Entrepreneurs

Why Tribe Believes In The Power Of Customer Communities

What if your customers could do your work for you – answering each other’s questions about your products, coming up with ideas for improvements, and spurring each other on to make more use of your services? This, suggests Siavash Mahmoudian, co-founder and CEO of Tribe, is the promise of the customer communities that his company helps its clients to build.

“The most successful companies are those that generate a sense of belonging among their customers,” argues Mahmoudian, who is today announcing that Tribe has raised $7.5m of seed financing. “You want your customers to see themselves as being part of something bigger.”

Customer communities – or social networks that revolve around the business – are the way to achieve that goal, Mahmoudian argues. So Tribe offers a platform on which businesses can build those communities. Its no-code software service enables clients to quickly launch their own social networks, customised to the business but requiring little or no technical IT expertise. “The goal is that even a client with no knowledge of coding should be able to create their own Facebook, LinkedIn or Slack within a short space of time,” Mahmoudian explains.

The appeal is considerable. Customers turning to one another for solutions to problems or ideas for achieving their goals get quicker and better answers than when they wait for the business itself to respond. Product managers get an endless stream of feedback on what customers think of the business and which improvements they would like to see. And the user-generated content that these communities produce boosts acquisition, with search engines such as Google increasingly valuing such content more highly.

It is a value proposition that has resonated with customers since Tribe’s launch in 2019. Customer numbers have grown at a rate of 400% year-on-year, with around 300 new communities now created on Tribe’s platform each day – around 80,000 such networks worldwide now depend on its tools.

Traditional social networks provide some competition, Mahmoudian concedes, with services such as Facebook’s group pages providing a means for businesses to launch dedicated spaces for their customers within its network. But Tribe believes a service launched specifically to help companies create these spaces for themselves, on a standalone basis, will trump the more generic offers of giants straddling a whole bunch of different use cases.

“What Shopify has done to Amazon, we think we can do to Facebook [and other social networks],” Mahmoudian says. “We want businesses to own their own customers and they should be able to build the spaces and environments they want.”

Set up with a software-as-a-service model, Tribe is well-placed to support such a vision. The company offers a free product, as well as a range of different levels of premium service starting at $50 a month, depending on the size of clients and their exact needs.

Crucially, Tribe offers a significant amount of help and advice on what it takes to build a successful customer community, as well as the IT knowhow to get the network off the ground. “In practice, 90% of this is about creating the community and only 10% of it is IT, but many companies get sucked into the latter,” Mahmoudian adds.

Tribe points to research underlining the returns on investment potentially available in this area. Research from Gartner suggests that customer experience drives more than two-thirds of customer loyalty, a greater impact than brand and price combined. Forrester’s data suggests companies driven by customer experience deliver 1.6 times’ to 1.9 times’ higher annual growth in customer retention, repeat purchase rates and customer lifetime value than other companies.

The company is planning to help clients capitalise on these trends. The $7.5m seed funding round announced today, led by Bessemer Venture Partners and CRV with participation from Inovia Capital, will ensure Mahmoudian and his team are able to rapidly iterate the second generation of their product.

Launched three weeks ago, Tribe’s latest offering is focused on delivering greater scalability and more opportunity for customisation. The platform is also keen to encourage third parties to develop apps for its clients. Other developers will often be able to improve on Tribe’s own solutions, Mahmoudian says, producing a better overall experience for community creators and their customers. The platform approach enables clients to simply plug in and play those apps that work best for their networks.

That brings Mahmoudian full circle. Born in Iran, he spent years creating a bunch of different apps – in fields ranging from dating to software engineering – but has long been fascinated by the idea of communities and networks. “I built the first community of iPhone users in Iran,” he recalls.

Tribe sees Mahmoudian reunited with two other Iranian expatriates, who he first worked alongside in his teenage years. Soheil Alavi and Mohsen Malayeri both emigrated to Toronto at about the same time as Mahmoudian himself, three years ago, and the trio have built the business from scratch. “We’ve just been really fortunate to find ourselves all in the same place at the same time,” he says.

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