Over the past few years, community has been a buzzword for tech startups looking to sell a product or service based on their definition of a useful network. The pandemic stress-tested these business models, with some companies seeing that consumers weren’t willing to pay fees in exchange for advice they could find on Twitter, while others realized that focusing on a target user was more important than finding the biggest total addressable market possible.
It’s part of the reason I had so much fun interviewing founders from Clubhouse and Chief last week at TechCrunch Disrupt. I spoke to the founders of these companies to understand how they’ve evolved to deal with a bewildering new normal, and while a social audio app and a private membership community for women in leadership are quite different in strategy, they shared the same vibe: Less is more.
Clubhouse’s product-market fit
Paul Davison, Clubhouse co-founder and CEO, was fast to address what others described as Clubhouse’s fall from grace. He said that the app’s early hype saw it grow 10x in users month over month, a boom that broke a lot of the underlying infrastructure of the app. For months, he said, people had a bad experience on the app because of tech issues and the inability to find a room that matched their interests.
“I don’t think hype is good. I don’t think extreme hypergrowth is good for a company. The ideal is to grow at a steady pace,” Davison said at TechCrunch Disrupt.
Today, Clubhouse’s tone has shifted to be more about private, small-group communities instead of broadcast shows that have guests like Elon Musk or Marc Andreessen.
“Growth tends to be driven by a series of continuous optimizations that happen over time,” Davison said. “And that’s punctuated by these discontinuities that come along every six to 24 months.” He went on to explain that Facebook’s discontinuity was its News Feed, while Instagram and Snapchat were disjointed by the Stories features. For Clubhouse, it’s to be determined.
“I think for us to really get the product right at this next level of scale, we have to allow these communities to undergo mitosis and split off and to become not just a single community, but a network of many different communities.”
No need to open up the floodgates — just the U.K.
It’s somewhat counterintuitive that Chief, a private membership club for women in leadership positions, has a waitlist that is three times larger than the number of people in its network.
At TechCrunch Disrupt last week, its co-founders Carolyn Childers and Lindsay Kaplan said that — even though they’re valued at $1.1 billion by investors — they want to make sure they’re focused on the experience of the community before opening the floodgates.
Childers said it’s a focus on retention and impact, not necessarily hypergrowth of the community. This month, Chief expanded to the U.K., one of the geographies most represented on its waitlist.
Another temptation that Chief has been able to avoid in its pursuit of venture-like scale is broadening its target consumer. Right now, the startup only focuses on women who identify as a “C-level executive, accomplished VP or equivalent executive leadership role within your organization,” and have an “established career with 15+ years of experience.”
Childers said that not everyone really needs to have 15 years of experience (founders are allowed, for example); however, the company does feel strongly about the impact of its members.
“We really wanted to make sure we had a vetted community where people had true peers, because the mentors need to mentor each other,” Kaplan said on stage. “It’s certainly part of a longer, bigger plan for us to think about what comes next and who else can we impact in the near future.”
While Chief’s investors are clearly patient, the market may not be. One of Chief’s biggest competitors, The Wing, shut down earlier this year due to the pandemic. Kaplan said that Chief’s focus is part of its endurance.
“We’re a community that happens to have a space, not a space that then tries to build a community,” she said. “I think that is what has allowed us to endure, especially during 2020 and 2021 when spaces were closed.”
How Clubhouse and Chief are connected
Clubhouse is attempting to redefine what its core consumer is, and it’s growing more toward those seeking private friendships and diverse conversations, rather than broad, generalist techie broadcast shows. Chief, meanwhile, sees staying sharp on its definition of who a core member is has helped it avoid the temptation of building spaces that don’t have an obvious reason. Add in my recent reporting on On Deck, which admitted that hyper-growth fractured focus and brand, and I think we have ourselves a trend.
I’m not a consumer reporter, not even a little, but I have spent years covering the networks that people in tech take to get their first check, job, promotion or just a yes. I’ve seen how most community-focused companies leap at the chance to go bigger — whether its accelerators growing their check size or simply the number of programs for entrepreneurs to go through.
It feels like we’re at an inflection point for the community-focused startup. In some ways, it matches with the current generic and tiresome advice being spouted around the market right now: Double down on what you know and focus on discipline throughout this downturn.
In other ways, it suggests that the bar for community startups has never been higher when it comes to investors throwing more millions their way and users trusting that the businesses are delivering real value, not just good marketing.