Exciting changes are afoot in the enterprise-tech market. Power is shifting from the handful of traditional ‘top-down’ buyers to millions of end users. With the consumerization of IT, we now expect the software we use at work to be just as easy and even delightful to use as the consumer tech we use in our off-hours.
Simultaneously, customer acquisition through traditional digital-marketing channels has gotten more and more expensive. Taken together, these two factors have shifted many enterprise-tech players towards a product-led growth (PLG) strategy. Essentially, the strategy involves creating a product that’s designed to go viral, individual by individual—turning your customers into your marketing team.
Product-led growth starts with designing an extraordinary product—which is easier said than done. Making sure your product actually delivers a world-class experience, and meets or exceeds user expectations, requires something else: building an authentic community around the problem(s) your product seeks to solve. Done right, this type of “community-led growth” can turn your users into ardent brand ambassadors.
Indeed, PLG and community-led growth are tightly coupled: Crowdsourcing product input, code and usability positions your PLG strategy well and naturally improves your product. But it also naturally creates a community of like-minded people with a vested interest in that product’s success — people who then may become part of your marketing, adoption and GTM engine.
Authentic community is the key
If your goal is to break into an enterprise, not through a big purchase order but through individual champions, then you’re targeting the end users of your product. That means it can be just as important to connect to a star developer, or a VP of engineering, as to a CTO. You’re appealing to individual champions who will spread the word about your product. These power users understand the particular challenges their organizations face. They have an action-oriented mindset. And they’re typically willing to give you feedback on your product. They can be the core of a community built around your product or brand, which can ultimately deepen your connection to existing users, and reach out to new users.
Some of the most powerful potential champions are people who self-identify deeply with their work. Designers, for example, bring a design mentality to everything they do. Engineers are always problem-solvers. They don’t turn those parts of their brains off when they leave work.
Communities that engage users in providing product feedback, or even contributing bits of code, can be particularly powerful. Once people are engaged in making something, they have a vested interest in seeing it succeed. Imagine if the brewery down the street from you asked for customer feedback on its new logo design. If the brewery used your favorite design, you might share it on your social media, or mention it to friends. The same is true for beta testers of a software product—if they’ve exerted a real influence on a product, they’ll feel more ownership of it.
Challenges in building strong user communities
The main challenge companies face in building communities is striking the right balance in terms of defining the community’s mission without limiting it too much. You want to guide the community towards the activities and topics that will be most useful to your product development and marketing, without making the community feel inauthentic or overly ‘sales-y.’
Take Docker, an open-source platform for developing, shipping and running applications. Docker enabled engineers to separate applications from infrastructure so they can deliver software more rapidly. At one time, Docker was super-popular — but the platform tied its open-source community too strongly to its monetization plan, and put up too many walls for users. Ultimately, Google open-sourced an alternative solution called Kubernetes that has gained significant mindshare.
Early-stage companies should also be aware that if a community really takes off, it can raise expectations, especially if there’s money involved. The crowd-sourced video game Star Citizen, for example, raised $2 million in a 2012 Kickstarter campaign and then went truly viral. In some ways, that’s the dream scenario: a community of supporters who all become evangelists, doing tons of free marketing. But Star Citizen ended up raising way more money than it ever intended to raise — $350 million to date, ranking among the top crowdfunded projects of all time. Yet its production cycle is endlessly delayed into the future. It might now be impossible for the final product to live up to the expectations created by that viral spread.
A third challenge we’ve seen is focus. If the product, and hence the community, isn’t organized around a clear focus, the product team can become distracted by features or use cases that don’t generate revenue.
Best practices for community building
Your goal should be to define what the community wants to achieve, but not how they’ll achieve it. In other words, the community is united around a shared problem—like making engineering more efficient—instead of focusing only on the shared solution that is your product. For example, Salesforce has created a community called Trailhead, where users can learn sales skills and build towards new careers. Users are pursuing their own goals, but Salesforce becomes the standard platform that they utilize. Similarly, our portfolio company Pendo* sponsors ProductCraft, a thriving community for everyone working on digital products. Most of these folks also use Pendo, but that’s not required for participation.
You should also aim to separate community-building goals from your explicit sales goals. Many companies today are creating a Chief Community Officer role to oversee their open-source communities. This role should ideally not be part of a sales or marketing team. Your community needs to stay authentically open-source in spirit in order to keep users engaged.
An open API is ideal for seeding a community. This allows other developers to create an ecosystem around your product. You want to be the center of the customer-relationship universe, or the product management universe, or whatever universe you’re targeting.
Two compelling examples of open API communities are cryptocurrencies and Salesforce. Amid all the buzz about crypto valuations for Bitcoin, Ethereum and DeFi, among others, many overlook that these are thriving communities built on many of the building blocks of a strong, authentic community. These are decentralized, open, technical integrations. The authenticity fosters some of the biggest believers in blockchain technology and an army of supporters that will propel the movement for years to come. Salesforce has created a powerful combination of community plus strong API integrations to become the center of the universe for all things sales. Other next-gen APIs that led with communities are Auth0, Airbnb , Notion, MongoDB, Netlify and Cloudinary.
Ultimately, a strong community of users can not only help your product go viral; it can be invaluable to your long-term growth. Engaged users may share your product with their friends and colleagues. But even better, they’re also smart people who spend a lot of time thinking about the core problems you’re trying to solve. They may come up with pain points or new feature ideas that you’d never have thought of. A strong community can actually help show you where your company could go for years into the future.
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*Denotes a past or present Battery portfolio company. For a full list of all Battery investments, please click here. Investments identified above are for illustrative purposes only. No assumptions should be made that any investments identified above were or will be profitable. It should not be assumed that recommendations in the future will be profitable or equal the performance of the companies identified above.
Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.