The Startup Ideas Podcast - How Jay Clouse Built a $500,000 ARR Community (in Less than 2 Years)

Episode Date: September 21, 2023

Today Greg is joined by Jay Clouse of Creator Science. In this episode, Greg and Jay talk about the upsides of cohort-based courses and what strategies Jay uses to achieve his 95% retention rate. ►►Subscribe to Greg's weekly newsletter for insights on community,creators and commerce.You'll also find out when new and exclusiveepisodes come out from Where it Happens. And it's totally free.https://latecheckout.substack.comFIND ME ON SOCIAL:Twitter: https://twitter.com/gregisenbergInstagram: https://instagram.com/gregisenberg/TikTok: https://tiktok.com/@gregisenbergaLINKS FOR THIS EPISODE:Production Team:https://www.bigoceanpodcasting.comJay Clousehttps://twitter.com/jayclousehttps://creatorscience.com/SHOW NOTES0:00 - Intro5:40 - How Jay studies top creators 12:10 - Courses vs. Membership Community19:30 - How Jay attracts audiences24:20 - The secret dividends of viral posts30:40 - Being a distributor vs. being an artist43:30 - Why retention is the golden metric

Cheers. Jay. It's been a while. Last time, I don't know if you remember the last and only time we've hung out, which was In the Maven Accelerator? In the Maven Accelerator. Oh yeah. I remember.

I have a great memory. So what do you remember about that time? It was fun. I mean, I'm involved in Maven in a small investment capacity. you might be as well. So I'm rooting for for them and I think that cohort based courses are a really interesting part of like the product like product development for creators. I think like the natural way things go oftentimes is I have an idea. I want to serve this audience. And now I tell people before you do like a self-based course, you should do a cohort based version of it because

the price is higher. You get much better feedback. You can triage issues that come up so you get better student outcomes earlier on. So I thought it was awesome. And I really liked the frameworks they taught us there. I've actually reached out to them. I want to relearn the frameworks they had for CBCs because I think they're also great frameworks for like prescriptive nonfiction books. So I remember when I was considering creating a core-based course.

and yeah, we basically, we started working, my agency, they check out was hired by them to build out their first version. And I remember thinking initially, like, this feels like such a waste of time to create this course. And it was the six-week accelerator that we did together where they basically taught us how to create a course. And it was single-handedly, probably one of the greatest things I've done in the last five years,

because it taught me how to... What did you like about it? What I liked about it was it forced me, this is like peak COVID, it forced me to distill all the knowledge I had about building businesses that were powered by community, but basically taking that and putting frameworks to it. So I created about 20 frameworks, 20 different models from that.

And it was just so valuable. Yeah. Yeah, having something that kind of forces you. Well, there's like a forcing function for deadlines within that accelerator, even running your own program, you know, like when things are scheduled and live, you have to live up to those deadlines and perform to that degree. But I agree. Like the structure they gave us and the way they taught us to think through frameworks,

frameworks are so valuable. This is something that doesn't talk about enough in the world of creators is intellectual property, frameworks, methodologies, because you do that. well, you can build a whole business on the back of that because you put the thought into making something great and strong and referable. And now suddenly people are spreading your ideas on your behalf. You know, like there's, there's always going to be some 20 year old with a ton of time and a ton of energy who's going to out tweet me or Zeepe me, whatever the word is, but they won't always have the experience that you have, that you can package an IP,

but now they proliferate on your behalf. And so that's like the wonder of the Maven Accelerator, I guess. Totally. Yeah, it's like Jack Butcher has this great saying, build once, sell twice. Yeah. And that's related to products and, you know, create a product basically and and sell it multiple times. And I think with a framework, it's kind of like create once and, you know,

sell twice, right? Like you're basically creating the framework and it becomes like this idea of Iris that people can now share with other people. And as long as the framework has to do with the core thing that you're trying to get across, I guess is the caveat. For sure. Well, and it's it's a shared vocabulary. You know, even Wes herself, Wes, the co-founder of Maven, she has this great blog post called Spiky Point of View. And I reference that all the time because I think that's becoming prerequisite for creators today is to really have some spiky point of view or some unique premise is my word for it. But the way she wrote that blog post, the way she named it, now I have vocabulary to point to somebody who has a gap in what they're doing

and say, oh, this is what you're missing. You're missing this thing called a specky point of view. And now I can name it. I can pass that idea on. And then it's like, if you want to go deeper on this, here's a great blog post by West. So, you know, I've probably generated as much traffic to that blog post of hers than she has. And that's a wonderful thing. Like, I want people to do that for my writing and for my work, too. So I brought you on here today, one to catch up and see how you're doing. You look great. Simple one. Thanks, man. Likewise. This is giving me a good excuse to break from our kitchen renovation right now. So I appreciate it. Okay. Perfect. So I saved you from that. Well, first I want you to explain.

explain what you do. And then secondly, I'd like to explain, how is it going? For sure. Well, I'm a MetaCreater. I'm a creator who creates about creators. There's a lot of people like me. It's a very red ocean. And there's a broad spectrum of legitimacy there. And I hope that people see me as towards the end of the spectrum of trustworthy and doing good work in this space, because there's definitely bad actors in this space. But what I like to do is I like to study today's top creators understand what they're doing well, why it's working, and then translate that to folks who are kind of on the cusp to help them get over that hump. What I realize I'm not really interested in doing is convincing people that they want to be a creator because, in my

opinion, creators done well, done in a way that is professional, you have to be an entrepreneur. And it's always going to be a minority of the population that is an entrepreneur. If you don't have it in you, I'm not going to try and convince you that you do because I'm setting you up for a lot of pain. So I'm really interested in helping people who have already decided this is the life for me. I'm working really hard. I'm not quite getting there to push them over the hump because, I mean, you probably feel this way too. There's not really a better life than doing things on your terms, getting your ideas out there, being known and respected and sought after for the you think about things and the art that you make.

So let me, let me lay out some, some frameworks here that I think are helpful, at least in understanding how I view the space. So in the creator economy, quote unquote, I think it's, it's kind of a dichotomy between people on the education side

and people on the entertainment side. And of course, there's some in between people who are both educational and entertaining. But broadly, I see that as the dichotomy and the, creator economy space. I work with a lot more of folks on the education side, people who have some sort of earned insight, some sort of experience. And now they're saying, I want to teach people who need to learn what I know. And I'm trying to build a business on the back of that.

Ironically, what I still see is the biggest issue for most creators who enter my world, it's not creating good work and it's often not even just getting attention to their work. A lot of them don't know how to turn that attention into a business. They have like a really, I guess, immature view as in like it hasn't been fleshed out of what like a revenue model looks like, how they actually turn this into a business. And a lot of times they come in and they think that attention is sold to advertisers and that's kind of it. So a lot of the folks that have entered my world, I've helped them on the revenue side, building out, okay, what what levers do I pull so that I am financially rewarded for the work that I'm doing? I would say my best and most successful product is my membership community, the lab. And in there, I've probably helped the most folks with building membership communities of their own as well.

Because that, when you get that going well, as you well know, it's like this very pure relationship between you and your customers. And you're selling directly to your customers. It's providing a lot of value to them. And my membership community then is kind of a double. dip because not only am I teaching these people how they can build a membership, they're seeing literally exactly what I do as well. So we've had folks, Miles McNair is one that comes to mind, who they've built great businesses on SEO. They get a ton of traffic. They're teaching other people SEO. And now, you know, he had a multi five figure launch of his membership community right out

of the gate. Another one is Brian Withers. He's a part of a team. It's actually three Bryans. And they were early Maven instructors as well. They had been doing cohort-based courses. They wanted to get off of the launch cycle to a degree. So they launched a private membership. And so that's been really, really gratifying to see that in that way. But even from a pure process standpoint, I like helping people think about their businesses as machines.

Because before there were creators, there were already entrepreneurs. And the entrepreneur's goal was to say, I know how to build something out of nothing and turn that into a machine that generates revenue. And over time, they often worked themselves out of the business. And people think that as a creator, you can't totally do that. And I agree, you usually can't totally do that. But you can do it a lot more than most people seem to think. You know, you can elevate yourself out of this.

You can make it so that you know when someone enters into your ecosystem, your world, they're going to be taken on a customer journey that introduces them to your best free resources, then some of your paid offers. And you should be able to see in a very small cycle, someone enters the front door over here. They come out on the other side with their own transformation and value was created, value was captured. Now we're building a business. And that's a lot of what I work with people on. Can you talk more about what a membership community is?

You know, because I see some people launching courses that look like to me a membership community. And then I see some people launching membership communities that sometimes look like courses to me. So could you define what that is? I look at it as this is a paid subscription product first and foremost. If that is true, then you might have a membership. And then generally I say there's another. kind of binary system. Is this a membership that gives me access to premium content, or is this a membership

that gives me access to a private community? And a lot of them have both. But even if you do have both in your membership, I think you usually lean on one more than the other. Is this a place about peer-to-peer connection, or is this a place about content that I can't get unless I'm outside of these gates? A lot of memberships that are predicated on premium content also tend to be lower priced from what I see. And the folks that come in, I like to say, hey, if you are able to

create this very rare, scarce space where a very select, exclusive group of people get together to meet other people like them, that's valued really highly. You can design this in such a way that it compensates you well for the time and effort you're putting into it. And people have a really great experience. So there's a huge spectrum of what membership communities look like from the price point from the experience, but generally I would say they either fall on the side of the spectrum of peer-to-peer connectivity or premium content. And with your, with the lab, and specifically, what are the price points and how many people are taking it and how much revenue does that bring in?

I've taken some interesting design choices with the lab. We have 200 members because that is the cap that I put on it. When we got to be about 50 members, I said, I'm actually going to keep this at 200 people. So we hit that 200 member cap at in February of this year. There were two tiers of membership. There was a standard tier, which was community access and access to all the courses.

Then there was a VIP tier, which was the standard tier plus a quarterly one-on-one call with me. The standard tier is priced at 1999, and the VIP tier is priced at 29-99. So that part of the lab... When you say 1999, you mean 1,999, correct? Correct. Correct. Correct. It's annual only. It's capped. It's relatively high priced. So with those two tiers of membership, the community was on a trajectory to about $400,000 in ARR.

Once we did hit that cap, I opened up a lower tier of membership that gave access to the educational materials only. So they don't have access to the forum or direct messages, but they can get all my courses, all my workshops, all the ongoing stuff I make. I do like a monthly retro behind the scenes, literally breaking down my own profit and loss, reflecting on the goals that I had that month, what went well, what didn't go well. So it's like this 30 minute, very transparent look at my business. We do basically internal cohort-based courses in the community. I call them shared focus sprints. and the videos of those courses, the structure of those courses, that gets recorded and put in for the lower tier of membership. So that's fairly new.

And we have three or four dozen folks in that membership as well. So all in all, we're on a trajectory of getting close to $500,000 in ARR. Which is pretty insane given you started this how long ago? March of 2022. Yeah. So the reason I wanted to bring you on is I think you're probably one of the people that do these membership-based experiences so thoughtfully. So everything about your how you operate is really smart. So I think the cap is really smart.

I think how you're doing those sprints is really smart. I think the fact that you're doing workshops is really smart. Even your welcome newsletter. I recently signed up to your newsletter and your welcome newsletter was like the Mona Lisa of welcome newsletters. I was like, this is amazing. And I think people are sleeping on membership and sleeping on. Yeah, I think they're sleeping on it.

And I think especially for B to B where if you can, you know, as you say, like if you can show people and add value, hey, come come to this experience. and you're going to come out of this experience with a ton of value, and you just have to give me a couple grand a year, that's when people are like, yeah, no-brainer. If that's the case, right, if you can actually do it. Right. It depends a little bit on your audience.

You know, there are niches, we'll call them, who just don't have as much as disposable income. So my style of membership might not fit in that world. There are also niches where you could take the exact thing I'm doing, double or triple the price, and they wouldn't blink an eye, you know? So it depends a little bit on your, on your audience. The 200 cap is fairly arbitrary. That just felt like based on the experience that I designed what I could sustain myself without bringing in like a community manager or kind of changing expectation of what the community looked like. You know, I've been a part of a lot of memberships now personally building.

them or running them. And there's an interesting relationship to scale with with memberships, where at a certain point, if this is based on peer-to-peer connectivity, you actually have to fight against the success of the product because huge numbers changes the experience for members who are there early. And it becomes more difficult for you to manage. So I just decided I was not going to set this up in a way where I had to fight that fight. And that played a role in how I chose the pricing in the beginning too, because I thought, okay, if I'm going to limit this somewhere, you know, what price makes me feel excited to continue working on this as the business grows, as I get more successful outside of the membership, you know? And I appreciate you saying that

about the intentionality because I see every touchpoint that I have with my customers or subscribers, you know, future customers. Every touchpoint is an opportunity for thought and design. And I just like really find joy and doing unique things in that process. Can you talk more about your top of the funnel strategy? So of course, you're capped right now, but I imagine you're going to have new products and maybe open up that cap in the future. How do you think about attracting audience and then converting those into, you know, paying customers. Yeah, I look at it now as, well, I think as a creator, there are two types of platforms you can be creating on.

We call them discovery platforms and relationship platforms. Discovery platforms have built in discovery mechanisms to the platform, social media, YouTube, search engines. these platforms, these machines, are incentivized to introduce new viewers to your content because they're ad support and it keeps them on platform. Relationship platforms, you own that distribution. It's email, it's podcasting, it's SMS, and it's private communities. And so my strategy is to top of funnel is the discovery platform, but I very quickly, as quickly

as I can, want to get them into my relationship platform, my main relationship platform, which is email, and then I actually tried to grow the email to push people towards the podcast. That's like at the bottom of my platform funnel, if you will. So increasingly, in the discovery platform part of my business, I'm actually leaning on YouTube more. I'm finding that YouTube is becoming one of the largest sources of new audience because YouTube has an incredible algorithm. them. We've started to find good content market fit with our podcasts on YouTube. And they're really high quality, which is awesome. And so YouTube both gets people into email, even though there's not a great pathway for that. And it introduces people to the audio podcast because we

produce one video episode for every two or three audio episodes that we put out. So that's basically the strategy is be a public loudmouth on social media and on YouTube. And and try to get people to email. So I just hit 10,000 YouTube subscribers today. Dude, congrats. Thank you. And I think it has been the hardest platform for me to grow ever. More than audio?

More than audio. Yes, that's right. Crazy. I find audio would be way harder than YouTube. Yeah, tell me more about that. Why is just from the discoverability? standpoint. Yeah, there's no discoverability. And like, really the best way to grow audio listeners is either to have a massive top of funnel elsewhere already. Or to get on other podcasts or do

cross promotions. Like, you really only convert existing audio listeners to audio listeners of your show. Yeah. And it's, it's difficult to get in front of existing audio listeners. But if you have like a big top of funnel, you have a really large Twitter audience. So I imagine that you're able to pull a significant number of people from Twitter into the show, which was a benefit that I did not have when I started the show three years ago. I think the benefit I had was I started podcasting in 2021. And when I started, I basically like, I went on my first million. I went on the Anthony Pompeiano show.

Yep, yep. That'll do it. It just like all at the same time. And then Twitter, you know, you know, started posting about it on Twitter and we had these like highly produced videos and stuff like that and from there a lot of people have just stuck around and with YouTube because I was so late I think um late in the game like I just started posting like I see on your channel you you've got your long form but you've also got your short form and like I see you with these thumbnails like I'm looking at your thumbnail right now with a coffee cup against your head like you're doing the the YouTube game. You got to do it.

You got any game, any game that you choose to play. Like, you've got to do that game or you're not going to win the game. We do shorts and clips much less than we used to now because YouTube is getting better at tying a shorts audience to your channel. But that doesn't mean that that changes user behavior. Like, I find that most shorts viewers just aren't interested in long form. And so it's not that YouTube isn't making it easy for them to do that. It's just that that's not what the user behavior is.

And so we're a pretty small team. You know, we have one audio, one video editor. So at one point, we just decided like, hey, let's put all of our capacity into making the long form videos just really good. And working on packaging and planning the pipeline. We're really focused on that right now. But it took a while. Like we, we, we've more than doubled our channel in the last two months, max. But the crazy thing is, like, you have one video do really well.

If the back catalog is good, it just gives the back catalog new life when one video does well. And that does not happen in audio. That's the secret that people don't talk about in social media, which is most followings come from a very small amount of posts going mega viral. Totally. Totally. Like, it's, it's really about a home run. Like, you just need a home run. And I remember when this happened. So in 2020, 2020, I think.

Yeah, it was in 2020, I got, I posted a thread on Twitter. And it got 55,000 likes. And Nick Huber, sweaty startup, sent me a text message. And he says, he says, Greg, you're not going to really understand this right now. but this tweet will change your life. And I remember thinking like, this guy's crazy. What is he talking about?

I got 50 or 60,000 followers in 24 hours. Nuts. Yeah, that's nuts. Nuts. And he was right. It did change my life because all of a sudden I had this group of people who started to really trust me. And then from that, it evolved.

and it's been really great ever since. And I think the same is probably true with YouTube, where you just need a few hits. Like, has there been a video for the last couple months that has really hit it for you? Oh, yeah. Yeah, which videos? It was two videos in a row.

One was an interview with Patty Galloway, who's one of the most sought after YouTube consultants out there. And then the next video was with Ed. His channel is called, film booth on YouTube. He has just a very tight fan base as well. And so those two videos back to back just really grew the channel significantly. And they continue to perform really, really well. So one thing we've learned, though, well, as you can probably attest, if your channel is predicated on long form interviews, that's just not the typical YouTube video that's playing YouTube on

hard mode as it is. Yeah, that's, that's challenging all on its own. But then packaging has to be even better, in my opinion, because that is so hard. So we've had to put way more time into packaging. And part of packaging is your guest. So we've even started to tailor the show a little bit to be successful on YouTube. And if, if we don't think that the guest will have significant pull with a unknown, you know, to a new viewer on YouTube, we don't make a video episode out of it. We basically make it audio only and then say video resources for video specific creators. I kind of hate that. Like I hate it because I'll tell you why I hate it. And then before you react. So a while ago when this, when this podcast first started, we only

interviewed top people. If they didn't have hundreds of thousands of followers, they were not interviewed on this show, basically. And I didn't like that because I thought the show was about having really interesting conversations with just community at the core of it. But community can mean a lot of different things to a lot of different people.

It could be, you know, you throw events or maybe you're a barista at a coffee shop or maybe you're you and you're building on these membership sites. and I got to a point where I was basically burnt out with these guests and I felt that I wasn't giving a chance to these smaller guests. So for the last year or 18 months, yeah, 12 to 18 months, I've been doing a mix of guests like you who have an audience and people who don't have audiences or have small audiences.

Okay, so my question, you, actually, this is feedback for me. I'm like, am I making the wrong decision by by dedicating resources to these things? And my reaction to you is, why don't you do more under the radar type interviews? Well, it's, I don't think you're making a quote unquote wrong decision. And when I talk about the guests need to make sense for video, a couple of our most popular videos. Our most recent episode is with George Blackman. I don't think people know his name. I don't think people know his face. But he is a script writer for some top YouTubers. So we were able to pull that into the packaging. So he's not a big name. He's not a big audience. But we knew that video would

be interesting to a YouTube audience. Same with Jake Thomas, who does incredible research in the world of what makes great YouTube titles. Again, people wouldn't know his name. People wouldn't know his face, but YouTube titles, that's a package that would work well on YouTube. I don't think there's anything wrong with having people who might not be as much of a clear home run on YouTube and putting them on the channel. We've had some episodes in the past with Mariah Cause or Brian Harris. These people are really thoughtful and well known in the world of online courses, which on the recommended page of views, but they do have longer average viewter,

And the comments we get are incredible. So I do want to put more of those videos on the channel, but it's just a question of prioritization in resources because I make a pretty hefty investment in each of the videos we put on the channel. And so at this phase where we are just trying to get the channel name out there and get in front of new viewers, I want to put my best foot forward with the investment that I'm making. I'm still having conversations with folks who really span the gamut of the creator economy, but most of those just end up in audio.

We're publishing an audio episode every week. We publish a video episode twice a month, max. So it's just prioritization. Richard Rubin's latest book, Creative Act? Most of it. Most of it, yeah. I think halfway through, he talks about being a distributor versus being like a artist, basically.

and he talks about if you're a distributor that means you find out what people want and you create the thing and you distribute the thing that people want and if you're an artist you craft the thing that you want for you and then you hope that others like it the question is where should you sit on on the spectrum is what he brings up and for so where do you set up on that spectrum. I'm closer to the edge of distributor, but then I say, okay, within the constraints of being a distributor, how can I make this as uniquely me as possible? And I think as time passes, I will slide down the spectrum to the other end because you

kind of earn the right to do your own thing and listen to your own taste if you have financial constraints. You know, if you are working at nine to five and you're happy with that nine to five, and you want to make whatever you want to make just because you want to make it, and you don't have intentions on that replacing your income on any particular time frame, then you should set as far on the side of artists as you want and make whatever you want. But if you have financial constraints and you want this thing to be a viable business on some predictable time frame, I think you need to lean into being a distributor because businesses are built on creating value for people.

So you have to understand what people want value from. otherwise is a little bit like a selection. Yeah, I would also, I would also argue that, and I wish Rick would have said this in the book, but it's often not about distributing to what people want, but it's distributing what the algorithm wants, right? So you're not just trying to please people. You're trying to please an algorithm. Well, and that's, that's if your strategy really weighs on the discovery platform side, right?

for a long time, I just didn't do discovery platforms at all, to my detriment. It took me way too long to realize, ah, I should actually prioritize more time creating on social media instead of just doing email, because the best way to grow an email list is not by writing great emails, unfortunately. Like, it's by getting top of funnel elsewhere, introducing them to the point, to the fact that you have email. Because if you are really predicated on the discovery platforms, you do have to, you do have to, play towards what's working there.

You know, how is the game being played? You're just not going to win on Instagram if you're not doing reels right now, you know? Yeah, and it's even more specific than that. Like, there's a specific type of reel that you need to do right now. And there's a specific type of following the trends. Knowing how to hook people in the first three seconds,

knowing how to end a reel so that it loops. Like every game has games in the game. and if you want to win the macro game, you've got to learn the micro games. And it becomes exhausting. It's really hard to win the micro games of multiple macro games. That's why it's hard to be successful on Instagram and Twitter simultaneously. Are you more tired now than or more energized now than you were,

let's say, when you were running a startup a few years ago? Oh, yes. If we're comparing to my startup times, 100%. I don't think, yeah, I don't think I'll ever go back. to like the quote unquote startup world. That doesn't mean that I wouldn't dip my toes into building like a software company at some point. But, you know, I think even the word like startup often gets sucked into the scene of what

being a startup founder is. And I'm not really interested in that that scene or that game. But, you know, I am interested in continuing to build strong businesses. And if I see an opportunity in software in the realm that I'm, playing in. I would do that. But I have no interest really in doing like the venture capital path again. Yeah, I would probably bootstrap or do some other type of creative financing or really focus on just a couple of angels if I really need capital for some reason. But, you know, building a business as a creator, the economics get pretty crazy pretty quickly. And you have a lot

of optionality to invest in your in your selling your projects if you're making $500,000 of revenue I imagine the margins on that are like 90 plus percent or 85 percent yeah for sure yeah they're they're they're they're really high and that's just one product you know granted the the membership is about 70 percent of my overall revenue but it's not my only revenue uh so it's it the economics get pretty crazy pretty quickly. You know, years ago it was kind of like you either raise venture or there was no other option actually. You kind of just had to raise venture and do the whole venture thing. Now there's so many options and I think creators are seeing so much success doing their own thing, going D to C direct to community as I call it. And yeah, I'm wondering, do you have any examples of

creators that you look up to that have really awesome businesses. Oh, tons. My friend Daphne, she has a business called teacher career coach. She helps burned out teachers explore opportunities outside of the classroom. In what I really, what blows my mind about Daphne's business, she's kind of showed me under the hood a couple of times, including like her convert kit subscriber graph, it's the most violent up and to the right graph I've ever seen in the creator space. And it's because, just like anything else, if you have product market fit and good timing, like things can just go so well for you so quickly. So I admire her for that because she's like genuinely helping a lot of people and she's handled like market driven scale in a really

impressive way. I really personally aspire to the lives and businesses of authors more than anything else because they're able to like spend a lot of time investing into making this one really great long form product and build really lean businesses on the back of that. Todd Henry is a great example of this. He writes a book and publishes like every two years or Dan Pink, James Clear. He only has the one book, obviously, but it's such a huge, ridiculous success. So I really aspire to that life because you can probably relate to this, Greg.

Like when you are playing the social media game as part of your top of funnel, that becomes a lot of production on its own, let alone whatever that is moving towards. So you get in this place where it's like, I am creating so much all the time just to remain in people's line of sight because that's the economics of how the business works. I would love to pull back for months, work on something much bigger, much crazier, much more enduring than this tweet and have that be the engine for the business. You know, that that would be just awesome. But you, when you get yourself on that treadmill, you have to buy yourself the time back to do the larger thing. So those are just a couple examples. But there are so many creators, some podcasters too, like a great podcast. the folks who do acquired, Ben and David.

I went to college with Ben. That's an incredible business that also really opened my eyes to, you can have a large audience of very influential, very accomplished people, you know, in a vacuum pre-acquired. I would have said the audience of the show seems really small. And yeah, those people are valuable, but it seems really small. I think they have on their About page that they get 150,000 downloads per month or something, something ridiculous. And all of their listeners are like founders, VCs, really intense people.

So that's an, oh, no, 300,000 unique listeners. Crazy. So that's a few examples. I also think we've just become numb to numbers. like you can't spell numbers without numb that's funny because especially I think Twitter slash X has done this to us

when they put the impressions on each tweet and now we're like okay how many likes did it get how many retweets did it get how many bookmarks did it get how many impressions did it get and impressions you know I always say chase impact not impressions.

And I say that because, well, first of all, I think you can get a lot of impressions, but not make an impact. But also, I have to, you know, just remind myself that these are real people. Like, 350,000 people, like, that's literally like 10 arenas. No, it's more. It's like 20 arena stadiums, you know? It's crazy. Yeah.

There was a time before, before we hit the. cap on the lab. Membership wasn't $2,000 as $1,500. When we hit the cap, I increased the price for new members. But at that time, I knew, you know, if I tweeted once a week or twice a week about the community, it would be my lowest engagement tweet, but it would result in a new member. And so I just looked at this as like, I don't even care the spread on this. This is worth saying.

This is worth sharing. and it's going to have a meaningful impact on the business. You know, it wasn't a 200-like tweet, but it was probably a $1,500 tweet. Like, that's a worthwhile way of using the tool, even if from the outset, it's like, oh, that tweet bombed. In a way, sure. In another way, all the other tweets are bombing, actually.

Well, it depends what you're optimizing for. So I think when you're creating content, the question you need to ask yourself is, what am I optimizing for? And I think that could be different each week, each day, each month. You know, I think to you at that point, it was my goal is to get 200 people into this group. And that's all, you know. And then after you did that, you might have been like, okay, back to regular scheduled programming.

Let's go, you know? Yep, yep. And I think the other thing is, you know, I look at these platforms, these social platforms, as a way just to build trust with people. And, you know, you're building trust, you're building trust. And at a certain point, you might want to cash in on that trust in some shape or form. It's just a question to ask yourself, which is when makes the most sense to cash in on that trust? So is social media for you top of the way?

funnel for late checkout is that are you trying to get clients from social media what's what's your strategy you look like you know i joined twitter in 2000 and i don't know it says on my profile or used to say on my profile right 2008 2008 and i've been tweeting about the same stuff since 2008 at the same velocity i'm on social media to get my ideas out there first and foremost and to attract interesting people like you. And I've had crazy people, crazy conversations with people from Twitter. So that's my number one reason why I'm on Twitter and why I do social media. It's better to make the product more retentive than to try to just make your top of funnel better to get more people in. What sort of retention do you see in the best performing versus worst performing membership?

I don't have a ton of data here. I know that my retention is over 90%. like most months the first four months when I was really looking at it it was above 94%. So that's the best I've seen. But I know that most memberships that I talk to are pretty static because they're bringing new people in every month, but they're losing just as many people as they're gaining. So by that logic, it would be like 50%. Right. If it's less than 50%, you have a real problem because you're shrinking actively.

But even if you're not shrinking actively, collectively, churn is such a dangerous thing because there are negative network effects in a peer-to-peer-based membership, where if my friends are leaving, why would I stick around? If I don't feel close to the people who are joining because we have just as many people joining as leaving, it just feels like the party is turning over all the time and I don't feel comfortable in this space anymore. So I think more memberships should focus on larger renewal timelines or larger commitments. Like I think a monthly membership

and a peer-to-peer-based community is a bad idea. You ought to do annual. You could do bi-annual. You could do quarterly. But I think monthly memberships and a peer-to-peer-based space is setting yourself up for failure. Yeah, I think retention is the golden metric

of if you have a good membership. And if you feel like your retention is low, then that is a signal to focus on investing in the experience and making it more retentive. Totally. And that sometimes could mean you need a part-time or full-time community manager that their only focus is retention. So, for example, have them create programming, social events, things like that

that bring people together in your membership. And you just look and you speak to that person. You're like, hey, retention's at 50%. You need to get to 70%. And a lot of these events and programming actually helps increase that. So you can look at it after 90 days or 120 days and be like, is this working or we're moving in the right direction? For sure. I think the larger community grows, the more you need to think about the community as a set of concentric circles where people will want varying degrees of closeness with smaller and smaller groups.

Like if I am in a 1,000 person community, but I value the ability to have a consistent small group interaction, you should be trying to facilitate that in some way to make that experience, something that can be formed. It might take a little bit of work on the part of the members themselves, but the more you can do to kind of meet them there and make that experience possible, that's when scale is not a problem. when you're able to continue to create close experiences in small groups, then scale is a good thing for the business. But a lot of people have this membership that starts off really small,

and people have these great, intimate small group experiences. They're successful in getting more members in. They don't facilitate continuing those experiences, and it just becomes a different experience with the membership. I don't feel that closeness anymore, and that's when it starts to work against you. we're running up on time, but I have one last question and putting you a little bit on the spot, but you're a smart guy.

You know, if you weren't doing what you're doing now, what is a business that you might start, or where do you see a trend or some opportunities that you're just like, I only had more time, I would do that. In this space, I think there is room for a, an agency that is of fractional community managers. Because there are a ton of people who are able to build and grow communities. They don't want to do active management of it. They don't want to hire, maybe can't hire a full-time employee.

But also, if you have a team of fractional community managers, that can be a small group of fire starters within each community that you guys take on as a client to get things kind of moving. I just think it's a no-brainer. I have no real interest in running an agency. So I'm happy to put that out there. But I think I'm shocked that this has no. come around yet as like a dominant player in that space.

Yeah. Agency business tough, as you know, but definitely think that if you can keep it small and you're not trying to hire a thousand fractional community managers, there's definitely an opportunity there. Where could people follow you? Check out the podcast, Creator Science. You can check out everything at creator science.com or find me at Jay Klaus on whatever platform you like to hang out on.

I was hoping you'd pick up that guitar and play me a song at some point. Part two. Part two. People want to comment in the YouTube. Comment on the YouTube if you want that. Yes. Yes. Let's make this happen.

Later, Jay. Let me, man.