Will community be king?

👋 Hi friends -

Welcome to The Newsletter Growth Memo. Twice a month, I share short reflections with my newsletter clients + other operators.

Zero formality, ads, or affiliate links - just a guy sharing learnings from working with media operators doing $25k-$2M+ / month with newsletters.

New reader highlights: Rosemary, Senior Director of Growth @ Axios | Alex, Head of Growth @ Hampton | Kyle, Chief of Staff @ Morning Brew | Mo, Co-founder @ Arkaea Media Group

Many of you know of Sam Parr, founder of The Hustle.

Fewer know that everyone told Sam his newsletter was a stupid idea back in 2015, when newsletters weren’t sexy.

I was at an event he spoke at in March, where he re-told a story of asking for advice about the business:

In 2021, Sam sells The Hustle to Hubspot for, I assume, $30-40M (Sam increasingly shoots down the publicly reported $27M figure these days. Good deal!).

And now you can’t go anywhere on LinkedIn/Twitter without hearing about newsletters.

Sam’s latest business, Hampton, is a high-ticket ($8-12k/yr) community.

He thinks communities are the next undervalued business model.

Here’s a trend we can all probably agree on - we’ve been taking our distribution for granted.

We watched TikTok nearly get banned earlier this year.

Email placement is getting harder - open rate validity is being attacked with pixel blocking, and it’s not crazy to think Gmail might just summarize your emails entirely 1-2 years from now.

It’s becoming more important to build distribution that you control - SMS, communities, events, etc.

Communities are one of the hardest models to pull off.

But when they work, they work:

The best way to learn what 10/10 community execution looks like is to join one (or, if you’re cheap, like me, make your own).

The 0 → $1M stage of my business took place in a barely furnished apartment in Columbus, Ohio.

This was important. I wanted to focus. But I would’ve gone insane without a community of internet friends (Rowan, Wouter, + a few others).

On Jan 1, I moved back to NYC to double down on community:

And finally, nothing’s given me more energy this year than co-working with a bunch of 19-23 year olds who dropped out of college to run 7-figure businesses.

These kids are amazing!

We have a little co-working spot on Park Ave. - any time we meet someone we like, we try to recruit them to the HQ.

We’re building a little army of bootstrapped founders - how cool is that?

My point is I’ve spent a lot of time and money joining, helping launch, and (informally) forming my own communities.

And I want to give you a few lessons I’ve learned.

1. Pick the right niche

The best communities do one of these two things:

Tap into high passions or careers (sneakers, nurses, engineers)

Help members make money (ecomm, investing, ghostwriting)

Ideally, both.

Look back at the list above - the most successful community niches all rhyme.

2. Build where your user already lives

It's extremely hard to build a community.

It's even harder to do it where your users don't naturally spend time.

Hampton and Client Ascension were built in Slack because they cater to founders who are already there.

Don't force your members onto Circle or Kajabi unless you have a 10x reason to.

3. Go cheap + mass or expensive and intimate, no in between

Sam Parr’s biggest regret about the $5M/yr Trends community was pricing at $300/yr.

Priced too high to scale to the 33k+ members needed to hit $10M+.

And too low to support the service level he wanted.

Go mass ($100-200 a year) or premium ($1k+), in between is no man’s land.

4. Onboarding is everything

As soon as someone buys, you must resell them on their decision.

Start with 1:1 onboarding — even if it's a 15-minute call.

Jay Clouse does a 20-minute onboarding call 3-5 days after you join The Lab, and he comes prepped with your activity data to push you to the right content/people.

When you join Client Ascension:

The first 30 days are carefully crafted. It's a product.

5. Seed the early activity yourself

Reddit's founders famously faked early activity, making burner accounts to simulate traction.

Sam Parr did the same thing with Trends.

He’d write posts for big-name friends to raise the status/activity of the group.

Your community won't magically come to life.

You have to manufacture momentum until it becomes real.

6. Lean on members + experts for fulfillment

You’ve aggregated distribution for a very valuable group of people.

Giving that distribution to members/experts is enticing for them and helps you avoid getting bogged down in owning 100% of fulfillment.

Knight people as educators, coaches, and hosts!

Client Ascension has coach-led calls for every B2B agency discipline (landing pages, operations, sales calls, cold email, etc.).

Each is run by an agency owner who does 7-figures in that vertical.

Hampton had member Anne Mahlum (founder of Solidcore, worth $100M+) host an event at her gorgeous house in Florida.

Contrarian Thinking lets you pitch the company you’re thinking of buying to your peers to get their help in tearing the deal apart (so that you make a good decision!).

You don't need to lead everything. You just need to build the infrastructure.

7. Annual > monthly memberships

Monthly memberships churn like crazy - 4-7% on the low end, up to 15–20% in many groups.

The Hustle’s Trends (annual-only) had an 80% year 2 retention rate - that’s A+ and incredible for LTV.

Hampton ($10-12k Y1, $8k Y2) started with the annual model right away as a result.

8. Grow slow and gate access

Fast growth is the enemy of a great community. And once a community begins to decline, it’s almost impossible to save.

Use filters: income, title, invite-only, industry.

Hampton, Workweek, Chief, and Contrarian Thinking all gate access via application.

Quality over quantity.

9. Bonus: Have fun (strategically)

Allocate some % of your budget to ‘magical moments’ that don’t scale.

Shaan Puri used a Cameo from rapper Sean Paul as the onboarding video for Club LTV (his invite-only ecommerce community).

Nobody forgets that kind of thing!

That’s the letter.

- Nathan May

P.S. I have a magical moment of my own in store for you if you or your team attends the Own The Inbox Summit. Something I’ve been waiting to announce for a while… come join us next week.