Why Communities Are The Future of Business and Marketing wtih Greg Isenberg

**SPEAKER_1** (0:01)
You're listening to Leveling Up where we'll show you how to win at the game of life and business. It's time to power up your skills through life gamification with your host, Eric Siu.

**Eric Siu** (0:15)
All right, everyone, super excited to bring you Greg Isenberg today. He's the co-founder of Late Checkout, which is a product studio, an agency that designs, creates, and acquires internet communities. Super excited about this topic, and I think we're going to jump all over, but we're going to talk a little bit about Miami, too, because the last person I interviewed was, I actually just moved over to Miami as well, the founder of 8 Sleep.
So, Greg, welcome to the show, first and foremost.

**Greg Isenberg** (0:40)
Thanks. Privileged to be here.

**Eric Siu** (0:42)
I think I first saw or heard of you when I was watching one of Nathan Ladka's Deal or Bust, and then you quickly jumped out. So, we're just looking to you a little more, and there's not a lot of people that focus on community. So, can you tell us a little more about Late Checkout, and then we'll start to talk about community a little bit?

**Greg Isenberg** (1:00)
Totally. I mean, before I talk about Late Checkout, I think the reason why we started Late Checkout was, we think this is the greatest time to be building community-first businesses. It's not just that COVID is a thing, and people are stuck in their homes, and they're searching for community. Yes, they're searching for community, and yes, people on connection, and yes, technology helps do that.
But I think it's even more than that. I think it's something's in the air and there's a huge opportunity. There's an unbundling of Reddit happening right now. There's an unbundling of Facebook groups happening right now.
And that's what Late Checkout does is we have a studio where we incubate community-first products. We have an agency where we partner with leading brands and startups to help execute on community-first products. And then we have a fund where we look to acquire community-first businesses or businesses that we think could be community-first with a little bit of our help.

**Eric Siu** (1:57)
Got it. Okay. That's awesome. So how does that all work? I guess so, obviously, I'm with you, right? I think building the audience or more so than the audience community because people are actually interacting with each other, that's an unfair leverage point. So how do you value communities in general, right? Because with SaaS, obviously, there's different multiples. How do you think about that?

**Greg Isenberg** (2:16)
It's not super straightforward. The way I see community is it's just a... Community is a fancy word for retention and word of mouth, frankly. If you drive community, you're going to see your word of mouth go up like crazy because people are in this experience and they want to tell all their friends, or at least the friends that are passionate about that particular topic, and then retention. Like they're going to come back every single day because that's their safe place.
I think that when you see a business that has super high retention and super high word of mouth, often and around a passion point, oftentimes it's community led business. So I think, you know, there's no exact science to like valuations of some of these businesses, but I will say that I feel, I do feel like they're undervalued across the board.

**Eric Siu** (3:05)
Got it. What would be some good examples of community first businesses just so people can wrap their head around it?

**Greg Isenberg** (3:10)
Totally. I would say like the one that comes to mind because I was just talking to someone from there today is Glossier.
So Glossier is a, I think a multi-billion dollar business or at least a billion dollar business today. And it started off with Humble Beginnings as a blog that was called Into the Gloss, intothegloss.com where the founder would just write about beauty, makeup and things that really were passionate, that she was really passionate about. And she ended up kind of like organically in a really guerrilla way, creating this almost like cult-like obsession with this blog.
Once she created this community online, she basically was like, hey, what do I do with this? And the beauty about community-led businesses is not only do you have a great idea around what are the type of products that I can be building for this audience or community, you also have your first set of customers. So if you do create something that's really, really awesome, you have them to talk about it and spread it, et cetera.
So she launches Glossier, I forget the year, this is a few years ago. She launches it and it's an instant success. People talking about it, industries talking about it, and it just took off like wildfire. I mean, now there's retail operations. It's really everywhere. And I think that's just a great example of like, pick a particular vertical, go really deep into it, create content that attracts those types of people, create spaces for them that allows them to communicate with one another. And then, ultimately, think about how you can monetize it.