The “Build A $100 Million Community” Playbook - Sam Parr, My First Million | INBOUND 2023

What's going on?

I think everyone's hungover from last night. I was in the lobby of the hotel and it was like bumping. Last night.

Yeah. People are going to be hurting tonight.

Yeah.

Welcome, everybody. What's up? Thanks for making it out early in the morning. So does everyone know who Sampar is over here? Anyone? Nice. So if you don't know, Sam Par is a bit of a community building powerhouse. So he. He founded the Hustle, a newsletter reaching about 3.5 million subscribers a day. Is that right? It was later acquired by HubSpot. He's also behind the Hustle Trends Community, a paid group of tens of thousands of members on Facebook and the My First Million podcast, a leading business podcast with over millions of downloads a month. His latest venture is Hampton, an exclusive community for high growth founders. He's aiming to scale that to 100 million in the near future.

And.

And we're gonna be talking about that. So let's welcome Sam Parr. Thanks, man. Thanks for being here. So all those businesses I just listed, there's a common thread through them, and that's community. What's the difference between an audience and a community? And why community?

I'll tell you guys a funny story. I was sitting up here with Brian Halligan, the founder and old CEO of HubSpot, and I was like, brian, you know, my last company, the Hustle, I wanted to scale to 100 million in revenue, but I bailed early and you guys bought us. You know, it was a good exit. And I was like, I just had to take advantage of it. And so my next company, I was like, I wanted to find an idea that can get to at least 100 million in revenue in like, at least shorter than 10 years. And he was like, yeah, I had a goal like that too. I was like, oh, what was your goal? He goes, it was a billion in revenue. I was like, thanks, Brian. Brian, you totally should show me. But so my last company was the Hustle, and a lot of people called it a community, and that's not a community. So how many of you here have, like, blogs? Does anyone here just blog? Or you have like a Twitter audience or something like that? That's an audience. That's not a community to me. And people use those words interchangeably. And I think that's wrong because a community is when you have a bunch of different people interacting without an audience. Creator or a creator, and you know that you have the one or the other. If you quit creating content for like two or three weeks, does more conversations happen? When you're gone than when you were there. If not, you have an audience, not a community. And when I started the Hustle, our idea was, like, it seemed really stupid to people. I was like, hey, I'm building this newsletter, and I remember pitching it to a CEO of a company that you guys all know about. And I was like, yeah, man, I got this idea for this newsletter. I'm not really raising funding, but I would love your advice. He's like, man, this will never get to more than $2 million a year in revenue. This is really dumb. Just come and work here. And I was like, yeah, I don't think that's true. Like, if you do the math. I know the math. I can do this on Excel. It's really easy. If I can get 4 million subscribers, that can get to like, 60 million in revenue, because I know my ad rates. I know then I could have other newsletters. I was like, I have a clear shot to at least like, 80. We sold early. But one of my good friends and our competitors, Morning Brew, they're at about 80 million in revenue. So, like, my prediction kind of came true, although I wasn't the one that pulled it. And so when I was looking for a new business to start, I really loved community. I think community is a fun thing to work on. But what I love with this type of business is I love finding these ideas that people dismiss and they think are silly. And I'm like, I think I could build a very, very valuable company worth hundreds of millions or billions of dollars in this space. And this is a community. Business is one of those businesses that people, like, they don't actually take seriously, but they will in about five years when. When we finally released some of our numbers. But community is like a thing like, how many of you have, like, a job at just, like a big corporate company? And they're like, we need community. We need community. It's like a really ambiguous term. It's kind of stupid the way people use that phrase. And it's not really. I don't think thought of as a serious business, but I think that's what's going to happen with us.

I think a lot of people, whenever they start a community, they just, like, you know, start a Facebook group and put a bunch of people in it and hope for the best. Like, if there's someone in the audience that's done that, what can they do to, like, foster this community? Get people talking.

Yeah. So at the Hustle, we had this thing called Trends. It was. It cost like, 300 bucks a year. And you would sign up and I would send you a weekly newsletter where we would like, deconstruct cool businesses and explain how they work and say what we think is the future of this. And like, two days before we launched it, I created a Facebook group for the subscribers. And I just like, we did it as an afterthought. And then people started signing up. I think. I don't know how big it is now, but at one point it was like 20 or 25,000 subscribers. A ton of people started signing up and I just made it a rinky dink Facebook group. But what I did was I would post in there every single day for like a year. Is there any early Trends members here? No. No. Oh, here you go. Here's one. So there's like, I think we launched it like in 2018 or something. And I would post every day and then what I would do is I would get like, some of my friends who I knew were really smart and I would write posts and I would say, hey, can you write this post or post it under your voice? I wrote it for you. And I would do that like constantly on a daily basis. And that created like some initial traction and it took like six months. And then eventually people started like commenting on their own and it actually had its own culture and it created its own thing. So now Trends has thousands of members and things are happening constantly. But a lot of times when people launch communities, they make a few mistakes. The first thing they do. And if you own one of these companies, I'm going to hate on you. But I'm sorry, but basically, if you wanted to create a community, they're like, well, we're going to make it like our company.com community and we're going to put it on Circle or this other website or we're going to build our own app. And in my opinion, that's like the hardest thing ever to do is to get someone to go to a particular website on a daily or multiple times a day on that type of, like, cadence in order to get them to comment. It's so freaking hard. And so what I tell people is if they're new to it, but like, big companies would never, like, buy into this. But I think they should. But if they're new to it, you have to start. My opinion is you should start a community in the lowest friction place. When I started, it was fair. Facebook groups. Now, I never thought this would be true, but now it's slack, but anywhere where people already are. So maybe if you have a lot of users who use WhatsApp or something like that to create these communities where there is the least amount of friction. Also, you need a leader, and this is actually really hard with big companies because no one wants to stick their neck out and look stupid or say something inappropriate or be the face of this. But you need a leader who embodies. It's basically like a cult. You need, like, your cult leader who, like, embodies, like, the rituals and the culture that you're trying to, like, get everyone else to buy into. And that person needs to be commenting a ton and, like, setting. Just like a CEO of a company, setting the culture of the. Of the group.

So the leader has to be in there all the time, constantly. How often were you inside of your community when you first started?

Well, if my computer was open, I was there. I mean, yeah, like, every. Like, I don't have my phone on me right now because I'm doing the talk, but I'm looking at my phone 100%, like, you know, three times an hour just to see, like, what's happening. And then, like, now we have a community manager who I've trained and they're on top of it. But, like, you have to have. I have my finger in the pulse all the time.

So you were kind of ahead of the game on newsletters. Everyone thought it was kind of a joke. Then you built it, you sold it to HubSpot, and now all of a sudden, there's a bunch of newsletter startups out there.

Yeah. Does anyone have a newsletter here? A bunch of people.

A lot of people.

Yeah.

Raising their hands right now.

It's way harder to do it now than when we started because there's so many of them.

Well, how do you see these trends that early? Like, if everyone says newsletters are stupid, why did you start a newsletter company?

Where. How are you.

How are you seeing this?

How do you gauge it? I just look at the math. So newsletters are cool because I was talking to the writers of the Hustle. Now, the hustle's. We have 3.5 million subscribers, and I think they said that 2 million people a day open it. 2 million people. 2 million unique people open it. Now, you can't exactly measure it this way, but kind of. But basically that means that roughly you have 60 million reads a month. Assuming we send 30 days, I think we send only 27. But let's just say 60 million people a month are being reached and you have three writers. And I remember doing that math and looking at BuzzFeed and I was like, well, when they had 60 million monthly uniques, they had, like, 150 writers. This model seems way better. And then I remember advertisers were like. Or people who weren't in advertising were like, well, why would anyone advertise in this newsletter where they could advertise on a website? It was like, well, why does it matter? They're gonna get the same amount of clicks. So, like, I would just, like, do the math where I was just like, well, if it costs this much money to advertise per 1000 readers, or a click costs this much, and I get this many eyeballs, and I only have three people to do it, and I don't have to. When you have just a blog, you have to acquire new readers every single day. With a newsletter, I'm like, well. And if I send daily, I'm going to create a habit, and they're going to come like, I just can basically just use a pen and paper and just be like, well, here's the really simple math behind it. This makes sense. It sounds stupid because no one is taking it seriously, but the math is the math, and that doesn't lie. And I think it's the same thing with Community. Like, for us, in order to hit 100 million in revenue, we need about 10,000 paying members. We were about in the thousands already. And so I'm like, well, are there 10,000 people who will sign up for this? Of course there are. Like, there's no doubt about that. It's just a very easy math. Like, a math thing. The issue is just, I think people, like, think it's silly because it's an easy word to dismiss because it's overused.

So you made headlines by selling the Hustle to HubSpot. You had a sweet little exit, and then roughly was like, a year later, you started, like, cryptically tweeting about a new venture, and it was involving a bunch of impressive business leaders. Can you tell us what Hampton is?

Yeah. So Hampton, that's my new company. Join Hampton.com and you can see it. But basically what it is is when I was running my company, it was pretty lonely because I couldn't. Like, I couldn't show too much fear or vulnerability to my employees. Like, I could do some, but I couldn't be like, I don't know if this is going to fucking work, or, I don't know how I'm going to pay payroll or I have to fire this person. And I'm really nervous about confronting them. Like, I didn't have that many people who I could like have this, these therapy sessions with. And so I wanted. And eventually I got that. But I lived in San Francisco and like, not everyone, I mean, you know, not that many people live in San Francisco. And so what we wanted to do was make it. So if you're the CEO of a company that does at least a certain threshold of revenue, you could come and join like, I call it, like it's basically a business therapy group. And so what it does is we've had like six or seven thousand entrepreneurs or you have to be a CEO. Six or seven CEOs apply. We go through the wait list and we try to make groups of seven or eight entrepreneurs or CEOs who have similar style businesses and similar size businesses. You're put in a group of eight people and you meet monthly with an executive facilitator who leads these three hour conversations. We also have a digital component where you can talk to all members of the community. And we've hosted this year, we're going to host like 150 dinners and we do retreats so you can meet and talk about all these important things that you can't normally talk about. Eventually we might have non CEOs and we'll do COO or we'll do. I'm sure some of you have heard of chief. I think that's for VPs of marketing. Maybe we'll have other roles as well.

You mentioned Hampton. Members get broken up into groups of eight. What's the significance of that number? Why eight?

At first I just made it up. I just thought that that seems like a nice number. So. And if someone can't make it, if they're sick or something like that. 7 still good.

Still small enough group to be able to like talk and share. It's like sitting at a table of eight.

Yeah, it's like a round table. I just, I just made it up.

Okay, so you said. See, here's kind of interesting. You said you wanted Hampton to hit 100 million in revenue quickly. You started it this year.

So we started working on it in June about a year ago. And we got to about 300 members organically. I didn't tell any. So the podcast, My First Millionaire has a really big audience and I didn't want to talk about it on the pod because I was going through a. A phase where I thought I was a loser. And I was like, I could only build a business if I tell my audience about it. You know, fuck that. I gotta prove that I could do it. And so I just try to grow organically by just, like, DMing people and, like, doing word of mouth for the first 300 people. And then March, like, six months ago, we. We actually announced it to the world, partially because of my ego, and I wanted to prove to myself that I was good and also because we wanted to perfect the product. Which is another thing about community. You can't just, like, throw a ton of people in there at the same time. You got to, like, be very meticulous and slow about it.

A quick side note about that. Everyone says build in public. Why didn't you? I mean, you felt pressured to do that. Why didn't you do it?

Because I was embarrassed and I didn't want to fail.

Good answer.

And I wanted to get big enough to. It would be hard to copy us.

So what's your. Okay, so you don't want anyone to copy by telling what people to people what to do. So what is your playbook to do this? I think people want to know, like, what's your plan on scaling this big? It seems like a community. You can have like 100 people. They're paying thousands of dollars a year, but how do you get it to $100 million?

And this is another thing. Well, that's easy. I told you. 10,000 customers, $10,000. The math is there for us. It gets really tactical where we have, like, different chapters and you only interact with, like, a certain cohort of 300ish people. And there's other ways that you can interact with the whole network. But for like, at a big company where your boss is like, this word community, it sounds good. Like, web three's out, community's in. Go and do that, whatever that is. It's really hard for those people because in order to build a really good community, you have to be meticulous. A community is sort of like an event. I was talking to Dharmesh last night, and he was telling me that at one year, they had 28,000 people here at this event. And he's like, but we had to scale it back because the experience was kind of a pain in the butt with 28,000 people. And it wasn't ideal for everyone. A community can do that same thing where if it gets too big and too fast, it sucks, and there's no culture and there's no soul to it. And so I think what a lot of people like. If your boss is telling you to create a community, what you really have to focus on is we have to meticulously let certain people in. And you have to like, indoctrinate them with the norms and the culture of what you're expecting, respecting how they should behave, how they should give, how they should take. And you have to really be very careful about doing that, otherwise it just becomes a shit show. But like, you can do this with hundreds of thousands or millions of people. Reddit has done it. Reddit is like, you know, the eighth most popular website in America. And they have sub communities that each have their own culture. And they've done a really good job of doing that. Another one is. Is anyone here part of the New York Times crossword crossword puzzle or the New York Times. Yeah, you are. Or the New York Times cooking Facebook group? Is anyone part of that group? You are. Did you see recently how they had like a revolt, how people, like freaked out? Yeah. So New York times has like 100,000 people in this Facebook group all about cooking. That's what it's about. It's cooking and recipes. And I guess that group of people is very passionate and they created this amazing culture. And then the New York Times, I forget exactly what they did, but they changed some type of policy. And the hundred thousand people, or however many it might even be a million actually, they like revolted and they're like, we're not. We don't stand for this. And that's actually the sign of a good community, is when they can like band together and like revolt against the leader if they feel like because a really good community is its own thing, it's incredibly hard to own and to like, dictate. But that's when you know you have it. When they like band together and they like, fight the man. And that was like a good example of that.

Okay, so let's get a little bit more technical, be conceptual about communities and stuff like that. Let's get down to the brass tacks. I think a lot of people, when they talk about community, they start with like the software. Are we. What software supposed to use Circle a forum Facebook group. You just went standard Slack.

I think that you should start a community where your people already are.

And everyone's on Slack.

Well, if it's a professional group, yeah. If you're doing white collar tech nerds, like I am Slack. If you're doing like some Gen Z, Gen Z shit and it's like young guys discord. That's where they are. If it's. You have an international audience, they're on WhatsApp. So yeah, you go to where the people are. That's my opinion. Dharmesh Cto of HubSpot. He actually disagrees. Well, he would. He is, in his opinion, you should have it on your own platform. But he will also acknowledge that that's like, incredibly challenging to do and very few people can pull it off. So in my opinion, I'm like, I don't, I'm not sure I can pull that off. And I don't think most people can. So I do it where. Where my customer already is.

All right, so. So in Hampton, you put people in a slack chat in a group of eight, and they also have a slack chat with everyone.

Yeah, but then there's all these norms. They have to introduce themselves in a very particular way. They. And then, and then we expect. We have, like, we have like, founders of, like, companies that are, like, publicly traded. And I was like, can I boss this guy around and make him, like, the social chair? Like, would he would, like, with this, like, big shot, be willing to, like, take on the burden of, like, introducing other people? And the answer was yes. And so we've assigned, like, social chapters and social chairs and they, like, bring people into the community and they, like, greet them and tell them what to expect.

So other than slack, is it just a slack community? Does the community get together? Do they do events? What's going on?

Yeah, so what we do. And I think you could do this for any type of company, but we've found members in our major cities and we assign them as a social chair and we give them a budget and then we just say you're going to be. The pitch to them is, do you want to be more popular and thought of as like a thought leader? Okay, cool. We're going to help you host dinners quarterly in your city. And we'll have eight or 10 or 30 people, however many will come at that dinner. And you're going to, we're going to give you the playbook and you're going to lead discussions that we've spoon fed you. And so we will do like 200 of those this year.

Is it just dinners?

We do dinners and we do adventures. Like when I was younger and I was trying to meet girls, I read this book that said, like, if you take a girl on an exciting date, maybe she'll like you more because it's exciting and it induces dopamine. And so we do things like rally car racing. We call them adventures. So we do, like, adventurous stuff, mountain biking things where, like, your blood gets flown a little bit.

Not just dinners, like, awesome stuff that you really, really want to go to.

Yeah.

And I Assume you're doing that not only because you want to do awesome stuff, but I'm assuming that fosters community.

It fosters community. So we went lobster diving in Miami two weeks ago and you bring your spouse and it was a great. And we always try to get the spouses involved as well, because we want to make it like we want your whole family bought in. But yeah, we do. We did lobster diving the other day. We do all types of stuff that.

Create a lot of FOMO for people to join that. You're like, I'm lobster diving one day, I'm rally car racing the other day.

Yeah. Which is like the, like the second or third most important thing about Community is fomo. Yeah. Like, it's very important to create that of if I'm not part of this, I'm missing out. And so it makes it much easier to sell or to convince people of some of the value.

Awesome. So we got about 10 minutes left and we took a bunch of questions from the audience. So I'm just going to rapid fire a couple of these. So where do you see Community going in the next few years? Is this like a thing that's going to grow, shrink? What's going on?

The same thing that's happening with newsletters is going to happen with Community. That's my prediction. So when we started the hustle that was in 2016, there was before us, there was the Daily Candy and Motley fool had been doing some cool stuff and there was other smallish newsletters, but there's been no one who had very few people that had done it to the point of getting many tens of millions in revenue or millions of daily readers. And then us, the scale and Morning Brew, none of us knew each other, but we all kind of separately came to a very similar conclusion. And then once we kind of got a little bit of success, people were like, oh, shit, this newsletter thing is really, really cool. We should also do that. And that is one of the many reasons why it's popular. And I think the same thing's gonna happen with Community. I think what's gonna happen is there's gonna be a lot of paid communities for niche professionals. So, for example, there's one called I always butcher the name, but I think it's Doximity. It's a paid community for doctors. And they actually went public and they have like a $4 or $5 billion valuation. They're doing hundreds of millions in revenue. I believe that there's going to be a bunch of like, substantial sized companies maybe also to the point of going public for niche communities. So orthodontists or dentists or things like that, for lawyers, doctors, any type of profession that you could think of. I think that there's going to be niche communities where you can be in a safe space and express things that maybe your husband won't understand or you don't want to look silly in front of your co workers by asking this question. I think that's going to be very, very, very, very popular in the next five or 10 years.

It sounds like social media went from this niche little thing where you can talk about anything, and now it got so big, everyone's on it, you don't feel safe sharing anything. So there's. There's going to be more of these small micro communities that you're talking about.

Micro communities is absolutely going to be a thing. And in my opinion, monetizing a community that's free. If you, like, own a product, if you're like HubSpot and you want to have a free community, that's cool, I think you should do that. But if you want the community to be the business, my opinion, you have to charge money, and you should probably charge more money than you think because then you can provide a better service. So at Trends, we screwed up. I charged $300. That was really stupid. I couldn't, like, provide certain service. I couldn't afford to provide certain services. And so I had to have like, you know, tens of thousands of members with a small staff in order to even make what Hampton's making already. And it was just. It was a cluster. It was. We screwed that up. And so I think that micro communities will exist. I think the paid is a significantly better route than advertising. And I think there's going to be way more of them in the next five years.

Let's start like the technical. We're talking about monetization. So, like, if someone started a Facebook group and they charge 50 bucks a month, that seems reasonable for some communities. Is that too much? Too little, in your opinion? You're saying way too little?

Well, it depends what the service is offering. If it's like, like there's this one community where it's like, mostly stay at home moms who are sharing, like, giveaways. There's this whole, like, giveaway community. Have you ever seen that? Yeah, we used to do these giveaways at the Hustle where, like, if you referred, like five people to join our newsletter, we would send you, like, a pair of socks and we would get like, all these people in Nebraska Signing up for us. I'm like, what the hell is this? And I linked it back. I'm like, oh, this is like a giveaway communities where these moms are sharing contests and shit like that. So if you want to charge like $50 a month for something like that, then yeah, I think that's fine. But if you're dealing with something that's related to someone's job and you could make the case that, look, just one conversation in here might make you a significant amount more money or might progress you in your career or make you a little bit more happier. If you could make that justification and that an ROI will be there, then I think you should charge way more money. Because not only does that give you the profit to provide a better experience, it makes people appreciate it more.

We saw a community with a guy who sold just high end CCT cameras. He just reviews them and he sells that membership to large casinos and stuff like that. Twelve hundred members, thousand bucks a year. Just one guy doing that whole thing.

How big was it?

It was about $1.2 million a year. And he just maintained that consistently and just no one knows about it. Micro community, no one really competes with him. It's like a bunch of stuff I've seen like that and then like.

And the best part about those businesses is, by the way, unlike a newsletter, we had to write that damn thing six days a week. That was a hard ass job. I was just talking to our writers. They're here at this conference, but they're actually going to go grab their laptop because they got to prepare for Monday's send. With community, you don't have to like make all the time.

It almost seems like newsletter and community kind of go hand in hand a little bit. You kind of like see what's happening in the community.

They could because typically if you're a really good audience builder, you know what people want and you know how to evoke certain emotion and you need to do that with a good community as well.

Real quick question, someone asked, why did you choose the name Hampton? What is that?

I have not spent time really in the Hamptons. I grew up in Missouri on a street called Hampton Avenue.

That's where that came from.

For some reason in St. Louis. A lot of the street names are really cool. I always thought the names are really cool. And so a lot of my LLCs or projects, I would just name them after streets. And I named it Hampton because someone was like, oh, that sounds fancy. And my favorite car is like this old Jaguar and British racing Green. And I was like, this kind of looks like an old Rolex ad. Hampton with this British racing green. Yeah, that's it.

And then what were some of the challenges you faced while building Hampton's community? What's the hard stuff that people miss and stumble upon usually?

Well, the hard part is, like, you want to grow really fast because you want to make more money, but you have to delay that. And so the hard part is, like, being meticulous. Another hard part? Well, it's not like software. Like, with software, you can throw a bunch of users in there and some things are going to break, but you can kind of fix it on the fly a little bit, and you could scale up a lot easier. And so, like, delaying that gratification has been quite hard. Another hard thing about community is I'm, like, in fear every day of, like, is someone gonna, like, say something bad, or are we going to, like, get one step closer to totally fucking this up? Because once a community is screwed up, I think it's, like, impossible to bring it back. So, like, if you have a dead community, in my opinion, just kill it and start over. It's so hard to, like, revitalize something that isn't working.

So is a community a dictatorship or, like, a democracy? In that case, you're saying you want to be the dictator.

It starts as a dictatorship. It definitely should start as a dictatorship with us. Like, we have core values, and so, like, some of those values are, like, you can't talk about what you've discussed in your core group, and if we hear about it, we kick you out. But eventually it kind of evolves to a democracy a little bit, where people are allowed to, like, have their say and. And. But I think it has to start as a dictatorship. Cool.

We're almost wrapping up here. So if someone's going to go and create a community, they were thinking about creating a community. What's kind of like, instead of the technical first step, do they have to have. Do you have to have, like, a vision for it? Do you have to have. What are the things you need to start a community for? Like, a total beginner to start with.

You need to have some flavor. So, like, and just like anyone who gets popular on the Internet, like, you need to have something that different, makes you different, and it doesn't need to be that different. Like, it could be, like. It could be like, we are a community for developers. Okay, cool. There's a million of them, but we are a community for developers that are like a little punk rock or we are like, we are the most helpful developer community in that everyone. Like, we've set the culture that we will reply thoughtfully to everything. Like, you need some type of shtick, and so I think that's really important. So, like, usually I think that, like, in my case, Hampton, like, I imagine the community has extended a little bit from my personality, but you typically need, like, a shtick. Like, what makes this, like, unique and funny or interesting or special. You need. I think you need something like that.

So ultimately, even. Even in Hampton, while it's a club and they're joining to meet other members, there is an element that they're coming to kind of hang out with you too, right?

Like, no, I don't think so. Like, no, we've made the product good enough and the community thriving enough that people don't want to come see me because I'm, like, one of the least successful people in the community. Because we've done a good job of, like, showing who's a member and we champion them. Not me. Sweet. I mean, I could barely get in.

So we're wrapping up over here. So where can people find you if they want to check out Hampton? Check out Sampar.

Yeah, I'm TheSampar on Twitter. I thought it was. It might be up here when we head off, but thesampar on Twitter, thesampar on Instagram, and joinhampton.com hopefully you guys still read the Hustle, even though I'm not part of it. It's way bigger and it's way better. So sign up for the hustle.

So Twitter hesampar, you find me @NevMed. And special thanks to Nick Gray for helping us out. And then also, we're doing a meetup at the Creator Lounge, 11am we're going to be there. So if you want to hang out with Sam, get a picture, something like that. Meet us at the Creator Lounge. Anything else?

We're all good. Thank you all.

Thanks, everybody, for joining. Appreciate it. Have a good morning.