Community-Led Growth and Publishers in the Smiling Curve: Navigating the Changing Landscape

Community-Led Growth and Publishers in the Smiling Curve: Navigating the Changing Landscape

In today's digital age, the way businesses grow and the value chains they operate in are constantly evolving. Two concepts that shed light on these changes are Community-Led Growth and the Smiling Curve. While they may seem unrelated at first, there are common points that connect these ideas and provide insights into navigating the changing landscape of business growth and value creation.

Community-Led Growth is a strategy that goes beyond product-led growth by actively facilitating user interactions and providing value beyond the product itself. It allows companies to have a stronger understanding of their customer pipeline, receive feature requests, and provide real-time support. By nurturing a community of active members, businesses create a flywheel effect where users become champions, strengthening the community further.

The COVID-19 pandemic has acted as an accelerant for Community-Led Growth as people increasingly seek a sense of belonging online. In a world of SaaS fragmentation, users are overwhelmed by choices and turn to influencers and their communities for guidance. However, simply throwing people into a Slack group chat is not enough to build a community. It is essential for companies to take an active role in making community engagement a part of their company culture and identity.

Moreover, the role of users in creating and participating in content within the community is changing. This presents an opportunity for businesses to educate their users on the market they operate in or the various use cases their product offers. It also creates a network effect as users expand their circle of creators. If users start sharing tutorials or DIY videos on how to use a product, it is a clear sign that a community should be built around it.

On the other hand, the Smiling Curve concept, initially observed in the IT-related manufacturing industry, highlights the value-adding potentials of different components of the value chain. The curve resembles a smile, with both ends of the value chain commanding higher values added to the product than the middle part. This phenomenon has been seen in the personal computer industry and the smartphone industry.

For traditional publishers, the Smiling Curve presents a challenge. The value in the publishing industry is shifting to the ends of the chain, just like in IT manufacturing and smartphones. The rise of social media platforms and aggregators has changed the way people consume news and access content. When readers follow a link on platforms like Facebook or Google, they are more likely to attribute positive feelings to the author rather than the hosting publication. Traditional publishers find themselves stuck in the undifferentiated middle, struggling to capture value.

The paradox for publishers is that while their addressable market has expanded globally through the internet, they no longer have exclusivity or a competitive advantage. The free distribution provided by the internet is available to every other publisher as well. To thrive in this changing landscape, publishers need to demonstrate value to their writers and adapt their strategies. The most successful writers and publications will focus on what they do best and accrue outsized value relative to publishers that are shifting from being platforms to obstacles.

Incorporating the principles of Community-Led Growth can be beneficial for publishers as well. By actively engaging their readers and fostering a sense of community, publishers can build stronger relationships and loyalty. This can help them differentiate themselves from other publishers and create a more valuable experience for their audience.

In conclusion, the concepts of Community-Led Growth and the Smiling Curve provide valuable insights into the evolving landscape of business growth and value creation. To navigate these changes successfully, businesses must actively engage their users, build communities, and provide value beyond the product itself. For publishers, adapting to the digital age requires demonstrating value to writers and focusing on what they do best. By incorporating these principles, businesses and publishers can thrive in an increasingly interconnected world.

Actionable Advice:

1. Foster a sense of community: Actively engage your users, provide real-time support, and facilitate user interactions. Make community engagement a part of your company culture and identity.
2. Educate your users: Take the opportunity to educate your users on the market you operate in or the various use cases your product offers. Encourage them to become creators and share their knowledge with the community.
3. Focus on differentiation and value: Publishers should focus on what they do best and provide value to their writers. Adapt strategies to demonstrate value and differentiate from other publishers.