An intro to community-driven companies

Over the past few years, a new type of company has become increasingly popular, one that places the community at the center of its operations. These companies are called community-driven companies, and they have become increasingly loved among consumers who seek a more meaningful and collaborative relationship with the brands they support.

What is a community-driven company

Put simply, it is a business that prioritizes building and nurturing a community of loyal customers, supporters, and stakeholders. This community is not just an audience that consumes the company's products or services, but an active participant in its success. Community-driven companies aim to foster a sense of belonging, trust, and shared purpose among their members, which in turn fuels engagement, growth, and innovation.

A key characteristic of community-driven companies is that they prioritize two-way communication and collaboration with their community. They listen to their feedback, ideas, and concerns, and incorporate them into their decision-making processes. They also involve their community in co-creation, co-marketing, and co-innovation initiatives, where they can contribute to the development of new products, services, and experiences. These engagements can happen online through platforms such as Reddit or Discord, or offline via in-person events and meet-ups. 

Community-driven organizations and web3

Web3 is the next iteration of the internet, which aims to create a decentralized ecosystem. Instead of a handful of large centralized companies having all the power, the power is given back to the users of the ecosystem. Naturally, as a result, most organizations in web3 are highly community-driven. Whether it’s the organization engaging with its user via Discord or being a fully decentralized autonomous organization (DAO), empowering users to participate in the development, governance, and ownership of digital assets and platforms. 

Some of the most famous examples include:

  1. Uniswap - Uniswap is a decentralized exchange that allows users to trade cryptocurrencies without relying on a centralized intermediary. The platform is powered by a community-driven governance model, where users can vote on proposals and changes to the protocol. Uniswap's community has been credited with driving its rapid growth and success, with the platform now being the largest decentralized exchange in terms of trading volume.
  2. Aave - Aave is a decentralized lending and borrowing platform that allows users to earn interest on their cryptocurrency holdings or borrow funds using their crypto as collateral. Aave's governance model is also community-driven, with users being able to vote on proposals and changes to the platform. Aave's community has been actively involved in shaping the platform's features, security, and user experience, which has helped it become one of the most popular and trusted DeFi platforms.
  3. Mirror - Mirror is a decentralized platform that enables users to create and trade synthetic assets that track the value of real-world assets such as stocks, commodities, and currencies. Mirror's governance model is based on a community-driven DAO (decentralized autonomous organization), where token holders can vote on proposals and changes to the platform. Mirror's community has been instrumental in driving its growth and adoption, with the platform now being one of the most innovative and accessible ways to invest in traditional assets using cryptocurrencies.
  4. Gitcoin - Gitcoin is a decentralized platform that enables developers to get paid for their open-source contributions and collaborations. The platform uses a community-driven funding model, where users can donate to open-source projects and receive rewards or bounties for their contributions. Gitcoin's community has been active in supporting and promoting open-source development, which has helped the platform become a leading force in the web3 ecosystem.

Examples of community-driven companies in web2

There are also plenty of successful examples of community-driven companies in various industries in web2, from tech to fashion to food. According to Peersignal, 58% of today’s top SaaS companies have active brand communities. 

One of the most prominent is the gaming company, Epic Games, which developed the popular game Fortnite. Epic Games has created a massive community of players, content creators, and developers who participate in events, competitions, and community-led initiatives. The company also provides tools and resources for community members to create and share their own content, which has resulted in a vibrant and diverse ecosystem of user-generated content.

Another example of a community-driven company is Patagonia, a sustainable outdoor clothing and gear brand. Patagonia has built a loyal community of environmentally-conscious consumers, activists, and outdoor enthusiasts, who share the brand's values and mission. The company engages with its community through advocacy campaigns, educational initiatives, and community events, such as cleanups and hikes. Patagonia also encourages its customers to repair and recycle their products, which reinforces the brand's commitment to sustainability and circularity. The company reported that customers who participate in its Worn Wear program spend on average 28% more on Patagonia products than non-participants.

Benefits of building a strong community  

One of the main benefits of building a strong community is that it can significantly reduce customer acquisition costs (CAC) and increase customer lifetime value (CLV). By creating a loyal and engaged community, companies can rely on word-of-mouth marketing, referrals, and user-generated content to attract new customers, instead of spending large sums on advertising and promotions. Moreover, community-driven companies tend to have higher retention rates, as they foster a sense of belonging and emotional connection that goes beyond transactional relationships. For example, Salesforce’s community-driven strategy, called Trailblazer Community, has resulted in a 31% higher customer retention rate and a 48% increase in customer satisfaction. Harley-Davidson, another company with a very loyal and engaged community, has seen its community members reportedly spending 30% more on Harley-Davidson products than non-members.

Additionally, a strong community can drive innovation and growth by providing insights and ideas. Community members can serve as beta-testers, early adopters, and ambassadors of new products and features. They can also provide feedback and suggestions for improvements and new opportunities. By involving the community in the product development process, companies can ensure that they are meeting their needs and preferences, and differentiate themselves from competitors.

With paid ads getting increasingly expensive, it’s expected that investment in community and community-led growth will only continue to increase over the next few years. A study by Insights Partners concluded that while in 2022 only 25% of their portfolio companies had established communities, but 55% are planning to start communities; and according to Bessemer Ventures 75% of the world’s top cloud companies such as Figma and Stripe have allocated resources to strengthening community efforts. 

Level up your community with Mava

At Mava, we help you stay on top of all the questions and support requests that come in from community members. Our AI tools automate repetitive queries, allowing you to respond 24/7 on Discord, Web Chat, or Telegram. The Mava Dashboard allows you to stay organized, respond to private queries, and get insight into what your community is asking and chatting about. 

Taking inspiration from the communities we serve, we strive to be transparent, listen to our customers and involve our community in every part of our company’s development. Check out Mava’s Community here: