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The Velvet Rope Effect

11 min

How to Make Community Your Competitive Advantage

Golden Hook & Introduction

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Olivia: Most businesses think the best way to grow is to make things easy for customers. Get them in the door, no friction. But what if the secret to building a fanatically loyal audience is to actually make it harder for them to join you? Jackson: Hold on, make it harder? That sounds like business suicide. You're telling me I should put a bouncer at the door of my lemonade stand? Olivia: Exactly! It's completely counterintuitive, but it's a core idea in David Spinks' book, The Business of Belonging. And Spinks knows a thing or two about this—he started building online communities as a teenager for a video game and eventually co-founded CMX, the largest network for community professionals, which was later acquired. He's literally built a career on this one powerful idea. Jackson: Okay, I'm listening. Why on earth would making something exclusive work? It feels like you're just turning away potential customers. Olivia: Because you're not just trying to get customers; you're trying to build a tribe. And tribes have boundaries. Spinks argues that when you create what he calls 'intentional barriers to entry,' you signal that what's inside is valuable. It filters for commitment and creates a powerful sense of shared identity for those who make it through.

The Community Flywheel: From Social Identity to Competitive Moat

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Jackson: Intentional barriers. That sounds a lot nicer than "we don't want you." Can you give me an example of how this works in the real world without just seeming snobby? Olivia: Absolutely. The book has a fantastic story about a high-end photography community called 'PixelPro.' The founder, Mark, wanted to create a space for serious photographers, not just hobbyists. So, he didn't just open the doors to everyone. Jackson: Let me guess. He put up a sign that said "No blurry photos allowed"? Olivia: Close! He implemented a three-part barrier. First, you had to submit a portfolio of your best work, which was reviewed by a panel of experienced photographers. Second, you had to write a short essay on why you wanted to join and what you would contribute. And third, if you were accepted, you had to pay a membership fee. Jackson: Wow, that’s like applying for college, not joining a forum. What happened? Olivia: It worked perfectly. The book tells the story of a talented photographer named Emily who went through the whole process. When she was finally accepted, she didn't feel excluded; she felt a huge sense of pride and accomplishment. She knew she was joining a group of peers who were just as dedicated as she was. The barriers didn't just keep people out; they created a powerful sense of value and belonging for the people who got in. PixelPro became known as this prestigious, high-quality resource. Jackson: Ah, so it's like a speakeasy or a private club. The velvet rope makes you want to be inside even more. You’re not just a customer; you’re a member. You’ve been vetted. Olivia: Exactly. You’ve been vetted. And that feeling is the first step in what Spinks calls the Social Identity Cycle. It’s a three-part loop: Identification, Participation, and Validation. First, you identify with the group—"These are my people." Then, you participate—you post something, you show up. And finally, you get validated—someone likes your post, welcomes you, or answers your question. That validation reinforces your identity, which makes you want to participate more. It’s a flywheel. Jackson: That makes so much sense. It’s the dopamine loop of belonging. Can you walk me through how that flywheel gets going for an average person? Olivia: For sure. The book uses the example of the 'Sales Hacker' community. Imagine a salesperson named Cam. He first identifies with Sales Hacker by seeing an article they shared on Twitter. He thinks, "Hmm, this is smart. These people get my world." So he takes the first step of participation: he signs up for the newsletter. Jackson: Okay, low stakes so far. He's just lurking. Olivia: Right. But then he gets a welcome email. He joins the online forum and other members welcome him. That’s validation. It feels good. So his identification gets stronger. He starts thinking of himself as a "Sales Hacker." This prompts more participation: he introduces himself, answers a question for another member, and even attends a local event. Jackson: And at the event, he gets more validation by meeting people in real life, making connections. Olivia: Precisely. And over six months, Cam goes from a passive consumer to an active creator, and eventually, a leader in his local chapter. He’s wearing the swag, he’s getting job offers through the network. He’s not just a customer of Sales Hacker; he is a Sales Hacker. The community has become part of his identity. That’s the flywheel in action. Jackson: But isn't there a danger of this becoming elitist or unwelcoming? If you're so focused on defining who's in, you're by definition defining who's out. Olivia: That’s a fantastic and critical point, and Spinks addresses it head-on. He argues for creating moral exclusivity, not discriminatory exclusion. It’s about shared values and commitment, not demographics. And he stresses that Diversity, Equity, and Inclusion have to be baked in from day one. In fact, sometimes the most powerful communities are built by broadening an identity. Jackson: How so? Olivia: He tells the story of 'Tech Ladies.' The founder, Allison Esposito Medina, noticed that most communities for "women in tech" were really just for female engineers. She felt that left out all the women in marketing, sales, HR, and other roles at tech companies. So she created Tech Ladies with a broader, more inclusive identity: a space for all women in tech. It exploded, growing to over 100,000 members because it served an isolated identity that wasn't being seen. Jackson: I see. So the "barrier" isn't about keeping people out, but about creating a safe and focused space for a specific group to connect. It’s about purpose. Olivia: Exactly. It's about creating a space where, as the founder of Ethel's Club says in the book, people feel "seen for who they are." Once you nail that identity, the next challenge is building the house they'll live in.

The Architecture of Belonging: Designing Spaces and Experiences

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Olivia: And that's the perfect bridge. Once you have this strong identity, you can't just leave people in an empty room or a silent Slack channel. You have to architect the belonging. This is where Spinks gets really tactical. Jackson: Right, because a sense of identity is great, but if there's nothing to do, the feeling fades. So what does this "architecture" look like? Olivia: Spinks breaks it down into two types of experiences: synchronous and asynchronous. Asynchronous is the stuff you can engage with anytime—like a forum, a newsletter, or a chat group. It provides breadth and constant connection. Synchronous is live, real-time interaction—like a virtual event, a local meetup, or a conference. It provides depth and intimacy. Jackson: Breadth and depth. I like that. One is the ongoing hum of the city, the other is the intense, memorable concert you go to. Olivia: What a perfect analogy. And the best communities blend both. He uses Duolingo as an example. The app itself is an asynchronous learning experience. But their community strategy is brilliant because they empower thousands of volunteers to host local, synchronous events all over the world. So you learn on the app, and then you go to a coffee shop in your city to practice with other learners. The online experience is made real and human. Jackson: That’s genius. It takes it from a solo activity on your phone to a real-world social connection. But this sounds really complex to manage. For someone starting out, is there a simpler framework for designing these experiences? Olivia: There is. It’s called the 7Ps of Community Experience Design. And it always starts with the first P: People. Who is this for? Then Purpose: Why are we gathering? What’s the business goal? Then you have Place (the platform or venue), Participation (what will people actually do?), Policy (the rules), Promotion (how you get people there), and finally, Performance (how you measure success). Jackson: Okay, that’s a useful checklist. It forces you to be intentional instead of just, "Hey, let's start a Facebook group!" Olivia: Exactly. And the story of CMX itself is the ultimate case study. When Spinks launched CMX, he didn't start with an online forum. He started with a bang. He organized the CMX Summit, a high-production, in-person conference. Jackson: So he went straight for the big, synchronous, peak experience. Olivia: He did. He brought together over 250 community professionals for this incredible, high-energy event. People felt understood and validated in their careers for the first time. The energy was electric. He created a massive peak moment. And only after that, to keep the energy going, did he create a Facebook group for the attendees to stay in touch. Jackson: So the big conference was like the pilot episode of a TV show. It had to be amazing to get people hooked for the whole season, which is the online forum. Olivia: That’s it! That Facebook group evolved into CMX Hub, a digital community with tens of thousands of members. The synchronous event seeded the asynchronous community. It was all intentionally designed. He curated the right People (community pros), for a clear Purpose (professional validation and learning), in a specific Place (the summit), with clear modes of Participation (talks, networking), and it was a massive success. It’s the 7Ps in action. Jackson: It’s fascinating how it all connects. The intentional barriers create the identity, the identity fuels the flywheel of participation, and the architecture of experiences gives that flywheel a track to run on. Olivia: You’ve got it. It’s a complete system for turning a group of strangers into a powerful, self-sustaining force.

Synthesis & Takeaways

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Jackson: So when you strip it all away, what's the one thing a business owner or a creator listening right now should remember from all this? It feels like a lot to implement. Olivia: It’s that community isn't a feature you add; it's a fundamental shift in how you operate. Products can be copied, marketing budgets can be matched, but you can't copy the relationships, the inside jokes, and the shared history of a group of people. That’s the moat. Jackson: The uncopyable advantage. Olivia: Exactly. The book is widely praised for making this clear, and the data backs it up. Spinks quotes a First Round Capital study showing that 80 percent of startups are now investing in community, and nearly a third consider it to be their “moat and critical to their success.” The real takeaway is that in an age of automation and AI, the most durable competitive advantage is profoundly human: creating a place where people feel they truly belong. Jackson: It makes you wonder, what communities are we already a part of, and what makes us stay? Maybe that's the real starting point for anyone wanting to build one. Olivia: That’s a beautiful way to put it. And we'd love to hear from our listeners. What's a community—online or off—that makes you feel like you belong, and why? Let us know on our social channels. We're genuinely curious to see what patterns emerge. Jackson: It’s a powerful question to reflect on. This has been incredibly insightful. Olivia: This is Aibrary, signing off.

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