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Are community tools the next unicorns?

In 2020, community tools raised around $179.8 million and another $115.6 million have come their way in 2021

October 09, 2021 / 07:21 AM IST
Image: Shutterstock

Image: Shutterstock

As communities become the new moats for brands and creators, tools that help monetise, manage and engage large communities are gaining prominence.

According to data from Tracxn, 259 community tools-based startups have been formed in India since 2019, with events tech and community customer relationship management (CRM) taking the lead. Are they the next unicorn opportunity?

In 2020, community tools— for tech, community & team chat— raised around $179.8 million and another $115.6 million have come their way in 2021, so far.

Some of the new and evolving categories in the space are community marketing and online community management tools.

According to a commsor blog, a similar number 242 tools-based startups are reported globally across similar categories. Commsor is a community integration platform.


The ‘community movement'

According to Vikas Malpani, Cofounder and CEO Leher app, a social network where you can drop in at audio or video rooms, join clubs and meet like-minded people, there are three primary reasons communities are formed.

1 We need communities because they are ingrained in the human DNA— every human has an inherent need to be a part of a bigger tribe but increasingly, the world is becoming lonelier, and the problem got acute following the coronavirus outbreak

2 Communities are moving online. Since we are in transition—offline to online-first generation—the focus is on moving offline behaviour online. Whether it is ClubHouse, or the long-forgotten HouseParty or even Ludo or gaming, offline behaviour is being replicated online.

3 Rise of niche communities and exclusive clubs.  According to a 2016 CMX research, 85 percent of marketers and community-builders believe that having a branded online community would improve the customer journey and increase trust.

Pandemic-induced digital use

The coronavirus pandemic pushed more users online. Here are some of the usage patterns and tools that gained prominence:

>> According to a survey of more than 25,000 consumers in 30 markets conducted from March 14 to 24, WhatsApp experienced the greatest gains among social media apps due to COVID-19.

>> Other social media apps that gained are Facebook and China’s WeChat and microblogging site Weibo.

>> Users on an average posted 6.1 Instagram stories a day, an increase of 15 percent week-over-week (March 7-14 to the week of March 15-21). Story impressions, or views, also increased 21 percent during the time.

>>Facebook announced the launch of the open beta version of Horizon Workrooms, a tool that facilitates collaboration between members of a work team.

How is the market shaping up in India?

According to the Likeminds State of Community Management Report, the community industry in India started picking up over the last three years. Here are some trends: 

1 The rise of the virtual world

Virtual events platforms will soon become a virtual world. Community managers have to keep their audience engaged throughout the year, as brands build both external and internal communities  (for their employees).

As more events become hybrid, the scope of an events platform will grow to capture analytics, audience engagement and their propensity to engage further with brand products and that is where the opportunity lies, says PurnankPraskash, Cofounder and CEO, Samaaro, a virtual events platform.

2 Focus on monetisation

Today, community managers are using numerous tools but there are gaps too—payment management, event experience and meaningful analytics. This is true especially for creators, says Nipun Goyal of LikeMinds.

“We help creators convert their audience into a private branded community with access to all these tools. They earn by selling membership, cohort -based courses, events or one-on-one consultations,” says Goyal.

3 Building the Lego set for community builders

According to Deepak Kumar Prabakaran, CEO, Habitate, “We are going to see more tools to help brands, makers, and creators start and run communities. We will also see a rise in the number of micro-communities from brands that will want to own their communities.”

Habitate builds technology to help brands create online customer communities.

“It is almost impossible to fit a community into a predefined framework and yet, we need to figure out how we can help many companies build communities at the same time,” he says.

At Habitate, they are approaching this by building Lego sets that individual brands and creators can customise. “The response has been great so far,” Prabakaran says.

4 Text is at the core

Digital marketing spends worldwide was $378 billion  in 2020. However, there is no CRM or standardised product that community managers can plug and play. “In our experience, text and newsletters will continue to grow and will always remain core to community engagement,” says Neeraj Joshi, Co-founder and CEO of Pushstart and Troopod.

5 Analytics and value will rule

According to Pramod Rao, Cofounder and CEO of Threado, a command centre for managing an online community across engagement tools and platforms, “Businesses built on top of communities are resilient. It is easy to copy a product but the network effects arising from a community-led approach to growth are hard to replicate.”

The biggest opportunities for community tools today are to provide a single source of truth and help measure the impact of community, says Rao.

6 Tools for cohort-based courses will grow

Distribution and monetisation are the biggest challenges facing budding independent creators. A community-first platform for creators to build their audience will help small and medium creators to monetise better.

The tools will have to incorporate growth and support, deeper dashboards, gamification and some “wow factors” that will create stickiness for the creators and their communities, says Vimal Singh Rathore, Cofounder and CEO of Qoohoo, a social platform that helps creators build communities.

7 Keeping up with creators, brand expectations 

In India, a lot of small and medium creators build communities on WhatsApp, YouTube, Facebook and Instagram. None of these platforms help them monetise, nor do they widen distribution.

Sumant Banavara, who runs Tech Kannada, an investment education community, started with YouTube and also has an Instagram and Twitter presence. But, it was Qoohoo that helped him gain his first 120 paying followers.

Banavara says he continously requires clarity and a distribution engine. Globally, large creators have already moved on to creating their own apps and merchandise— we are yet to see that happens in India. What will help them first is to cultivate their 1,000 true paying fans.

Rachit Sohgaura, who runs Musicwale, a music education community agrees. A mechanical engineer by training, Sohguara is a passionate music teacher and started by building his audience on YouTube and Instagram.

For an audience upwards of 1.15 lakh, many of his videos only got 1,000 views and he had no idea about monetisation until Qoohoo happened. Today as his community grows, he and his team have a steady income and are able to structure their time better.

On the other hand, brands have nuanced requirements and while their stacks could include Discord, WhatsApp/Telegram, Substack, Zoom/Airmeet, Slack or, primary requirements vary.

For example, FamPay, a prepaid cards provider for teenagers, is experimenting with a platform that can help them livestream and at the same time they use Discord (with strict community rules), as their native audience understands this tool better. Hence today, integrations rule.

What does the future look like?

Heightened investor interest

As communities will be highly engaged and monetisable, investors are excited about the opportunity to scale and track data. Says Naman Gupta, AVP Supply Strategy & Access at Swiggy, and an angel investor in Samaaro, “As community frameworks grow, the following disruptions will take place 1) we will have a hybrid model to community meetups 2) more data and tracking, therefore more scale and 3) huge potential to monetise the community through in-built payment gateways or group-buying like we see in China. Hence this opportunity excites me.”

Anonymous community metaverse

Here communities will look like cities, users will be anonymous and follow a code. There will be community commerce like in China with WeChat, Pinduoduo, Meituan and Didi.

Rise of no-code personalised tools

Creators and brands will customise tools and each will have a distinct tool strategy to engage with their audience and also solve for distribution and monetisation.

No-code and low code will have a huge bearing here. Creators and community managers will also have to have basic understanding of tools and analytics to facilitate creating their own communities.

(This is the final article in a three-part series on internet communities)

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Nisha Ramchandani is Manager-Outreach At Axilor Ventures & Writer at Future of Work.
Suhas Motwani is the cofounder of The Product Folks and Indistractable.
first published: Oct 9, 2021 07:21 am
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