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Transcript: Lesson One

What is Fanocracy and Why Does it Matter?

Video 1: The power of fandom

David Meerman Scott: Brian.

Brian Halligan: David.

David: We met each other 12 years ago and I remember it like it was yesterday.

Brian: I do too.

David: You guys invited me to come and meet you, here in Cambridge, although not in this building and the email I got, it's a memorable email because the subject line is so awesome. It said, "We have based our company on the ideas in your book."

Brian: Okay, let me go back even further than that.

David: Please.

Brian: I remember that email because we had a marketing guy and he was going away on his honeymoon. And he was going away for two weeks to Bora Bora, a long trip, and he had a stack of books at his desk this high.

David: Pre-Kindle.

Brian: Way pre-Kindle, and he knew I liked to read, and I was like, whoa looks like a romantic honeymoon you're going on.” And so, he goes away and comes back and he leaves one book on my chair with a little sticky and it said, "Brian, read this one" and that was your book.

David: Nice.

Brian: And then we looked you up, and I was like wait, he lives right around the corner from us. Let's see if we can engage him, that's how I saw you were going.

David: And this email came, of course I’ve got to take that meeting--a company that says they based their company on my book. Which wasn't entirely true, but it got me into the meeting. And I walked into the meeting and I had, it was an older generation MacBook Pro, but it was a MacBook Pro, and I opened up my Mac book Pro, and we started to chat. Now we have known each other for one minute, literally one minute, and you go, Hang on, hang on, hang on. We can't start this meeting until you tell me about these stickers.” And I had three of the stickers that are on this one right now, that you pointed out. Like what's that Nantucket sticker?” So, I said, "Hey I've been to Nantucket many times and a house in Nantucket, it's fabulous,” and you said…

Brian: I'm hanging out there all the time, and then I was like, Oh the Japan sticker. Why do you have a Japan sticker?”

David: Japan what's that about? I said my wife is Japanese. I lived in Japan for seven years, Japan is incredibly important in my life.

Brian: And I lived in Japan for two years and we lived there at the same time!

David: The same time, and then I'm like, wait a minute, we're both saw the future of marketing, you started a company based on this idea of inbound marketing, and I wrote a book about what I called "The New Rules of Marketing", which is essentially the same thing. And we both have this Japan fascination, and we both love Nantucket. It's like we're long lost brothers, and you're like what about the Grateful Dead steely going on here, and I said Grateful Dead's my favorite band. The Grateful Dead I've seen over 50 times, and you're like…

Brian: I was like, it's my favorite band too, I've seen them over 100 times, and I remember that conversation led to you're reaching into your briefcase at the time, you said I got two extra tickets to Phil and friends basic Grateful Dead Redux, you want 'em?”

David: Yeah.

Brian: And you gave me those tickets that night and we ended up going.

David: We ended up going together. And what's so cool about this is that simply a couple of stickers on a computer led to us having an instant connection in the first minute we met one another. Which is something that fandom can do, it's something that, having, sharing, something with somebody in a personal way, can lead to something that is incredibly powerful, and in 12 years we've probably seen The Grateful Dead together 50 times. Something like six times this year so far!

Brian: A lot.

David: Six, six times this year so far. When you opened your HubSpot office in Tokyo, I was there.

Brian: Yes!

David: So we've been in Japan the same time--Brian: Yes, I had to for your daughter’s wedding.

David: We had beers together at Cisco brewery in Nantucket, so the whole idea of fandom is you share things with like-minded people and the personal stuff can lead to business.

Brian: I agree with that.

Video 2: What is Fanocracyand why does it matter?

David Meerman Scott: So where did this idea of fandom and Fanocracycome from? The whole idea started because we were thinking about social media and the promise of social media. And I've been talking about social media and how to use it in marketing now for way more than ten years. And social media has incredible promise at this point. It was all about how you can communicate with people and how you can grow your business, and how you can engage with people, and that is sometimes happening. But what we both noticed and in talking with hundreds of people around the world, everyone is saying to me is that there's digital chaos out there. There's cries of fake news, there's yet more spam, and more spam. And then sometimes you don't even know if you're communicating on Twitter or Facebook with a robot. It's just incessant when people are doubling down on yet another social media post. We believe, that the pendulum has swung too far in the direction of superficial online communication, when people are hungry for a true human connection. And so, we came up with this concept of fandom.

Reiko Scott: Yeah.

David: The concept of true human connection to reach people as an antidote to this digital chaos. A Fanocracy, as we describe it and define it, is an organization that inspires extreme passion for product, brand, or idea by putting customers' needs and wishes at the center of everything it does.

Reiko Scott: It's a force critical for massive success.

David: And this idea of Fanocracy, of growing fans, is how you take and create human connections. True human connections to move that pendulum back from superficial online communications to an organization that truly meets the needs of customers. So to think about this idea of fandom, it's important to be thinking about what you're a fan of. So what are your fandoms?

Reiko: So when I was six years old, the same time that you brought me to my first rock concert, you also started reading Harry Potter to me. It was about a few years after the first book came out. And then you kept reading them to me as nighttime stories. We enjoyed our time together like that.

David: Yeah we did it was great.

Reiko: And then till theDavid: We were sitting close to each other like we are now.

Reiko: Until the fourth book, where I couldn't wait for you anymore because you thought it was too long.

And I…

David: It was long.

Reiko: …just wanted to finish it. So that was my fandom growing up. And the last movie came out when I was a freshmen in college. So, my whole grade school life was Harry Potter.

David: So, I've been to 788 live concerts, since the first oneReiko: I know.

David: when I was age 15, and I'm such a geek, I actually have a spreadsheet that lists the concerts that I've been to. And I'm so, so, so into live music, the most shows I've ever seen of one band is 75 of the Grateful Dead, which is kind of nutty I know, I get it, but I love it, I love going to live music. So, what's interesting about this idea of fandom, this idea as we call it, Fanocracy, is that those things are great, live music is great, Harry Potter is great, but what's really powerful is the relationship that we have with our friends who do the same thing. And it's incredibly powerful, the shared emotions. We humans biologically are hardwired for sharing things with like-minded people, and that's the idea of why growing fans of your business is so, so, so powerful. Because that human emotion of sharing is something you can actually develop within your core group of people. So, we have a definition of Fanocracy, there's five things that are part of this definition.

(1) It's something you're incredibly passionate about.

Reiko: (2) It's something that makes you extremely happy.

David: (3) You're eager to replicate it again and again and again.

Reiko: (4) You have friends or family who do the same thing.

David: (5)And you devote significant time and/or money to that activity.

You're always looking for something that you can do to celebrate that fandom with the people that you're close to. I have three, already mentioned live music, huge fan of live music. I'm a huge fan of the Apollo

Lunar Program, it's a really obscure fandom, and I love to surf.

Reiko: I have, I actually tried to count, and it got up to 25.

David: Wow.

Reiko: And then I was like, " I don't think I can really put them into boxes." So infinite.

David: Infinite number of fandoms, but what's interesting is for you to be thinking about as you're going through this course to be thinking about, what it is that you're a fan of, why you're so passionate about that, and how important that is to your life because that can help you to better understand how to grow fans for your business. We've identified, by asking thousands and thousands of people, that unlike you Reiko, the average person has 2.5 fandoms, I have three, average person has 2.5. And interestingly, the average person's most passionate fandom, they started when they were age 12. So, fandom, a Fanocracy, it's a fabulous way to grow a business. The more you think about your own fandom, the better you are equipped to be able to use this idea in your business.

Video 3: Any business can develop fans: Hagerty Insurance case study

Do you love to buy auto insurance? I've asked that question of thousands of people, and there's no one who answers yes that they love to buy auto insurance. I had someone say to me, "insurance sucks."

Nobody likes to buy insurance, it's not fun, and that was McKeel Hagerty. He's the CEO of an insurance company.

So when you have a business that everybody hates, you can't market in the same way that everybody's marketing. McKeel Hagerty knew he had to do something completely different. He knew he had to do something different, and what he did was he said "We're going to go out and build fans. We're going to go out and create a culture that has fans." McKeel Hagerty said "everyone hates the product I sell, I can't sell in the same way." So they specifically went out and cultivated fandom. So, Hagerty sells insurance for classic cars. What they did was they went to classic car shows, and they still do this, hundreds of classic car shows each year, and they do education. They have a booth, they share great information physically with their customers about classic cars. They have a magazine, the Hagerty Magazine, which is all about classic cars, that they send out to people. They have a fabulous YouTube channel and that YouTube channel has many many people who are watching them. I'm going to share with you one of those YouTube videos right now.

Hagerty Insurance Video Clip

This channel has 780,000 subscribers. May I remind you this is an insurance company, with 780,000 subscribers of their YouTube channel. They have a valuation report, where you can go on and learn about the values of classic cars. They have a driver's club with 600,000 members of their driver's club.

They did something really clever for people who love classic cars and go to the auctions. There’s a series of auctions every year in January in Scottsdale, Arizona. And, the challenge with this particular auction week is there's multiple auctions going on at one time. Sothebys, Goodings, Bonhams, Barrett-Jackson, they're happening at the same time. The problem, as a collector, is you can't be at four auctions at once. So what Hagerty did—they're an insurance company, they're not in the auction business—they created a free app, Hagerty Insider, where you can actually see each of the cars at each of the auctions in real time, as they're being sold, and what the selling price is. So that if you happen to be at one auction, you're able to virtually see what's going on at those other auctions.

I'm a fan of Hagerty. Yes, I am a fan of my insurance company. I own a 1973 Land Rover. It's insured by Hagerty. I love my insurance company. The idea that you can grow fans of any business, you can grow fans even in a business that everybody hates, means that this is an incredible opportunity for you. Here's what McKeel Hagerty told me. He said "We went out and expressly challenged ourselves: How can we build fans? We discovered we're pretty good at it, we have fun doing it, and it matters because that's our wordof-mouth growth engine."

Here are the results of Hagerty. They are the largest classic car insurance company which they've become because of this focus on fandom. They've had double digit compound growth every single year that they've been in business. And this year, they expect 200,000 new customers. This is the idea of fandom.

This is the idea that can be implemented in any business. This is an idea that can be implemented in your business: how to grow by growing fans.

Video 4: Building a fan base: NASA case study

David Meerman Scott: When we were looking around for examples of fandom, one of the things that was just massive is NASA. NASA, oh my gosh. You see people walking down the street with NASA T-shirts all the time. Everyone knows about NASA. By the way, they're a government agency that has 32 million Twitter followers, that has 48 million Instagram followers. How crazy is that? We had an opportunity to interview Jim Bridenstine. He's the director of NASA. He runs the entire place out of Washington, D.C. And we spoke with him about how he and NASA builds fans.

Jim Bridenstine: I think it starts with the Apollo program, with the idea that we sent people to the Moon.

And that legacy lives on today in really significant ways, to the point where, I mean, even today people are wearing NASA shirts. We've got professional athletes that have their own branded shoes with the NASA logo. So I would say it seems like the brand is coming back in a big way right now, and I think a lot of it stems from social media, and Facebook, and Twitter, and YouTube, and so many other ways that we reach the public as an agency. But it also stems from, and this is I think the most important thing, it stems from stunning achievements. So, for example, back in November of 2018, we landed Insight on Mars. Well that was the eighth time in human history that we've landed a spacecraft on Mars, softly, in a way that the spacecraft can actually operate as a robot or a rover. In this case, Insight was just a lander. But the important thing is that's only been done eight times in human history. It's always been done by NASA.

Nobody else has been able to achieve it. It's really, I think, it's a tool of national power that helps change the perception of young people all over the world towards the United States of America. And I think it's recognized. It is, it's absolutely recognized all over the world.

Davi: Oh, it absolutely is. And just the outward manifestations of, what I call, Fanocracy, people wearing Tshirts with the logo on it and the fact that National Air and Space Museum is one of the most popular museums on the planet. Tell me, how would you advise the CEO of any kind of organization, could be a nonprofit, it could be a company, to use the tools of social media to project an image and a message to grow fans in the way that NASA has done such a terrific job doing that?

Jim: So I think you have to have two things. Number one, you have to have a group of people that is starting with, that are interested in what you're trying to achieve. And then you have to achieve something significant. In fact, in the case of NASA, something magnificent. So I would say NASA is quite frankly unique in the sense that we are constantly doing very stunning things that captures the imagination of a very enthusiastic fan base. But it all comes back to, look, we can do really amazing things, if we're not communicating about it, nobody cares. But yet you have to constantly be sharing your victories, and NASA is really good at sharing its victories. It just so happens that our victories are quite magnificent.

David: They're amazing. My final question, when you were in Congress, before you became administrator, were you a fan of NASA?

Jim: Absolutely. I've been a big fan of just space exploration and space activities for a long time.

David: So you have the ideal job in the whole world now?

Jim: Without question. I do think that this probably the best job in the world.

David: Thank you so much, Jim.

Jim: Thank you.

Crystal King: You've heard a lot about Fanocracy so far, and hopefully you've learned that one of the best things about Fanocracy is that any business can tap into the power of its audience. It doesn't matter if you're NASA and have obviously magnificent achievements to share or if you're Hagerty Insurance in an industry everyone hates. At the beginning of the course, I told you we'd be exploring three themes from David and Reiko’s book "Fanocracy", how you can get closer than usual to your audience, how to let go of your creations and give your fans control, and how to develop employees who are fans. Exploring these

themes will help you start thinking about a strategy to build your own fandom, whether you're a B2B company or a B2C company, whether you sell tangible goods or services, or if your industry is easily understood and well loved, or if it isn't. The point is, with a little creativity and with a focus on who your customers are and what they want, any business can enjoy the same fandom as Hagerty Insurance. And, yes, even NASA.