Deep Dives
min read

How the community-led business, Earlywork, raised $700,000 and why audience matters

Written by
Will Richards
Published on

I sat down virtually with Jono Herman, one of the 3 co-founders of Earlywork. The plan was to discuss how Earlywork started and jump into understanding the current business model. In chatting with Jono, I discovered the future of Earlywork is far more interesting. Earlywork is building a community of the next generation Australian founders and tech workers. As such, Tim Duggan’s Cult Status frameworks were invaluable in dissecting what makes EW special.

So what is Earlywork?

Like all good things, Earlywork started off as a newsletter to highlight jobs in Australian start-ups. Since those humble beginnings, Earlywork has transformed into a community of young people sharing ideas and opportunities. Solo-founders have found co-founders and interns their first jobs. It's also fair to say a few cheques have definitely been swapped via a slack DM or two.  

A slightly different capital raise

Before jumping into why Earlywork raised cash, It’s important to understand the context of where the cash came from. The $700K came from Square Peg in a non-traditional VC round. What the hell is a non-traditional VC round from one of Australia's largest VCs?

As the investment came directly from Square Peg, not the investment funds they manage. Square Peg is directly backing this community. This gives off some interesting signals:

  1. Square Peg knows EarlyWork are building something great for the wider tech community. And they want a slice of it.
  2. Earlywork doesn’t need to make VC-backed start-up decisions. Meaning trying to become a unicorn isn’t the (main) focus.
  3. Square Peg can lean on decision-making at Earlywork. Potentially pushing the young tech community in a particular direction.

Jono put it pretty succinctly. For his founding team, VC funding means “you’re put in a position where you're making decisions without understanding the full ramifications”. For Earlywork in particular, Jono told me “we didn't want to put ourselves in a position where we were ready to sacrifice the community in pursuit of profits or an exit opportunity”.

Community First

So who is the community? At the writing of this article, there are almost 4,000 members of the slack group, now called Earlywork Village. With members spanning solo founders, start-ups, scale-ups and investment firms. There are also a number of young people looking to enter the start-up world. For them, it’s an opportunity to network, discuss the news of the day and gain access to resources to help them.

A highlight channel is the questions channel. Members can ask anything and even stay anonymous if they want. This is Earlyworks answer to no stupid questions. It opens the floor to questions about recent redundancies or accelerator programs. My favourite question recently was “if you ask someone out for a networking coffee, who pays?”. Important questions when you’re a student!

Analysing Earlywork

Previously, in deep-diving on Aussie start-ups, we’ve utilised Hamilton Helmers 7 powers to understand why a business may get outsized returns.

Although there are growing powers present in Earlywork. Namely, network effects, counter positioning and cornered resource (young tech people being the resource). We’ll look at Earlywork through the lens of Tim Duggans Cult Stats: How to Build a Business People Adore. Duggan's book explains how owning a passionate community can build long-term, sustainable success.

How Earlywork are building a business people adore

Leading from the middle. Walking alongside the community they helped build.

Earlywork’s founding team are in the thick of the community. Attending events and answering questions. They’re even happy to be interviewed for an article like this. Importantly, the leadership doesn’t dictate the direction of the community, or sit behind and observe and pull strings at an arm's length. Earlywork’s team empowers the community to ask questions. When a constant theme pops up, they’ll look to open a space dedicated to that and build resources for it.

Through this style of leadership, Earlyworkers feel they’ve contributed to the direction of the community. During the "tech crash of 2022" many start-ups were extending their runway by reducing team size. The community was inundated with requests and anxiety about finding new work. Noticing this, the team partnered with Afterwork Ventures to create the neatly named, BetweenWork. This new platform was spun up rapidly and connected recently laid-off tech workers with opportunities at new start-ups keen to hire.

Create an Altar & host a congregation

Duggan’s 4th step is to define an alter. A central place for a community to congregate similarly to a religion. The first alter community members would congregate at was the newsletter. Which morphed into a slack community now called Earlywork Village. In the Village, thousands of young people can share ideas and opportunities with each other. The Slack alter is also complete with its own rituals and small nods to the community. Custom reaction emojis that default to EW’s brand as well as every start-up or VC in Australia.

The one-minute hustles are produced weekly to feature a member of the community and promptly run through who they are and what they’re working on.

No Bullshit: Provides value first before selling anything

Earlywork hasn’t asked me once for my card information. They have asked me several times to refer people in reward for some funky socks.

It’s important to note that this article isn’t a long-winded attempt to get some socks, but if you do join Earlywork (which you should!). Use my name at the door.

By providing their community with value before asking for anything in return, there is genuine and authentic trust being built. Having a degree of financial freedom through the Square Peg investment helps Jono ensure Earlywork isn’t forced to monetise too early.

So how will Earlywork monetize?

Currently, EW leverages its community and charges businesses to advertise job opportunities. Companies can also search through the database of eager young people who may get a tap on the shoulder for an opportunity.

But what next? Jono was quite tight-lipped about this. The consensus was they had big plans but were not set on a particular direction. The luxury Earlywork has now is to test and iterate based on genuine feedback from their community. To sit within the middle, be the first to notice problems in the global tech ecosystem and build.

Jono told me “the logic there is if you build out these deeply embedded, engaged, communities. That puts you in an even stronger position to be able to build your own platforms”.

The Earlywork team will continue to double down on community building. While events are currently hosted in Sydney regularly, with a recent full-time hire of Elaha Gurgani in an Operations and Community role. Expect events to start popping up around Australia. Jono’s view is that “community building is a very strategic defensive mode for business building”.

The ramifications for the greater Australian tech ecosystem are overall positive as well. Builders can find each other faster by opening up a networking space.

On the investment side, it’s a weird one to rate. Square Peg probably isn’t looking at Earlywork as a potential unicorn. But I can guarantee there are builders inside who are currently percolating a few unicorns. Square Peg has invested in the altar where the next generation of founders congregates. It's a net positive for the ecosystem plus and as one of the larger VCs in the space, Square Peg has put itself in front of mind when those young founders need some capital.

(KaaS) Knowledge as a Service

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