What Business Leaders Should Know About The Community Economy

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It finally happened: Last week, the Federal Reserve cut interest rates for the first time in four years. The Fed’s policy-setting committee opted for a significant rate cut of half a percentage point, meaning the target federal funds rate is now 4.75% to 5%, down from the 5.25% to 5.5% where it’s sat since July 2023.

“This recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we begin the process of moving toward a more neutral stance,” Fed Chairman Jerome Powell said at the press conference following last Wednesday’s announcement.

The decision had a near-immediate impact on markets, which surged immediately after the news, then shrank back a bit as it was digested. On Thursday and Friday, markets continued to climb as investors basked in the optimism a rate cut brings: Cheaper borrowing, more funds circulating for business ventures and expansions, and stronger consumer buying power. The companies leading the post-cut party were some of the same ones that have buoyed markets all year, including Apple, Nvidia and Meta. Other companies that are expected to see more activity in the near future also saw their stocks surge, including construction equipment maker Caterpillar, banking giant Citigroup and private equity firm Blackstone.

But what does the rate cut mean in the long run? And is this the beginning of more leveling off? The answer to both is we’ll see. Before the decision came down, Forbes contributor Dan Irvine wrote a 50-basis-point rate cut could show the Fed’s commitment to promoting a stable economy—as well as encouraging job growth, stimulating investment, spurring consumer spending and reinvigorating economic activity. Further, Powell said in the press conference that the Fed’s rate cut is the start of “the cutting cycle,” meaning more is at least under consideration.

What happens next depends on how businesses, financial institutions, investors and consumers behave. If inflation continues to decrease or stays steady, if employment figures move upward and if the economy sees increased vigor, it may be the beginning of more economic good news. Forbes writers have collected predictions of how the rate cuts will impact different interest groups, ranging from small businesses to student loan borrowers, which you can read here.

Regardless of what the larger economy is doing on a day-to-day basis, business thrives on serving people. Amrapali Gan, the former CEO of OnlyFans, sees the future in businesses based on community. Gan, who started strategy firm Hoxton Projects after stepping down from OnlyFans, recently became a strategic partner and growth advisor to secure women’s social platform Communia. I spoke to her about the growth of the community economy and work in safe social platforms dedicated to women’s empowerment. An excerpt from our conversation appears later in this newsletter.

Forbes is compiling its first-ever list of best-in-state CPAs, and nominations are now open. You can find all the details and submit a nomination here.

BIG MOVES

In need of a bold shakeup to reinvigorate the company after years of sales declines, Nike made like its legendary slogan: Just do it. Last Thursday, Nike announced that CEO John Donahoe would retire in October—a decision attributed both to the board and Donahoe in the company release—and longtime Nike employee Elliott Hill would return from retirement to take the CEO’s slot. Hill’s hiring supercharged Nike’s stock—which increased as much as 9% right after his appointment was announced last week—and excited investors.

Donahoe, who took the helm of the athletic shoe and apparel titan in 2020, brought a vastly different approach to the company, which analysts have said contributed to its recent decline. In a LinkedIn post this summer, former Nike executive Massimo Giunco detailed some of the problematic decisions Donahoe had made. He moved away from the warehouse model, making Nike a DTC-first business. He eliminated many of the categories in the organization, making merchandise categories gender-led. And the messaging model switched from marketing and enhancing the brand to digital marketing and sales activation.

Hill is a 32-year Nike veteran who started at the company as an intern in 1988. He climbed the company’s ranks to become president of consumer and marketplace, and Fast Company reported many at Nike thought Hill was the obvious choice to become CEO in 2020. After Donahoe was named to the position, Hill retired. Analysts are enthusiastic about Hill’s prospects for the company. “This highly anticipated leadership change will inject a much-needed sense of urgency,” Deutsche Bank analyst Krisztina Katai wrote in a note to clients.

INDUSTRY NEWS

As the federal government has cracked down on monopolies, it’s stopped several proposed mergers, but not all of them. Last Tuesday, the Department of Transportation gave its approval to Alaska Airlines’ $1.9 billion acquisition of Hawaiian Airlines. One day later, the deal was completed. The Transportation Department issued several conditions to Alaska Airlines in order to close the deal: Ensuring frequent flyer miles earned on both airlines would be maintained, continuing essential air support for rural areas, and requiring the same amount of service between Hawaii and the U.S. mainland.

The merger is especially notable because it was approved. The federal government has stopped several other major mergers, including a proposed JetBlue acquisition of Spirit Airlines, and book publisher Penguin Random House’s bid to buy Simon & Schuster. Arguments in a three-week trial at which the Federal Trade Commission challenged a proposed merger of grocery chains Kroger and Albertsons wrapped up last week. While a decision could be weeks away, analysts are projecting that deal will also ultimately be blocked, Grocery Dive reported.

NOTABLE NEWS

While the number of women in the C-suite has increased 12% from 2015 to today, in which nearly three out of 10 top execs are women, there’s still a long way to go, the most recent Women in the Workplace report from Lean In and McKinsey showed. Forbes senior contributor Kim Elsesser writes that at the current rate of progress, it will take 22 more years for white women to achieve gender parity at work. For women of color, that milestone will be met in 50 years. Lean In founder Sheryl Sandberg told Elsesser that this problem begins early, with the failure to promote entry-level women to managerial roles. “Everyone wants women in senior leadership roles, but five years out of college, which is roughly when this happens, if for every 100 men, you only promote 81 women and 54 women of color, you’re never going to get there,” Sandberg explained.

Another problem the report calls out: Men see women’s progress and opportunities differently. Among senior leaders, 79% of men think women are well-represented in top leadership, a viewpoint only shared by 55% of women. Close to nine in 10 senior-level men think that women’s opportunities to advance have improved, while just over six in 10 women believe similarly.

TOMORROW’S TRENDS

Why Amrapali Gan Says Community (And Women’s Empowerment) Is The Next Big Social Platform

After spending three years at the online creator platform OnlyFans, and just over a year and a half of that as its CEO, Amrapali “Ami” Gan stepped down to pursue her own venture: strategy and branding firm Hoxton Projects. She also came across Communia, a secure social platform for women to have honest and emotional conversations. This summer, Gan joined Communia as a strategic partner and growth advisor.

I talked to Gan about Communia, the up-and-coming community economy it represents, and her work in online platforms dedicated to women’s empowerment and security. This conversation has been edited for length, clarity and continuity. A more complete version is available here.

Tell me about what the community economy is and how it works.

Gan: Everyone is familiar with the term ‘creator economy’ and how the creator economy has truly taken off. The pandemic hit fast forward on that, where everyone with a phone is essentially a content creator: able to share content, create a following and monetize it. Now you have this breadth of creators in various categories.

I see the future being the community economy, which is more about deep, meaningful interactions versus a larger individual talent, influencer or celebrity speaking to a broad audience. Whereas with the community economy, it’s more about coming together over a shared experience through shared interest interaction. And that’s digital, [but] could be translated to IRL. You’re seeing everything from book clubs, run clubs, all of these different experiences on the rise, which are mixing digital and IRL components. That’s something Communia also has in the works: smaller IRL events for their community, which they’ve tested out in the U.K. and starting to do in the Los Angeles area, too.

Thinking about value creation for the community economy, that’s really through these shared experience interactions versus creator economy, where it’s much more about views, likes and follower accounts. It’s a different kind of value. With community, it’s much more of that emotional, positive ethos. Anyone can be part of it. It’s not necessarily like, ‘Oh, I’m just following this person,’ and they need to have certain likes on stuff, or engagement, or they’re doing brand deals. What is actually meaningful is very different.

The community economy, thinking about relationships, is more about long-term authentic relationships. Whereas the creator economy can be a bit transactional in terms of those brand deals, affiliate codes, links—which in all honesty, many consumers and fans are a bit fatigued by and are very much aware that that happens. There’s been this search for anyone who’s engaging digitally. Like, ‘Oh, where are there other people that like the same music, sports, going through the same shared life experiences.’ That’s why I always was gravitating towards Communia because it’s a place for these shared experiences, for people to come together who are like-minded and have a safe space. That can be the same thing for people who like going to concerts, sports fans, usually across the board.

Communia is a place that brings women support and empowerment. When you ran OnlyFans, it was as a company that brought a different sort of empowerment to women, but it was made to tailor to their safety and support for them. Why is it important for social platforms to foster a place for women’s empowerment?

What’s important is that women feel there’s some level of control over their identity, their data, their IP, whenever they are using a platform or are in the digital ecosystem. I know when I go online shopping and I give my email, I’m going to end up getting a bunch of stuff. But if I don’t want that, I can easily opt-out. Having clear terms of service, knowing what you’re getting into when you sign up for a platform. Women are very savvy tech consumers, and that’s something that businesses are definitely realizing, and that’s what creates an opportunity for a platform like Communia.

Where do you see the community economy going in the next five years?

It’s going to continue to grow. You’re going to see other platforms come out that appeal to different communities. The future is: people want that connection. If you look at the world right now, there’s all these articles about the loneliness epidemic. There’s different AI tools coming out that combat that. There’s this natural need for, ‘Where can I find like-minded people who have the same interests?’ And then from there, it just organically grows.

FACTS + COMMENTS

California Governor Gavin Newsom signed five bills last week about use of AI deepfake images, videos and voices.

3: Number of bills about election-related items. The other two require informed consent and compensation for AI-derived images, video and voice replicas of living and dead actors

120: Days before an election in which it is now illegal to distribute deceptive audio or visual media of a candidate

‘It was just wrong on every level’: Newsom said about people using deepfakes of candidates on social media

STRATEGIES + ADVICE

TikTok isn’t just for influencers and showing off dance moves. Executives can use the video blogging platform to build a personal brand. Here are some tips to start.

Many companies are setting aside their formal DEI programs, but what they stand for is still necessary. Here are some reasons why diversity is important.

VIDEO

QUIZ

Elon Musk has officially moved the headquarters of X, according to court filings. Where is the social media platform formerly known as Twitter now located?

A. Omaha, Nebraska

B. Bastrop, Texas

C. McKinney, Texas

D. Broken Arrow, Oklahoma

See if you got the answer right here.

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