Online communities have been the theme de jour of pure Internet business for some time, but this focus is now expanding elsewhere. Seemingly every business, organisation and individual wants to either become part of an online community, or build an online community around their area of interest or business. Small start-up businesses have a hard enough time trying to develop a product, secure funding and gain market traction, now they're concerned they have to become community builders as well. But can a community be created at will, and what models are there to follow for building communities?

Online communities - what are they and who uses them?
The Internet has had community aspects since its inception. From the early days of group bulletin boards way back in 1978, through to the current plethora of social networking offerings, the hyper-connectedness of the Internet has been a logical place to augment, and in some instances replace, real world communities.


The statistics of online communities are pretty staggering. MySpace's Head of Sales and Business Development, Susan Carlton reports the following;

•    Internationally the number of monthly active users on MySpace is around 115 million
•    Of these users 8 million are online at any one time
•    Over 85% of the New Zealand population has Internet access of some sort
•    62% of those online have utilised online community features in the past 12 months
•    In New Zealand alone there are over half a million MySpace accounts

With statistics like this, it's not difficult to see that some understanding, involvement in, and nurturing of online communities is a non-negotiable requirement for modern businesses and organisations. As Carlton says: “it’s our belief that we’re at the first phase [of online communities]; the tip of the iceberg of the new social web. Social destinations like MySpace are pushing the larger web to become more personal, portable and collaborative.”

So is it as simple as "build it and they'll come?” We take a look at some success stories - and one failure - in online community building, and see what lessons can be drawn from their collective experience.

iYomu - a cautionary tale of community gone wrong
iYomu launched in 2007 as an online community. Their model was to combine social networking features with the provision of personal online backup services and they were funded by some high profile domestic and international investors. The core function was a "digital vault" where files could be stored. Wrapped around all of that were traditional social networking features. iYomu was heralded with much press, especially after announcing a competition which would see one member receive a US$1 million prize.

Not surprisingly, the promise of this cash garnered iYomu some initial traffic - people joined up in order to be in with a chance to win the prize. However, some bad press around the competition itself ensued (the eventual winner was paid out via a confidential settlement) and user numbers never scaled sufficiently quickly to build a critical mass.

iYomu was closed down in May, having burnt through many millions of dollars in funding. Founder David Wolf-Rooney was reported at the time as saying "iYomu got its proposition – social networking for grown-ups – wrong, and did not have the resources to grow its membership numbers".

Clearly there were issues around providing relevance for users beyond the initial competition, but another reason for the failure was the lack of community drive behind iYomu.

A user should be able to quickly assess the benefit they will derive from participation - after all online communities are attempting to subvert some of their users’ valuable time. In the example of MySpace, it is a chance to connect and communicate with one’s peers. Other online communities are built around a shared interest: one of the most successful local examples of this is technology site Geekzone.

A safe environment for the Geeks

Founded in 2003 by Mauricio Freitas, and specialising in technology and telecommunications, Geekzone is the most popular New Zealand-based technology site by a large margin. Geekzone ticks off all the check boxes in terms of building successful online communities. Freitas attributes some of the success of Geekzone to the fact that "Geekzone displays the classic traits of successful online communities - those of independence, self-determination, hands-off leadership and providing the tools the community wants".

Geekzone delivers on these traits in a number of ways:

•    Fiercely independent, Geekzone is seen as a neutral party in the industry
•    Freitas encourages the community to shape itself - having community members as moderators ensures that the community is about the members rather than about him
•    Freitas is partly hands-off in terms of control of the community - preferring that the community itself polices the content and membership
•    Geekzone includes all the important online community functionalities - instant messaging, forums, blogging as well as physical meet-ups from time to time
Community builds community

The experience of Freitas with Geekzone shows that the most important role in any community is that of ambassador. The ambassador holds an important role because they "seed" the initial members - leveraging their own personal connections to bring the first members into the fold. From here, however, the community needs to become self-fulfilling, having enough value to attract and retain members, while providing enough of a "buzz" to encourage members to contribute. Geekzone is now at the stage where a number of individuals handle the moderation of the content, leaving Freitas to concentrate more on developing the community at a more strategic level. Freitas mentioned that “we bring our moderators here to Wellington (all expenses paid) for a little bit of beer and dinners, plus a full day meeting at a retreat so we can “get in sync”. We do this every few months, at least once a year but sometimes more.” Clearly investing in the community is important.

It is important to note that the 80/20 rule works for online communities - 20% of a community's membership creates 80% of the content and it is these active community members that attract others and allow the site to achieve that most desired attribute - viral growth. A quick inspection of the successful online communities shows that it is the visibility and output of these "loud voices" that drives more widespread, but less vocal, uptake.

Part of creating a successful online community is to give it the freedom to move in ways not initially expected. Just because the ambassador has a view on how the site should develop, what topics are of relevance or where the members should head, doesn't mean that the community shares this view. Freitas regularly canvases both his moderators and the community at large to determine new directions and initiatives.

The hardest part of maintaining an online community is the preparedness to let the community take you in new, unexpected and unexplored directions - rather than feeling threatened by this, it should be celebrated. Quite simply, the most valuable return from an online community occurs when it is allowed to explore these unexpected and unplanned-for areas.

TradeMe Lessons
The story of TradeMe has been told many times. However one aspect that is sometimes overlooked in the often told tale of Sam Morgan and his heater is the importance that the community has had on its growth and success.

CEO of TradeMe, Jon Macdonald is adamant that a good offering builds community: "our experience has been that you should start with the product and if you build a great product people will use it and they'll use it again and they'll tell their friends and traffic and community will grow".

TradeMe is also appreciative of the ability of the blogosphere to create evangelists out of users. As Macdonald says: "one of the great things about the blogosphere these days is that if you build a great site people won't be shy about blogging about it for you".

Macdonald points out that the majority of big successful community sites - from Google to TradeMe to Facebook - haven't succeeded through any real marketing, rather they succeed through the dynamic of viral uptake. Macdonald recounts the tale of Flying Pig, the failed New Zealand online retailer. Flying Pig had a promotion early on where, in an effort to boost traffic to the site, they gave away one Apple iMac computer a day for a month. While TradeMe didn't have a large resource pool and hence couldn't hope to respond in kind, being the "feisty little company it was" it responded with a “Big Mac a Day” promotion. This sort of pep shows that lesser-resourced players can find an answer to their competitors and that dollars do not always translate into clout within the community.

Macdonald does concede that it would be almost impossible for a new entrant to disrupt TradeMe's community across the board. However, he does believe individual communities of interest could put a dent in TradeMe's strength. He cites the example of Torpedo7, the cycling and sporting e-tailer that is gaining real traction in their own niche. As such, there is some potential for followers to gain traction within a community.

It's not your community, it's their community

TradeMe has a huge respect for their user community, and keeps a very close eye on their community forums or message boards. However Macdonald stated the fact that TradeMe is aware they need to avoid being swayed by the "vocal minority" who partake in the message board discussions. TradeMe spends much time crafting a balance within the market place - trying hard to avoid the demands of any one subset of the community. "Community input is fantastic but empirical evidence trumps" says Macdonald, indicating the fact that the TradeMe mantra of "measure, measure, measure" is alive and well.
Macdonald is also mindful of the impact a high level of engagement has for such a high profile site: "We found having staff posting on our message boards required them to have a pretty thick skin. We very seldom post on our boards these days, and rather leave it as a venue for our members to talk. We do still keep tabs on the message boards though, and take on board the ideas and opinions we read.”

It's about our experiences and being honest

The ultimate proof for a community site is when members have joined not because of your existing connections with them, but out of an awareness of the value of the site, and make comments along the line of: "this is such a valuable offering for me". Successful communities also develop their own cultural traits, sharing inside knowledge, jokes and historical references.
The number one requirement to building successful communities is around the honesty of the offering. As Macdonald says: “I absolutely think that authenticity, openness and honesty are totally vital [when building an online community]”.

The combined experience of all of these businesses, both the successes and the failures, shows that only through the cultivation of history, and the commitment to honesty will robust, successful and viable communities be built.

Ben Kepes is a director of Diversity Limited, a multi-faceted investment, entrepreneurial and advisory company. See www.diversity.net.nz

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