📻 — Hard Lessons Learned from Closing Down a Failed Community (and What to Avoid Next Time)

This is your Community, Daily.

Reading Time: ~ 17 min.

Good morning yeniverse!

Today’s topic might feel like a heavy one but let’s remember that all things, including and especially community, have beginnings and ends.

Strangely, for every 1,000 pieces of content telling us how to “build a community on the internet” there are… well, not that many telling us how to “shut one down” gracefully and respectfully.

Perhaps this is because we simply do not like talking about dying and death and endings that weren’t “epic wins”; well, this is our opportunity to talk more openly about something that happens every single day on the internet and how, perhaps, we can do it better.

To infinity & community,

— john


I first heard of Jose Bermejo through a candid and brutally honest post on Indie Hackers where he shared what it was like launching, growing, and then having to close down a community site that failed to become financially sustainable and evolve into a more business venture.

He shared his biggest takeaway:

My top learning is the huge amount of time and effort that’s needed to make a community work.

Jose Bermejo

Amen and amen!

And when I see courage like this, I have to comment:

A few emails and Twitter DMs later we found time to unpack even more of Jose’s important story of a community’s natural lifecycle (between life and death), what he’s learned, and how he’s going to do it differently on his very next project.

Thank you Jose for honoring your community and our community here in the yeniverse by sharing your story — grateful for folks like you who truly want to democratize community building for others!

Let’s dive in.


To start, give us an idea of who you are! What’s your background and how has that impacted your career choices?

First of all, I want to say huge thanks for allowing me to share my experience and thoughts with your audience. Thanks, John!

My career story, so far, has 3 major “decision points” that dramatically changed the direction of my career and life. But, we’ll start at the beginning…

I graduated in Computer Science 13 years ago in Spain. After graduating I faced one of the hardest decisions up until that point in my life: Which path should I take?

I had two choices and two directions in front of me: One was to work with one of my teachers who was also the IT Director at the University and who wanted me to work as a Systems Administrator and another direction was to follow an award that I had received for a Ph.D. internship at the Science Council of Spain — a big deal!

The first path would lead my career to work more directly in the private sector while the second path would lead me to eventually become a researcher by trade or a teacher in academics. After considerable thought I chose to work for the University; I wasn’t as excited or certain about the academic / researcher track.

This was the first, significant “decision point”! I made my decision and hoped that it would just “work out” for me.

It didn’t take but a few years to realize that there was no obvious (or engaging) career path working at the University — I felt stuck, disappointed, and discouraged and ended up leaving and heading back to something familiar, comfortable, and safe: Work in the family business, a small commercial real estate agency.

I put my head down, helped the family, and stayed open to opportunities as they appeared. With a little luck, I found an opportunity to do some light consulting for a technology company and I seized the opportunity hoping to get back into technology more formally. 

I became a consultant and project manager, learning new skills that would grow me as a manager and leader. In fact, I realized that I loved leading, investing, and serving other people — “people management” was something that I was generally good at and I particularly loved helping and coaching others to grow and succeed.

As I learned more about business-building in the areas of sales, marketing, strategy, I decided to go deeper, enrolling in the MBA program @ IESE Business School in 2015.

This was an important moment for my, a second major “decision point” because I had gotten my life “back together” and even had a bit of extra “spending money” lying around — if I’m to be completely honest, I was weighing the purchase of a Porsche or joining the MBA program.

The cost was about the same (~$80k) but whereas one would provide an immense amount of personal joy and satisfaction, the other would be a long-term investment in my future.

This may have been one of the more important decisions of my life: Deciding to invest in myself, first, has changed everything.

I picked the MBA instead of the Porsche and this reshaped my mindset, my leadership style, enhanced my skills, accelerated my career, and I ended up meeting my wife during the program!

I still have a bit to go on the loan, but, I would do it again in a heartbeat!

I’m grateful for having some of the best leaders during this period of my life, both at Encamina and throughout my MBA program. These people inspired me to become the best version of myself and provided me opportunities to grow in ambitious, passionate cultures.

The CEO, for instance, asked me to help design and put together a new strategic plan for the entire organization, even though I hadn’t quite finished my MBA. After collaborating with him I had the chance to introduce and present the plan to the executive committee.

The experience was rewarding, humbling, and life-changing — I’ll never forget the feeling of being recognized and respected for who I was and what I brought to the table. A little later, I was promoted to Chief Business Development Officer, while allowed me to provide strategic counsel to the CEO on a more consistent, permanent basis.

The visibility at this level was profound as I was able to see and identify even greater opportunities in the market, especially in real estate. A friend and MBA graduate of mine decided it was time to attempt a “disruption” in Spain’s real estate market and with two other partners we launched deplace.es.

I wish I could tell you that I took this all the way to a huge exit but the real story is that I wasn’t as-committed as my partners needed me to be and my role as CBDO @ Encamina required much more time than I had planned.

Simply-put, I wasn’t the partner that they needed at that time and after some tough but honest conversations I was able to leave the startup without burning significant relational bridges. I didn’t get a financial windfall but what I did get was three great friends and a ton of learnings on how to be a startup founder.

The story for them hasn’t ended as they’ve raised ~$850k USD and are growing in the Spanish digital real estate market — I hope they win big!

Fast-forward and the 3rd major “decision point” arose as I had achieved many of the professional goals that I had had for Encamina (110%+ growth year-over-year) and I was starting to think about my next challenge.

An opportunity came up in the United States (THANK YOU Plain Concepts!) but it came with a number of typical logistical challenges: Visa issues combined with relationship (and talks about getting married) and the fact that I'd be joining a direct competitor to my existing business — but I knew that this was the next big step in my career.

I went for it.

Then, COVID.

The job opportunity vanished and I had to pivot, just like the entire world. I had, at the time, been mentoring and volunteering my time helping younger entrepreneurs build companies so I decided that I’d invest more time into what would eventually become GrowthSeeker by Q1/Q2 of 2020:

I kicked it off and hoped that I could just “make it work” as a community and business project.

That’s not what happened.

Wow. Thank you for that Jose! And grateful for your candor! Not to open “fresh wounds” but could you help us understand how the GrowthSeeker project and community came together what technology you used, and what actually went right? What were your hopes and dreams for it? Were you looking to monetize?

Yes! Here’s the story… it all started in 2019.

I was invited to be a volunteer mentor for entrepreneurs in Seattle for a Spanish University that I was affiliated with. And, as many of you know, spending any time around other entrepreneurs makes you start thinking about building stuff yourself!

Simply-put, I was inspired by the students — that’s the power of community!

One of the more obvious areas of opportunity was providing startup and entrepreneurial mentorship, coaching, and education for students, especially for international or non-USA students.

You see, in the US, there’s an overwhelming amount of information and support for founders and startup builders — this isn’t the case in most other parts of the world.

I personally believe that there’s a growing “white space” for community-based education, especially for non-English-speaking folks and my hope with GrowthSeeker was to provide a safe place for these types of people — I knew that we could provide more guidance for those that didn’t have it and, as a result, we’d be able to accelerate innovation and human progress.

So, I decided to give that a shot, to democratize access to startup mentorship through a community that would accelerate innovation: GrowthSeeker was born!

My initial goal was to see if I could get to 1,000 members in ~6 months and within that 6 months they’d “graduate” from the program and wouldn’t necessarily need the community-centric materials.

Here’s what worked, from a technical perspective: I started with Circle and went with an “unpaid” community at first.

Everything started out very nicely (like most new communities)! The conversions were excellent (~20%) but the engagement was low. This didn’t discourage me though as I experimented with tactics like daily calls (via Discord) and our start seemed promising.

2 months in we had 70+ founders joining and once had 18 folks on one of the audio coaching calls! The demand-side worked as well since I had built up a network of great mentors who were willing to donate their time to early-stage founders.

These folks trusted my vision and gave me a lot of encouragement and support in the very beginning and I’ll never forget our first mentor, Warren Schirtzinger, the co-creator of The Chasm Framework (Crossing the Chasm) who helped us launch! I’m forever grateful for folks like Warren who helped give me a boost when I most needed it — we’re still friends today.

Let’s talk briefly about monetization: I was going to sustain the community by selling membership for $35 / month to start. We had a plan, we had coaches, we had mentors, we had students, we had community…

… but it didn’t work.

How did you know that it was the “right time” to close it down? What specific things did you consider and what anxieties / insecurities did you have? Talk us through that decision-making process.

Honestly, I knew there was something “missing” by the time we were a few weeks into the new site and after turning “on” the paid community feature.

More specifically, after test-driving the Discord calls — which worked well — I migrated this behavior and experience to Circle and we lost most of the users that were actively engaged in that particular experience.

They disappeared, suddenly losing all interest and it left me scratching my head — could such a simple change in behavior create such a dramatic reduction? I dug into the numbers and I found sobering data:

  • Churn was 80%+ — Very few folks were sticking around after the first 30 days of membership

  • Growth was at a stable 25%, but nothing spectacular.

  • The audience that was joining the community was not the same customer who needed our provided solutions. Clear mis-alignment with messaging and value.

  • The business model not scalable enough for the prices (and delivered value) that would have made this work and accessible.

  • A very high (and growing) opportunity cost: 5 months @ 50+ hours per week doing 300+ hours of call per month had resulted in just barely ~$300 per month in revenue.

Bottom-line: I knew, based on previous experience, that I could invest that time into other ideas that would result in a higher rate of return and revenue per month.

Consequently, I decided to make the hard but important decision to shut it down.

When you knew it was time to close it down, how did you plan, and what steps did you take to notify the community? How did they respond to the news?

Great question — here are my steps that I took:

  1. I had been using Notion (good choice!) as a personal CRM for the community. I wrote down each member’s goals and classified them by engagement and tiers of value, service, etc.

  2. The week that I made the decision I called the most engaged members and partners to tell them the news in-person. I gave this a high-degree of personal touch.

  3. I then contacted the “second tier” of relationships through digital channels, like email, Twitter, Linkedin, and more giving them a direct line into what I was thinking.

  4. Finally, for the rest of the members (least engaged) I sent them an update via the newsletter to announce the closing and scheduled a final call to answer any questions they might have.

  5. I had the final call and prepared myself for their reactions…

Thankfully, most of them were very kind and sent me encouraging messages, words, and notes. Naturally, many were disappointed and just as many never responded.

This workflow felt simple, approachable, and tried to treat the members in a way that was respectful based on their engagement.

Looking back is always 20/20, but, if you were to do this again, what things would you most definitely avoid and what tactics would you most-definitely do again?

Great question! Here are a few things that I would definitely avoid (and what I plan on avoiding!) in the next community attempt:

  • Shape the product roadmap with feedback from customers that you don’t know if they will pay. They could be very demanding, but they won’t pay.

  • Don’t fall into the trap of “community are forums”. Community is the people, the connections and the value network they build. The forum is just the technology and not a surrogate for connection.

  • Make sure you can interpret feedback properly! Compliments are nice but they aren’t useful for actual business and community building. Better to dig deeper for things that don’t work and look for brutally honest feedback that can help push the community forward.

  • Change the community tool when you have the Minimum Viable Community, a “set of users engaged continuously with the community” as I define it. If you move too quickly you’ll kill momentum.

  • I didn’t do a good enough job moderating the community and making sure conversations were “focused” — some members starting spamming and I didn’t do a good enough job filtering users for high-quality.

  • Use tools that your members are familiar with! Anything that creates friction will stop you from building community. I didn’t fully appreciate this until it was too late.

  • Charge immediately! Don’t wait too long to monetize. In fact, I’d charge the moment you hit “MVC”.

  • If you can gamify the experience, that would be helpful but value first, always.

  • I should have started smaller — too many groups can over-complicate the community fast. Start small. Stay small as long as you can.

  • From an operational and business perspective, I also spent way too much money on the tools that I was using — I could have reduced my own expenses for better financial management.

Here are things that I plan on trying next time:

  • Start with why. Build your OS. Launch as fast as possible.

  • Start free, build that “MVC”, and deliver value first. Monitor the “social proof” with a light touch.

  • Have those 1-on-1 feedback calls immediately to understand if your value proposition is landing (Noelle’s framework works really well here).

  • Create exclusive content inside the community and then inform the users with a link to make them visit the community looking for the exclusive content.

  • Pick a tool that fits with what your audience is used to work with. But pick a tool that has the features to deliver your value proposition. In our case, it was discord (and we should have stayed here a bit longer perhaps).

  • Pivot quickly and/or experiment with different ways to deliver value: Custom content, advice through forums, brainstorm calls (audio and video), accountability groups, accountability calls, fast networking calls, and more. This is part of the validating the Value Proposition and then building against that discovery.

  • Personally introduce members that share interests. Drive networking and show them you care about their businesses.

  • Have a list of “members care” like a CRM to work and track the personal touch, using Notion as an example.

  • Have a calendar of events so that people can download the appointment and block their agendas.

These are just a few things that I’ve thought about!

You shared a few very candid thoughts on failure on a recent podcast episode (fantastic, btw!) — what words of wisdom would you share with community builders who are a bit nervous about launching a new community in 2021?

Thanks for your kind words John! I’m humbled to know that you’ve taken the time to listen to me.

As in the podcast, I like to emphasize the importance of not being afraid of failure. Failure is growth. It’s easy to say and hard to do. I’ve been there, I understand, I feel it.

But try to face the launch as one of the most fantastic learning opportunities you will have to grow, build your brand, and connect with amazing people!

Don’t stay too high in your expectations, don’t stay too low either. Just try to give your best, add value to your audience, be genuine, helpful, and consistent. 

I believe that you’ll get a “positive” outcome at the end of your trip, regardless of the outcome that you thought you’d have!

Jump in, go for it. You’ll learn a ton.

You love mentorship, education, and helping others level-up and build new skills (you’re a true yenizen!!) and you talk about “access” quite a bit. How have you seen access change as it relates to community and what do you think will change in 2021?

Love to be a yenizen! Thanks for the warm welcome to the yeniverse! Together we can make a difference — we must!

I believe communities are democratizing access to quality information making what was once “paid” and “premium” to peer learning and freely-available content (like the yeniverse).

In short, community is the “unlock” for modern education.

However, I am starting to see some community fatigue too. By the end of 2021 I still think we’ll see growth in the community market but I think we’ll see just as many of these communities disappear, die, merge, or niche down.

Many communities are going to start and struggle to survive in 2021 as the market expands. We’ll need to figure out how to not just start new communities with excellence but also how to shut them down, gracefully and with a lot of love.

Simultaneously, communities are fragmenting the access to information and making the information more private: I see some that require a membership from the jump. This could, in some ways, cause the contrary effect of democratization by raising prices and fragmenting the information, disallowing access to information to the people that most need it.

This, of course, is a not the best outcome.

2021 is going to be an “experimental” year in community building and community destruction — I plan on helping others figure this out!

I love that you’re not giving up and starting a new project, Startup Builder — tell us how you’re building that! What are the tools, workflows, and techniques that you’re using and how’s it going so far?

So far, it’s been a fantastic trip with just as many highs and lows!

After 1.5 months I’ve sold almost 70 copies of this tool to validate ideas and build key aspects of the business model. Plenty of the sales were before I started building the product. 

And, in many ways, StartupBuilder continues GrowthSeeker’s legacy as a purpose-built community to help founders build startups.

Another way that I’ve put this is that the mission is to be the most accessible tool to accelerate a founder’s startup journey and my goal is to help 10,000 founders in the next 5 years.

I simplified all I could to launch the initial product version and applied the learnings to be quicker validating. 

I used lean community startup workflow and validated 5 key aspects before building the product:

  • The Market

  • The Problem

  • The Value Proposition

  • The GoToMarket / Channels

  • The Willingness To Pay

I teach these things in the material:

After that, I began to build the actual toolset using these tools:

  • Notion.so for the product itself right now, a set of notion templates divided in 5 validation blocks and 27 steps/checks with guides, resources, and specific use cases.

  • Circle.so for the validators community, included with the product.

  • Umsofor the landing page. 

  • Paddle.com for payments. I changed from Stripe after having customers asking for PayPal support. It helps too with conversions because it converts the $ to the local currency.

  • Paritybar.com for Purchasing Power Parity discounts. To be the most accessible tool, I need to adapt the price to the countries average income, so I offer discounts automatically depending on the country you are based. The user is the one who decides to pick the deal or not. I assume people will be fair in determining if they need it or not.

  • Drip.com for email automation + newsletter.

  • GrowthTools.com for viral loops, integrated with the email automation and lead magnets.

Here are my current automated workflows:

  • Onboarding: I send access to Notion with a set of videos and instructions to the users.

  • Feedback: 5 days after the users received the product, I ask them for feedback in an email. I tell them the 5 channels they have to provide me feedback: a feedback survey, the community group, AMA live sessions we have every week, email or 1:1 calls. If they don’t answer, I ask for feedback again after 10 days.

  • Viral loop: There is a CTA in the landing page to send the visitors a sample of a couple of checks. After they opt-in, a window opens in the browser to give them a free Notion lean canvas template in exchange for a tweet.

  • Small marketing automation: After the user opts-in for the sample, I send them a free resource 5 days after. If they don’t buy the product in 10 days, I send them a non-buyer feedback survey to understand why they don’t purchase and improve the value proposition. I have plenty of ideas to add to this journey to nurture the lead, but this is how I’m starting.

Here’s what this looks like visually:

Peter Thiel Question: What is one important (community) truth that most folks disagree with you on?

The end of communities is closer than we think if we don’t address the fatigue and the information fragmentation.

Who inspires you? Who should we publicly thank (twitter handles) for you?

YES!

Here are some amazing people that have changed my life: My best source of inspiration are my managers in Cncamina, Hugo de Juan (@hdejuan), the CEO, and Jorge Aranzabal (@jaranzabal).

They trusted me when I had no experience, pushed me when I needed it, coached me, and provided me with the best opportunities at the right time to keep growing, learning, and feel motivated with a superb leadership transformational leadership style.

Of course, I have to give a shoutout to @iesebschool. They taught me how to lead by example, serving, and how to lead myself.

They shaped my mind to make better, well-informed decisions, among tons of learnings I really use every day.


Finally, a few links that I loved yesterday:

  1. I’m looking to hire a content & community intern.

  2. Stripe announces their endgameplatforms, oh my. This is a very, very big deal and I am very excited about this.

  3. Community buying is a thing… actually, much more. Moneybags, yo.

  4. Side Hustle Stack — This. is. good. shit.

  5. Community Jobs via Community Club — The Community Gigster™️

  6. On Deck Community Building Fellowship…?! YIKES. DO THIS.

There are so many great things happening in our world… we just need to look out for them a bit more at times.

I also added a brand new section in The YeniverseWORKFLOWS

Like, the Community Onion Model and nearly 30 others!! Check them out here.

Community Onion — Download

Care of Souls — Download

How We Gather — Download

Have a good one!