How Small Bets Created a $200k/year Community

Small Bets is a community that seemingly goes against all of the best practices - there’s no hard selling, no ongoing subscription and they don't use any of the popular community building platforms. 

Yet, it is a thriving and successful business led by a small team of two that has generated more than $200,000 in profit in each of the last two years. 

What’s behind the success and how does the community keep growing? Find out more in this deep-dive.

THE SETUP

• Website: SmallBets.com

• Community platform: Campfire

• Member count: 6149

• Membership cost: $120

• Membership length: Lifetime

BACKGROUND

The community is built on Daniel Vassallo’s substantial X (formerly Twitter) following, which has grown to over 180,000 followers—an impressive unfair advantage. However, this advantage was earned, not handed to him.

Vassallo was a senior software engineer at Amazon, earning up to $500,000 annually. Despite the financial success, the pressures of building a corporate career began to weigh on him. Seeking a different path, he started exploring new opportunities.

One of his first ventures was writing a book on a topic he knew well: his work. The result was The Good Parts of AWS. At the same time, he started sharing his insights on solo entrepreneurship on Twitter, steadily building his audience.

As his following grew, Vassallo launched another digital product: a course titled Everyone Can Build a Twitter Audience, which shared the framework on how he gained 24,000 followers in just 14 months. This concept—building and leveraging small, scalable bets—became a cornerstone of his entrepreneurial philosophy.

As Daniel kept building more digital products, he realized that diversifying risk in his online business can be done by creating more products. “Think of a business idea like an experiment,” Daniel says. “You don't need to invest your whole identity in one income stream.” 

THE COMMUNITY

This is where his community, Small Bets, comes into play. However, building a successful community was not straightforward for Vassallo. His journey in the community business began with a setback.

In 2020, he launched a community called Profit & Loss, which initially saw promising growth, reaching an impressive 1,500 members. Despite this early success, the community eventually failed.

Later on, he created a cohort called Small Bets talking about his philosophy on creating multiple projects and showing the pathway on how he did it. Initially, he set up a Discord server as a support tool for cohort participants.

However, something unexpected happened—members began sharing their own thoughts and observations. Organic connections started forming, and smaller circles of collaboration and discussion emerged within the community.

Vassallo says that what ignited his community was getting lucky with the first 25 people who were highly engaged and did not need a lot of support from Daniel himself. “It’s hard to engineer engagement,” says Daniel. “You will not make people do things that are not followed by an intrinsic motivation.” 

For Small Bets, the community wasn’t the original product—it started with the cohorts Daniel ran. Over time, after completing 12 cohorts, members began providing feedback, consistently highlighting the Discord server as the most valuable aspect of the experience.

What began as a support tool evolved into something much bigger, and the Small Bets community eventually took on a life of its own.

ONBOARDING

Small Bets have recently gone through a redesign of their landing page and now rock a very minimalistic design.

The page clearly communicates who the community is for and prominently features a mission statement in the “above the fold” section. It positions itself as a counterpoint to traditional VC culture, promoting a more achievable and relatable goal: creating a small product that generates $1,000 in revenue—a realistic and attainable starting point for its audience.

Interestingly, their main CTA button encourages people to log-in, not sign up for the community. That implies that users are already part of the community which leverages the foot-in-the-door effect, encouraging a mental shift where the user assumes partial association with the community.

Then, just below the fold Small Bets emphasizes their revenue model - which is a lifetime, upfront membership. We’ll touch on that in a moment. Then, they clearly outline the main value propositions and display social proof with a running member count.

The rest of the landing page consists of a list of available video materials and testimonials. The whole landing page uses just 4 sections.

Once you become a member, you simply get 1 email via Gumroad with instructions on how to log-in to the Small Bets community. 

MEMBERSHIP MODEL

Small Bets operates on a one-time upfront payment model, offering lifetime membership for a relatively modest fee, typically ranging from $79 to $199. This pricing aligns proportionally with the community’s core goal: helping members earn their first $1,000.

All payments are processed through Gumroad which also owns 10% of the community. The community also uses Purchase Parity adjusted pricing which helps to convert more customers, per Vassallo.

Upfront payments, and thus avoiding the comforts of a monthly subscription, have been a hot topic in Daniel’s discussions about the business. He believes that the benefits of the lifetime membership outweigh the subscription revenue.

“Realize that every customer has a lifetime value. You might want to consider capturing the revenue upfront,” says Daniel. “It should make the sale easier. People are a bit reluctant to add another subscription. There’s also a sense of ownership.” 

When considering an lifetime membership model for your community, consider these factors:

• Can you generate a consistent stream of new memberships?

• Do you have large recurring costs associated with your community? 

The lifetime membership model has clearly worked for Small Bets. It has generated more than 6000 sales, averaging more than $200,000 in profit in the last two years - which is split between Daniel himself, his business partner Louis Bacaj (both own equal share of 45% of the business) and Gumroad. 

The advantages of a lifetime membership are clear: 

• Won't have to battle churn;

• Offer high perceived value;

• Stand out from communities using monthly memberships. 

However, it's important to assess whether this model suits your business. A low-cost lifetime membership might lead to less upfront engagement and activity from members. Additionally, if your community has recurring costs, relying solely on attracting new members may not provide sustainable revenue. Finally, consider your audience—an ongoing subscription model might be more suitable if you're targeting professionals or businesses.

THE COMMUNITY PLATFORM

Small Bets started their community using Discord as the communications platform, but have now switched to Campfire, which was built as a Slack competitor by the founders of Basecamp. Interestingly, Campfire also aligns with the Small Bets philosophy - it’s a software product that does not charge a recurring subscription fee.

Campfire is not a purpose built community-platform. It’s a chat tool. 

Visually, it takes a bit of time to get used to the messaging flow and the organization of the various discussion topics. However, as any chat-based tool, it’s main task is to get people talking - which it does well. Daniel Vassallo has reported that switching to Campfire has improved the member engagement numbers.

However, I’d say that the right sidebar can get overwhelming and there’s not an easy way to find a member you’d like to connect to regarding a specific topic.

ONGOING EVENTS

A key value driver for the Small Bets community is its recurring events, featuring domain-level experts on various topics to help members grow their online businesses. Vassallo openly pays $1,000 per event to guest speakers, highlighting the emphasis on high-quality content.

Beyond the events, there are no structured community rituals. Members are neither encouraged nor pressured to check in frequently. Relationships within the community develop organically, largely depending on the individual effort each member invests in building connections.

TAKEAWAYS

• One-time fee. Community businesses do not have to be built on recurring payments if you can guarantee a steady stream of new members.  

• Positioning. Small Bets positions itself as the opposite of what you often hear from entrepreneurship gurus. The community’s relatable and down to earth approach has been a key driver to the success. 

• Cohorts. If your community isn't a smashing success right out of the gate, consider different approaches you could take. For Daniel, it was running 12 cohorts until the community formed around itself.