Those that control the audience, control the future
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Founders are realizing that transparency, audience, and engagement are significant advantages in today’s business environment.
The invention of the internet, and the adoption of social media specifically, has led to a new set of tools being available to entrepreneurs as they build their companies. Rather than operating behind closed doors, a new crop of companies are using these tools to build highly defendable moats. Here are a few examples:
Austen Allred and Lambda School — The company is taking on the big, bad higher education system by providing free computer science education to students. Think of it as a coding bootcamp on steroids. The best part? Students don’t pay for the education unless they earn $50,000 or more post-Lambda School. The cost isn’t paid with debt either, but leverages Income Sharing Agreements instead. Austen has expertly used Twitter to build a loyal following, drive the acquisition cost of students down, drastically increase the tech community’s support of the company, and generally create a situation where Lambda School has a sense of inevitability to it now. It would be incredibly difficult for someone to recreate the magic of Austen’s Twitter account, let alone compete head-to-head with the fast growing startup.
Barstool Sports — The controversial media startup has grown from a one-man operation into a $100+ million empire. Dave Portnoy and his band of social media mavens have created one of the most engaged audiences on the internet, which allows the company to rally the troops around ideas, sell merchandise, drive attendance at events, and monetize a media company in a way that was previously unseen. When the company makes a mistake, they immediately admit it publicly and keep pushing forward, which has led to a level of authenticity and raw fanaticism that is rare in business.
Kraken — The cryptocurrency exchange was recently faced with navigating the highly debated BitcoinSV debacle, which left the exchange wondering if they should continue to support the Bitcoin fork or delist it. Rather than try to make the decision in a unilateral manner, Kraken ran a Twitter poll that made the decision easy. This level of transparency and customer engagement is absent in the legacy financial system, which helps companies like Kraken stand out.
As Paul Graham of YCombinator famously says, find 100 customers that absolutely love you, rather than 1,000 customers that sort of like you. Each of the examples above, along with many more for-profit companies today, are figuring out that highly engaged, loyal audiences are a defendable moat worth building.
As crypto networks become more popular and pervasive, I anticipate that this community/network building skill set will become more important. Teams will start to sink significant dollars into building repeatable, scalable models that produce these audiences. We started to see this with the “Telegram community building” during the 2017 ICO boom (teams would race to get as many people into their Telegram messaging chats and then brag about it to investors as a sign of traction), but that was just the tip of the iceberg.
Audience is a new currency. Those that have it, have incredible power. Those that don’t are starting at a disadvantage. Whether entrepreneurs are building crypto networks or for-profit companies, those who control the message, control the future.
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