Hormozi Bets on Skool, Creator Communities, and the Bank of Trust

Welcome to Creator 3×3!

This week we’re talking about Creator Communities.

And by the end you’ll understand that if you create content you have a community whether you realize it or not, and while paid communities are powerful, you should only start one if it makes sense for your audience and if you have enough credibility in your Bank of Trust.

Here are 3 Creator facts from the past, 3 notes on the present, and 3 thoughts about the future of the content economy...

3 FACTS FROM THE PAST

I.

Patreon is the OG paid Creator Community.

Founded in May 2013 by Sam Yam and Jack Conte, Patreon was created to help artists earn more income from their work.

They regularly released content on platforms like YouTube and had a core fan base that loved their art, but all their platforms were focused on ad revenue rather than subscription style payments.

In its first 18 months, they signed up over 125,000 patrons by late 2014 were paying out about $1M a month!

They raised $2.1M in 2013, then $15M the next year, and by 2016 their total funding reached about $47M.

By 2017, they had send a cumulative $100M to over 50,000 active creators.

And that’s when Patreon really leaned into Creator Community tools.

Over the next few years, they executed a string of membership-related acquisitions and continued to grow, but to be honest Patreon has had a tough time since COVID.

After layoffs in 2020, 2021, and 2022, a brief dalliance with crypto, and a complete redesign of their app last Fall…

Patreon still has over 250,000 active creators and more than 8 million patrons.

So they’re by no means out of the game yet, but their investors (especially the $155M Series F investors from 2021) probably aren’t very happy.

​II.

Most communities aren’t top down.

They form organically because a group of people love something (or someone).

Historically, these grassroots communities formed IRL or (eventually) by mail and telephone, but the internet really changed things up.

The internet facilitated fan pages through hosting platforms like GeoCities, Tripod, and AngelFire - and this digital abundance infinitely niched the subcultures down.

Then web forums and eventually platforms like Tumblr supercharged them.

Tens of thousands of people converged in online spaces to talk about everything from Dr. Who to makeup tutorials to military strategy.

Then weirdly (at least to me since I don’t touch Facebook), in the early 2010’s a ton of fan groups migrated over to Facebook Groups.

And then came the Fandoms.

Finally, a mixed-media oasis where aggressively detail oriented superfans can catalog, categorize, and carouse about their favorite anime!

Today, algorithmic feeds emergently work in quasi-tandem with these fandom sites.

When a potential fan gets served a piece of content by an algorithm, falls in love, and wants to dive as deep as they possibly can…

The Wiki is ready to help them go down the rabbithole 🥲 

III.

Related, but not quite the same thing…

Social and Professional clubs were a huge part of the advancement of society and culture.

The US used to have a lot of clubs.

In 1893, New York City alone had 119 social clubs where the bigwigs and luminaries of the city gathered together in a physical space to talk philosophy, art, and politics.

Professional and Academic Associations like Phi Beta Kappa, the American Physical Society, and the Young President’s Organization (yes that’s what it’s actually called) previously helped speed like-minded, ambitious folks along their intended career paths.

They also ran/run relevant conferences and trade shows for their respective members.

Community orgs like knitting clubs, the Veterans of Foreign Wars, and the infamous Homebrew Computer Club helped people build relationships with their communities by hosting activities related to their member’s stated interests.

Secret societies… also did things.

It’s important to note that for most of history these clubs were really only open to white dudes.

According to lots of sources that mostly cite “Bowling Alone” from waaaaay back in 2000, Social Clubs have basically all died in the past 40 years.

Professional clubs still exist, but mostly because a lot of them are important legally.

It wasn’t integration that killed clubs.

It was great content.

TV, movies, and an increasing number of entertaining things that kept people near a screen, seem to be the biggest driver of less community social interaction.

This is fascinating when you really think about how strong a community a Creator can drive!

Some experiments in club revival are underway, but nothing has really nailed the “consistently get people excited to meet IRL” thing post-Internet except for maybe Taylor Swift.

3 NOTES ON THE PRESENT

I.

Hormozi invested in Skool and it’s a big bet.

He says in the tweet that host payouts on Skool are growing 62% per month!

That’s pretty dang fast, but I won’t lie…

I’m concerned.

A quick check of the Discovery page seems to show the “Top 30 Communities” on Skool.

Breaking these down:

28 of the top 30 communities seem focused on helping you make more money in or around the next 90 days 🫠

Check out the “High Achiever Society” as an example.

Which is helpful enough to educate me about what they do with screens like this.

I’m actually really passionate about men finding a supportive community.

As a white, male veteran of the military with a lot of family spread across the South, I’m smack dab in the middle of the most “at-risk individuals” for domestic terrorism in the US and I’ve experienced (and fortunately dodged) the radicalization pipeline firsthand.

I also empathize with the loneliness a lot of these guys might feel.

But money focused communities like these tend to prey on the insecurities of men white-knuckling their way through life.

So like I said.

I’m concerned.

But to be completely fair…

I did find one Skool group that will teach you how to dunk!

and then I immediately found whatever the fuck this is lol.

The reality of building an authentic and sustainable community is that it’s hard.

You can always make a quick buck by convincing people who need money that they can also make a quick buck. 

But if you:

1. Start a paid community to teach people how to make more money

2. Teach those people how to start a paid community to make more money

3. Then those people start a paid community to teach other people how to start a paid community to make more money

You have not created anything of value.

And people will eventually stop buying.

So…

Hormozi is a smart guy.

He definitely sees what I’m seeing.

And I bet he either thinks there’s real potential in verticals where community driven courses can genuinely teach valuable concepts to cohorts of motivated people.

Or he thinks we’ve still got a long way to go before the digital course bubble pops 🤷‍♂️

II.

Circle.

Kajabi.

Ko-fi.

(Plus like 50 more that I don’t feel like linking to)

These are the companies that offer the “closest” thing to what Skool does.

Ko-fi started with donations (“buy me a co-ffee” get it??) and drifted into this other stuff.

But Circle and Kajabi are fully focused on creating digital courses.

Why?

Because that’s where the margin is!

If it costs 2 weeks of your time to make a course and you can sell it for $100 a person - it’s basically 100% profit every time you make a sale.

Obviously an oversimplification, but that’s way better than making $2 on a $20 T-shirt from your merch store (assuming you can make a sellable course).

Digital course content and paid cohorts that work through it together make a ton of sense.

There’s no doubt in my mind this is Skool’s vision too.

Part of the Creator economy is evolving towards paywalls.

Sometimes it content.

Sometimes it’s a chat.

Sometimes it’s a course.

But the act of “selling access to something” is the key trend.

III.

Subreddits, Slacks, and Discords (in that order) are actually the OG’s of gated Creator access!

What’s the big difference though?

Those tools were built for one thing and have over time morphed into the community gated access thing.

That’s why there are some issues…

Subreddits are very exposed to the internet - which means it’s really hard to gate community access without a lot of moderator work.

Slack is very not exposed to the internet - so it has the reverse problem. Nobody will ever find your Slack since there’s no public distribution!

Discord is a mess that’s sort of in-between Slack and Subreddits, but content organization in Discord is a nightmare which also makes it not ideal.

That’s why there is still opportunity for new players.

And as a Creator, these options are worth thinking about too - especially depending on your audience demographics.

(For example, gaming creators should obviously maintain a Discord)

3 THOUGHTS FOR THE FUTURE

I.

Should you start a Paid Community?

It depends.

Do you know something valuable that other people might not know?

Does that knowledge need to be actively taught or can it passively consumed?

Are you excited to spend more time engaging with fans in a new, payment gated a way?

Are you able to offer access to something that people haven’t had access to before with your content?

(This could be deeper dives, cutting room floor content, mock-ups, illustrations, raw footage, or some entirely new thing you haven’t tried before)

If so, definitely spend some time thinking about it.

If not, remember that actively managing a community is a brand new job to learn.

There are probably easier ways to make money that you haven’t tried yet.

​II.

How big of a community do you need to make money?

Not very big… if you’re selling something expensive.

10 people paying you $1000 a month is hard to nail down, but incredible when it works.

But if access is only $5, you’ll need 2000 people to achieve that same lifestyle - with a lot more community management effort.

Every Creator and every offering is different, but defining the offering and its price is key to preparing for your community’s launch and growth.

III.

Everybody has a Bank of Trust.

When you do things people like and respect, you fill up your Bank of Trust.

When you do things people don’t like, you spend what’s in that Bank of Trust.

If you have nothing left in the Bank of Trust, people won’t believe the things you say.

Your community matters whether you want it to or not.

Sometimes you’ll see their conversations, but most of the time you won’t.

They can be a huge asset for the goals you’re trying to accomplish.

They’ll also respond decisively when they feel taken advantage of.

Paid Communities are going to be a huge part of the creator conversation for the next few years.

Before doing anything, I recommend you ask yourself…

Will launching your Paid Community fill up or empty out your Bank of Trust?

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See you next week,

Cameron Armstrong
Founder of Seemore.tv​​​

p.s. I can’t stop watching Chad Smith absolutely nail drumming to Thirty Seconds To Mars on the first take…