Community-Driven Companies: What They Are and Why We’re Investing in Them

Image by Alexandra Koch from Pixabay.

Hi all! My name is Lolita Taub. I’m General Partner at Ganas Ventures where our mission is to leverage the power of our community to invest in community-driven future unicorns. We believe that companies with community at the core will become unicorns and produce outsized returns.

What’s a community-driven company?

There are various takes on what community-driven companies are. It’s part of what makes this model so special. But we, at Ganas Ventures, all coalesce around a few key points including…

1. customers identify as members
2. members are able to create value for other members
3. members start the marketing and sales flywheel

Side-notes: a community-driven company can have the community be its product or have a community built around its product. They can also come from any sector and can be both B2B (e.g., MongoDB, Salesforce) or Consumer (e.g., Peloton, Glossier).

Why is now the time to invest in community-driven companies?

The timing is right for community-driven companies to rise and build the companies of the future because:

1. people more than ever are seeking community
2. platforms to unite/create communities are abundantly available (e.g., Slack, Facebook Groups)
3. traditional ways of attracting customers are expensive

Why do you believe that community will be a strong indicator of success for companies?

Community-driven companies are faster growing due to their passionate members and sticky products, they have better gross margins because engaged users support others and engage in sharing product feedback, and these businesses have lower operating and sales costs from that marketing/sales flywheel I mentioned above. All…