This week we’re wrapping up our 4-part series on Decoding Community with Max Altschuler. If you haven’t been following each one prior to this one, I recommend you go back to Part 1: Starting a Community and work your way back to this one!
Let us know if you’ve enjoyed the Max takeover, we’ll need to pull him back into the ring from time to time 🥊
This is the last Newsletter that I’ll be writing from Vancouver for a while – lots of work travel and big things ahead for the month of June.
Next week, I’ll be writing to you from Hong Kong – send over any must-dos.
Anyway, let’s get into it.
We’re officially running a GTMfund Summer Giveaway: Share your favourite piece of our content (Newsletter or Podcast), tag us, and you’ll be entered to win a pair of exclusive GTMfund Airpod Pro’s.
Max Altschuler, GP at GTMfund:
This section comes in 3 parts – Picking, Pricing, and Path Forward.
So you want to buy a community?
Smart move! It can save you years of work, it can drive you tons of traffic, it can make your brand an authority in the space, and it can do that all virtually overnight. It’s a great way to get closer to your customer, in mass, fast.
Or…it can be highly profitable via direct revenue or by helping you up sell or cross sell different assets you already have.
For this post, I’ll gear this to folks out there reading this that see it as a meaningful add-on to their business and not just additional revenue (so not PE firms).
First, you need to Pick a community.
It’s always easiest if you’ve been working with the community already. Are you a sponsor? Attendee? Have you “used” the product? You should do that first.
What about the key person? The face of the business. Do you get along well with them? See the world similarly? Grok together professionally? You will be making them a very public face of your company. You need to believe in them in a big way.
The next question is, what do the people in the audience represent? You need to see the list and the open rate or activity of the list. Is it fresh and active? Do the titles, industries, and segments align with your business goals? How will it achieve your goals for you? Maybe the goal is more immediate revenue so you’ll hope that it’ll open up more Top of Funnel Opportunities. Maybe it’s long tail revenue and giving you a leg up on the competition by always being in the spotlight for your customers. Maybe it’s recruiting. Maybe it’s product. You should know exactly, and then try to assign a value to everything. ie. Users that log in daily are worth $100 or paid members with Y Title in Z Industry are worth $1000 on top of whatever revenue they drive.
What assets are you getting? Is it webinars? Conferences? Publication? Newsletter? What are you getting and how does it mesh with what you already have?
The same goes for the headcount. What are you bringing to the larger business? Amazing SEO skills that can translate to the brand/core company? A team of virtual assistants that can scale across the new org?
What about the community can help you establish a moat? Is there any defensibility? Maybe it’s the size of the community. Maybe the face of the community is really famous. What’s the differentiating factor and how do you maintain it?
The next piece is negotiation or Pricing.
The price is what the market decides it is. Usually, it’s not some arbitrary multiple of X or Y metric. You can try to start there though. Start with EBITDA and a multiple. Or start with how much a community member is worth to you and what conversion to customer could look like if they become a paid user of your product.
Are you paying cash or providing upside? Maybe a little of both? Are you keeping the CEO/team or is it not needed? If so, for how many years is there earn out? Are you negotiating against competitors or is it yours to lose? A lot of these factors will affect pricing.
Lastly, how to not f*%$ it up – AKA Path Forward.
This should be talked about in the acquisition process but are you on the same page with where the business and community go from here together? How do they blend and how are they resourced?
The biggest thing in the first few months is to make sure you don’t cannibalize the asset you just purchased. You need to keep members loyal to the brand. Don’t make drastic moves for at least a year. Make sure to retain the face of the community for at least a year, even if it’s not in an active, day-to-day role.
Over-rotate into not screwing it up for a year. You will need to do more than usual to keep the trust. I like adding a subtle “Powered by ____” under the community logo but I wouldn’t go changing the name or branding too much in year one. An eventual reskin to acquiring company colors makes sense as well but do it all with time.
Be sure to keep a hard wall between business leads and community subscribers/members. Not all community members become leads. There has to be a rule here internally that everyone follows. Members only become leads once they opt in directly. The main use is for content promotion and brand, not direct lead gen. It’s long-tail. It’ll come over time. The need to sign up for a lead magnet like an ebook or webinar specifically called out as sponsored for a rep to reach out to them.
Running a community is an absolute blast. You get to learn by osmosis from others who’ve been there, don’t that, build a network of like-minded people, and actually help them, all while getting paid to do it! And if it really works out, you can sell it for big money one day. It’s anything but easy, but it’s doable – and knowing how possible it is was always enough to keep me going.
Good luck out there! Let me know if this was a helpful primer for you.
👀 More for your eyeballs:
👂 More for your eardrums:
This week we sat down with one of the Ent. Sellers in the game, Jamal Reimer. Jamal closed multiple $50m deals as an individual contributor Enterprise seller, authored the best selling book, Mega Deal Secrets, coached hundreds of ambitious sellers to sell the largest deals of their lives, and founded the Enterprise Sellers Community, a community of practice for individual contributors.
🚀 Start-ups to watch:
Magic announced the successful completion of their latest funding round, raising $52 million to fuel their growth and accelerate their mission to provide a web3 wallet to every internet user. Check em out👇
🔥Hottest GTM job of the week:
Check out more of our jobs here.
That’s it from me for this week.
If you’ve been following through each part of the Community series, curious to hear which one you found most valuable. Let us know in the comments👇
Enjoy the weekend.