SPI 619: How to Create a Community that Becomes Your Business

SPI 619: How to Create a Community that Becomes Your Business

Andrew Guttormsen: Something that I found very surprising was that even the absolute best communities on Circle that are earning the most, they're very small.

Almost all of them are under three hundred members, and many of them are less than a hundred members. They are often not just these big kind of expansive communities where a whole lot of stuff is happening. They're actually these very targeted, specific communities meant to deliver really, like, two things they do well.

It's easier to go after the right customer. It's easier to deliver on the promise that you're making. You make a promise on the sales page, you have to deliver that promise.

Pat Flynn: Hey, that was Andy co-founder of Circle. We've had him on the show before to talk about community because community, if you haven't noticed yet, has become basically the center of our business. A huge change over the years for us. Community, from the SPI Pro community, which is more the advanced audience and now we recently launched SPI Learner community, which is for the beginners.

These are two communities that are hosted on Circle that have become essentially our business now. And revenue models and business and numbers and things like that are an important part of making these kinds of decisions, as well as obviously the main component, being able to bring the community together and to support each other.

We have a lot to say about community. I wanna bring Andy on to talk about something incredibly insightful about the data that he has access to with Circle now hosting over 7,000 communities on the platform. We talk about a lot of different examples and things that you could pull inspiration from as you were building your community.

So whether you already have one that is separate from a community like a Facebook group or a LinkedIn group, but like a private group, a niched community, that will serve your audience that also then in turn pays you back. Well, that's what we're talking about today. And we also have a special announcement for something that's happening very soon inside of the middle of this episode as well. So stay tuned for that.

Thank you again for joining me on the Smart Passive Income podcast. Here's Andy from Circle.

Announcer: Welcome to the Smart Passive Income Podcast, where it's all about working hard now, so you can sit back and reap the benefits later. And now your host, he dreams of having a menu item named after him one day, Pat Flynn.

Andy welcome back to the Smart Passive Income podcast. I feel like you are, I mean, this is obvious, but you're sort of our resident sort of community expert, you know, in house who comes in from Circle to give us the insights on what's happening in community, cuz community continues to be just a keyword, a a, a hot word right now in the world of creators.

Pat Flynn: How are you and how is Circle doing?

Andrew Guttormsen: I'm doing really well. It's really exciting. Every time you invite me to be on as a guest, Circle's doing well, community is doing well. If you made a bet and decided, Hey, I'm gonna create my own community, then you're doing really well right now.

Pat Flynn: Yeah. Indeed. And, you know, SPI has done a lot in community.

Recently, we launched SPI Pro, many people know that. Many of you might not know that we also released our beginner community, the SPI Learner community, which is doing fantastic. So we're now able to serve sort of different spectrums of our audience now, all using Circle and, and Circle's been fantastic.

And what you guys have done and how quickly you move is just amazing. I mean, there's a lot of people building SaaS companies right now, like as a SaaS company yourself, like, how are you making it work so smoothly? Or at least from our end, it looks like it's running smoothly. But like, what's your secret?

Andrew Guttormsen: I would say generally things run pretty smoothly. Not all the time. But it's been relatively straightforward to figure out what to build, right? We're really fortunate right now where we have probably 7,000 customers, 7,000 people building communities on Circle. And so when we wanna know what to build and what order, all of that, you know, we ask our customers, they're the ones that have the most insight into what is coming next.

They're in the weeds every single day. So like very tactically I'll tell you, gosh, probably four or five months ago we sent. A survey to all of our customers and we asked them, what's like your favorite thing? Like, what do you use the most? But then also what's the thing that's missing that you wanna see?

And we sent this out to thousands of people. We looked manually like at every single response. And really there were three things that, that came back that people wanted three specific features. And so what we did is we just said, all right, let's rally, you know, the engineering teams, the product teams, designers, and let's prioritize those three things and really like focus on delivering those. We may say, no, we will say no to a lot of other things that are good ideas, but aren't priorities right now. The natural next question is what are those three things, which, you know, I'm happy to share with you.

One of them is an Android app. Another is having like scheduled post. Another is the ability to deliver a course on, on Circle. And there's a long list of other things, but, you know, that's how we prioritize what to build.

Pat Flynn: I love that removing the guesswork is one of my phrases here. And the best way to do that is just to ask exactly who your customer is, so that that's great.

Do you do that survey? Like how often do you run a survey like that with your customers?

Andrew Guttormsen: We do it about once every six months. Of course, you know, we're talking to our customers every day. We have our own customer community. We're asking them, we're doing office hours a few times a week. We have a customer success team support.

So we're getting all the input all day, every day. But that formal survey happens about twice a year.

Pat Flynn: Nice. And I know that you guys just got back from your whole team was in Portugal to meet. Was this the first time that the entire sort of team was able to come together?

Andrew Guttormsen: It was so it's been two and a half years since we started the company.

And this is the first time that everybody's been in one place talking to each other, a meeting. It was really cool.

Pat Flynn: Yeah. What happens when you bring people together like that? Like what are some of the fun surprises or, or things that came out of, you know, cause that's a, that's quite of an investment. I imagine that, you know, y'all paid for people to come and go to a central place to, to hang out. How long were you there? And like, what was the result of that? Was it worth it?

Andrew Guttormsen: It was the coolest thing. So, you know, imagine, you know what it's like when you have teammates who know you're there in the, in the weeds with them every single day, you're solving problems, you're getting to know them, you know, a lot about their families and, and all of that.

I'll tell you the biggest surprise was when we first walked up and our chief of staff Karthik on the team, we saw that he was almost seven feet tall. I had no idea. There's so much of that over that, that week. But imagine it's like, you bring these 70 people before and you're like, oh, that's not what I was expecting you to look like.

Or, oh, I didn't know you were into that thing. Or I thought you were really shy, but you're really gregarious or whatever it is. It was, it was a lot of fun.

Pat Flynn: That's cool. I've heard that story many times. Not about like a seven foot person on the team, but things like that, surprises and things that now you take back into the virtual meeting room and those relationships are much stronger. Those stories are retold and those memories are created. It helps with retention. I imagine it helps with quicker ideation and, and problem solving, cuz I'm sure there were, it wasn't just like a go and play and surf all day, right? Kind of thing. It was like there were work sessions and, and things like that.

Like, what's an example of a work session that you did together to utilize the team as they were together that you couldn't really do sort of virtually.

Andrew Guttormsen: Yeah. I'll give you a few examples. So, you know, the first thing we had a chance to do, so we have a sales team. Like we have people, you know, who reach out this Circle every day and they wanna demo Circle.

Normally, we're all kind of in our own little rooms, but here we had our whole sales team kind of in one room together, talking to customers, giving people demo, having to learn how to like talk around each other and put headphones on. And all of that. We had another session with our, our marketing team and our product team where you know, I don't wanna give away the surprise, but talking about the big summit that we have coming up, Pat.

So like we just spent hours in a room together talking all about that. We had another session where we talked about in 2023, like, you know, we're in the weeds all day, every day. What's the kind of like big bets that we wanna make next year from a product perspective that we really wanna invest in.

And so there's some of those kind of conversations that like, you just, it's harder to have over Zoom when it's easier to be creative in person. When you're sitting around a table, there's like a, a whiteboard there and you can't do that on Zoom for more than like 30 minutes or an hour just tiring.

Pat Flynn: That's so true. I mean, there's just another energy in the room as well. And things flow faster. That's cool. Thank you. And we run a in person meeting every year, a work summit for us as well. And our team isn't quite as big, but it's still worthwhile to do. And it was actually something that as we are always looking to make cuts and smart decisions in our business, it was one of the things that was on the chopping block for the team to let go, okay, maybe we can let go of this so we can take some of that revenue and put it somewhere else.

And everybody on the team was like, no, we can't imagine getting rid of that. It's like one of the most important things we do. So we're meeting in October, but speaking of October, you had just mentioned the summit that we're putting on together. This is a Circle plus SPI summit, which we've done one before called CX Day, which was more of a general thing about community. If you're getting started with community, you should, you know, rewatch that replay, that kind of thing. But this one is gonna be even better because this is called the Business of Community Summit. So give us a little rundown on what this sort of one day Summit's gonna be between the two of us that people should sign up for immediately after hearing about it. Right now.

Andrew Guttormsen: It's funny. I always talk with, with the team, like, what would it be like if we wanted to deliver this amazing experience where, you know, you can learn about how to actually do this. A lot of times I go to, I think like in person conference or small coaching experience and ultimately what we decided to do, you know, after last time we had, gosh, I think like four or five folks from the SPI Team on four or five folks from our side.

And we were like, what if it, there was a one day where we basically just kind of pull back the curtains, go deep into how to build your community, not just how to build it though, but like how to set it up in terms of setting up as a business that is sustainable, that you can do for a long period of time.

And so we're putting together a full day event where we'll have the SPI Team come in show, you know, how you've built the SPI communities and, and, you know, you were not the first, but like you were the first with us and you've done it really, really well. And sometimes you just wanna hear it from the horse's mouth.

Like let's not guess at this stuff, let, let's actually kind of like walk through from end to end how you're running a community, how you're attracting members, how you're creating the offer, how you're keeping them coming back, how you ensure that your team can be sustainable around it. On our side, on the Circle side, we have this kind of unfair advantage, which is we have 7,000 communities.

And all we do is we look at the data all day, every day, we know which ones are doing really well. We which know which ones struggle, but we're doing is we're going in and, and taking all of those learnings, putting them in a kind of workshop, couple workshops and just sharing them and you know, so it'll be free.

Anybody can, can come and, and join. But really excited sometimes it's nice to do this stuff. You know, have a lot of people there and interact with the, the audience and the summits are our favorite.

Pat Flynn: It's gonna be a lot of fun. You've done summits before in partnership with other people. And now it's time for us to work together with something huge.

And so if y'all wanna sign up for this again, this is a free one day sort of summit that's happening. There's gonna be a live stream essentially happening all day and certain guests coming on. But like Andy was saying, there's going to be a ton revealed. We're going to open the curtain up and show you exactly how we do what we do down to like the pricing model and everything.

I'm sure Matt's gonna have a lot of fun with that presentation cuz that's his world, the marketing stuff I'm so excited to chat about and how do we get members? And like you said, how do we keep churn low, how do we keep people in? And we'll probably talk about some more nuanced things like onboarding, cuz that's a part of that process and, and whatnot, which Jillian's an expert in and we're just gonna have the whole team come on and, and deliver as much value as we can.

So right now you could sign up it's happening on October 25th. And if you're listening to this in the future beyond October 25th, 2022, you should still go to the link. I'm about to share because you'll get access to the material or like places that you can go afterwards to, to get something similar, SmartPassiveIncome.com/bcs.

That stands for Business of Community Summit, cuz we're talking business now, not just like the technicalities of how to set it up. A lot of that stuff you could find elsewhere and you can get instructed to learn how to set that up when you sign up with Circle. But when you go to SmartPassiveIncome.com/bcs, you'll be able to register and save your seat for this one day summit and get access to stuff that really isn't gonna be shared anywhere else. And hopefully have the ability to now understand how community will be a part of your business and become a business because it is definitely something that's generating revenue, but it has some cost. And there is a model that you could follow to make it successful, or you can just grapple, put it together and make mistakes along the way.

We've already made those mistakes. So let us show you what's going on. So again, SmartPassiveIncome.com/bcs. We'll plug that again a little bit later.

Let's Shift conversations to the communities that you have now. You have 7,000 communities in using Circle. It's a beautiful platform continues to get better, but just because you look at the data all the time, are there any insights you could reveal about what's working today or what the trends are?

Anything that we can as future community builders know just to better position ourselves for success as we're building our communities? Like what, what's the scoop?

Andrew Guttormsen: There's no, like right way, one right way, one end all be all way to run a community and there's lots of different types. But there are definitely seeing things that are working. And there are approaches where if you take these approaches, your, your odds of likelihood go way up. And so probably, I don't know, four months ago, five months ago is it was in the spring. And, and we were kind of going deep with our product team, but we were looking at the size of a lot of these communities. And, and something that I found very surprising was that the average community on Circle, even the absolute best communities on Circle that are earning the most, they're very small.

Almost all of them are under 300 members. But they are, and many of them are less than a hundred members, and they are often not just these big kind of expansive communities where a whole lot of stuff is happening in them. They're actually these very targeted, specific communities meant to deliver certain outcomes.

I like to call these mission based communities where there might be a start and an end. So an example would be Self-made is one of my favorites. It's a community for women who are building their own businesses. Another example would be there's Joe Lamp'l who is a gardener and he, you know, teaches gardening.

He has memberships and, and all of that, but you know, there's not a whole bunch of people in there where they're just, chit-chatting all day and there's a whole bunch different topics and 10 or 15 different kind of ways they interact. There's really like two things they do. Well, maybe they have weekly coaching or they have weekly office hours.

They bring in an expert. Maybe what they do is they have some type of accountability group, but the communities that we see do well, they don't try to, to do a whole lot. What they do is they, they focus on like one, maybe two, maybe three of these kind of rituals or, or ways of delivering value. And then that's where they start in the end and, and it's over.

They don't try and do more than that. It's easier to go after the right customer. It's easier to deliver on the promise that you're making cuz that's what a lot of these communities are. You have a sales page, you make a promise on the sales page, you have to deliver that promise. That was probably the biggest piece of data.

That was a surprise to us at our whole team. And it kind of changed also how we have to talk about Circle. Because most of our customers have less than 300 members and that includes the absolute best ones, which requires you to change, maybe when you're thinking about your business and like what your community might be.

Well, maybe that's not the end all be all to have some community with thousands and thousands of folks and, and Pat, I, I think the SPI community is a good example. Of where it's definitely quality over quantity. And there are very specific outcomes that, that you deliver.

Pat Flynn: For sure. I mean, we have talked internally about, and I've spoken about this every once in a while externally about the idea of putting a limit on it.

Like, we don't want it to grow too big because then it'll change the dynamic of the relationships in there. It'll affect how much team we would need and, and, and just the jive of the group. So I, I love to hear that. I think that's really encouraging and I think it can inspire people to think of communities maybe even not for their entire audience, but for a specific segment of their audience.

And this idea just came to mind. I, if I already wasn't so busy, I would totally build this community that I'm thinking about right now, because I have dove pretty deep into the world of YouTube, right? With the Deep Pocket Monster channel. And I have the Pat Flynn channel and I've been helping a lot of people through our online course, YouTube From Scratch it's been really helpful too, for hundreds of people.

And during office hours, those students often come to me with some thumbnails and like YouTube thumbnails, cuz it's a major component of, of success on YouTube is capturing that attention up front and they'll share the thumbnail with me. I'll spend a minute or two, just kind of offering some advice on it or encouraging them to go one direction or another, and then that's it.

And they come back every week cuz they just get this amazing feedback that will have a direct impact on the views and clicks that they have. And there's a very specific outcome of that particular moment in office hours for those people who, who do send that. What if there was a community called, I don't know, like Thumbnail Academy or something where for $99 a month, you could join. And once a week you could post a thumbnail to the group and my team or myself and the other people in the community would comment their suggestions on how the thumbnail looks and what suggestions could be made to make it better.

I mean, just the thumbnail of a video. You could make a community about all of YouTube, but that community, I would join and subscribe for, and that value that you get from that one change that you make every week could mean millions of additional views over time. And that, that would be totally worth the money. Like, is that kind of the idea of what you're saying as far as like such a specific thing and a mission based sort of outcome with a community, something like that would work?

Andrew Guttormsen: Well, what you're so what you're describing, right, there's there's these signature gatherings that you can offer. There's almost like they're almost like arrows in your quiver of these signature gatherings, right? Maybe you bring in an expert speaker once a month or once a week, or once every other week, maybe you do a kind of behind the scenes interview with somebody who could really help with something, maybe you have weekly or daily accountability groups.

Maybe you give feedback on somebody's work. There's probably 20 different versions of that, that we see just all the time. There're probably a hundred different versions of that. Your job is to figure out what are like the two or three of those that are the most valuable and most in demand from the members of your community.

And then you'll deliver that for them. And. before we turned on the lights Pat. I was mentioning, oh yeah, I'm having a lot of fun playing golf for the first time. Since I was a little kid, gosh, a month or two ago, I, I actually signed up for a golf membership community. It's one thing. It all it is, you upload a video of your swing and you get feedback from the instructor, you do it once a week. You get feedback on your, your swing, by the way, I don't upload my swing every single week, but I can, and I can get that one piece of feedback and I pay $79 a month for that. But that's the community. Then in the meantime, you're also able to like, just talk about your game and, you know, different topics and things like that, a more casual way, but the real value prop is that that swinger review, that swing.

So everybody might have their own version of a, a swing critique in, you know, whatever their, their acuity is. That's just wonderful of a signature gathering.

Pat Flynn: Yeah, that's great. And you could become like, maybe you're not the expert in the space entirely, but you are the expert at that little tiny thing that people really need.

Right? And, and you could still do very, very well. I remember watching a, a, it was like a pre-workout for Tiger Woods before I think he was shooting the masters or something way back in the day, during his prime. And he had a swing coach. I'm like, why does Tiger Woods need a swing coach? For that, he's like the top golfer in the world.

And I was like, oh, maybe it's because he has a swing coach that he is the top golfer in the world. It's like, that person is so specific on everything that goes on with just the swing in general. There's so much more to golf. There's a lot more to golf, but the swing coach was there during the workout to help him.

And even Tiger Woods had a swing coach. You could be thumbnail coach, or if you're in the world of, I don't know, Pokemon, like I am, maybe you specifically are the trophy card person, right? Which are the high end cards and people who are experts at other things would come to you because you have that specialty.

And I would imagine that like for marketing purposes, that's so much easier because you can come on and deliver value on a podcast or in a video about that one specific thing, that person, although they might be considered a competitor, they're not because they don't have that same specialization that you have.

And then the community who wants more information about that particular thing will, will come join you and, and follow you from there. That's I hope that's really encouraging to people listening because I think we have this. I don't know when we start business, we're like, we need millions of followers.

We need millions of subscribers. And if we're starting a community, like I can't imagine it being successful with just thousands. How is a community of 300 or even 100 successful as a business to tease a little bit about kind of what we're gonna talk about during our summit.

Andrew Guttormsen: I think you gotta talk about the money in order to talk about the business. I'll I'll give you maybe some real examples to start. So let's remove the word community for a minute and let's think of it more as like a product or a service cause a, a community is a community and, and all that of course, you know, you have people connection, but like that's still a product you're offering a product.

The community is a product. So for. Let's say that there's gonna be a hundred people in my community and I need to have $50,000 a year. Well then, you know, I need to make $500 a year from a hundred people, you know, then I need to start thinking through my product, like what is valuable enough for me to command $500 a year?

How can I deliver two or three or $5,000 of value to people and collect a fraction of that? You know, one of my favorite examples would be Josh Hall, who, you know, he's a coach he has a membership community for freelancers designers. It's a hundred dollars a month, right? So that might be a thousand or $1,200 a year from each of those members.

And he might have 80 or a hundred or a couple hundred. I actually don't know right now. But he's not going after the world. He's just supporting those hundred people really, really well. And so, you know, if you're thinking through, Hey, I want to create this visit. And by the way, maybe you're not even an expert like, maybe you're just a fan of something or an enthusiast of something, but you can be the person who brings folks together. Maybe it's a book club.

Pat Flynn: Maybe you're Backstreet Boys.

Andrew Guttormsen: You know Backstreet Boys is a customer Circle.

Pat Flynn: I know that's why I'm saying that. Which is really interesting, cuz I, I mentioned the Backstreet Boys a lot, cuz my wife is a huge fan and I've used that story in my presentation.

So I know that the Backstreet Boys have a community that's hosted on Circle, for their fans. Right?

Andrew Guttormsen: Exactly. Yeah. But by the way, there's communities where it's a fan, who's creating the community of whatever that thing is. And it could music, or it could be pottery, but you can also be the kind of curator who brings people together and more so enables them to explore those curiosities or learn together versus being the one actually teaching the stuff.

When you think about your business, you don't have to limit it to, what's the thing where I can teach a hundred people about this thing. It could be more is there something that I'm really excited about that I do know a lot about, but I also just like learning about it and I know there's a hundred people like me and I can take a lot of the work away and craft an experience where we're all learning together like that in itself could be a business as well. And you might wanna start with 10 people.

Pat Flynn: You don't need a ton of people. That's the big thing when you do, when you actually do the math, it's, it's kind of mind boggling because we, again, we always default to, we need thousands of people. We need millions of subscribers or people on our email list, right?

It's like this idea of a hundred people has come up in a, a lot, like let's get a hundred people in a community they're paying $99 a month, for access to whatever. I mean, that's $120,000 a year already. I mean, that's more than people are making at their nine to five, if, and, and you just need a hundred people, right?

I mean, there's variables and things change in different industries will pay more than others, but it's kind of ridiculous and amazing at the same time. So I, I, I hope this encourages you and there's a lot more to unpack with relation to turning idea, your audience, your, your passion, your love, your art, your craft, your expertise, whatever it might be into a community and inviting other people within it.

And then having it give you return, having, having it be a part of, of your business or your entire business. We're gonna talk about all that during our business of community summit. If you go to SmartPassiveIncome.com/bcs, that'll take you to the registration page where you could sign up and reserve your seat before October 25th, which is when it happens and it'll be a full day summit.

Any final words, Andy, to encourage people to go and sign up for that and, and come join us?

Andrew Guttormsen: Yeah. I mean, we just love to see you there. Many years ago, we started doing summits and I still remember being in the room with, with the team at the time we said to ourselves, like, if we're gonna do this, we have to do it in a way where it feels as valuable as if somebody were to spend a thousand dollars on an in person conference, right? And like, how can we deliver that kind of, of value online and how can we also give it away for free? Right. When we think about like how to deliver these really great kind of summits, like that's kind of like the bar we have in our mind and we'll do everything we can to deliver on.

If you wanna see how this stuff is actually done for people who do it every day, there's no better folks to learn from than the SPI team. And then, you know, the thing I'll promise you is we won't bring opinions. We're just gonna bring actual data and we're gonna bring kind of real trends and stuff that's working now.

And so, you know, hopefully we'll see you there and, and you'll walk away with not just the motivation to create your community, but actually the real like tactical step by steps for how to do this stuff based on people who are actually doing it in real key studies,

Pat Flynn: Step by step direction. Clarity reduced confusion. These are the kinds of things that are gonna happen at the business of community summit. So thank you, Andy, for coming on. We'll have you again, on, in the future. I'm sure. Since, since you're our community expert here and always, always a pleasure and I'm just again, so grateful to be working with you. Not just here on this summit, but as an affiliate, of course, but more so even an advisor to the company and being a part of the Circle family, it's just been a tremendous gem in the world of, of online business to work with you and for you to provide all of us the opportunity to bring our community together in a way that wasn't possible before, just on behalf of everybody and especially Team SPI thank you so much.

Andrew Guttormsen: Thanks so much, pat. Really appreciate.

Pat Flynn: All right. I hope you enjoyed that conversation with Andy. It's always a pleasure to have Andy on. And again, big kudos and shout to the entire team at Circle. I'm glad they all got together and just had a great time at their retreat and I'm looking forward to our retreat as well.

But right now I'm more looking forward to this amazing summit\ of that's happening. The Business of Community Summit, which one more time you can go to SmartPassiveIncome.com/bcs to sign up. That's a one day event that's happening and a live stream that I will be hosting that I want you to be a part of so you don't miss out. SmartPassiveIncome.com/bcs. Co-hosted between myself and the SPI team. And of course, The team at Circle, it'll be super, super fun. Looking forward to seeing you there and having you join us in the chat and getting access to all the free training that's gonna happen. It'll be a blast.

I hope to see you there. This was episode 619 of the Smart Passive Income podcast. Thanks for joining me today. And if you're already interested in starting a community or you're moving from somewhere else and you wanna bring your community into a platform like Circle, be sure to check out Circle using our affiliate links, SmartPassiveIncome.com/circle.

We get a little kickback for that. And so thank you in. But one more time, sign up right now. SmartPassiveIncome.com/bcs and don't miss out. We'll see you there. Thank you so much. Take care and look forward to serving you in the next episode. Peace out.

Thanks for listening to the Smart Passive Income Podcast at SmartPassiveIncome.com. I'm your host Pat Flynn. Our senior producer is Sara Jane Hess. Our series producer is David Grabowski. And our executive producer is Matt Gartland. Sound editing by Duncan Brown. The Smart Passive Income Podcast is a production of SPI Media. We'll catch you in the next session.