Why everyone is starting a paid membership community (& making millions!)
Billion dollar Chief & new up-start Hampton, why brands should launch paid communities, and the rise of "community as a product" across nearly every industry.
Verticalization of paid communities by function, interest, and even business model
Welcome back to Meagan’s Newsletter: The Gen Z POV, where I break down trends, industries, and tech with a Gen Z lens every other week. I’m Meagan and I’m so happy you’re here.
This week I’m launching new referral programs!!!! Thanks to all 1,400 of you for reading, and I’m always open to suggestions on ways to improve or trends to write about ❤️
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Now onto the theme of this newsletter… the rise of paid membership communities! I’m seeing these nearly everywhere in my life, which inspired me to write about it. For example:
My friend Thea recently launched/developed a private membership club in Vail called Chasing Rabbits
Convos with community builders all over the world in recent weeks:
I’m going to be moving soon and recently applied to join SoHo House, and was at the NYC one just last week for a meeting
TLDR: Many Gen Z friends of mine are either (a) starting communities of their own or (b) looking for interest or profession-based communities to join.
I’m the founder of a Gen Z community of 23k+ members from 80 countries & consult startups/Fortune500 companies on building and scaling their own communities… so this is right in my wheelhouse & a massive opportunity / trend right now. In some cases, even a billion-dollar opportunity like Chief.
Not to mention, I’m sure many of you are part of paid communities of your own, whether it’s SoHo House, alumni clubs, and beyond.
Are you part of a paid membership community?
Can be a social club, online community, country club, etc.
I’ll break down:
The overall paid community landscape — how the business model has evolved, why “community as a product” is such a trend, and case studies on Chief & Hampton
Opportunities I see in the space — how brands are launching paid communities (Urban Outfitters, Fabletics, Olipop, & what I would do if I was Hunter Boots), and the rise of verticalized professional communities
Now… let’s get into it! ⬇️
The landscape of paid communities
The notion of paid membership communities is not new… think back to tradesmen’s guilds in the middle ages & private gentleman’s clubs that have existed for hundreds of years like White’s (founded in 1693 in the UK), and The Union Club (founded in 1863 in NYC, 15 Presidents have been members including Ulysses S. Grant and Herbert Hoover) which are still around today.
The business model has always worked. Force exclusivity to maintain quality & generate “hype” around becoming a member, bring together likeminded people, and offer a set list of perks and amenities to keep people coming back in exchange for yearly dues/fees.
Fast forward nearly 800+ years later… paid membership communities are still around & creating tremendous value where people have become the product. The business models have evolved as well, and the digital age has made it 100x easier to launch, scale, and monetize communities without physical spaces.
Chief is a private paid membership community for executive women that raised $100m at a $1.1Bn valuation last year. They have 12,000 members (+ another 60,000 on their waitlist) and a yearly membership costs $5,800. In doing the math, that’s nearly $70m in annual revenue.
If you go to Chief’s website, you’ll see the way they sell themselves is different than membership clubs of the past. They don’t start with selling you on the amenities & beautiful space… they sell you on the people you’ll have access to and how the membership will help you “level up”. This is the order in which they list their membership benefits:
The Network: Get instant access to a vetted community of professional peers who understand your challenges and needs.
Core Group: Navigate and accelerate your journey as a leader in a curated peer group, facilitated by an executive coach.
Workshops & Conversations: Access cutting-edge leadership resources designed for senior executives and led by renowned business school professors, economists, and diversity experts — available live and on demand.
The Power Seat: Gain insider knowledge and insights from business leaders and cultural icons. Past guests have included: Amal Clooney, Mellody Hobson, Indra Nooyi, Diane von Furstenberg, Kara Swisher, Gloria Estefan, Adam Grant, and Gayle King.
The Chief Platform: Join industry-, role-, and identity based community groups to discuss trends, come to member meetups in-person and virtually, and explore on-demand content
Flagship Access: With exclusive clubhouses in major cities, Chief members can host meetings, enjoy drinks, and connect with other members. Chief’s Flagships are located in New York, Los Angeles, Chicago, and San Francisco.
Literally 5 out of the 6 are all about connections and being part of an exclusive network of like-minded people… not physical products or spaces.
My market map below showcases just how many ways private communities like Chief can manifest, where people (and access to like-minded people) are the core product.
My market map on the community landscape, focusing on paid/monetized ones.
by function: you work in sales? join 200k+ verified B2B sales professionals on Bravado ($38M raised). While membership is free for salespeople, they monetize access to Bravado’s amazing network of sales talent for companies hiring.
by interest: you like sneakers? join SoleSavy ($14.5M raised) to meet other sneakerheads & cop the most coveted sneaker drops at retail prices with their proprietary tools.
The ages-old in-person community hub model still exists, ranging from co-working spaces to alumni clubs & private social clubs. But beyond that, there’s been a ton of innovation and the business of community has fundamentally changed… it’s no longer as simple as a yearly fee in exchange for access.
With the proliferation of NFT communities, memberships were more than just access fees… they were investments & online identities, and also perpetual.
Community-driven apps with freemium models still have people as the product (access to like-minded people is the core value), but are monetizing with premium features.
Multi-million dollar startups have popped up to create infrastructure that help businesses & creators alike launch, manage, and monetize communities (paid communities & customer communities). Teams and roles have been created to manage these communities as a core business line.
I think what’s particularly interesting about the paid community model is it can easily be a bootstrapped business or side hustle… no wonder launching communities has become a Gen Z favorite.
When Hampton launched this past week (a highly vetted membership community for entrepreneurs, founders and CEOs), the founder noted they were intentionally not taking VC money & capping the membership at 700 to maintain quality.
A Hampton membership costs $8,500 a year (so with 700 members, they’re making ~6m annually in Y1), and unlike Chief, they don’t plan to own physical real estate. The membership perks look very similar though — access to monthly peer groups, a digital community, in-person experiences, access to speakers — albeit for a different customer segment (founders/CEOs vs. women execs).
Hampton got a whopping 3,000 applications 1 day after launching. They only accept <8% of applicants, but it just shows how hungry people are for community and access to great people in their peer set.
There are thousands of these private paid communities out there across industries, and the barriers to entry of starting a community & monetizing it have never been lower.
Swipe Files featured on the market map above is a one-man show bootstrapping a private community for marketers, and with 400+ members at $499 a year, the founder is theoretically pulling in $200k annually.
Creators like Savannah Rae Demers (2.5M TikTok followers) have launched private communities on FanFix (she charges subscribers $6 a month & has made $100k+ on the platform), and many creators on Patreon launch a private discord community as one of their paid perks to bring their communities together.
So where are the opportunities?
Okay, so here are my thoughts. First, the biz side. Then why so many Gen Zers are and will get in on the action.
Companies supercharging their communities
There’s an ages-old saying in business that 80% of a company's revenue is generated by 20% of its customers… how can you supercharge the way you’re supporting that top 20%?
Maybe it’s a new loyalty program, maybe it’s creating a dedicated forum for those customers within your brand… but it has to be something. And when it comes to a Gen Z audience, we’re craving these types of exclusive experiences and community.
Every brand that’s selling to Gen Z should be thinking about paid membership communities / superfans in some way… maybe that’s spending a certain $$$ to gain access, engaging with the brand across a number of vectors, or coming up with a separate paid membership altogether. But there’s certainly demand.
My absolute favorite person in the CX/Retention space is Eli Weiss (now leading CX at Jones Road, formerly doing the same at Olipop) and my mind always goes back to this tweet when I think about revamping loyalty/subscription/membership. It takes real creativity to capture the attention of customers & get them to want to be a part of what you’re building… not just $5 off a purchase. As an Olipop super fan, I would LOVE an exclusive soda club.
I’ve spent the last few months thinking about the evolution of subscription, and put some high level thoughts into a deck for OLIPOP. 👀
Sharing a bit here because I’m all about building in public (blurred some confidential info).
— Eli Weiss (@eliweisss)
Feb 20, 2022
Fabletics, Savage x Fenty, JustFab, and Public Goods (100k+ members) have been built from Day 1 off of a VIP/paid membership model
Urban Outfitters launched a paid annual membership in 2021 called UP at two price points: $48 and $98.
At Restoration Hardware, for an annual fee of $175, you'll get a 25% discount on all full-priced merchandise and an additional 20% off sale items. Members also get VIP treatment, including early access to clearance events, preferred financing on your RH credit card and complimentary interior design help.
But remember… this stuff is for the super fans. I see such a huge opportunity for brands to capitalize on paid membership to access exclusive opportunities and experiences.
Here’s a perfect IRL example. A few months ago, I saw a viral TikTok showcasing the personalization feature now available from Hunter (the popular rain boots maker) — instead of the boots saying “Hunter,” I customized them so the right boot says “Loyst” and the left one says “Meagan”). Note, this is a fictional example.
If I were Hunter, I would’ve used this as an opportunity to launch a paid membership community. Everyone who joins for $50 annually gets:
To personalize their rain boots, where you not only receive the customized boots but you can see how your name ranks out of all the people who have bought Hunter boots (ie: the name Meagan is #3654 because not as many people have gotten them, vs. Olivia is #1)
Discount on the custom Hunter socks that go with the boots for the year beyond your initial purchase
If you refer a friend to the personalization service / “Hunter Club”, you get a % of their yearly membership
Be entered into a raffle to be featured in a community Hunter ad campaign wearing your customized boots
Discounts to brand partners who make umbrellas, rain coats, etc. (similar-ish purchases) — a $200 value
Invitation to a fun local Hunter community event (pre-planned before the launch in each of the major storefronts across the U.S.)
Any brand with a cult following or superfans should have an exclusive fan club. That’s the future.
Verticalized communities for every profession
Not every community is going to be a billion-dollar business like Chief. But if I could encourage someone to start any kind of business today, it would likely be a bootstrapped, paid membership community. Screw drop shipping.
Such a big part of the Gen Z mindset is leaning into our native experiences, seeing a problem, and solving that problem authentically. When we see a lack of community in our chosen field/profession, building community from scratch is a native instinct — you also know that you’re helping people along the way, so it’s easy to tie impact into your career. Gen Z VCs is just one example specifically in the VC/Tech industry.
Over the next few years, I expect Gen Zers to tackle this in a big way — every profession & function will have a verticalized private member community, with curated on-demand educational resources, online community forums, access to speakers in their field, and unique peer networking opportunities. Charge $1k a year for access, and with 1,000 members you’re making $1M a year.
I would genuinely start with the 10 highest paying careers in the U.S. and see where there’s opportunity. Even in doing my deep dive work, there seems to be opportunities for HR professionals (existing associations/memberships are ~75 yrs old), lawyers, and athletes.
And as promised, here are a few things (tech, culture & life) I’m intrigued by at the moment.
Tech: I lost access to my Twitter account (42k followers, my biggest creator platform) this week after I got a new phone for my birthday (April 5th!) and I have NEVER been more anxious. I’m a legacy verified creator and have been putting off subscribing to Twitter Blue… I tried one of their suggested 3rd party 2FA authentication systems as a non-paying subscriber, but when I got the new phone, completely lost access to my account because none of the 2FA stuff transferred over. Lesson learned — swallow the pill & subscribe to Twitter Blue to get access to the SMS authentication.
Culture: I love this account @classofpalmbeach showcasing luxury outfits of people on the street in Palm Beach (88k followers). I even spotted my friend Marigay in one of them! She’s a queen, former Pres. of Saks Fifth Avenue and now GP at Fernbrook! It’s so funny to see people you know come up organically on your FYP.
Life: I have been watching full-length episodes of TV shows on TikTok lately… it feels illegal but I guess it’s not??? I stumbled upon a few accounts that will have 60 Part series of episodes of Young Sheldon, each about ~3 minutes in length but by scrolling through you can watch the whole episode. This one posted just yesterday has 11.5M views, 1.8M likes, and 105k saves. I’ve literally never seen Young Sheldon before, but these videos have me hooked. I’m gonna get a subscription to HBO Max to finish the Series since the accounts are uploading the episodes too slowly. Also, my entire FYP this weekend has been Young Sheldon clips lol. Any other video is just people freaking out about the lost surprise songs for each night of the Eras Tour (RIP Death by a Thousand Cuts… my fave 💔).
P.S. I mentioned my friend Eli above, the CX king… here’s his newsletter in case you’re interested or building in D2C/consumer!