Before we begin, I just posted a podcast with Dickie Bush, Nicolas Cole on how we'd make $10M in 2024. Watch it on YouTube (it was recorded in their cool Miami studio) or listen on Apple Podcasts and Spotify. Enjoy!
The hidden goldmine of 2024 – why internet memberships are outshining communities
90%+ of internet communities are zombies. People have invested millions in them and they lost their heartbeat.
But there’s a small group of them that are doing 7 to 9 figures a year of revenue and are thriving. It gives us a glimpse into one of the biggest business opportunities of 2024 that no one is talking about: internet memberships.
Today, I'm unpacking why memberships are the new kings of the internet community space.
Pandemic pivot – from physical to digital
Remember when COVID hit, and we all flocked to online communities? We couldn't hang out at our usual spots, so the digital world became our go-to. We saw Facebook Groups explode past 1+ billion active users. Discord’s valuation soared to $15 billion. Clubhouse raised money at $4B. And a gold rush ensued.
Now, most of these communities were free. But people began experimenting with new models to start monetizing the thousands of members that entrepreneurs amassed.
Monetizing communities – the trial and error
A popular way to monetize was just charging for access to a sliver of the community. Think of a group for stock market ideas, or a group of female founders but you had to pay a monthly fee.
"Pay us a monthly fee and you’ll get access to a community."
Every Tom, Dick and Harry were selling paid communities.
Money was flowing. Until it wasn't.
Retention was the major issue. People just weren’t coming back and churning. They would rather spend their money on IRL experiences like going to Coachella or eating croissants in France with friends. With the world opening up, many paid communities were closing down.
Turns out selling a velvet rope wasn’t the right product for monetizing most of these communities.
The membership evolution – come for the access, stay for the membership
But hold on, something shifted recently. A handful of these communities didn’t just survive; they evolved into full-fledged businesses. And they're not just communities anymore – they are memberships.
Breaking down the differences between a community and a membership
What’s the difference? Let’s break it down.
A paid community is paying for access to:
- Community
The team is usually a community manager or a founder + community manager. These businesses are often solopreneur businesses.
A membership includes things like:
- Community
- Paid newsletter
- Discounts & deals
- IRL events
- Software
- Job boards
- Digital assets (templates, resources etc).
- Etc
WeightWatchers is the original membership company. There's a digital component, physical component, community component and everything is gamified with points (a common feature of membership businesses). They even have a GLP-1 drug they sell nowadays.
The team for memberships is usually larger, more diverse skill set (engineers, product people, marketers, community managers etc) versus just a community team or a founder for a paid community.
Why memberships triumph – the secret sauce
Successful memberships have two things in common:
- Strong Identity: Members aren’t just part of a group; they’re part of a mission, a movement.
- Transformational Journey: It's about evolving, growing – think going from newbie to pro.
Let’s put this into perspective with two examples
2 examples of memberships:
Keto Membership Example:
- Community: Engaged group sharing keto recipes and success stories.
- Exclusive Content: Monthly webinars with nutritionists and chefs.
- Discounts: Deals on keto-friendly products.
- IRL Events: Local keto-friendly cookouts or dining events.
- Digital Assets: Custom meal plans, grocery lists, and
- Software: Keto tracking app
Pickleball Membership Example:
- Community: Enthusiasts sharing tips, strategies, and local game meetups.
- Online Clinics: Monthly virtual sessions with pro players.
- Gear Deals: Discounts on equipment and apparel.
- Tournaments: Access to member-only pickleball tournaments.
- Job Board: Listings for coaching or event management roles in the pickleball community.
- Software: finding people to play with, content app, marketplace to buy/sell gear
The winning formula – identity and transformation
What makes these memberships stand out? Two key ingredients:
- A Strong Identity: Members aren’t just joining; they’re part of something bigger.
- A Transformational Journey: Helping members evolve, like from a beginner to an expert.
Investors are looking to capitalize on the new gold rush
It's probably the reason why Alex Hormozi made the biggest investment of his career last week into Skool, the community software that's really a membership software.
It's the platform I've been using for my own membership community empire (private Q&As with me, hours of content, monthly startup idea paid newsletter based on trends etc..). I wanted to dogfood my own thesis on membership so I built my own and it's working.
To summarize – 2024 will be the year of the memberships
The mindset shift of the community is a product, not the product is a powerful one.
Come for the community, stay for the membership.
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Next up, bookmarks I saved this week worth reading
P.S: our agency LCA is the leader in building products for memberships to drive revenue and community love. We've even worked with WeightWatchers. If you have a 150k+ budget, fill out a form on our website here to learn more.
- Why you should ignore the advice "don't have a free plan or serve cheap customers". View tweet
- How to achieve content/market fit. View tweet
- Some exciting use-cases for Apple Vision Pro. Are you getting one? I'm already sketching out some ideas for the AVP App Store. View link
- How Cody got is getting to 100k LinkedIn followers with only AI content and it's working. This made me laugh but also slightly concerned for the state of the internet. View link
- "Become a magnet. For people that want to come to work with you (external) and for people internally. Be the person every team wants to work with when stuff gets challenging.” — Dave Gerhardt
That’s a wrap!
I hope you enjoyed this week’s post.
Don't forget to listen to the podcast I did with Dickie Bush, Nicolas Cole on how we'd make $10M in 2024.
Watch it on YouTube (it was recorded in their cool Miami studio) or listen on Apple Podcasts and Spotify.
And tag me on X if you enjoyed the episode. I read every mention.
Oh, and I found out that Skool has a 14-free trial. Enjoy it here if you're looking for a community/membership platform I enjoy using.
Thank you for reading. Hope you found it valuable. Forward to a friend if you did.
Be well,
