How Circle Is Betting On Community Over Content With Andy Guttormsen

• Content keeps getting cheaper, so Circle is wagering that the durable creator business is built on connection between members rather than one-way content.

• The counterintuitive growth move: cap your membership. A Circle customer froze his membership community at 200 people and scaled price and quality instead of volume.

• Circle AI, Circle Studios, and Circle Discover aim at the thing customers keep asking for: more members, less busywork.

Let’s dive in. No floaties needed…

Revenge of the Nerds

Andy Guttormsen, Co-founder & Chief Revenue Officer of Circle

Andy Guttormsen spent nearly five years on the founding team at Teachable, the course platform that was sold to Hotmart for around $250M in 2020. Thousands of customer conversations there taught him that the creators making the most money had turned their audiences into communities. So he co-founded Circle with CEO Sid Yadav and Rudy Santino to build exactly that infrastructure: paid communities, courses, live events, and branded apps for names like Pat Flynn, Ali Abdaal, Jay Shetty, and Dr. Becky. Circle raised its Series A in December 2021, led by Tiger Global at a $200M valuation, and by Andy's count, now runs at roughly $60M in ARR with 280 employees, 20k customers, and 15M members.

What makes Andy worth listening to is the timing of his bet. AI is flooding the internet with cheap content, and its pitch is that the abundance is the opportunity: when anyone can spin up a course in seconds, the thing that can't be faked is a room full of real people going somewhere together. That belief runs through Circle's most aggressive product push yet (an AI partner for the back office, a studio arm built from an acquired cohort-course team, and a six-week-old discovery marketplace). Whether it holds as AI gets better at faking connection is the question underneath everything he says here.

Give us the overview of Circle

At Circle, we make it really easy to build a home for your digital business and your community. Folks come and build entire businesses around people getting together, whether that's a community, coaching, or education business. We're the technology that makes it easy to set it all up, run the day-to-day, and grow it.

Why is a community business more durable than content right now?

Content is everywhere today, and it's feeling a lot easier to come by. But community businesses are really hard to replicate. That's a big unfair advantage.

We serve digital businesses where community is at the heart of it, and what people come to them looking for is transformation. Big outcomes. Yes, you can get outcomes from content. We've all read a book that changed our lives or gone through a static online course. But in these community businesses, folks are actually going on a journey together and sharing ideas with each other.

If you run that type of business, you can charge a lot more. People get more transformation, they're willing to pay more, and they tend to buy your next product. The lifetime value of a customer in a community business tends to be a lot bigger than that of someone who's just a customer of content.

What is the hard part of building & running a community?

It's the connection. Imagine this for a minute. Like any product, you have an offer, and you need to provide value. We have this one amazing community called Good Inside. It's a parenting community run by this amazing personality, Dr. Becky. She teaches parenting.

You get in there, and she's got all these folks trying to figure out how to be a better parent, help their kids sleep better, cope better. Once those people are in the door, they need other people like them alongside, and they need to get as much value from each other as from her. The people are the product. And you're a little less in control of those people, so that's a really big challenge.

To solve for it, you need rituals and standards for who's coming in. If the people are the product, you need guardrails around the people. That's hard because you're literally putting friction into who can pay you.

How do those guardrails work?

Imagine this. One of our customers does a few hundred thousand dollars a year with a membership community he runs on Circle, and for a while, he capped it. It was maybe a couple of thousand dollars a year for business owners, really valuable. But he capped it at 200 people.

Whenever the next person wanted in, he said no. You can come in, but only when somebody else leaves. He wanted a really high-quality bar for the people in that membership, because those people are part of the product. Instead of scaling by volume, his goal was to scale by raising the price and the quality of the people.

Where do you draw the line on AI in communities?

There's no line we have, but there are recommendations we make. We have a product called Circle AI, which is like a business partner running the day-to-day of your community, helping you grow it, create plans, and execute them.

For the parts of these businesses that are about sharing content, connection, and people, we don't really suggest using much AI there. But for the day-to-day, something like Circle AI is like having the power of a team without one. It can onboard new members, connect them with one another, and be really smart about which connections get made. AI is not who you're connecting with, but it can facilitate the connection.

It can say, 'You should drive more engagement with some kind of gamification,' then recommend the system and build it in a couple of minutes, where before that would have taken somebody a day. It can see what your members are talking about, tell you to set up an event series, suggest the topics, point to who inside your community could host them, then set it all up and email those people on your behalf in the next five or ten minutes. Circle AI can do that today. That's where AI is powerful in these businesses: running the day-to-day and facilitating connection between members, not replacing it.

What convinced you to go end-to-end with Studios?

If you talk to even the most sophisticated creators out there, the ones with big audiences and multiple products, it becomes very clear they need a lot of help too. There are like 20 things you have to get right in these businesses: building your audience, converting them, delivering the experiences.

We realized we have huge unfair advantages at Circle. We have 20k customers, so we get lots of data on exactly what's working: what products sell, the right prices, what engagement benchmarks look like, and which topics sell the most. What if we brought that to creators who have the audience but need the help? On their own, it would take them 12 or 18 months of trial and error just to start scratching at it.

Beyond the data, we acquired a business from a couple of guys who were behind the scenes of some of the biggest cohort-based course and community businesses out there, folks like David Perell from Write of Passage or Tiago Forte from Building a Second Brain. And in a world with AI, so much of the day-to-day work of taking an audience and launching these transformational programs can be done with AI, with setting up skills, with mapping the end-to-end process, and tackling it bit by bit. That's what Circle Studios is, and it's a huge unlock for the first folks we're working with. Of course, we have distribution too, big audiences we can get them in front of.

How does Discover work & what audience does it create?

The biggest problem every Circle customer has is that they want more customers. They want to get in front of more people, and it would be a cop-out not to solve that for them. So we launched Circle Discover, with thousands of the top communities, memberships, courses, and cohorts on there. At this point, we get tens of thousands of people coming every single month looking for a transformation.

It's a big bet and a big investment, and we're still super early, about six weeks in. But there's a really nice loop. We have 15M members already looking for outcomes in our existing communities, and so many of them want the next transformation or the next person to learn from. That's been a really quick way to get Discover started and drive demand.

If Circle wins, what does the creator economy look like in five years?

People will be more ambitious about how many transformations they can experience, and they'll get to those outcomes faster. Say I wanted to become a better golfer. Today I'd do a lot of research, maybe find a membership community on this site, do a course here, read a newsletter over there.

In a world with Circle, there will be a lot more formats available and a lot more genuine experts who previously wouldn't have known how to start this business at all. It's going to be so much easier for them because of Circle AI, because of the infrastructure, because we drive demand for them. Everyone looking for transformations gets more optionality, more people to learn from, and a much higher quality bar. More people are getting bigger outcomes.

Quick Poll

Additional Reads

• How Circle's Eclipse Reshapes Creator-Led Businesses - Forbes

• How Circle Built an AI to Run Creator Businesses From the Inside Out - Net Influencer

• Circle raises fresh capital led by Tiger Global at a $200M valuation - TechCrunch

Rate This Edition