#265: How I Built A Community-Driven Business ($500K/yr) | Niche Pursuits Crossover

Jay Clouse [00:00:00]:
Foreign. Hello, my friend. Welcome to a bonus episode of Creator Science. I was recently interviewed on the Niche Pursuits podcast hosted by Jared Bowman. He wanted to get into the nitty gritty about how we built the lab, our membership community, and how that 200 member community became a $400,000 plus property in the business. So we got really nerdy because those guys know their stuff. They asked great questions and I was able to get really, really specific. So if you are thinking about a community or membership, this will certainly help you think about how to design that and build something that becomes a great little engine for your business as it has for mine.

Jay Clouse [00:00:58]:
So that's what you can expect. A lot of behind the scenes in membership, a lot of how to think about building memberships. I think it will help you a lot. If you enjoy this episode, please tag me at jclaus on whatever platform makes the most sense for you. I love seeing where you're listening, what you're learning and if you enjoyed this episode, consider going and subscribing to the Niche Pursuits podcast which I have linked in the show notes. We'll get to the full episode right after this.

Jared Bauman [00:01:25]:
Today we're joined by Jay Clouse with Creator Science.

Jay Clouse [00:01:28]:
I want to do a community in my business, but I want to design it differently. We're talking about all things creator businesses, but with a pretty analytical and like data oriented bent to it.

Jared Bauman [00:01:40]:
What is Creator Science in the lab?

Jay Clouse [00:01:42]:
Today we did $830,000 top line. We have about a 66% retention rate year on year. So two out of every three people.

Jared Bauman [00:01:51]:
Renew who is primed for starting a.

Jay Clouse [00:01:56]:
Community component at the basest level. The job of any piece of is to make it more likely that I will consume your next piece of content.

Jared Bauman [00:02:06]:
What are some of the things that you do differently?

Jay Clouse [00:02:08]:
I just find it's a lot easier to get somebody to make one larger decision than 12 consecutive decisions. The game, in my opinion, is to.

Jared Bauman [00:02:20]:
All right, welcome back to the Niche Pursuits podcast. My name is Jared Bauman. Today we're joined by Jay Clouse with Creator Science. Jay, welcome on board.

Jay Clouse [00:02:28]:
Hello Jared. Glad to be here.

Jared Bauman [00:02:29]:
It's great to have you. You're a familiar name in my. In the circles of content that I like to engage in and so it's great to meet you and have you on the podcast today. We're going to be got a lot of topics actually to get to, so I don't want to bury the lead. But before we get into, you know, Creator Science and your journey, maybe give us some backstory Tell us who you are, especially before you started getting into this world that we live in now.

Jay Clouse [00:02:50]:
Sure. Well, I grew up in a farm town and my parents and entire like extended family were basically K through 12 teachers. And the funny ironic thing is when I went to college, I didn't know what I wanted to do, but I knew for sure I would not be a teacher. Fast forward to today and essentially I'm a teacher just online. So yeah, before I was doing the content thing, I was in the world of tech. I built a startup in the, the ticketing space is kind of a StubHub competitor.

Jared Bauman [00:03:23]:
Okay.

Jay Clouse [00:03:23]:
And I like that startups were sexy and I thought that entrepreneurship meant like tech startups at the time. And then I slowly expanded my understanding of what entrepreneurship could be to things like freelancing and consulting and eventually content. But when I was in the tech world, I spent most of my time in product was the discipline. And if people aren't familiar with product is basically you are an advocate for the end consumer. You're like kind of the visionary of the product experience itself. But you have to work with engineers and designers to help make real the, the, the features and functionality that the end user needs. So it taught me a lot about all things like problem solving. And when I realized that content writing podcasts, that itself is a product, it kind of unlocked a lot of things for me.

Jay Clouse [00:04:16]:
But it allowed me to be a lot more independent and self sufficient.

Jared Bauman [00:04:20]:
I feel like I interview a decent number of people who come from tech startup and end up in this world. What for you drove you from your, you know, your career in, as a product manager in tech over to what you do now?

Jay Clouse [00:04:36]:
Well, to be honest, we sold the company, the ticketing company that I was talking about, it wasn't life changing money. So you know, I had to go on to some new opportunity after that. And then getting a role as a product manager, suddenly going from like leading a company to now I'm a layer below leadership and I don't even have full visibility into what this company is doing or why. That was a hard transition for me from an identity standpoint. But I also, you know that company that I worked at, they were post series C, they had raised like 50 plus million dollars, which was uncommon here in Ohio. And I got a good look at what that CEO's life was like and I realized I don't want to do that. That seems terrible actually. I don't want that lifestyle.

Jay Clouse [00:05:21]:
And so when it kind of became clear to me that I was over the problem, the company was trying to solve is in the health care space. US health care is like so difficult to work in. I very quickly had this moment of the company was pivoting. The product I was building was no longer priority. I was going to move on to another product. And I went from having like a three month time horizon for I think I'll probably leave this company soon to, oh, maybe I should just leave now. So I went from like this three month time horizon in my head to being fully unemployed with no plan within 48 hours. And I kind of had to figure it out.

Jay Clouse [00:05:55]:
And I had enough confidence in myself at the time that I could freelance or do some sort of consulting to pay the bills. And over time I just kept studying the content space. I got a better understanding for digital products as products. And as I was learning about the model, I was writing about it. And soon you have this very meta thing of now I'm a creator who talks about content creation.

Jared Bauman [00:06:18]:
And was that it? Did you move from that straight into what is now creator, science, the lab, these things you're part of now? Or was there something in between that?

Jay Clouse [00:06:26]:
I mean, it's never as smooth as it sounds in retrospect. You know, like I can draw the straight line looking backwards now, but at the time it was like I was doing random consulting gigs to pay the bills, but I was also building this Mastermind program that I was facilitating and that was like the main thrust of what I was doing. And in 2017, facilitating mastermind groups using Slack and Zoom. All that sounds like super obvious now, but that was like a pretty unique use case for using those tools at the time. And after we did this 12 month, or sorry, 12 week program, these mastermind programs I was running, I just kept the Slack active and people on the back end would continue to hang out there. We built a little bit of a community. And in 2020, Pat Flynn and his business partner Matt Garland came to me and they were trying to accelerate some efforts for building an online community because this is when Covid was happening. Matt, who is Pat's business partner, has seen what I had done with Zoom and Slack.

Jay Clouse [00:07:26]:
And like we have this new tool that we have access to, we're advisors, it's called Circle, they're in beta. If you can help us like figure out how to do community with this tool set, that would be great. So in 2020, I was basically taking on whatever work I could do because at the time we had just no idea what the world was going to be like. It's like my Wife might lose her job. I'm just going to take on whatever paying work I could do. So I helped them build and launch that community. And they said, you know, we'd like you to just lead the community team here. Can you do that? And I said, no, I'm busy.

Jay Clouse [00:07:54]:
Like, I'm doing content, I'm doing the mastermind stuff, but I'm happy to consult more. They said, well, what if we bought your community and your Mastermind program and you'd have to do that anymore and you just focused on content and our stuff? I said, that sounds like a pretty good outcome, actually. So for the year of 2021, I was pseudo full time at SPI while I was still doing my content stuff on the side. But that was also the year that my content started to really take off. So by the end of 2021, I was like, I can't do both of these things. And 2022 left, went back out on my own. And that's when I started my membership, which is called the Lab.

Jared Bauman [00:08:32]:
You're right, it's not a straight line. Got some cool stuff along the way too. That's great. Okay, so maybe give people an overview of what the Lab is, you know, the broader scopes of what you're doing right now, and then we can kind of get into how you built this. Because that's, I think, what everybody here is going to be the most interested in is the tactics, the details, the strategy that you use to build what you have now.

Jay Clouse [00:08:57]:
So the company as a whole is called Creator Science. Right. And I think that's probably fairly intuitive. What we're talking about, we're talking about all things creator businesses, but with a pretty analytical and like data oriented bent to it. But I've always been a community guy before spi, before my mastermind stuff, going all the way Back to like 2012, I was organizing Startup Weekend events here locally. Always been a community guy. And when I left spi, I had like a community shaped hole in my life because I was running their community. Now I had nothing.

Jay Clouse [00:09:30]:
And I thought, I think I, I want to do a community in my business, but I want to design it differently. And so the, the goal was, I had seen that at a certain level of scale, some of the benefits that come with being a community change, they kind of go out the window. Like when you start a community and it's small, there's magic in the smallness and the closeness of it. But sometimes it's so successful that now it gets kind of big and you lose the thing that was what people really loved about it in the first place.

Jared Bauman [00:10:03]:
Right.

Jay Clouse [00:10:04]:
So the question in my mind was, could I just architect a space and a community and a model that would financially make sense to stay small and be enough for me and like, fund the stuff I want to do in the business outside of it, but not take over my whole life? So the lab is our membership community. It's for more advanced creators. We have some eligibility criteria and an application in place now, but the idea was this can be viable at the beginning with 200 or less members. Now we've grown a little bit, but with the lens of we cannot lose the closeness, like the small group experiences that are a part of this. And in that community, it's all about experimenting together, sharing the results of our experiments. Because again, creator science, we're all as creators, whether we're doing it very intentionally or not, we're experimenting constantly. Any piece of content you put out has performance metrics attached to it. You can look at that as an experiment, learn from it, iterate on it.

Jay Clouse [00:11:05]:
And if you're experimenting alongside hundreds of other people, you're not only benefiting from the results of your experiment, you can learn from the results of all of those experiments simultaneously. And the thesis was that will help you grow faster.

Jared Bauman [00:11:22]:
And I mean, it's incredibly compelling because I feel like there are community aspects to everything that every industry, but this industry in particular, because you have the label creator on it, like, it's literally about having to create at the core of what you're doing. I'm just curious what initially took off for you? Was it the lab? And was it people wanting to join this community of people that were creating, sharing their results and helping each other out? Or was it something else you were doing, maybe content? You were writing your email. Like, what was the first thing to kind of take hold and catch fire in people's minds?

Jay Clouse [00:11:57]:
It's really hard to say because in my memory there's. There's almost no inflection points. Like, it's. It's just felt like a incremental improvement grind for eight years. You know, we're talking since 2017 in some regard. So if, if I were to say, here are some of the things that I think started to break my way. Number one is the brand Creator Science. The name Creator Science didn't exist until 2023.

Jay Clouse [00:12:28]:
Three, I think. Actually, let me look this up real quick. Okay. No, mid-2022. So from 2017 to 2022, I was operating under different brand names. And near the beginning of 2022. I just was getting frustrated because I noticed that nobody was recommending my newsletter, which was written for creators. When people would ask, what are the best newsletters for creators? I just wasn't getting mentioned in these lists.

Jay Clouse [00:13:03]:
And it was so frustrating to me. I was like, but I know I'm doing some of the more interesting work. And so I started thinking about, how do I get associated with creators? I thought, maybe I just need to put the word in the brand name. So up to that point, the newsletter was called Creative Companion. And it's kind of like, I want to be your companion on this creative journey. But I thought maybe, maybe Creator will be the thing. I had, like, this notion document of all these different names that have the word creator in it. And in, like, a flash of inspiration at the airport, I was like, creator Science.

Jay Clouse [00:13:38]:
There's a nice, like, juxtaposition there. That's interesting. And I shared it with the community, which existed at the time, but it was under another name also. It was the Creative Companion Club at the time. I said, I think I want to go all in on rebranding to Creator Science. And people were not into it. I would say at least 50% of the community was like, this is a bad rebrand. And the reason they told me, or like, the common reason was that the name didn't have a certain warmth or approachability that people had kind of associated with my vibe.

Jay Clouse [00:14:10]:
And they were like, this feels a little clinical, a little surgical, a little sterile. And I thought, yeah, but I think I can get past that. I think I can, like, imbue the brand with the warmth and approachability that I want. And I feel like the name is really good. So I pressed forward and rebranded that, eventually rebranded the podcast as well. Because the podcast also had a different name. It was called Creative Elements in the beginning. And when I finally had, like, a unified brand under Creator Science and I was just known as the Creator Science guy, and it wasn't Creative Companion and Creative Elements.

Jay Clouse [00:14:43]:
It was just easier to associate me with a single thing. Then people started to pay attention, the association got stronger, and a lot of stuff in life is like a rich, get richer world. So, like, the more successful I was, the more successful I became, the more successful I was, the more successful I became. And it just kind of compounds like that. And there isn't really much I can point to outside of that. Like, we've had one of our YouTube videos go really well, and that really boosted the channel, and that got us in front of a bunch of new people doing YouTube at all, I think was probably one of the bigger inflection points for the show when we said, we're doing this audio show, but let's see if we can do on YouTube. But really it's just been, like, incremental improvements and, like, wild consistency. We're talking two newsletters a week for eight years, a podcast a week for five years, and now YouTube's in the mix.

Jay Clouse [00:15:42]:
It's just. It's just been a lot of that.

Jared Bauman [00:15:44]:
So perfect transition. What is creator science in the lab today? What are all the things that you're doing? You know, you mentioned two emails, a podcast, like, what is the whole brand doing consistently? And then we can maybe unpack how you grew some of those.

Jay Clouse [00:16:02]:
So if we want to talk about, like, the business size in 2024, we. We did $830,000 top line, and about 50% of that is the membership on an ongoing basis. We have two newsletters per week, one podcast episode per week, sometimes two. We probably do two, maybe three videos on YouTube per month. And I'm active in the community constantly, you know, so that's kind of the shape of it. I'm probably posting daily on LinkedIn, X threads, Instagram starting, too. So we're all over the place. Like, we're.

Jay Clouse [00:16:43]:
We're publishing constantly, and it's not even as streamlined as you might expect. I'm creating, like, a lot of bespoke assets for these different platforms. But, you know, you show up every day and you get in people's line of sight, and it legitimizes you in a way. People see that, like, you're really taking this seriously and they take you more seriously. And, yeah, that's the scope.

Jared Bauman [00:17:08]:
I'm glad you mentioned it because it sounds like a lot. And so I feel like the only way you're able to do that is with either a large team or these really efficient systems. How are you managing all this at scale? And then the second part of that question, if you want to answer it as part of the first or if you want to tackle it differently. Like, I think a big problem that a lot of people have is coming up with the ideas and enough ideas to consistently publish. You talked about being consistent, and how do you consistently come up with all these topics to tackle?

Jay Clouse [00:17:41]:
Well, part of it is I really like this new Steven Pressfield saying he wrote the War of Art, and his latest book is. I forget what it's actually called, but he has this line that is basically, put your ass where your heart needs to be. It's basically like if you want to be a writer, sit in the chair and write. And I am somebody who from the beginning, I thrive on public accountability. And by thrive on public accountability, I mean I have a crippling fear of public failure. And so if I give myself a deadline in college I studied, studied journalism for two years. So deadlines just became like this thing that was absolutely drilled into me and if I have a deadline, I'm going to hit it. So I have to be actually really careful with myself, what I commit to.

Jay Clouse [00:18:27]:
Because for better or for worse, for my own well being, for the sanity of our family here, if I have a deadline, I'm going to hit it. And whatever like needs to get sacrificed is going to get sacrificed. So our pace of publishing is basically the fastest pace I can push sustainably. We do have a bit of a team. My wife and I are the only full time W2 employees. I have a video editor who is pseudo full time. He's actually a producer now. We have an audio engineer who's on contract.

Jay Clouse [00:19:01]:
I have a virtual assistant. We have a thumbnail designer who's on contract. And of course I outsource accounting and legal as well. So, you know, there's a, there's a bunch of people involved and anything I need to do, like I have a designer that's kind of my go to designer. I have somebody who, if I'm creating something highly designed for short form, like a carousel on Instagram and LinkedIn, I'll go to him. So I engage a lot of people on a contract basis, but it's actually a very lean team in terms of full time headcount or hours. And I work a lot.

Jared Bauman [00:19:36]:
Fair point. Okay. Cat's out of the bag on that one, huh?

Jay Clouse [00:19:40]:
Yeah. We'll get back to my interview on Niche Pursuits right after this. And now please enjoy the rest of this episode from the Niche Pursuits podcast.

Jared Bauman [00:19:55]:
I mean, that is a lean team. That's a very lean team, especially for the amount of content that you're creating. What, what are the. How strategic are you with how you structure it all? You're kind of, I mean, you're kind of all places. You say you're like just dabbling in Instagram, I heard you say, but you're kind of in all the places. And I've got to imagine there's a slightly different approach to each one. Even if you're talking about the same piece of content, the same idea, the same topic, you're approaching a little bit differently. How strategic is that? I mean, for Someone who is maybe only on YouTube, for example, but wants to expand into these other verticals.

Jared Bauman [00:20:30]:
Like how different of an approach are they going to need to take? How different is your approach?

Jay Clouse [00:20:35]:
I'm extremely strategic because I'm extremely data oriented. I just published an essay this past weekend called the Value of Attention which kind of articulated, finally got out of my head how I see different types of attention and how I value them in the business and therefore prioritize my time and what I'm doing. Because not all attention is created equal. I think a lot of people who get into the creator game, they think that more views is the goal and then they get more views and they say, but I'm not making any money actually, more revenue is the goal and then they get more revenue and they say, actually this is good, but like, what am I doing here? And they realize actually alignment purpose, that is the goal. And so I've kind of, I at least started on the revenue side because when I left that job I had no real safety net. Like I had that exit and it was okay, but I could have burned through that in the first year if I, if I really didn't have any income at all. So from the beginning it's like I need revenue to pay the bills and I'm only going to spend my time doing things that I can map to revenue. And publishing on Instagram, like, didn't really make sense to me to map to revenue in 2017, like that just wasn't a thing.

Jay Clouse [00:21:45]:
And even today it's not really a thing. People today are like, well, brand deals maybe, maybe that was way less of a thing in 2017. But from the beginning it's like, what are the forms of attention that I can actually leverage to turn into revenue to survive at the time? And so broadly, when people are thinking about content strategy and where they're putting their time, I think about your strategy. I think about two buckets of platforms that you could be on. You have relationship platforms and you have discovery platforms. Discovery platforms have some sort of built in mechanism to introduce content consumers to your content as a content producer. These are algorithmic, they're typically ad supported. Their incentive is to maximize consumption time on their platform.

Jay Clouse [00:22:34]:
So we're talking about social media, we're talking about YouTube. I would even say that search broadly is a discovery platform. It's great because this is how you get in front of new people, right? But it's also inherently a little bit risky because there's no guarantee that you're going to get back in front of that same consumer. Again, relationship platforms on the other side, on the other hand, this is a like a curated feed that everybody has themselves. It's their email inbox, it's their podcast, RSS feeds, SMS and private communities. The game, in my opinion, is to leverage discovery platforms to reduce your dependency on them. Leverage discovery platforms to grow your relationship platforms. You want to grow an email list.

Jay Clouse [00:23:18]:
If you aspire to podcasts, getting people to your audio show, if you aspire to run a community, getting people into your community and sms, but at least email. I think every creator should have email as part of their strategy because it really future proofs you, it makes things a lot more resilient, a lot less risky. And so I started with email. I added on podcasting. It built a really strong base. They're like the slowest, hardest platforms to grow, but it built a really strong base because the people who were there really wanted to hear from me. And just over the last few years, I've really started layering on more of the social media and YouTube stuff.

Jared Bauman [00:23:56]:
How much of your strategy and the approach, even hearing you talk about discovery relationship, but how much of your approach does have some foundation back to your work in product, in looking at things from a product standpoint and, you know, almost managing that product from your tech startup background, like a lot of creators come into this without that background. You know, like creators are creators by nature. And so you bring this interesting background. Have you used it utilized that at all in areas you've seen?

Jay Clouse [00:24:24]:
Yeah, I mean the most obvious context would be the actual literal products that I make and sell. The community is a product, my courses are a product, my notion operating system is a product. So those are like obvious things. But every piece of content is a product, you know, and in product management we have this framework called jobs to be done. When people buy your product, they're basically hiring it to do some sort of job in their life. But there's no job security. They might hire some other provider of that for price or quality or speed or whatever. So I think even just your free content has a job to be done.

Jay Clouse [00:24:58]:
And if you are clear about what that is, it's a lot more likely that you're going to be successful in fulfilling that job for somebody. At the, at the basest level, the job of any piece of content is to make it more likely that I will consume your next piece of content. I call this passing the regret test. If somebody takes the time to interact with any piece of content that you have, do they regret that they did that or are they glad that they did that? And as long as you are on the positive side of that regret test, that piece of content did its job. The bar is like fairly low on that. It's getting higher all the time. The, the average content quality increases because competition increases. And so the bar is raising all the time.

Jay Clouse [00:25:40]:
But every piece of content you put out should pass the regret test. Product itself is kind of this fractal idea that once you see it, it's kind of been everything. Like, in a way, I'm a product, the business is a product. A product is about like, do I trust this entity to do something for me? And at the bottom layer, I just think about trust more than anything else. Like, am I developing trust with the people who are choosing to hear from me? If I'm getting in front of new people, am I giving them a reason to trust me or at least go deeper with me? And I think that has been what has been the slow incremental build for the last eight years.

Jared Bauman [00:26:23]:
Right, right. You know, I'm struck by probably, I probably only know a few of the things that you do differently with community, but I know, for example, you don't do monthly memberships. You only do yearly annual memberships. I mean, I think I have that right. Like, what are some of the things that you do differently? Like that. Why do you do them that way? And you know, like, for example, with the annual membership, how do you think that's led? How do you think that's been successful? You know, instead of doing something like.

Jay Clouse [00:26:49]:
A monthly membership for any membership, a lot of people have the words membership and community as interchangeable in their mind. To me, a membership is a subscription relationship to some value proposition. Community may be part of the value proposition. Okay, so in a membership, typically you are choosing whether you're hanging the value on premium content or peer to peer relationships. And there's probably gonna be a blend of both, but you're gonna market one more than the other. I've always been more on the peer to peer side, which is a more difficult thing to actually market the value of, because it's. It's something you kind of have to discover to understand it and value for yourself. I can't even tell you.

Jay Clouse [00:27:36]:
Like, if you were to join the lab today, who are you going to make the strongest relationships with? I don't know. I could introduce you to some folks that might make some sense and I might imagine what that relationship could look like. But until you actually get in there, meet somebody, build these relationships, you won't actually know what the value of those relationships are. So in a peer to peer membership, typically what I try to do is have enough gated, obvious valued things to de risk the year one investment into the membership so that you have a chance to discover that value and say, actually this is why I'm here. So when it comes to annual versus monthly or whatever cadence in a peer to peer membership, I think it's really important to try and reduce the volatility of people coming in and out of the space. Because if you came in on a seven day free trial, which a lot of communities offer a seven day free trial, and people are like, oh my God, Jared's here. I love his podcast. I'm excited to get to know Jared.

Jay Clouse [00:28:36]:
And then you decide after seven days, this isn't what I expected and you leave. That's kind of a weird experience for those people who are excited to meet you and build a relationship with you. And they also have to ask themselves, well, if Jared was here for seven days and didn't think it was valuable, but I'm here paying for it, am I the idiot? Is there something that like he knows or saw that like I'm not seeing? So I really tried to just reduce the volatility and people joining and also recognize that it takes time to realize the value of relationships. And so it's kind of a filter, to be honest. It's like if, if you aren't willing to commit to this for a year, I don't need you here. It's, it's, it's okay. And, and similarly, we have an application in place now where the criteria is $10,000 per month in non service revenue or 10,000 followers on a single platform. The follower thing is actually a lot easier to achieve.

Jay Clouse [00:29:30]:
But I have people who ask and say, do you have payment plans? And the answer is no, because actually I don't want this to be a financial burden. And if you need a payment plan, you probably actually not ready for this. Like you're, you're not actually where we need you to be or recommend you be to join in here. So part of that is a filter. Part of it is also it's great for cash flow. It's not monthly recurring revenue because it's annual only. But now that we've been doing this for three plus years, we don't do launches. So people join in any month.

Jay Clouse [00:30:02]:
I have like the illusion of monthly recurring revenue because people have been joining for three years. Something else we did that was a little bit different in the beginning we had a cap on the total number of members that could come in because again, I wanted to see can we design this to be small and stay that way? And that was really effective for a lot of reasons. Number one, as we got closer to the cap, people really had a reason to say, should I join this now? Because otherwise I might not be able to join later. It was also great for retention because until we hit the cap, the price was slightly lower than it is now. So anyone who got in before the cap was hit had a legacy price that if they left, they would have to pay a higher price to come back. So it was really great from a marketing and retention standpoint. What I ran into as a problem was I really wanted to have more density in terms of geography. Like I want to be able to host little pop up meetups around the country, around the world.

Jay Clouse [00:31:05]:
But if we're at a 200 member cap, there's only two people in Spain. I have no way to get more people in Spain. You know, similarly, creator is a broad term. We have creators on TikTok, Instagram substack. Like the number of platforms people are really focused on is pretty broad. So if I needed more people to join a mastermind for substack, but we're at our 200 member cap, what do I do? So I basically went to the community itself. Once a year we do this thing called a town hall where I come and say, this is some of the stuff we did in the community over the last year. Here's feedback I'm hearing for you.

Jay Clouse [00:31:40]:
Here are ideas I have for the next year. Let's talk about them. And then after the town hall, I send an anonymous survey to have them rank these ideas as priorities for what we should do as a team to make the membership better. And I basically said, like, here are the reasons why this cap is no longer serving us. Can we move to an application standard? So I'm basically raising the standard on what it takes to join, but we don't have this fairly arbitrary number of how many people can be here. And it was a near unanimous vote. Yes. I think there was one person who was like, I'm a little skeptical.

Jay Clouse [00:32:17]:
So now we do the application, which I used to be very against because an application, it produces friction, but also at the point of highest excitement, somebody saying, I want to join this. Like, thank you, stand by, fill out a form. Yeah, thank you, stand by, fill out a form. We'll let you know. But I have come around on this that the magic in a community is actually like the exclusivity is a feature and you have to you being the person who leads the community, you have to be the person that is a strong filter and willing to walk away from money because they aren't a culture fit or they don't meet the criteria or whatever reason. Like you need to have that integrity, which is hard sometimes. I have some people who, who want to join that I know I could help but they're not quite ready. Or I have some people want to join and I'm actually pretty serious about not letting strictly competitive folks into the group unless the person who's already in the group kind of like agrees, consents.

Jay Clouse [00:33:28]:
And so I've had to leave a lot of money on the table with the application, but I think it's long term good because I'm always trying to optimize instead of new members, I'm trying to optimize for renewals because it's a lot easier to keep a customer than to gain a new one.

Jared Bauman [00:33:44]:
That is an age old phrase that gets lost in the shuffle. So often I'm thinking about people listening who are probably sitting here saying I wonder if building a community to what I'm doing right now is a good move. Maybe I have a YouTube channel where I pour a lot of my time in there and that's where my energy goes. Maybe I have an email list. I send an email once a week, I send an email twice a week. Maybe I'm on TikTok or these other substack like who is primed for starting a community component or a membership component to what they're doing. What are some things that people listening can maybe go through a mental checklist on whether it's their audience and the type of audience they've created or the type of person they are.

Jay Clouse [00:34:31]:
Both are important questions. Like there are filters on both and I think anybody can do it. The question is, do you want to? Because there's so many different levers you can pull. There's so many variables here. The first most important thing is basically like what do you want your level of involvement to be? Because that's going to filter out some ways this can look. In my case, I am receiving notifications for every post that goes in the community and I'm trying to jump in and personally be helpful as quickly as possible. That is a certain level of like mental load that is ever present. And I'm not even just talking about during the workday if I'm not on do not Disturb, like that's happening at night.

Jay Clouse [00:35:18]:
It's happening weekends. But that's the design of the community that I have. I wanted our, one of our advantages to be speed. And for that to be true, I need to be tapped in so that at least what I can control is my own response. Now, thankfully, over time, like other people have seen, like this is the way this community operates. And if I could be helpful quickly, I'm going to be helpful too. If you don't have an audience that has like a high discretionary income, then it kind of means that you will need a lower priced membership. And that then means you need a lot of scale for this to be worth it for you.

Jay Clouse [00:35:57]:
Probably. You know, I'm a big fan of just like breaking out a spreadsheet and say, what is, what is their precedent for an audience of people like mine to pay for on a recurring basis? And at that price point, if it's monthly or annual, whatever, how many people would I need to join for me to feel financially incentivized to do the work to make this place great? A lot of people will kind of think like, I want recurring revenue. And so they'll make something that is $20 a month. They'll go people who will buy it. But you know, you get a hundred people paying $200 or $20 a month, that's $2,000 per month. And it can be a lot of work for $2,000 per month. And on top of that, lower price memberships typically have pretty high churn. So you have to get a lot of people in there and it's, it's, it's exhausting.

Jay Clouse [00:36:48]:
Like a membership is never truly done. You have to continue to like, just tend to it like a garden, to make sure the environment is right for the experience to be what you want it to be and for people to stick around. So I think you need to know your audience and what they have enough like budget for what problem you're solving. And also does this form factor make sense? Because a membership is a subscription product, which means there needs to be a good reason for this to be a recurring, ongoing relationship. A lot of people be like, well, I'll teach you to go from A to B, okay, but if I get to B, is there a reason for me to renew? You know, so what, what makes this something that I need to continue having access to? Are you continuously releasing new premium content like the Netflix model? Are you continue to make new content? Are you the place where everyone in the space comes to meet each other? You know, are you providing connection to other people in the space. If so, like they're constantly new people joining the space and that's valuable, ongoing. Are you keeping people up to date on something that's changing all the time? That's a reason to renew? You know, this is a place where we keep you kind of at the edge. But if you don't have a good reason for why people would renew, then a membership is not a good fit.

Jared Bauman [00:38:17]:
I want to ask you about this as well in relation to that question just prior. Your community is called the lab and it's not called creator Science. I see a lot of people when they decide to build out a community, it almost looks and acts like a bolt on. It's like, well, I send this email every week and now you can join my community and I, you know, I make these YouTube videos every week and now you can join my community. I'm just curious like how much is the focus of your community having a focus? This idea of the lab, this idea of testing, of trying, of creating, of sharing. Like, it's not just what your email newsletter is about, it's not just what your YouTube video is about. It's. It has a certain theme.

Jared Bauman [00:39:00]:
I'm curious if I'm making a bigger deal out of that than it really is or is that actually a pretty big component of being able to drive community as not just a bolt on?

Jay Clouse [00:39:08]:
I think it's a pretty astute observation. Getting a community to be self sustaining and getting activity in there consistently, that's a difficult thing to do. And unless the community is the thing, the thing people are paying for, the reason they're showing up, it's hard to get people to do that. There's just a lot of friction. It's. It's something I have to think about. So if it's. I see this all the time with like Patreons, right? It's like, you love my channel, join my Patreon, right? And people will do that because they want to support that creator, but there's almost never any actual activity in the community part of that Patreon.

Jay Clouse [00:39:45]:
That's not the value proposition for why people are joining. They're joining because they want to support you. And that has been fulfilled with their monthly or annual payment. So to me, I wanted the lab to be its own thing. I wanted. When you name something, it gives it its own gravitas, you know, it gives it its own weight and gravity. And it's a subtle signal that I'm taking this re really seriously. And it's also easier for other people to refer A lot of things are still word of mouth.

Jay Clouse [00:40:18]:
So I think it's easier to refer to a named thing than Creator Science Pro. You know, that's, that's like a popular nomenclature. And there's. It's not like really knocking it. I just think it's. It's a little bit less interesting, has a little bit less weight, because I think it centers the other thing versus its own thing, you know, and so it was an intentional decision, for sure. And I thought about the name a lot. We have, I have a membership rubric.

Jay Clouse [00:40:54]:
I help people walk through and like, part of it is naming because you want something that is referable. When the company was called Creative Companion, the membership was called the Creative Companion Club. Horrible thing to try to say out loud. Like, it's just such a mouthful so hard. And so I learned that the hard way because, like, even in videos that I would record, I'm like, hey, you should join the Creative Companion Club. I like stumble over it. Let's just go something short, something easy, the lab. That's all it is.

Jay Clouse [00:41:24]:
When it's easier to say, more people will say it. And so that was a part of the reason too.

Jared Bauman [00:41:30]:
It's funny you mentioned that. Yeah, that is a mouthful. And there's something to name. I want to ask you before we run out of time, a little bit more of a detailed question. And that's around churn, that's around retention, that's around getting people to renew. And I feel like when you have an annual membership, you kind of. You kind of circle the wagons with a member on rejoining, renewing for another year. Whereas with monthly, it's kind of starts to probably just get.

Jared Bauman [00:41:59]:
It's all just chaff at some point. It's like, well, you know, everyone can kind of renew every month, and every. Every month is a renewal. And so it's just kind of this bigger idea. But when you have a yearly renewal process, I'm imagining there could be maybe bigger emphasis that's put on Churn. Or maybe your view on Churn is. Is more just the other direction, which is, hey, if we've been creating great content all year, then that takes care of itself. Churn is a big problem for communities and for people who are running communities.

Jared Bauman [00:42:23]:
Any insights you can share that you've learned along the way about reducing churn and keeping engagement high?

Jay Clouse [00:42:29]:
When there's an opportunity for churn, some churn will happen. So by going from monthly to annual, you have effectively reduced Churn just out of the box because it's going to If I have a hundred members and I'm asking them to renew on a monthly basis, just the law of numbers, some people will choose not to renew, you know, and so I just find it's a lot easier to get somebody to make one larger decision than 12 consecutive decisions. Because what happens in a monthly membership? Well, right now the stock market here in the US is in the tank. What are we going to eliminate? Probably subscriptions. Right. And that could have absolutely nothing to do with the experience I've had in your membership. It's just an easy thing to buckle my belt and leave. And the problem with Churn is once I have made a conscious decision to stop paying for something and I've told myself this is not worth the price to me, it's very hard to get that person back because you would have to operate against their own consistency bias.

Jay Clouse [00:43:34]:
They would have to say, I was wrong, I changed my mind. Which happens. But it's hard, it's a lot harder to get people to rejoin once they've, once they've left. So even if it's not the stock market, like anything could happen over a 12 month period in somebody's life that has nothing to do with you, that takes them out of the community. And maybe a month goes by they don't use it. Not a big deal. Two months go by, I'm starting to remember that I'm still paying for this. Three months go by, I haven't been in here and I'm still paying for it.

Jay Clouse [00:44:00]:
I'm gonna let it go. Same paradigm in an annual membership. I'm gone for three months, but I already paid for it. It's like a sunk cost. I come back month four, have a great connection or attend this workshop that helps me make a decision. Suddenly this is still worth the annual fee to me. And so I'm going to renew more likely than not. So I do think about this a lot.

Jay Clouse [00:44:24]:
It's frustrating to me that most analytics software won't give you a clear CHURN rate on an annual subscription. Like everything is still MRR focused. Even if you are running an annual subscription in Stripe or like associated tools like Bare Metrics or Chart Mobile, they all give me MRR Churn. So it's even hard for me to like get the exact figure of what our retention is. But as much as, as near as I can tell, we have about a 66% retention rate year on year. So two out of every three people renew every time it comes around. And if you're above 50%, you're replacing the People who are, you don't have to replace the people who are leaving. Like you're, you're growing.

Jay Clouse [00:45:04]:
Anyone who adds, you know, you're just in default growing. And that's a pretty awesome place to be. So I do think you should look at it closely. I think you're right in that in an annual membership you have more of an opportunity to talk to somebody before it renews and be like, what are you thinking for this next year? Or take a second to send them a note and say, how are things going? Is there anything we can help with? You know, we would like for you to stick around. That's actually like a pretty non trivial act to take is to tell someone, I value the contribution you make to the space here. I would love for you to stick around. I think that would have a material impact if you did that when people were thinking whether to renew or not. To feel valued is important.

Jay Clouse [00:45:49]:
So yeah, I'm a big fan of the annual version, but I also recognize that as not practical for all audiences.

Jared Bauman [00:45:57]:
Right. Well, I think you have a lot of people thinking about it, I'll tell you that much. You make a compelling set of cases. There's so many different avenues we could go down, but we're coming up against time. So I'll pause there and just say that this has been really insightful. I think a lot of people that listen to this show here are familiar with the methods to drive traffic to what they're doing. Again, whether it's a social media, whether it's an email, but sometimes the monetization side of it, sometimes taking that traffic, creating systems that put people in community with each other and then find ways to add value to that community. That's why I think this interview is going to be so helpful for people.

Jared Bauman [00:46:41]:
It was less about how to get people in the door and more about how to give them value, give them something that they can be a part of and then, you know, charge a price that's fair and reasonable for that. So thanks for coming on and sharing. Where can people go to follow along with what you're doing? Obviously we know creator science. I'll put that in the show notes. But beyond creator science, I mean, you have a podcast. Just tell people what you're up to every week.

Jay Clouse [00:47:03]:
Yeah, I mean, you're listening to this show, so you obviously like podcasts. Would love for you to check out the Creator Science podcast we publish once a week if you want to get more of me yapping. Otherwise, search for Jay Clouse on social media or creatorscience.com you had mentioned before.

Jared Bauman [00:47:18]:
We hit record, you're like, yeah, it's funny. I go into Apple podcasts and it's like, because you listen to this, you should listen to niche pursuits. And I get the same thing on mine. So I'm sure a lot of listeners would have the same set of interests that obviously both you and I get targeted for on our podcast. But Jay, thanks so much for coming on. This was great until we see each other again. For Appreciate it.

Jay Clouse [00:47:38]:
Yeah, thanks, Jared.