How developing a breakaway brand helped Gina Bianchini secure $67 million in funding for Mighty Networks
How developing a breakaway brand helped Gina Bianchini secure $67 million in funding for Mighty Networks
Gina Bianchini (00:02):
We are not looking to rest on our laurels. We are looking to continue to innovate, what is available to 400 million potential creators and entrepreneurs and people who can create communities that get more interesting and grow differently from each other, even though they'll be enabled on the same platform.
Peep Laja (00:27):
I'm Peep Laja. I don't do fluff. I don't do filler. I don't do emojis. What I do is study winners in B2B SaaS. Guess I want to know, how much you strive as you, how much is luck and how to do win. This week, Gina Bianchini, founder and CEO at Mighty Networks, a community building platform that combines courses, memberships, and events. Gina launched Mighty Networks in 2017, and they've since grown to a team around 70 with around $67 million in funding.
Peep Laja (00:57):
In this episode, we talk about becoming an alternative to existing stale, restrictive social media offerings. We hear about deliberately switching from big enterprise clients to SMBs and creators, and we hear about offering clear value to clients with higher content engagement and customer retention. Let's get into it.
Peep Laja (01:17):
You guys launched in 2017, however, Mighty Networks is a pivot of your previous company, Mighty Bell, so how did that come about?
Gina Bianchini (01:26):
When we started Mighty Software back in 2011, our vision was always to serve the broadest number of people that we could. So entrepreneurs, creators, brands, especially because that was my experience at Ning, where we had over 3 million Ning networks created 300,000 active on a monthly basis created by individuals, entrepreneurs, people that were just having fun and also celebrities and brands. With Mighty Software, we basically were like, "Let's go do this without any advertising and mobile first." What was interesting is, when we launched the first version of Mighty Software, the Mighty Bell product, the demand was actually from enterprises, not individuals.
Gina Bianchini (02:23):
We also looked around at this and said to ourselves, okay, well, we weren't necessarily expecting that, but if we can actually build the core platform off of revenue deals versus more and more venture capital, that's non dilutive capital, that will allow us to put in place the building blocks for ultimately what we want to create, and the vision we had to unlock millions of unique and vibrant communities, mastering something interesting or important together, creating something interesting or important together led by creators and entrepreneurs and brands.
Peep Laja (03:06):
The right answer changes over time, quickly adapting and changing it up is a must. What used to work doesn't anymore. If you preach a way to get results and tie your identity to it, it's very hard to get off the soapbox. This can kill you. It's also scary to be a contrarian and ask what else might be possible, or how can this be better? Who's going to be the person in the company that says, "We need to change it up." In my experience, most people optimize for group belonging and to be liked over finding the best idea.
Peep Laja (03:38):
It's popular to be a yes, man. I get it, everyone likes to be agreed with. Before Satya Nadella took Microsoft over, it had a culture of intelligence, whoever argued for their idea the best, won, and so people did not consider other points of view and many argued that this heavily contributed to Microsoft missing the mobile revolution. Nadella focused on changing the culture and he oversaw the rollout of a new management model centered around growth mindset. Microsoft has since turned their culture around and has seen impressive growth.
Satya Nadella (04:12):
Everything that starts off and goes into hyper growth, ultimately does taper off. The real question is, what do you do when that happens? How do you hit refresh is, I think the real challenge for us as individuals, as companies or us as societies. When a company is successful, one of the things that happens is the concept that got you started in the first place, the capability that you have, and the culture all get into this beautiful virtuous lock and things are going well, then lo and behold, you need to come up with a new concept, a new idea for which you need new capability.
Satya Nadella (04:46):
That's when the culture has to be at its premium. In other words, the culture needs to enable you to come up with new ideas, build new capabilities. That's why I think, for companies to be successful over a long period of time, you need more than a good idea and a good strategy. You need a culture that fosters that growth.
Gina Bianchini (05:04):
Basically, what happened was, for about four years, we built out the core engine of what is today Mighty Networks through partnerships and through revenue deals with three enterprise companies in one large organization. We essentially said, "Look, these deals will end at some point, that's fine. We're not going to invest in account management, other than ourselves. We're not going to build out some big account management function for enterprises. We're not going to build an enterprise Salesforce. This is not what we want."
Gina Bianchini (05:41):
When the final deal ended in 2017, we changed the name of the company to Mighty Networks, opened it up to individuals and offered a lower priced version with what we today call our community plan and our business plan. We had exactly what we thought would happen, which is, it took off with individuals and entrepreneurs and creators. In addition to continuing to sell what has become our mighty pro plan to brands, and also more successful create years.
Peep Laja (06:17):
Back then in 2017, it's not like there weren't platforms to build a type of a community. Facebook groups were blowing up already back then, different ways to set up online forums and self-hosted communities. What was the opening that you saw where Mighty can fit in and gain a toehold?
Gina Bianchini (06:38):
It wasn't something I saw in 2017, it was something I saw in 2007. Specifically my experience at Ning, pointed to a very different future and a very different way of thinking about social networks and social networking, which is human beings don't necessarily really want to have every aspect of their life on one platform. We have multiple facets to our personality. We have multiple interests and passions and goals. We have different ways for different topics that we want to show up.
Gina Bianchini (07:14):
Our core DNA at Ning and certainly our core DNA at Mighty Networks is all around, create the community, create the social network you want, and one that has your own branding, your own choice of features, and most importantly, your own members that aren't being bombarded by a bunch of other things. We always believed that Mighty Networks was different. It bends towards people having their own place. They get to fully immerse themselves in that particular topic, that particular... We talk about it as your big purpose, the motivation for the community. We always had this different vision of, let the creator of the community and let the community members decide what it looks like.
Peep Laja (08:09):
You've said years ago, that you don't believe in entering the feature war and winning on features that, if you build a new company, it has to be for a different use case, a different reason for existing, so that's exactly what you're talking about here?
Gina Bianchini (08:24):
That's exactly right. We have never looked at ourselves as, we want to be the social platform to rule them all. You will live in our world and you will be forced fed and forced into the box of one single feed. I created Ning at the same time Facebook was getting started and Facebook always had a different view of the world than the one that I had, and our team had at Ning, where it was about how do we create... Ning's whole purpose was a programmable platform for social applications. Our vision for Mighty Networks is, more and more ways, not just to mix and match the feature set for creating different social experiences, but ultimately, our vision is to create the first network and certainly not the last first network effect platform.
Gina Bianchini (09:22):
What we mean by that is, this is not about Mighty Networks having a network that gets more valuable to every member with each new person who joins such that we have massive scale and hide it, and then build an advertising business, that's been done. The part that hasn't been done, what is different is we're actually saying, "Hey, creators, individuals, brands, let's give you your own network effect and see what's possible when you can connect your members in totally different and unique ways. We're the only platform in the market right now, where you can have online courses and community together in one place."
Gina Bianchini (10:02):
We did it because we know, well, one, if people are coming together to create or master something interesting or important together, you need a way for them to go on a journey, with a beginning and middle and an end. That's what an online course does. You know this better than anybody, but also the community allows you to do so many new and interesting things with that course content with that journey, with that beginning, middle and end.
Gina Bianchini (10:32):
How we got there was, it was our host, as we call the creators and entrepreneurs and brands on our platform, it was our Mighty Networks host who basically were like, "Hey, you guys have an awesome community platform. We know you got big vision, that's great. But can you just build some online course feature stuff in here and give us the ability to have some courses that are content only some courses that are course plus community and some that we're going to run live with community plus course?" And we were like, "Really? You want that? Okay, cool. Let's go ahead and build that." And what we have found is, that is what has taken off.
Peep Laja (11:16):
As Gina points out the Genesis of the company is that, she had a point of view on the market and it's what great entrepreneurs do. They combine their creative instincts with their experience and data, and put forth a point of view on how things should be. Spend time developing and getting clarity on your point of view. A company that has a well articulated clear point of view, is very attractive. Think of HubSpot. When they first came out with inbound marketing. For companies, it can be a way to differentiate. Chris Walker from Refine Labs has a point of view in how demand generation has to be done. Talking about his point of view is what's feeding him with endless content ideas, and it's what really differentiates his company.
Peep Laja (11:59):
Category creating companies like Drift or Gong, lead with a point of view. Remember when Base Camp that small project management software company, announced their no politics policy at company? Sure. The whole thing turned into overall negative PR for them. But leaving aside the content of the published memos, the whole world was discussing their internal staff policies. This was a small business with 57 employees. What other small businesses got all the media to cover their internal staff. That was an amazing feat.
Peep Laja (12:30):
Nobody else comes close, and how did they do it? Their public founders had been publishing their point of view for like a decade. The lesson here is that, enlisting in the point of view can have a huge impact, and this enables even small businesses to punch way above their weight class.
Peep Laja (12:48):
It sounds like you started the company, the fundamental product strategy was based off of your vision, so your point of view on the market and what was needing and was what was missing, and then you started mixing in user feedback to shape your product strategy. Can you tell me more about how your strategy has evolved since 2017, the original vision and what you're doing today?
Gina Bianchini (13:13):
There's a couple of things that I think are awesome. One, we continue to co-create with the hosts and members across Mighty Networks. What does that mean? That means when we start to hear the same patterns of features over and over again, that our hosts want, so that they can unlock this network effect for their own community, their own courses, their own subscriptions, we build it. We think about those as the features that we need to have. For example, we'll launch live video, we'll launch native video, we'll launch a whole new way of looking at and doing group messaging across Mighty Networks. We just, this week launched multicurrency support, which was our third most requested feature, and so many hundreds of more small changes that we're making in any given month.
Gina Bianchini (14:06):
The biggest thing that hasn't changed in our product roadmap is that vision of, how do we help our host connect the most relevant members to each other? How do we break the ice? How do we use software to bring those members back for relationships and their own creation, their own projects, their own things that they want to do in a way that software can actually support hosts in ways that are not just sustainable and scalable, but also really fun? We get to work on technology that, if we do our jobs right, just feels like the best party you've been to. You're looking around and you're like, "I like everybody who is here and I want to be around these people more often." Software actually can play such an incredible role in making that a reality, both online and in real life.
Peep Laja (15:09):
2020 was a good year for you guys, where you reached like 10,000 customers, ARR grew 2.5 times, I bet this year was similarly good. Tell me, what is working for you in terms of your customer acquisition marketing strategy? What is your bet here and what's working and what hasn't panned out?
Gina Bianchini (15:29):
The thing we always start with is that, Mighty Networks has a flywheel, all our own. Host comes in, creates a Mighty Network, invites a bunch of members, and again, they don't actually have to start with very many, to create something really powerful. You could just imagine when you do have a larger following how effective it can be, then a percentage of those members become hosts themselves.
Gina Bianchini (15:58):
You show up and you're a part of a Mighty Network for one thing you love and you decide, "Hey, wait a second. This could work really well for this other thing that I'm working on, and this other thing that I'm interested in." And so that is the core flywheel to Mighty Networks. Then for us, the challenge becomes, "Okay, how do we get more hosts into this system, into this flywheel?" We've had a lot of luck with Google search, specifically and I think that the most interesting things for us is, the keywords that work for us are not community. They're not online courses. What do you think the keyword that works the best for us is?
Peep Laja (16:41):
Facebook group alternative.
Gina Bianchini (16:43):
Nope.
Peep Laja (16:44):
Okay. Surprise me.
Gina Bianchini (16:45):
Website builder.
Peep Laja (16:47):
Are you also in your mind competing with the likes of Wix and Squarespace and-
Gina Bianchini (16:52):
No, because where we actually look at that, is we say we're a different website builder. One that people actually want to come back to. You can absolutely create a static website on a mighty network, but is it the single best place with 47,000 templates? No, but what we found, and I think that this is really was a surprise to me is, website builder is the search term for people when they want to do something different and interesting online. They want to start a business. They want to build a community. It's been, I would argue at least 18 months since people started a community on a Facebook group. Today, they'll go mighty, they'll go slack, they'll go discord. Facebook groups is a place where groups exist, they're not necessarily the platform that people are starting new groups.
Peep Laja (17:51):
I have a question about that. For instance, I have a group on Facebook. I started years ago and I had a goal for a while to host my own platform, and it ended up being a ghost town because it was another place you had to log into versus people already on Facebook. You guys, I also know that you have your own customer community that is feeding your successes, like a marketing mode, even for you. What is a secret to a successful community? Most communities out there are ghost towns, nothing's happening.
Gina Bianchini (18:27):
They're not. I challenge that. The idea that most communities out there are ghost towns is just simply not true. What did you use when you had your own community?
Peep Laja (18:32):
I believe it's a circle, circle that is so.
Gina Bianchini (18:36):
Yeah. It turns out that the software really matters in creating a community that people come back to, off Facebook or off social media. The thing that becomes most important is that you're not just building features, you're building that network effect. You're building a way for members to connect to each other in new, fresh and interesting ways.
Gina Bianchini (19:04):
For example, on a mighty network, you immediately see members near you, members like you, members who care about the same topics, also when you bring your courses and community together in one place, there's just significantly higher engagement, and then when you layer on top of that, the ability to charge for that entire stack in one place, we see 60% higher engagement with communities on Mighty Networks that have a charge for membership, 60% higher engagement.
Peep Laja (19:41):
A Fully engaged community is a great moment. Being at the center of an ecosystem of engaged professionals, builds mental availability and makes your brand a go-to name associated with excellence and engaged discussion in the field, even if you aren't generating much of that content yourself, because it's being self-sustained by the users. It's something that's been hugely successful for people management platform Lattice. As their former VP of marketing, Alex Grech explains in episode nine of how to win.
Alax Grech (20:15):
When we first launched it, we tried to make it really like an executive level community, like how do we get CHROs in there, and it completely tanked, because we found that the executive did not have the same time in their life. We relaunched it as a general HR community and it started to really take off, and I think the best thing we did was make it feel very VIP. You had to apply, you couldn't just join. There was an application form, you had to explain why, and that was really helpful, and getting the right people in there and creating this aura around it.
Alax Grech (20:49):
The other thing was continual growth, because I think what happens with the community is, a lot of people get into a slack channel, they forget about it, and so we are constantly adding new people into there, and then we built it into our entire process. In an outbound sales email, someone's like, "No, I don't want to buy Lattice or I'm not interested." We said, "Oh no, no worries, join our community." And it was a way to stay in touch.
Gina Bianchini (21:09):
What I would say is a couple of things. One is, it's just simply not true that Facebook groups has more engagement than all communities off Facebook. The other thing is their numbers are inflated because, you as a creator on a Facebook group, have absolutely no control over where your group shows up, what else Facebook is marketing to your group. You have no way to actually send a message so that all of your members can see, you are completely mediated by Facebook. Is that really creating an asset that gets more valuable to every member with each new person who joins your group on Facebook? No, but when you pull together having more ways to connect your members to each other, which again is why we view ourselves not as a community platform, but really as a network effect platform in large part, because we also have other features that you wouldn't necessarily find on a community platform.
Gina Bianchini (22:14):
But because of that, this notion that people don't want to engage off Facebook is just simply not true, is the quality of the platforms. The idea that you would have one login for your courses, your community, your events, your subscriptions, that is just again, it's a different model than the ghost towns that have typically been. The reason I asked who you'd use, because we see engagement being challenging with static websites, with online forums, like they were great when they were the only option for connecting people. Online forums has not kept up with competing with people's expectations that have been set by Facebook, but that they don't really want anymore. They want those features brought together in their own network effect under their brand, and that's what we're doing with Mighty Networks.
Peep Laja (23:12):
We typically tend to think of website builders as a category in a straightforward way. It's a software to build websites. Now, when Mighty Networks is also catering to this use case, at first, this might sound like a fully strategy. Clearly, they're not a website builder, but let's pause for a moment. One way to differentiate yourself from the competition is to create a breakaway brand. This is essentially about creating a new subcategory. Nest Thermostat is an example. Nest turned an ugly box on the wall into a beautiful learning computer at the center of the home. Changing the idea of what a thermostat is about.
Peep Laja (23:49):
It's about changing the use case of a product, changing who it's for, changing the way you think about a product. Diaper manufacturers reacted to the stigma of kids over three, wearing diapers by creating pull ups. Basically the same product, but it looks like underwear for three to five year olds. The signal went away and the sales went up. You can find success in breaking away from the pressure of norms, challenging authority, and being disagreeable. As a challenger, your reason for existing might need to be changing the way things are. Everything is the way it is because someone changed the way it was. Mighty Networks challenging website builders might make complete sense after all.
Peep Laja (24:30):
Mighty is a B2B to C platform, so meaning that your customers invite their own community that they sell to, what does it take to be successful with this B2B to C model?
Gina Bianchini (24:43):
Let me take a step back. We don't really view ourselves as a B2B to C company. We view ourselves as a platform to make our hosts wildly successful. Now, what are our hosts trying to do that we need to help make them wildly successful doing, is creating their own network effect, their own owned and operated destination that pulls people back, that offers them higher retention or a higher conversion rate, lower churn, and have to do a lot less work to provide value for individual members because other members are providing value for each other. That's what we have to do. The number one thing that is important to us, and we talk about this all the time internally is, we need to make our hosts look amazing.
Peep Laja (25:38):
This is not too similar to Shopify is focusing on merchant success?
Gina Bianchini (25:42):
Absolutely. We think about it as our future company spirit animal. For us, what Shopify has done for e-commerce, we want to do for network effect. For us, it is about first, we can do no harm. We've got to have trust. We've got to do the right thing by our hosts, and also we need to then them look incredible to their members.
Gina Bianchini (26:10):
How did it feel when you asked your people to go to a new platform and it didn't work? That did not feel good. We uniquely understand that dynamic, because we've been doing this as long as we've been doing this. For us, everything that we do as a company is about how do we ensure that every host who sends an invitation to a member, not only has a fantastic experience for themselves, but that they can have high degree of confidence and we can have a high degree of confidence, that member's going to show up and they're going to be stoked.
Peep Laja (26:52):
Notice, how Mighty Networks is doing a lot of thinking through their brand identity lens. Being brand first is a step tower to building a unique company. Relying too much on consumer research will make you blend and boring. The feedback can make you smooth out the edges, remove the quirks and personality that makes your brand, you. It's easy to optimize to vanilla, with good user centric intentions. It's the key reason why sameness is the norm. Consumer research won't tell you much about how to be different and unique.
Peep Laja (27:23):
Since in interviews, many people prefer options they already know and have seen. They want better and slightly improved. Innovative and new stuff does poorly in focus groups and user service. Your brand is your best long term competitive advantage. Listen to the people, but have a vision. Invest in user research, but think brand first. Ikea is the sixteenth, most valuable retailer in the world, making it the most valuable furniture retail brand. Just before COVID, they got 1 billion store visitors and 2.8 billion visits to its websites.
Peep Laja (27:55):
Now, imagine you're doing customer research for Ikea. You're looking into the friction it's customers experiencing, there are jobs to be done. Without a doubt, you will learn that the people complain about the shortage of staff, how difficult it is to find the parts in the store, difficulties with assembly. It takes way too long to navigate the stores, too many pieces. It sucks to load the car with all the boxes and the furniture doesn't last long, if the stores are too far from everything and yada yada yada. We could all come up with a long page full of complaints. Yet, it's the most valuable furniture brand in the world.
Peep Laja (28:29):
If they listen to all the complaints and address them, focused on the customer experience, eliminated all the friction, it would become a vanilla brand and we would stop buying it. That's how brands lose their uniqueness. Now, I'm not advocating for don't do research. I've been a champion of research for a decade. I'm saying be brand first, have a strong point of view. Stay true to your brand principles, filter all research through your brand lens.
Peep Laja (29:00):
The creative economy is growing fast and you guys have good numbers on this stuff, and you are also not certainly the only player hopping on this building platforms, building companies. While today Mighty might be unique, in what you do, if you think 5 to 10 years into the future, there's probably going to be a clone, the more successful you are, more people are going to come after you. How are you thinking about mot sent, building some defensive walls around or your business?
Gina Bianchini (29:29):
Sure. One, we live in a time and a place where success, if anything is defined by following a different path and hopefully more people are going to follow you on that path. For us that's network effect platforms. If we do this right in five years, a network effect platform is going to be a thing that everybody uses. Look, if anything, as more people come into this world, first of all, water's warm, this is an incredible opportunity to create new and interesting companies.
Gina Bianchini (30:04):
But also we look at it as competition is going to allow us to up our game. We are not looking to rest on our laurels. We are looking to continue to innovate what is available to 400 million potential creators in entrepreneurs and people who can create really valuable communities that get more interesting and again, grow differently from each other, even though they'll be enabled on the same platform.
Peep Laja (30:35):
Having competition is no bad thing. One of the most expensive and time consuming aspects of developing a new category or subcategory is building awareness, and so having more than one company spending that time and marketing cost is better for everyone. It's something Alina Vandenberg of Chili Piper put well in, How To Win.
Alina Vandenberg (30:52):
For the longest time, we had zero competition and it was quite unusual that we would be operating like that. There's no company that doesn't have competition and it's both a luxury, and not because you still have to educate the market quite a lot. When you have competitors that are starting to copy what you do, which is what's happening to us, there's a benefit to that because they're going and they're saying, "Oh, you should do that."
Alina Vandenberg (31:18):
It's not only Chili Piper who tells you that you should automate your conversion, there's also X, Y, and Z that tell you that, then you're more likely to take action. There's the buyer is more aware of the problem. They're more aware that there's a solution as opposed to the status quo. For us, it's actually good in that sense, we're getting the competition to educate our buyer. It makes us more competitive ourselves, because then we say, "Oh, they've done this feature. We should have done it 10 times better." So it brings a competitive spirit, I really like that.
Gina Bianchini (31:48):
We're combining software strategy and support such that, they're able to unlock both communities and businesses that they never imagined, and that the community is building something special together. We then again, because we see this different path to how do we connect the most relevant members to each other, how do we break the ice, how do we bring them back, how do we provide more value for members in new and innovative and more intelligent ways? That's going to be where we spend the next 5 or 10 years.
Peep Laja (32:25):
Awesome. Thank you so much. How is Mighty Networks winning? One, they adapted their business to focus on current opportunities in order to fund product development down the line.
Gina Bianchini (32:39):
We built out the core engine of what is today Mighty Networks through revenue deals with enterprise companies. When the final deal ended, we had exactly what we thought would happen, which is, it took off with individuals and entrepreneurs and creators.
Peep Laja (32:58):
Two, they had customer centric and use customer input to inform their product roadmap.
Gina Bianchini (33:03):
It was our Mighty Networks host who basically were like, "Hey, you guys have an awesome community platform. We know you got big vision, that's great. But can you just build some online course feature stuff in here?" And we were like, "Really? You want that? Okay, cool." Let's go ahead and build that.
Peep Laja (33:21):
Three, they have a point of view on how communities should work and build towards that.
Gina Bianchini (33:26):
My experience at Ning, pointed to a very different way of thinking about social networks and social networking and certainly our core DNA at Mighty Networks is all around, create the community, create the social network you want
Peep Laja (33:44):
A final takeaway from Gina.
Gina Bianchini (33:46):
As more people come into this world, first of all, water's warm. This is an incredible opportunity to create new and interesting companies, but also we look at it as competition is going to allow us to up our game.
Peep Laja (34:00):
That's how you win. I'm Peep Laja, for more tips, follow me on LinkedIn or Twitter. Thanks listening.
