#160 - Paid Communities Making $20m+ (and How to Build One), Fighting Inertia & An Interview With Dave Selinger of Deep Sentinel · My First Million summary

Key takeaways

Paid communities can be built quickly with an existing audience and can be highly profitable with relatively low start-up costs.
The success of a paid community hinges on the ability to connect members in a way that helps them generate value or income, especially when the community is niche and passionate.
Scaling human-in-the-loop services, such as security or customer support, can be achieved by integrating AI to extend the capacity of human guards or reps, vastly improving efficiency and cost-effectiveness.
Overcoming inertia requires decisive actions—burning bridges, public commitments, or small rapid steps—to break out of autopilot and pursue what genuinely makes you happy or successful.
Building bold, targeted community models—focusing on passionate, underrepresented groups—can unlock significant value, entrepreneurial opportunities, and even the chance to launch brands or equity campaigns.
Engaging with your audience, sharing knowledge, and taking deliberate steps can transform ordinary pursuits into impactful, life-changing ventures.

Summary

Introduction to Paid Communities and Personal Impact

The hosts discuss their interest in paid community models, emphasizing they can be built relatively quickly if an audience already exists, are fun for those passionate about the topic, require minimal startup capital, and are often quite profitable. They note challenges such as churn rates and limitations on scaling, especially for user-content or connection-driven communities. The episode aims to explain what makes these communities successful, focusing on the math behind profitability—particularly how the value for members, and their potential to earn or benefit from the community, influences charges and success.

Examples of Successful Paid Communities

Several case studies are explored: - Tiger 21: An exclusive high-net-worth peer group for individuals with at least $10 million in investable assets, generating over $24 million annually in revenue, recently sold for about $375 million. Its success derives from high membership fees and facilitating investments and connections. - Evanta: A network for C-level executives, deriving income mainly from event sponsorships, with a large global footprint and significant participation from Fortune 100 firms, sold for $275 million. - SoleSavy: A sneaker enthusiast community with 5,000 members paying $33/month, originally launched as a Slack group, showing how niche interests can develop profitable communities. - NurseLifeRN and Bala: Niche communities leveraging social media for engagement and advertising, with potential for launching brands or holding equity, especially in underrepresented or passionate sectors.

Designing and Scaling Paid Communities and Opportunities

The hosts analyze the core elements contributing to community success—passion, exclusivity, and the ability to generate revenue for members. They highlight how niche communities like RC enthusiasts, crypto traders, or design professionals can be highly valuable when they connect people who can benefit financially or professionally. They discuss methods to scale, such as leveraging data and AI to enhance human guards or service reps, and expanding into related sectors like security, real estate, or construction. Challenges include maintaining intimacy or exclusivity and avoiding diluting the community’s value. Additionally, the conversation emphasizes using psychological triggers like burning bridges or public commitments to overcome inertia, encouraging immediate and decisive action toward personal or business goals.

Fighting Inertia and Making Bold Decisions

A significant part of the episode is dedicated to understanding inertia—the tendency to keep doing what one is already doing—often because of comfort or fear, rather than genuine desire or strategic benefit. The hosts share personal strategies, such as creating dramatic stakes or taking small steps, to force change and avoid mediocrity. They discuss the importance of making decisions that align with one's true aspirations, emphasizing that most risks are overestimated and that avoiding change out of inertia can lead to a life of unfulfilled potential. The overarching message encourages bold moves when necessary, including burning bridges to create new momentum.

Conclusion and Call for Engagement

The episode wraps with encouragement for listeners to join their private Facebook group and participate in upcoming Q&A episodes by sending questions through a hotline. The hosts underscore the value of community, proactive decision-making, and leveraging real-world technology and psychological principles to enhance personal and business success.

Show notes

MFM #160

The guys breakdown paid communities

Why paid communities are good businesses:

You can make them kinda fast (much faster if you have an audience)

Fun to run if you like the interest

Don’t need a lot of start-up capital and can have a lean team

Quite profitable

Cons:

Churn can be high

Likely can’t scale to me huge

Won’t get better with size necessarily (if user content-driven, deal-driven, or otherwise, more can be better. If connection related, less is better)

Seem challenging to sell if there’s a leader

To make a successful community:

The amount of money you’ll make is directly proportional to the amount of revenue the members will make being connected to each other multiplied by the amount of people who’d sign up.

Enthusiasts of RC cars? Likely don’t make much value from it, so you can’t charge a lot. But if it’s huge (and get better with size) then can work

Underdog, us vs them, united interests, info that wants to be private, highly disjointed online,

Communities the guys like:
Tiger21: A peer group for people above with a net worth of at least $10m.

Numbers: It boasts ~850 members. They generate revenue through a $30,000 membership fee and also run ads to its members. Do an estimated $24m at least in sales

Sold to private equity recently

Why join?: Learn and make connections.

Evanta

Was known as CXO Acquisition Co. and Sports Leadership Acquisition Co...so maybe started in sports?

Evanta derives most of its revenue from event sponsorship. Event sponsors pay a fee to advertise at each event with pricing dependent upon the quality and level of executive attendance.

121 Unique communities worldwide 6,500 Participating organizations 253 C-level programs across 10 countries 83% of Fortune 100 represented 18,000 Participating C-level executives 87% companies with revenue of $1B+

Sold for $275m in 2016 to CEB and then Gartner

Had $17m in cash when bought

12x income...so made $23m in profit!

SoleSavvy

A SoleSavy membership provides you the tools and resources you need to successfully purchase the products you want for retail (starting with sneakers)

Raised $2m

Started as a Slack group (the waitlist for the group grows by 400 people per day)

5,000 members. They charge $33 a month so $160k MRR

Cook groups. AK Chef is a big one. 2000 ish members at $50.

NurseLifeRN

Instagram meme page with 1.2m followers

BALA (a shoe for nurses company) uses this as the main advertising channel.

Shaan predicts these niche communities can launch brands and hold equity in companies who need their captive audience to grow.

Inertia

Shaan explains inertia:

Are you doing what you are doing just because or does it make you happy and are you chasing what you actually want

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Editing thanks to Jonathan Gallegos (@jjonthan)

#160 - Paid Communities Making $20m+ (and How to Build One), Fighting Inertia & An Interview With Dave Selinger of Deep Sentinel