Are You Selling a Product or a Membership Fee?

2 minute read

January 22, 2015

Are You Selling a Product or a Membership Fee?

Last week, the famous venture capital firm Andreesen Horowitz made a multi-million dollar investment in Solyent, makers of a meal replacement powder. In their rationale, they positioned the company as ‘a community of people who are enthusiastic about using science to improve food’. I.e. the product in it’s current state isn’t as important as the community Soylent has built around the idea of the product.

If gaining access to your community is what tips a consumer’s purchase decision in your favor, is the customer buying your product or buying a membership to your community? For some products, like a gritty, bland, flatulence-inducing meal replacement powder, the benefits of the community are likely greater than that of the product itself. For products that provide a lot of value on their own, a community allows users to share and improve that experience and creates a competitive advantage for the brand owner.

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Luc Vezina

Written by Luc Vezina

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