Community and Other C-Words to Build a Business On
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Before you get in a tizzy about Entrepreneur publishing an article referring to whatever you consider the C-words to be, step back, breathe and put your Get Offended switch in the off position.
I'll address the C-words from the perspective of a startup out of California that I can't seem to take my eyes off of. I first spied NeighborGoods founder Micki Krimmel as she walked up on the stage at this year's SXSW Accelerator, a startup-launch showcase held during the famed SXSW Interactive in Austin, Texas. The unabashed chutzpah she demonstrated during her company's pitch has led to multiple conversations since, including many about the C-words.
When neighborgoods.net launched nationally in the summer of 2010, it pioneered the collaborative consumption space. The company allows communities to build online collaborative sharing spaces. Need a ladder? Borrow one from a friend. Have a drill? Lend it to someone in your community. Much like Airbnb offered people a way to monetize space, NeighborGoods offers people a way to build relationships throughout their community and, quite simply, to do good in collaboration with other people. Site members are currently sharing more than $3.5 million in goods, from lawn mowers to power tools to cars.
Let's have a look at how the C-words make NeighborGoods a success that your business can emulate.
The first C-word: CHEAP
During beta trials, NeighborGoods discovered that finances get in the way of building online sharing communities. Data indicated that free transactions outnumbered rental transactions 8-to-1.
"If you're renting out a vacuum for $5, that's a high-friction transaction. Setting up a meeting time, picking it up, dropping it off, returning it--that's a lot of work for $5," says Krimmel. "As soon as you remove money from the transaction, it becomes a lot less work. You're doing something that's helpful to someone in your community. So we've shifted our business model so it caters to those types of transactions and discovered other ways to monetize our community."
If you thought "cheap" couldn't be a business model, NeighborGoods is proving you wrong. There are ways to make money by offering a low-cost service or by connecting people who lend and borrow things without any money ever changing hands. For NeighborGoods, it's through fees charged for users who build private sharing groups or who want to become verified users.
The second C-word: COMMUNITY
NeighborGoods' bootstrapping practices serve as an example for anyone who wants to know the secret to a viable business model. With little money available for marketing, they had to rely on media coverage and their current users to build buzz. With mentions in The New York Times, Oprah Magazine and on Lifehacker.com, NeighborGoods has built an online community of users from different walks of life.
"We're 100 percent focused on our community," Krimmel says. "They give us our best ideas. We're building and evolving our model to serve them, and we're able to do that by asking what they find most important."
Whether you run a coffee shop or an online marketplace--by reaching out to your community for suggestions and showing them that you're willing to change, you're paving the way for long-term customer loyalty.
Any more C-words?
From collaboration to communication, the list goes on. So, go ahead: Drop some C-words into your day-to-day business practices.We all should do more with companies who collaborate, turn conceptions of cheap inside out and build communities out of customers--all the while making a little cash in the process.