The True Value of Community
Jun 07, 2022By Angela Pierce
The CFO’s role in business is an interesting one, in that you often feel like the parent in the room when among your peers and your team. Likewise, most of the CFOs I know were the oldest siblings, the rule followers, the list makers, and the committed, responsible ones among their friends growing up.
While I'm an unusual CFO (if you’ve met me, you know what I mean), I do make lists and play the grown-up more often than I would like, and most of my decisions are financially motivated. However, when I joined Anaconda I learned to care about more than immediate financial impacts. I had to learn to wear a community hat.
At Anaconda, we put community first. This means we build software that benefits the broader Python community, sometimes at the expense of what would otherwise be the obvious financial decision. When you are community-driven, you invest significant capital into the business to build connections between your end users and your mission, with the goal of truly building something bigger than your company. You’ll notice I mentioned building connections to your mission, not building revenue and profits.
To be a successful community-driven company, your primary motivation should not be to “monetize a community.” I actually don’t like the phrase “monetize a community,” though you’ll hear it discussed at many CFO and investor events. If you are able to build a community that is connected to your mission, you will be able to offer commercial products that bring additional value to your users. I advise other CFOs with similar community models not to look at the investment in a “free community” as a low priority, a sunk cost, or of minimal value. I also advise them not to start with a monetization path in mind—or else you are at risk of losing your authenticity within the community. Instead, look at investing in a community as building an asset. While you can’t capitalize it, a community has significant value even before it is able to create revenue opportunities. Take a look at the enterprise value per user for a company like Meta at approximately $150 per user, and for other companies with less direct revenue models like Yelp or Yahoo where they may report between $10 and $25 in enterprise value per user. While the values per user may vary depending on when you look at the metric, the point is the same: A community is valuable, and if you are a business leader you should be able to estimate the value of your company derived from the community and calculate a return on your investments in growing and supporting your community.
If you’re a leader of a community-driven organization, don’t underestimate your responsibility to wear your community hat when you need to and trade it in for your commercial hat when the time is right. You will swap these two hats often. And remember that while your community and commercial efforts may each stand on their own, they are intrinsically linked and must both be supported in order to build an enduring company.
With more than 25 years years of executive-level financial development experience for a wide range of businesses, Angela now provides financial stewardship and executive leadership at Anaconda. Angela is no stranger to crafting financial management plans for technology leaders. In her tenure as the CFO for AirStrip Technologies, a med-tech software company backed by Sequoia Capital, she supported the successful scale of the business and raised more than $100 million in equity and debt financing. Previously, as CFO of Trillion Partners, she spearheaded the effort to raise $60 million in debt and private equity for the business. As VP of Finance at Broadwing, Angela led the raising of more than $200 million and managed the company's M&A activities and investor relations functions.
Angela also previously managed financial services and corporate banking as an executive with The Bank of Tokyo Mitsubishi and Deutsche Bank. She is a CPA and has a Bachelor’s degree in Finance and an MBA from The University of Texas at Austin.