you like an Alan public hackathon?
👉 Send your staff on a tour of duty (Sifted)
Every year, hundreds of Bulb’s employees take up short-term posts — ‘rotations’ — in other departments to learn new skills and share knowledge. (206 people went on rotation last year.)
Run a competitive — and clearly advertised — application process. Be clear on the length of rotation: we go for six months, primarily.
Make it admin-light. Make sure it’s clear how someone starts and finishes a rotation. Create clear templates and guides for running a quick recruitment process. Remind people that they need to manage people on rotation slightly differently from other team members, as you need to be thinking about what’s next for them.
➡️ I found the idea very interesting.
🗞 In the news
📱Technology
👉 Communities of the Future (Medium)
With Web2, community operating systems like Commsor, Orbit, and Common Room came about to solve the data and workflow problems that already existed in the community tech stack and to coordinate across hundreds of existing point solutions. In contrast, even in the earliest days of DAOs, there are already many operating systems available (Aragon, DAOstack, Colony, Syndicate, and Orca, to name a few).
➡️ Interesting list of tools to build communities.
👉 Ali Hamed - Amazon Aggregators: Buying Third-Party Sellers (Join Colossus)
Amazon aggregators. These are the companies that are buying up hundreds of Amazon's third party sellers. The concept of Amazon aggregators is relatively new, tracing back to 2018 with the founding of Thrasio.
Amazon actually make higher margins on Amazon third party sellers than they do their own stuff. They're able to essentially be a service provider to these Amazon third party sellers, where they charge them for the warehousing and the shipping, the payment, the whole thing. Actually 40% of revenues of an Amazon seller often go to Amazon. It's actually not so bad for Amazon. Without taking any of the inventory risk, or the product risk, or anything like that.
What Amazon does is it charges you line by line for the services they provide. That could be storage, that could be shipping, that could be payments, that could be whatever. And what's charged to the Amazon third party seller is mostly in that 40% range.
🏥 Healthcare
👉 150 most promising startups in digital health (Healthcare Insights by CB Insights)
👉 HTN Weekly Health Tech Reads 3/13 (Health Tech Nerds)
Babylon posted earnings, and its growth in lives under value-based contracts shows the benefits of growing by acquiring practices - it has grown from 58k Medicaid lives at YE2020 to 140k Medicaid lives at YE2021. The analyst questions are really good here trying to understand how exactly Babylon is winning and performing on value-based care contracts, and the answers aren't super clear. Link.
Fair Health's updated data on telehealth sure seems to indicate that telehealth has settled into a new normal at around 4% - 5% of medical claims. While a significant improvement over pre-pandemic telehealth utilization, it's not exactly the tectonic shift many were expecting back in 2020.
👉 Health insurance tech companies, struggling to turn profits, bet on software to turn business around (Stat News)
They have yet to prove they can make money in the long run.
Oscar Health and Clover Health — have plummeted since their initial trades. They’re still racking up losses and the proportion of premiums they spend on medical claims outpaces that of lower-tech health insurance competitors.
Despite promising membership and revenue increases, they’re still reporting net losses
Oscar projected it would pull in $6 billion in premiums from more than 1 million members in 2022.
But membership increases don’t necessarily reflect that the company is in a good position to become profitable. Net losses topped $571 million in 2021, an increase of about $165 million compared to the last year.
Schlosser said Oscar’s homegrown health record software — which he says can combine payer and clinical information more seamlessly than more widely available software designed for one or the other — helps the company better identify opportunities for preventive care. A patient whose claims information shows frequent emergency room visits might be flagged in health records as a potential diabetic, for instance. “We drive that up to the physicians in our own EHR, so that is something we can deploy into our primary care data,” Schlosser said.
➡️ With Alan, we have built a very different path where we improve unit economics year on year towards profitability.
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