Community Revenue Formula
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A framework for calculating and evaluating the potential of membership communities and what makes them successful.
Core Revenue Formula
- Revenue potential = Member revenue generation × Number of potential members
- Higher member revenue generation potential = Higher membership fees possible
- Community value must exceed membership cost (e.g., $30k/year for Tiger 21 justified by >$10M investable assets)
Two Types of Community Value Propositions
- Direct Revenue Generation
- Members can directly make money from participation
- Examples:
- Stock trading groups
- NFT communities
- Trading card groups
- Sneaker reselling communities
- Network/Status Value
- Value comes from exclusive access to high-value individuals
- Examples:
- CMO networks
- Executive groups
- Professional communities
Characteristics of Successful Communities
- High passion from members
- Clear path to monetary return
- Specific professional focus
- Members feel underserved or "downtrodden"
- Large enough addressable market
- Unique insider knowledge needed
- Professional advancement opportunities
Example: Professional Communities
- Can work for any profession but better for:
- Newer/emerging roles (e.g., Community Managers)
- Roles with unclear career paths
- Underappreciated positions
- Large professional populations (e.g., nurses)
- Roles where networking is valuable
- Positions where salary/career info sharing is valuable
Monetization Strategies
- Direct membership fees
- Employer-sponsored memberships
- Sponsorship revenue (e.g., $5k/month from relevant sponsors)
- Focus on high-value members who can justify the expense
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.