In this episode of Startups For The Rest Of Us, Rob and Mike share their experience and give insight on steps to validate, build and launch a membership website. They also give tips on how to decide whether a membership site is the right platform for your idea.
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Rob [0:00]: In this episode of Startups For the Rest of Us, Mike and I talk about how to build and launch a membership web site. This is Startups For the Rest of Us, episode 278. Welcome to Startups For the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products. Whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Mike [0:26] : And I’m Mike.
Rob [0:27] : And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?
Mike [0:31]: Well I’m pleased to report that I’ve got a end-to-end deployment process in place for Bluetick, so the April 1st deadline that I’ve been shooting for is looking good right now.
Rob [0:41]: That’s only five weeks away. You’re still on track?
Mike [0:44]: Yeah.
Rob [0:45]: April 1 is the day that you’ll expect, or that you’ll hoping to have a couple early access people in, is that right, five to ten of them?
Mike [0:50]: I mean it kind of depends on exactly how the development process shakes out in terms of getting them on before that date or afterwards. But I want to have everything ready to go by then, and it may just take some time to put everybody on there, but that’s the goal to shoot for at the moment.
Rob [1:06] Cool. Glad to here you’re still on track, because we’d originally talked about that a couple months ago, about that deadline. These things change over time and you’re still on track. That’s good news. So the day after this podcast airs is Jason Calacanis’ launch festival in San Francisco and I will be there, or I’m planning to be there. Although I booked something in Airbnb and I tried to book it and the person never got back, and then said maybe. So I may be there and like sleeping on the street, but I have a ticket to the launch festival and I’m planning to be there, I guess, even if I have to drive. My brother lives about an hour away, even if I have to stay with him and drive in each day, I’ll do that. So if you are at the launch festival tweet at me or DM me or something and I’m trying to set up a little gathering of bootstrappers, or folks who listen to this podcast. I don’t know that it’ll be as formal as a dinner, but probably just a meeting place at a bar or something to get together and chat.
Mike [1:58] : Cool. Well about an hour ago you and I had just finished up a worldwide call for the membership Web site that you and I run called FounderCafe, and we very nearly rolled it into today’s podcast, to do a live podcast. But you didn’t bring it up until after the call was over.
Rob [2:13] : Yeah. I know. It would have been interesting. We’ve never done a live podcast in front of an audience with a chatroom and all that stuff. But this, of all topics, like you said, today’s topic would have probably been a pretty good one to do it. Maybe next time. I was a little hesitant because we’ve never recorded in anywhere but Skype, and we know how that works and it’s repeatable and predictable. And this would have been an off the cuff, hey, let’s just record ourselves in Google Hangouts and hope we can get the audio out later.
Mike [2:37] : Yeah. And I’m sure that there’s tool out there that allow you to do that, but that’s a risky thing to do.
Rob [2:42] : To basically record a whole episode and then not know if it’s going to turn out technically very well. Last thing, for me is, there’s an epic post that Zach on my team wrote. It’s up on the Drip blog, we’ll link it up. But blog.getdrip.com, you’ll find it in the top few of the listings. Zach wrote this epic tear down of Derek Halpern’s email launch. He recently launched a course called, I think it was called “7 Figure Courses”, and he just hammered through this thing. It’s like awesome. He analyzed every email in the series, and talks about why it works, and analyzes specific sentences, and then offers a checklist download at the end, just a bunch of stuff. It’s 3,000, words or 3,500, I mean it’s huge. It might even be longer than that and it’s got a dozen screenshots and stuff in it. This is one of the best tear-downs I’ve seen in a while of an email launch sequence. And while you don’t have to obviously use everything and all the mechanisms that Derek Halpern does, this takes a look at why each of them works and could allow you to potentially take the same ideas and thoughts and put them into your emails.
Mike [3:42]: I saw that. That’s a fantastic post. If you have any questions about what sorts of things should go into an announcement like that, or a lead up to something that you’re launching, there’s a lot of really great ideas in there that you’re probably implementing at least some of them, but I would be hesitant to say that you’re implementing all of them, because there’s a lot of really good things in there. Some things I looked at and said “Oh, I got to try that.”
Rob : [4:05] So today we’re tackling a big topic, and this was requested in a thread inside FounderCafe. And FounderCafe is the membership web site that Mike and I run where we gather bootstrappers together and built on DISCUS, which is a forum and discussion software. We have conversations, we ask, answer questions and just kind of everybody engages. We also do calls periodically; Google Hangouts where people can ask stuff in a chatroom. Try to do it monthly but they wind up being once every probably month or two. When I asked for topic suggestions for the podcast, this topic today about how to build and launch a membership web site, was requested several times. And so we wanted to cover it, because we know that there’s a lot that goes into doing this – to validating and building and launching a membership web site – but we definitely have had experience, and we’ve actually launched the Academy several years ago, the Micropreneuer Academy, and then essentially moved the platform from WordPress to a third party SaaS host for that, and then recently moved it again, this time into DISCUS in order to focus on the interactions with entrepreneurs. And we also did a re-branding at that point from Micropreneur Academy to FounderCafe. So we have experience on a lot of realms of doing this. Certainly this is not something that we’ve done dozens of times, so I wouldn’t claim to be a membership web site expert. But we have taken some hard knocks on this, and I think we have some insight to lend on it. So I’ve broken this down into three main categories or topics. The first is how to validate, second is how to build, and the third is how to launch. And so there’s a bunch of different sub points under each of those. The first piece about validation is one that I think that folks may overlook. And it’s to ask yourself this question, “Does this topic that you’re thinking about, or that you’re an expert in, does it warrant a full-membership web site? Does it warrant someone paying you every month or every quarter to have access to content and potentially discussion? Or, is a video course or an eBook a better way to go – something that’s a little more static, and that doesn’t require, A, all the work, but, B, all the audience engagement and all the effort of getting an entire membership Web site set up.
Mike [6:15] : Yeah. And I think the way that you can ask yourself that question – that probably phrases it a little bit better than just saying “Which one of these should I do?” – is that you evaluate the reasons why you are looking to build a membership web site. So if you’re looking at that and saying, “I want to do this because I want a recurring source of revenue. ” that’s the wrong way to look at it. What you really should be looking at it from is the perspective of the customer, the person who’s going to be a subscriber to your community. So if they look at that, and you can put yourself in their shoes, and you can say, “Yes, this is not only providing value, but it is providing more value over time.” And I think that that’s the real key here as to whether or not it should be something like a membership site – where it’s a recurring subscription fee – or something that is a one-time fee. And I think the differentiator there… I was listening to, I think it was Scott – I can’t remember the guy’s last name – Farquhar from Atlassian. He was speaking at Business of Software, and he answered this question about, “how do you decide whether something should be a recurring subscription fee, or whether it should be a one-time fee?” And his answer to that was pretty compelling. It was, “Does this provide more or less value over time? And if it provides more value over time, then you can justify a subscription fee. But if the value that it provides over time goes down, then it should be a one-time fee, so that way they get all their value upfront, and then they walk away.” And that’s very similar to this in determining whether or not you make it into a course or an eBook, or you have it into a membership web site that people would pay for on a recurring basis.
Rob [7:45]: And one concrete example of this is, I had a friend several years ago – I think it was maybe four or five years ago – and he was really doubling down on building a personal brand around recording awesome screencasts. Like how to do a really good product demo, how to tell a story, and how to it all with a screencast. And he had a whole approach that he used and was really good at it and was getting paid by Fortune 500 companies several thousand dollar – I don’t know, it was like ten grand or 15 grand to record these demos. And so then he started blogging about it and, I think, was kind of writing an eBook, and he was thinking that he was going to do a membership site around this topic. But the more we got into it and discussed it, he said, “You know? It’s like you learn some things, and you learn these tips and tactics, and then you can go do it, and then you’re done. And a lot of people either only record one of these screencasts over time, or maybe a couple, and you can learn a lot from just an eBook or even just a video course, I think, which is what he wound up doing. But you didn’t need, A, ongoing content that was updated, or, B, discussions; forums with people interacting, because there wasn’t really a community built around it, and there wasn’t necessarily a need for that ongoing value, to tie back into what Mike was just saying. I think an interesting way, in terms of actually validating, if you decide, “Okay. I am working on something that I think people would want ongoing support with, and there’s new stuff coming out that I want to provide new content on.” I think there’s a couple interesting ideas in terms of validating it. One is instead of launching as a full membership Web site, is to try to push something out on Udemy, or Udacity, or Teachable, and just do a simple video course, and see how much uptick you get, and who’s interested in it, and then you gain, kind of, a broadcast capability to those people. So if you do sell a few thousand of your video course to them, later on there’s a likelihood that you could use that as an audience, that if you’re going to go off and build something else you could potentially promote to them. I don’t know about the terms of service with those sites, and if you did promote that if that’d be a problem, but it’s an interesting idea if you’re starting from not a large audience to, kind of, prove the concept and figure out boy, “How hard is this content going to be to create.” and “How much time do I have to spend.”, is this worth it, and are people interested in it? Because I think without an audience that’s something that you could consider. My advice though would be you really don’t want to launch a membership web site without some type of an audience, like whether you have a blog or a podcast, or some type of email list that you’ve build up over time. Because starting from a cold stop, I’ve never seen anyone do that. Because a membership web site is not an eBook. It’s not something that you can sell on some merits. It’s very hard to do that, I’ll say. Getting someone to spend 20 or 30 bucks on an eBook is one thing, if you’re providing the reason to do it and have a good sales letter. But trying to start a membership web site where you’re going to have people interacting on forums and you don’t have a community built in advance can be really, really hard to do. When I talk about this Udemy, Udacity, Teachable, etc. approach, I’m thinking more that you do have some type of audience, even a smaller one, that you can send to those courses and promote them, and if no one buys them then you know you’re probably off the mark with the whole deal. But if there’s a lot of uptick and they are popular, then you can use that to level up. I mean, I do view it as a stair step approach of maybe building email lists and then stair-stepping up to just an online video course, and then considering whether or not you want to level up to an actual, essentially a subscription product like a membership Web site.
Mike [10:54]: Yeah. When I think back to how we started the Micropreneuer Academy – and I don’t want to set it up as saying it’s an anti-example to what you just said – but I think that there’s a caveat with what we did, which was we, kind of, started it from scratch, but there were people being fed into that from our blogs and from social networks. But in addition to that, we weren’t just selling a community. There was also the course content that was associated with it, and that course content was regularly coming out. So the forums were, kind of, half of that membership web site, and then the other half was courses, which we eventually made a decision to move away from course content. But that’s one way that you could potentially build up the community there. and hand hold it until it gets to the point where it’s a little bit more self-sustaining. So maybe that’s one approach that somebody might be able to take.
Rob : [11:41]: You know. when I was getting the Academy off the ground I did have enough of an audience to get it going because I had 25,000 RSS subscribers at the time. That and four bucks will get you a latte at Starbucks. But it wasn’t an email list, like if I had 25,000 email subscribers it would have been so much better. I think I had hundreds of people on an email list at the time, because I hadn’t realized the power of email at the time. This was probably 2009, I think. 2009, 2010 timeframe. I did have that RSS audience and that was what kickstarted it. Without that I don’t know how I would have done it. And we’ll talk a little bit more about it in the building, but I had seeded the forums and gotten a few people in there from that audience. And if you’re going to have forums you need to have people in there interacting, or else it looks like a ghost town. And right away I was able to sell a hundred people to get inside the Academy from the start, and then that was, essentially the impetus. Because if you’re not able to kickstart that really early on, you’re going to have an issue with feeling like a ghost town. That’s only if you decide to do forums. Now there’s a decision that comes up, we’ll talk about a little bit, about whether or not you want to do that or just offer content. Another interesting example – and this is the first time I’d seen it done, but in terms of validating a membership web site concept – was Adrian Rosebrock from PyImageSearch, and he validated it using Kickstarter. And we’ll link over to that, but it’s the PyImageSearch Guru’s Computer Vision membership community, basically. He posted it up there, but he had an email list and he built it up and he launched to that list for them to go kickstart the thing if they were interested. And what they were buying was the first three months or the first however many months of their membership to that thing, and he got past his goal, well, well past his goal, and was able to, essentially, get some cash out of it upfront to justify building it. In essence, I think his goal was $2,500 and he wound up getting about $35,000 in backers. So that was obviously a really nice validation that the idea had some legs. But again, he didn’t start from no audience. He did have an email list that he utilized very well. We actually did a case study of him because he used DRIP to do it. And if you search back through the DRIP blog you can find out what he did, and how he did it to basically, to get the kickstarter funded.
Mike [13:45]: So as Rob just said, the first stage is to essentially validate the idea. The second one is to build it. And at the very beginning of building you have to make some decisions about exactly what it is that you’re going to be building, and what you’re going to be doing for your customers. Are you going to have just forums? Are you going to have just content? Are you going to be doing both? Doing both is a heck of a lot of work. If you’re going to be building content, content can take a long time to build. Back when Rob started the Academy, and just to give a quick timeline here, when the Micropreneur Academy started it was actually just Rob. And that was for probably what, was it three, four, five months, something like that?
Rob [14:22] : Somewhere in that.
Mike [14:23]: Yeah. So I. kind of, signed on board after that point because Rob was overwhelmed and needed some help with it. So he looked through his Rolodex and I ended up on the shortlist and we basically worked out how that was going to work.
Rob [14:35] : You were my fifth choice, Mike.
Mike [14:37] : I was your fifth, excellent.
Rob [14:38]: No, you weren’t. Man, to talk about overwhelmed. I was working 20 to 30 hours a week just hammering out content. I’ve never created so much content as I was there. And I felt like I just could not keep up with how much content I had committed to.
Mike [14:53]: I can’t even imagine how difficult that was, because even when I came on and I started building content, that was a heck of a lot of work. Basically we split it down the middle at that point. I was doing half and you were doing half, but I can’t imagine doing double that for three months beforehand.
Rob [15:11]: It was a bit of work.
Mike [15:12] : But basically what we were doing is we were building content, and Rob would build – I forget what it was we started out – like we were doing two lessons each per week, or one lesson each per week, and every single week we would push out new content. But in addition to that we were also helping to nurture the community, and interacting with people on the forums and just asking people questions. So it was a combination of building the content, talking to people in the community, maintaining the forums, and then in addition to that, doing marketing for it as well. So it wasn’t really a trivial amount of work. There was a huge amount of work because we were doing both things. We were generating the content at the same time. And I think that if you go back to the very first step where we talked about validation, if you were deciding whether or not you’re going to do a membership Web site or a video course, or an eBook or something like that, depending on how long it takes you to build one of those things is going to dictate how much work it’s going to be down the road for you. So you do have to make some decisions about what you want to offer people and what it is that they’re going to find valuable.
Rob [16:12]: Yeah. I think in a perfect world, if you’ve created a nice base of content already – like you’ve written a book, or you’ve written an eBook, and you’ve gotten people on the same page with kind of shared base of knowledge, then launching a membership web site that was just forums/a community around that topic, and you guys have that shared vocabulary from whatever it is that you’ve wrote that everyone’s been reading, that, to me, is the easiest way – or maybe the best way to do this. Because it’s very natural for someone that if they’re getting value out of a community, and it’s high quality, for them to consider paying for that on an ongoing basis every month. It’s less so with content, because at a certain point you tend to run out of good content. And the content, I think, could be sold almost separately as a way to, again, get everyone on the same page and, I think, there’s this phrase that “people will come for the content and they stay for the community”. This is kind of a common phrase people throw out with membership web sites. And I think that’s true. I think that being able to train people, and offer advice and that kind of stuff with an actual curriculum, is helpful. But I think the idea of being able to perpetually create content to keep someone around month after month and year after year is a really tall order, because eventually the topics, you just run out of interesting topics that you haven’t covered already. Now an exception to this is if your membership web site, or a content producer more like Mixergy, where you’re doing interviews, then yes, there is an evergreen, perpetual thing that you can do, and you can just do a few more interviews and spit them out. But if that’s not it, and you really are the personal brand and, it’s your thoughts and your content and your take on this that makes it unique, I would lean towards trying to put enough content together that people really dig it and you can either sell that as its own thing, and then offer the community as an add-on rather than focusing on trying to have both content and community tied up in the same thing. And I think, looking back, that’s something I probably would do differently with seven years, in essence, of hindsight on the Academy. Back then the only membership web sites I knew did both, and it was A, too much work for one person, and B, in the long run I think that focusing more on the forums and the community would have probably been a better approach.
Mike [18:19]: One of the things that we did early on was that we took a look at how many people were inside the Academy. And we were probably about 16 months into creating content, and we looked at that and said, “Well, how many people who are joining this month are going to see the content that we’re creating from the 16th month?” And that question made us go back and take a look at stuff and start thinking about churn rates and things like that because we were charging people every single month. And what we realized was that we were putting the same amount of effort into the content 16 months after we started that we did in the first month and the second month and the third month. So there really wasn’t exactly a good ROI for that. So what we did was we compressed a lot of that content back down, and we said “Okay, we’re going to make this into a course, and our billing mechanism was just, “We’re going to charge for 12 months of the course, and if you wanted to buy it all upfront you could do that. We’d make some special offers along the way, about three or four months in.” But you could buy the whole course for, I think it was like probably $500 or $600, something like that. But that was it. So even doing that though, like when we were selling it to people, we had a roadmap of all the different content that we wanted. And that’s something else that I would highly recommend doing upfront as part of this. If you’re going to go the route of content, know exactly what it is that you’re going to build along the way so that you can make things lead from one into another, and you can decide, “Okay. This lesson, or this module, is going to be there in week 17, or month three or something like that, and then the next month you’re going to follow it up with X. And if you have all of those things laid out – whether you use Trello or a spreadsheet or anything like that – lay them out so that it really is, kind of, a course, so that things build on top of each other like Legos. So that way you’re building, kind of, a foundation and you’re moving up from there. I guess that applies more probably if you’re doing like a drip content of any kind. So you’re dripping that out over time. But early on, if you’re building all the content, you don’t have all the content built so you kind of have to drip it out. Having that roadmap upfront and in place on day one is really going to provide, not only you a lot of value because it tells you exactly what you need to do moving forward, but it’s also going to provide you some marketing materials that you can provide to the people who you’re onboarding.
Rob [20:31]: Yeah. That’s a good point to bring up, is when you’re building content for a site like this, if you do decide to actually build it into the site, and not do this kind of more standalone or one-time product, and you’re going to build stuff along the way, then I would do exactly what you said, which is basically have an outline for maybe three months, maybe four months, but only build the first couple of weeks – maybe two to four weeks worth of content – because if you don’t know if the idea is going to fly, and you haven’t done extensive validation or you still have doubts, you don’t want to build months and months worth of content. Because if it doesn’t fly then you’ve wasted that. You can, instead, build the first few weeks and then you drip it out over time, and as the frontrunners – the first people who sign up, make it to that next week – you can basically turn it out right before they arrive at that point. And that can create some helpful deadlines, to be honest. I remember feeling stressed about it, but it forced me to create a lot of, what I consider, it’s the most content and some of the best content I’ve ever produced, was in that six to twelve month timeframe when I was just running week to week. Now, it was exhausting and I couldn’t do anything else, and that’s all I did pretty much full-time, except from just managing the little software products that I have. But I think that was a nice motivator. Now in retrospect, would I ever do that again? Probably not at this point, because it just was so hard, it was so much time and it was so much work. So something that you have to weigh when you’re thinking about this, do you want to include content in your membership web site?
And the last piece I’ll throw out is if you decide that you are going to have a forum piece, and again that’s typically the piece I hear about that keeps people coming around is that community aspect, start to think through how you’re going to have a plan to spur conversation. Both to get people onboarded, because if someone’s never posted to the forum they’re much less likely to ever post to it. So you want to get them in, get them introducing themselves. It’d be great if there was beyond introducing, there was even another one that was a question about you, what’s your business? or something like that. Then having a weekly discussion topic that the people can come back to week after week, I think is another thing to think about. And if you can hire a community manager that would great. Or if you’re going to handle it yourself, that’s something else to do. But forums don’t tend to grow and thrive by themselves. They tend to need some nurturing along the way.
All right. You’ve validated, you’ve built it, now the thought is how are you going to launch it? That’s your last step before everything really starts. Your last step before everything starts. I’ll say it again, I can’t imagine launching a membership web site without an email list of at least a couple thousand people. I don’t know how you’d do it without an existing audience, because trying to run ads or trying to just do it without this base of people would be very, very hard. So with that said, build the list first. You got to build up your content producing chops if you’re going to do this, or you’re personal brand and your audience. And then you’ll want to launch to them. And I’ll talk in a couple minutes about how to do that with email. But before that, one of the ways to prep the inside of your membership web site is if you do have forums, you have to let some charter members – or founding members – inside early to basically populate those forums. You want to seed them with some questions and some discussions. With the Academy I think I let four or five people in. I called them charter members. I don’t remember, I may have comped them all lifetime, but I don’t know that you need to do that. If people are really interested you could just give them 50% off as charter/founding members. It depends on the situation you’re in, and how desperate you are for them. But getting these folks in early and getting them participating will be a big win for you to have something in the forums when people arrive. Even if you only have a dozen or two forum topics when someone gets there.
Mike [23:59] : Yeah. This is really, really important because the last thing you want to have when people log in is to have that community be a ghost town. So there’s a couple of different ways that you can do that. One thing that we’ve found that worked really well was to let a bunch of people in all at the same time. And what that does is it tends to create sort of momentum for people to introduce themselves, and they see, “Oh, this other person introduced themself. And then a second person and a third person.” And then suddenly they feel like there’s a lot of people who are also new, just like them. And I think there’s different ways to approach that particular problem, but essentially what you’re doing is your creating conversation starters, so people can see what other people are working on, what they’re doing, what they’re interested in, and start asking questions. And that’s really where the value of the community comes from is people talking to one another and providing other conversation starters. “Oh, I see that you’re in this part of the country. Where are you? I used to live there.” So those types of things are probably not directly important to the type of product that you’re building this community around, but it is extremely important for having that sense of community because it gives them something to talk about. If you have nothing to talk about, there’s no community.
Rob [25:09]: Yeah. And that cohort approach of basically not letting people in all the time, but letting people in in groups, serves both the approach of getting folks in all at once both, so they can get something out of it, but so that you can manage that whole process. We found it being much more beneficial to have 25, 30 new people all at once, rather than have them trickle in over the course of a few months. And the nice part if we’ve also found that it increases conversion rates, because people are focused and more ready when the time comes, rather than just signing in to check out what it’s like.
Mike [25:40]: Yeah. And maybe you should explain that a little bit, because that really boils down to doing a launch. Because what we were doing when we had the cohorts was we would draw a line in the sand and after a certain date, let’s say the first Tuesday of the month or something like that, we would say, “Okay. Let’s take everybody who signed up over the past 30 or 60 days and send them through this launch sequence.” And that’s essentially going to be this new cohort that comes into the community. So we found that that was very effective. We did, too, some testing around allowing people to just sign up whenever they wanted. There really wasn’t the pressure for them to say, “Oh, well, I can only do this now. Or if I want to do it a week from now I won’t be able to, I’m going to have to wait another month or two months or something like that.” That really helps drive some of the people in and say, “Okay. Let me make the decision now, as opposed to just pushing the decision off and then never really deciding because they said I can do this at any time.
Rob [26:32]: And in terms of your launch, like Mike just said, you are definitely going to want to launch with a series of emails. I’d say four or more emails. I went into this in my book, and we, of course, talk about it inside the Academy. We’ve probably talked about it on the podcast before. There’s a lot of info about this. You could go back to the Derek Halpern post that I talked about just a few minutes ago, about the tear down we did on the DRIP blog. You’ll see that sending a lot of emails tends to – as long as you’re doing it tastefully – will tend to produce better results, and it’s not just this one launch email, but it’s building up some anticipation. You can do it in a classy and really respectful way, and offer tastes of things and talk about what it’s going to be, and try to flesh out the idea of what this is really going to be so that people get a picture of it in their minds, and you’re not trying to basically sell someone on signing up to a membership web site in a thousand words. Which is, essentially, if you’re just going to do it in one email, is what you’re trying to do. So you’re really going to spell out the benefits, everything that will be part of the experience, and talk about what it’s going to offer for them. And so, setting up that series of emails is something that you’ll do in the initial launch, and then if you do decide to do cohorts, like we have traditionally done, then you can basically modify those just a bit and use them to then launch to the groups every month or every two, as you open the doors.
Mike [27:48]: Another decision you have to make about your launch is how you’re going to charge people. And this boils down to essentially the frequency. Are you going to charge them monthly? Are you going to charge them quarterly? Are you going to charge them just one time and it’s going to be unlimited or lifetime access? It, kind of, depends on the type of site that you’re running. If you have just forums, then it’s probably best to do something quarterly or annually. And what that does is that allows you to get them out of the mindset of “I’m going to try this out for a month or for two months.” Because the fact of the matter is they’re probably not going to get a lot of value out of it in 15 days or 30 days. So what you really want to do is push them much more towards a quarterly or annual plan of some kind. That doesn’t mean that it needs to be $3,000 or anything like that. I mean you could charge $50 or $100 either a quarter or per year. It depends on what it is that you’re building this community around. But the point still stands. I mean, you have to make a decision about whether or not you are going to be charging monthly or quarterly basis. Going back to the other side of it, if you’re providing content plus forums, then I think that you can move much more towards a monthly plan. Especially if you’re dripping out content over that time period. You could presumably build a community site where you have content that everybody gets access to all the content on day one, and then they have access to the community. But if they come in there and they say, “Oh, let me spend my 15 or 30 day free time period in here. I’m going to consume all the content and then I’m going to quit.” That defeats the purpose of having that type of arrangement. In that case you might say. “Well, I can go through and I can say it will be $400 to join and this is what the content is. And then over here I’m going to charge separately for ongoing access to the community.” So those are both different approaches that you can take in terms of how you’re going to be charging them. But it really depends a lot on the type of content that you’re charging further access to.
Rob [29:43]: Yeah. The point here is that most people tend to wander in and out of forums, right? They’re not in them all day or everyday. So one month you may get busy and you don’t use the forum, and if you’re getting billed for it every month, you’ll look and say, “I’m not using that. I’m not getting value out of it.” and cancel it. But if someone’s going to be getting reasonable value out of it, they’re going to get some value out of it every quarter, let’s assume. They’re probably not going to go six months and then get value out of it. The odds are it’s going to be every 90 days or something, they’re going to get a nice little hit from it. And so that’s the idea here is to try to match up the billing cycle with the value cycle of what someone’s receiving. So there’s a lot to talk about on this one, but I would agree with what Mike said here, that if you’re doing forums only, I would always lean towards quarterly. That’s the model I’ve seen working. But you could definitely do annual as well. I know you’ll have to ask for more money. You’re going to get more failed credit card charges, because they’re going to fail between there. You’re going to get more charge backs if you do annual. You have all these things that can go wrong. But I think those are probably the best way to go. And then if you’re releasing a ton of content then monthly you are providing them a lot of value, and I think it’s easier to justify that.
And then I think the last topic we have time to cover today is churn. Membership Web sites have tremendous churn compared to SaaS apps, because a lot of them are information and they’re not necessarily critical to a business’ success, or a person’s success doing something. And so they tend to historically have churn that is a lot higher than maybe a mission critical SaaS app that someone’s using. And I’ve talked to several – I’d say a couple dozen membership web site owners – and the average lifetime on membership web sites can be as low as between three and six months, which essentially means you’re churning out – you might have a 30% or a 20% churn rate where you’re losing that many people each month during that time. Some ways to think about this are to try to look at where you lose most of your people, and think about whether there’s something you could offer folks to stick around, and to try to find out why they are churning out. Like if they say, “The content just stops being good after month four,” then think to yourself, “Okay. So should I just give away the content because people are valuing that so much? Give it away to everybody and then just make the forums the piece that keeps people there?” Or if folks say, “I just didn’t have time to use it.” then maybe are you putting out too much information? Are you overwhelming people? Or, if everyone cancels after month four or month five, do you want to consider maybe pitching them at month two or month three with something that’s like, “Hey, we have a pretty reduced-price annual plan that can keep you around for the whole year, and it’s half the price of if you’re going monthly.” And then if someone’s on the fence or in doubt then maybe they upgrade to that plan. So there’s some different ways to think about it and a way to reduce the risk for the customer, and to also try to head off, or eliminate, some of the cancellation reasons that folks might be having. Because there’s a lot of reasons, of course, to cancel your membership if you see it coming in every month and you’re not getting value.
Mike [32:36]: This is something that when you’re first starting a membership site, can be really difficult to figure out, because you’re looking for trends in your churn, and every single month things are changing. And as months go on, you’re entire platform is changing as well. So you have to, kind of, look back with a bit of a critical eye and say. “Okay, what is it that changed?” And this is where having cohorts of people can be really helpful, because if you’re tracking those cohorts of people into your community, then you can say, “Okay, these people that came in in the first month, at what point down the road do they typically churn out.” And then the people who came in the month after that, what point did they churn out? Is your churn rate going up or down for each of those cohorts? And what is changing in the background? Are you adding content, are you moving content around, or are you improving anything? And as Rob said, are there pieces of content that you’re providing to them that are just not very good, or are you just overwhelming them with too much? All of those things can factor into it. Especially when you’re early on it can be very easy to just completely ignore churn, because chances are good that you’re growing the community at a rate that it eclipses what your churn is. So it’s sometimes difficult to see what’s happening there, because if your revenue is growing so fast that it basically trivializes or minimizes the churn rates, then you won’t notice that there’s a problem until it’s almost too late. That’s definitely something that you have to be careful of and look back at and figure out whether people are even paying attention to the content that you’re building.
So to just recap a little bit. This was how to build and launch a membership web site, and a lot of it was based on our own experience around building and launching the Micropreneur Academy. And basic steps really, are to validate what you have and what you’re looking at building, go ahead and build it using a variety of different technologies that are out there, and making sure that you’re crafting it in such a way that it’s going to be usable for your community. And then the third step is to launch and make sure that you are setting things up in such a way, in terms of the rate that you’re charging people, and doing ongoing launches to make sure that people are coming in as a cohort so that you can measure things and ensure that what you’re providing to people is valuable. And if you’re interested in the FounderCafe you can go over to foundercafe.com and everything that we have for our online community is laid out there.
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