The Netflix Principle for Associations & Tech Companies

By Matt Derrick
December 7, 2019

Just before Thanksgiving, I attended a conference in San Francisco for Salesforce’s annual conference, Dreamforce, which had a staggering 175,000 paid attendees. The sheer scale is a bit overwhelming, especially when you consider Salesforce was founded only 20 years ago. More than just the size however, the most striking aspect was the sense of community—in Salesforce parlance, Trailblazers. It wasn’t just people listening to speakers and visiting exhibit booths, it was a collective of business leaders and sales professionals looking to learn from each other. In the association world, we talk a lot about the importance of cultivating communities, and here, a tech company was seemingly delivering it at an incredibly high level. Passion, commitment, and a sense of shared values—common staples in the association world—were everywhere.

(Credit: Salesforce, 2019)

It made me truly ponder what the difference is between a tech company and an association. Is there a difference? Let’s take a look.

At first blush, I can already hear both groups recoiling—of course there is a difference. Tech companies are profit-driven, while associations are largely not-for-profit. Associations come in all shapes and sizes, but their primary focus is bringing together their members to further their interests or advocate for a cause. Tech companies also come in all shapes and sizes—for every Google or Facebook, there are myriads of small startups—but almost by definition, they all leverage technology to provide value or alleviate pain points for businesses and consumers. It’s almost futile to try to define the number of tech companies, for it grows by leaps and bounds every year. The drive for businesses to reinvent themselves as tech companies is so overwhelming that it’s spawned reporting about the phenomenon itself.

Associations regularly try to demonstrate ROI to their constituents, whether they’re individuals or companies. With tech companies, specifically Software as a Service (SaaS), you know exactly what the ROI is—by definition, it’s the service you are getting for the monthly or annual cost of your subscription. With associations, it tends to be defined much less clearly. You may receive discounts to products or access to content, but how often do you take advantage of those benefits? It’s often hard to precisely determine what the return is—until it’s time to renew your membership.

As tech companies have matured, they realized that in order to continue to grow, they need to go beyond the pure ROI and robust features and truly engender a sense of belonging and community. Companies like Salesforce, Apple, and others have developed passionate followings and communities – as evidenced at Dreamforce. It could be argued that tech companies are building on the strengths of associations—developing such communities, many times even creating foundations and philanthropic efforts—while still delivering the tangible ROI which attracted users in the first place.

So where does that leave associations? Netflix famously said once, “The goal is to become HBO faster than HBO can become us.” I’d argue similarly that associations have to become tech companies— embracing technology tied to tangible ROI—faster than tech companies can build communities. In the next 5-10 years, the ‘gap’ between technology companies and associations will shrink dramatically. Those associations that effectively utilize technology to enhance their mission and deliver tangible ROI will be those that not only are left standing, but can go toe-to-toe with the tech empire.

As viewed through the prism of our own association, AALU and GAMA are passionately dedicated to creating an organization that has many aspects of a tech company while also creating authentic community experiences that enrich members and develop the leaders of tomorrow. You will hear much more about that in the months to come, but rest assured that as NewCo—the creation of combined AALU and GAMA—both of these elements will be an integral driver of value.

So in conclusion, can associations become tech companies before the alternative happens? Only time will tell, but I look forward to the ride!

Yours in tech,