Why Community is critical in Web 3

Hi everyone,

Confused by the subtitle? This will explain everything 😅.

Welcome to Issue #8 of Sports 3.0 - Thank you to all the new subscribers - I really can't believe how quickly this is growing so thank you 🙏.

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First, a Shoutout

Before we get into this week, a big shoutout to everyone who I met at the iSportConnect Web3 summit this week - some really great meetings and to see 600 people at the Emirates all excited about the future of Sports and Web3 was awesome.

Great job Sree and the team for putting it on!

They will host the event on 13th & 14th June again next year so look forward to that.

And now, onto this weeks edition 👇

The role of 'Community' in Web 3

Anyone for some more 2022 buzzword bingo?

Spend any time in the Web3 world, and you will quickly see 'Community' is way up there for one of the most used words, along with 'Utility' and 'Metaverse' of course.

In fact, CCO, Chief Community Officer, is the new CMO!

Sports needs to be thinking about the importance of community in Web 3.

But why?

The above quote is critical to the Community movement in Web 3, and we see clear evidence of this.

The Web 3 space has been able generate eye watering results and attention with smaller but more deeply engaged groups.

"Most people aren't trying to build communities, they're trying to use the word. If you erase behind the word, it actually says "customers." Building a community only looks like one way: you give more to them than you want from them." - Gary Vaynerchuck

Yuga Labs (owners of Bored Ape Yacht Club) have become wildly successful and profitable in Web 3 beginning with just a handful of members in their community comparatively to sports fan bases.

This is because from Day 1, they have looked to give more to their community than it asked.

Their initial offering was formed around members only access Discord channels, exclusive merchandise, games & events, and also granted commercial ownership to the community members, allowing owners to monetise their Apes.

Since they have conducted countless airdrops and experiences exclusively for Bored Ape holders.

Yuga Labs wanted their community to be a key feature in their success.

And this in turn created a flywheel of demand and interest. A leaked Yuga Labs pitch deck showed its 2021 net profit was $127 million with 93% margins 🤯.

Of course community wasn't the only factor, but it was a catalyst. Knowing people who bought Apes at the time being part of the 'Community' was one of the key factors in their decision.

So what do we mean by Community? Is it just a new word for engaged fans?

I think it's fair to say Yes and No.

Let's have a look at how communities can be defined.

As reported by VOX, according to psychologist David McMillan communities are defined by 4 criteria:

1) Membership. This gives you a sense of belonging

2) Influence. The ability to make a difference to the group and the group making a difference to you

3) Integration and fulfilment of needs

4) Shared emotional connection. Feeling like you share experiences, time and space together.

It's fair to say attendance at any live sports event ticks all these boxes.

We've all felt it. A true sense of belonging, support working two ways from the crowd to the athletes and shared agony or ecstasy with last minute drama.

But this has only scaled so far to date.

Where the relationship that sports teams and athletes have with fans extends mainly to social, can we really claim these are places of genuine community?

Where is 'Community' happening?

Community as we are seeing at the moment tend to be fostered away from the main social platforms, and in dark social territories of Telegram, Discord or whitelabel community apps like FanCircles.

I think the reason for this is two fold:

1) It allows for spaces to be formed away from the noise of traditional social away from the algorithm. In private spaces attention can be focused and it encourages community members to be more engaged over passive.

2) Deeper customisation is possible. Spaces such as Discord and Telegram can be customisable to enhance community experience. The ability to restrict access to certain channels for token holders or create custom stickers relevant to community memes enhances to feeling of unity. However due to some recent security issues with Discord 3rd part API's, expect more alternatives to pick up traction soon.

Why can this be important for Sports?

There are some really great advantages to focusing on community.

1) Community is a moat

"Investment and time are required to establish a foundation for lasting community; members need to feel as if they have a shared emotional connection, not just an affinity toward a product or brand, but with each other." - Vox

These days, anyone can pay for attention. So as we see the big arbitrary numbers of fandom for clubs and leagues beginning to lose significance, more deeply engaged communities built around shared mentality and purpose will increase and protect value.

In short, it will be a critical skill for rights-owners who need to forge their own narrative against the bigger players.

It will be one of the key differentiators outside of performance.

2) Two way test and learn

You can create communities to perform specific functions which benefit the members and the owners.

For example, DTC beauty brands are replacing focus groups with private online clubs.

In sports, particularly football where fan influence and ownership is highly contested, the ability to create communities to give fans a sense of involvement can be incredibly powerful - scaling up a typical fan forum experience.

You can also learn more around your fans and adjacent interests, gaining a deeper understanding of their wider cultural influences.

3) Recognise and reward

The Web 3.0 view on community is inherently more programmed for rewarding/recognising participants.

For example, Admiverse, which is owned by by actor and Wrexham owner Rob McElhenney describes itself as "a community of storytellers, fans and friends working together to create and own a new generation of fans and stories'.

The startup will use decentralised writer communities to develop IP and then share in future royalties or revenue with NFT-holding co-creators.

I love the idea that sports brands can be open enough to tap into a creative community of their fan base and pre-programme rewards.

I've no doubt the biggest winners of Sports 3.0 will be the brands that understand how to facilitate community & culture.

A final word

Community is built by doing, not saying - John Kraski

🚀 Level Up

Hungry for more? Here are a few further things I've hand curated this week that I think you may be interested in:

🎧 Listen... The brilliant Zoe Scaman did a podcast all around Community earlier this year and its a superb listen

📖 Read... Seeking tips for how to build community - this may help start you off

That's all for this week!

If you enjoyed this insight please feel free to share with like minded friends and colleagues.

Thanks & see you next week, Richard Johnson