How to understand the financial performance of an online community?
Let’s look at community management from a slightly different angle.
Working with volunteers or hiring employees are just different approaches, but the end goal is the same - creating some value. To measure the business success of an online community you can compare it with a standard business using their metrics. To do this, you need to understand the value your community creates. There are two primary types of value created by an online community.
- User actions. We expect users to perform certain actions that have value in themselves. For example, buying a product, signing a petition, recommending your service to friends.
- User generated content. By interacting on your platform, users leave a digital footprint—the content. This content usually has value in itself and generates income.
You can measure the business success of your community as the difference between the value created minus the costs of creating and maintaining a community. When calculating the value created, make adjustments for community inertia. The larger the community, the greater the inertia and the longer the community can create value with almost zero costs. To understand how viable your community is, look at the financials of a “standard business” that creates similar value. For example, if you make money from the user generated content, you can compare your financial values to the values of companies that hire content creators.
This is a fragment of a draft of the book “Lessons Learned While Working On Stack Overflow”. Read the full book on kindle or the paperback version.