Fandom is not an isolation chamber. It is created and built in places like convention halls, online communities, mailing lists, social media groups, theaters, and bookshops. Fandom is created when people dress up for the Harry Potter book release, when fanartists create genderbent or racebent versions of their favorite characters, when fic writers post a new chapter. Fandom thrives in a communal, collaborative, constructive environment.
When zines were passed out at conventions, there were collating parties and meetups with the actors at cafes. The scene was just small enough that you felt like everybody could tug on a few strings and know anyone else. Now certain convents are so large and sprawling that it wouldn’t be hard to get lost in between a signing booth and a merch table. Community creation is harder to do in-person, and has migrated heavily to digital platforms, most commonly in spaces that encourage following and re-sharing content, such as Tumblr and Twitter. Old forum-based community sites like Dreamwidth and Livejournal are still around, but legal action taken against the client base has greatly reduced their usage.
So how do online communities create collaboratively? There are a lot of ways that fans can meet and speak to each other online, but one of the ways that prioritizes fanwork creation and fandom development is called a fandom challenge. Challenges can vary widely, but usually there are two or more fancreators involved who ‘challenge’ each other to create a new piece of fanwork. This fanwork can be centered around a theme, pairing, media, or even just a single character. Fanwork can consist of fanfic, fanart, podfic, playlists, or graphics. Each challenge has a different set of rules, requirements, and structure.
Challenges and fanwork exchange is certainly not new to the online fandoms; there is a record of the Star Trek fandom engaging in Fic-a-Thons, where writers were challenged to write a fanfic in a certain amount of time. Sometimes these were called Thing-a-Thons, wherein art and other work would be allowed in. Many times Trek fic writers would submit pieces to zines based on previously published pieces of art, and some times art and fic would be submitted together, both produced by different artists.
Online communities took this kind of collaborative creation and made it more accessible and easy to enter. There are many different kinds of challenges, focused on many different kinds of media. An extremely common challenge is called a Bang. Usually the way a Bang challenge works is a group of mods create a community (on Tumblr, Dreamwidth, or Livejournal) dedicated to the bang. They ask fan writers to write a new fic based around a certain theme, and then they allow artists to claim fics. The writers and artists collaborate to create a finished piece of fanfic and at least one (sometimes multiple pieces) of accompanying fanart.
Bangs have many iterations; Big Bangs usually have require high word counts; Reverse Bangs ask the artist to submit pieces first; Podfic Bangs encourage writers and podficcers to work together; Flash Bangs encourage microfiction and collaboration without claims. Community is built through these sorts of exchange and collaborations. There is usually space to discuss your work, your experiments and trials, and you get to see what the rest of the fans are creating while you are also working.
This is an incredibly important part of fandom-building. When people are in small fandoms that don’t get attention from other fans, they feel isolated and can be easily discouraged. When there is no feedback and no audience, fandom cannot be maintained. The opportunity to engage with other fans, even after a show has been finished, or a book series concluded, is essential for the growth and longevity of fandom. Sometimes it takes a new version of a musical, or a single interview to reactivate a fandom, but unless there is active creation of some kind — whether through discussion, fanwork, or just conversations at conventions, fandoms lose fans and are not longer enjoyable to even longtime fans. 
If you’re interested in looking at the nitty-gritty of bang challenges, here are some excellent challenges that have produced some amazing fanwork and community; Yuletide (for lesser known fandoms and pairing, given every year around Christmas, has been occurring annually since 2003); the Inception Reverse Bang (a great example of an active community that has lasted far beyond the initial media release); the Merlin fandom has a huge numbers of bangs and challenges; you can view an incomplete list on Fanlore.
The last thing I want to shed some light on is the way that fan communities can often coalesce around a cause or an event. Charity challenges are a huge part of fandom, and some of the best well known fandom examples are Fandom Trumps Hate (where fans offered to create fanwork for other fans based on donations to specific charities, which has raised over 50K in two years) and Random Acts, a charity championed by Supernatural’s Misha Collins, has also benefited from fandom action. GISHWISHES, a for-profit company started by Collins, has donated almost all proceeds to Random Acts for six years, and has been able to give over 50K to Random Acts. It has been described as a collaborative, non-centrist, democratic, all-media event.
Collaborative community creation is the lifeblood of fandom. Interactions and multiple editions of fanmade creative work are integral to the health of a fandom. Feedback will certainly keep creators invested, but in order to draw new people into a fandom there needs to be time allowed for them to integrate into a fanbase and there needs to be space made for new work to be published, promoted, and distributed to other like-minded and interested fans. Often writing, drawing, and other methods of fanwork creation can be an extremely isolating experience: you are alone at your computer. Bangs and challenges help tie together all the individual threads of fanwork, and keep fandoms strong, thriving, and creative.