The 'Community' Lie & Reducing Churn
This breakdown examines Hamza's community business model on Skool. Including an analysis of the challenges around churn, pricing, and the nature of online communities as well as solutions for building a more valuable and sustainable community model.
Hamza's Community and Churn Rate
1
Hamza's Following:
Built a cult-like following on Twitter/X through self-development 'manosphere' content
2
Skool Community:
Launched a community on Skool (the Adonis School)
3
Revenue:
Allegedly generates around $100k/m
Now, here's the reason for the 'allegedly'.
Hamza's (self-reported) churn rate is at best 30-40% (as evidenced in the screenshot above)
i.e. 40% of his followers sign up to his community on Skool, pay for one month and then leave 😳
The Problem with Low-Ticket Offers
1
Initial Low Price
Hamza followed the advice and launched it as a low ticket offer - initially only costing members a few bucks per week.
2
High Acquisition Cost
Even if you have the following that Hamza has, the cost of acquisition for a new member who pays less than $100 and then churns (possibly for life) does not warrant the upside.
3
Damaged Reputation
Worse yet, the new member has been exposed to how bad the product likely is and in return have lost trust in Hamza. Churn has not only lost Hamza money, it's damaged his reputation.
Pricing Fluctuations
Since...the price of Adonis School has flip flopped:
Hamza's churn problem is not going away any time soon…
Breaking Down the Problem
Communities are the next SMMA Gold Rush
Almost all of the community gurus selling courses on how to get rich building communities on Skool are making their money from you buying their course.
The Affiliate Link Trap
If you try to build your own community, you'll be doing so inevitably via their Skool affiliate link. Once you realize you can't do what they say, you'll understand the real way they're making money.
The Audience Problem
The whole thing was a ploy to leverage a big following and share a tool with their audience that they get paid for. But it won't work if you don't have the audience.
Low Ticket Offers vs SaaS
Not True SaaS
- Just because you charge $19/month for your community, does not mean you're offering anything of intrinsic value.
- SaaS companies that do the same, especially in the B2B space, spend hundreds of millions and deploy a wealth of resources in order to create something proprietary that adds material value.
Churn and Value
- If a user doesn't get or stops getting value, they stop paying...and churn ♻️
- But the problem with the community space is that 9 times out of 10, there's no value.
- Members who join get access to information (like an online course) and if they're lucky, perhaps some group calls with 100s of other teenagers vying for attention.
Brand Damage
- They feel scammed and stop paying - which causes churn.
- Churn, however is not created equal.
- For the SaaS companies, they have a multitude of chances to win-back the customer and re-engage them.
- But for you and for Hamza, not only does churn lose money, it damages the brand.
Redefining "Community"
Community Is The Wrong Term
If you were buying a house.
And you specifically wanted to live somewhere in or with a strong community.
What would you be looking for?
- I'd want privacy ✅
- Gates ✅
- A neighbourhood watch, perhaps ✅
- Some sort of organised structure in place that protects me and my family and doesn't let the riff raff in ✅
- A place where the free flow of random people is prevented and not allowed ✅
That's what I would be PAYING for.
London is NOT a community ❌
9m people moving in and out freely ❌
No gates ❌
No boarders ❌
I wouldn't spend money on a random house in London under the impression that I was buying into a community.
So why are you doing this with Skool?
It's because 'Community' is not what's on offer.
"Community" is the wrong term.
What you're paying for and what you get is completely disenfranchised.
You think you're getting access to great people but in reality, it's just another online course.
The Way Forward
So...where do you go from here?
The 'Community' product is so widely coined now as a phrase that it would be commercially stupid not to use it.
But, in the context of ap.io here's what we're focussing on:
1
Religiously Gatekeeping
- Continuing to religiously gate-keep applications.
- Opening up available spaces when and if it adds value to the other members.
- Progressively adding more and more resources and access opportunities indefinitely.
2
Leveraged Membership
- We want members and membership to be LEVERAGED.
- i.e. fewer members, each bringing unique value.
- Where their engagement directly increases the value for other members exponentially
Gate-Keeping Strategies
1
Strict Application Process
Not only gate-keeping applications but also gate-keeping by price.
2
Premium Pricing
- Our memberships are not and won't be $19/month type arrangements.
- If you want access to the Community and you get invited, you'll have to achieve a minimum buy-in too.
3
Quality Over Quantity
- All 'wantrepreneurs' and teenagers in Mom's basement are weaned out.
- We don't want to expose our community members to newcomers who pay just to 'try it out' and then leave.
- Value-add only.
Exclusive Waitlist Access
Community Access Access is by invite only.
To get an invite, you must be on the waitlist.
We already have 100s on the waitlist, so make sure you:
