January 16, 2020- Harvard Business Review published an article titled “Turn Your Customers Into Community” that outlined the heroic rise of Lego off the backs of a revitalized community-first brand-building approach. The HBR article attributes the success to the launch of the LEGO Ideas platform, allowing fans to submit new concepts for LEGO sets. Other fans vote on proposals, and top vote-getters are reviewed by LEGO staff. Chosen ideas are turned into sets for sale.

Sounds like a DAO, eh? The fan designer also receives 1% of the royalties.

The article goes on to list three Lessons for turning your customers into a community:

Lesson 1: Be willing to trust your customers.
Lesson 2: Start with “who,” not “what”
Lesson 3: Consider a sustained collaboration, not a short-term investment.

The underlying shift from treating your customers as a community is not new. It’s been marinating for a few years amongst big brands and entities, with each marketing campaign becoming more community-centric. For large brands and entities, community building feels more like a walk in the park that is slowly becoming a brisk jog.

For crypto companies, community building feels like riding a bike with square tires while trying to juggle eggs.

It gets worse when you realize you’re being forced to ride the bike. Because every crypto product needs a community, but not everyone knows how to get there.

Let’s start with a couple of wrong assumptions that people have about community and community building:

1. Simply putting people in a discord or telegram is a “community”

2. Your community needs to be hyper-focused on your product or business

3. Bootstrapping and building a community is a community manager’s job

4. People will automatically care about what you’re building

5. People will participate in your community just because

The reality is that community building is tough. Attention is scarce, and there will always be a cooler, newer, higher FDV product that you have to compete with.

That being said, all hope is not lost.

There’s a few things that I think are foundational to why people join and participate in “communities”:

They’re making money
They’re making friends/ connections
They’re gaining status

My favorite angle to harp on when discussing community building is this idea of status.

In his piece, Status As A Service, Eugene Wei outlines two principles that are core to community building:

1. People are status-seeking monkeys

2. People seek out the most efficient path to maximizing social capital

Communities are their own social networks, equipped with their nuances of social capital and how it is perceived. Eugene uses this three-axis framework, which presents a more complete image of community composition.

It’s not all about social capital or utility, and there is a third axis: entertainment, which speaks to an intangible necessity to build and maintain a community.

But let’s discuss each in its context:

Utility: For crypto communities, this is self-explanatory. In the startup context, builders and founders always try to provide utility to their community. This is not where they fail.

Entertainment: Self-explanatory but slept on. Many people forget the fun part of communities (especially when the communities are connected to their product or business). Founders/ community builders often take an overly rigid approach, making their job harder. It’s crypto… people like to have fun, shitpost, and make memes. They also like to degen, so a little community-based degeneracy is never a bad idea. Don’t be afraid to build community lore, either. It adds character to your community and creates a genuine bond between community community members.

Social Capital: the most misunderstood. You will struggle to maintain your community if you don’t have mechanisms to identify and reward active contributors or distinguished members. The catch is that your mechanisms and activations will be lackluster without the other two variables. It’s the “proof of work” dynamic described by Eugene, but without context, “Proof of Work” is meaningless. Your “Proof of Work” mechanism is essential to capturing the top 1% performers across your community, the people, and participants who are integral to the success of your community.

I’ll have to expand on this in a future piece, but identifying your top 1% performers with meaningful and community-centric activations is one of the best ways to build and maintain a loyal community.

For now, happy community building.

See you next time!