Launching with little, building from scratch

Brian Steffens, Director of Communications

The founders/operators/leaders of these sites have a couple of things in common: creativity, the ability to inspire all who come in contact with them, perseverance and dedication that borders on clinical obsession, and sadly, funds from a buyout, 401(k), pension plan or a “day job.” Yes, alas, some of these excellent enterprises are a second full-time job, a true labor of love, typically not yet able to pay the mortgage, kids’ college tuition, etc.

“Bootstrapping doesn’t replace a previous job or salary in journalism,” said Susan Mernit of Oakland Local. She says she has kept her “day job,” basically working two full-time jobs.

Mernit says the founders haven’t yet taken a salary, and admits that in the second year of the venture: “I’m all about money. … Once you start, the most important thing is to make sure you keep going.” To help makes ends meet, she has built a growing, for profit consulting service. And continues to seek out advertising.

Her team has an impressive startup record: more than 1 million website visitors in past year; 950 people a week check their Facebook page (there is more discussion by the community on that Facebook page than on the website, she notes).

Interesting takeaway: Using Google Analytics Mernit found that readers were largely ignoring what she thought was the core journalism (some might categorize this as process journalism?) Readers wanted community (refrigerator?) news and investigative work. She wiped out that vast middle section of journalism content, that had been soaking up most of her staff, resources, and revenue, and found a significant bounce in community interest. Mernit’s advice: “cover stuff that isn’t well covered by other media.”

Tom Ferrick of Philadelphia’s Metropolis says he began with the idea of answering “how do I …?” (find) records, etc. Ten years ago the large, wide bottom of the journalism pyramid was hyper local (zoned editions or pages), the smaller middle of the pyramid were the core beats, and the smallest top of the pyramid was value add (investigations, analysis, in-depth stories, explainers, regional trends, projects, enterprise, etc).

Now the zones have disappeared; the core beats are still there, if smaller; and the value added material has shrunk much smaller.

Interesting Ferrick comment: The old Knight-Ridder rule was that you could pursue new ideas only if you could guarantee 25% profit in first year. “As you might imagine, it totally stifled innovation.”

David Boraks of DavidsonNewsnet said his best advice was to hire someone like Lyndsay Kibiloski “who does everything I don’t do”  (the all-important non journalism stuff).

Second: a volunteer ad sales person taking a one-year break from tech sales. “She sold out our two-page site, so we had to redesign site” to increase ad spots, Boraks said. That meant moving from WordPress to a platform that supported ad serving.

In addition to “lots of marketing” (two percent of revenue is allocated to marketing), he emphasized asking for voluntary subscription payments and sponsorships. The ad sales team is commission based with small stipend. “Try for 3 month contracts minimum,” he advised. The site charges $100-$375 a month ($375 for banners; $100 for inside pages).

Boraks says the operation grosses “maybe $90,000”. After 4 years, he’s seen a spike in audience the last six months … 20,000 unique visits a month in a community of about 10,000.

Next steps: talking to investors, maybe add editions for nearby towns. After the third year he took a small salary—“about equal to my first journalism job in 1980s.” This year, no salary, he wants to reinvest in the enterprise.

The site sells primarily to mom and pop advertisers. He hasn’t been able to reach regional advertisers (grocery stores, auto dealers, etc.) He feels he needs to grow some to get those accounts.

He notes two problems with mom and pop clients: 1) they spend ton a money opening, so there’s no dollars left for marketing, and 2) “they don’t think of the web” when it comes to advertising or marketing.

Boraks’ closing advice: If you desire consistency in contributors, you need to pay them something … they need something in return. It may not be much, but they give to you, you need to give something back to them. That builds their commitment.

John Mooney, founding editor, NJ Spotlight, “where issues matter.” The site covers public affairs and niche topics. And it seeks niche funding sources for those niche topics. “It’s hardly easy, incredibly time consuming,” says Mooney.

“You hope the next call is the next big things, but it never is. … Fundraising a full-time job.”

NJ Spotlight has a $400,000 budget, three full-time staff, and three who work full-time but are paid part-time.

Best line: “If looking for money, ask for advice; if seeking advice, ask for money. It works.”

Jim Cutie, COO, Connecticut Mirror.

When seeking foundation funding: mission is the key. Your mission and the foundation’s mission need to mesh. And you need a business model, partnerships, a strong board, a strong management team, and a strong staff.

You need to demonstrate a plan for sustainability … typically a three-to-five-year window to self-sufficiency, he advised.

Cutie’s site is independent, non-partisan (no endorsements), non-profit. Its purpose is to reinvigorate the community dialogue—the better informed, the better they can participate in public policy.

He suggested community news sites consider corporate sponsors as well as foundation funders. And look at community foundations, not just journalism or national foundations.

Giving money is where local foundations and corporations begin, not where they stop, he said. They’re invested in the community. You can ask for other types of assistance from them: connections, introductions, inroads into the community.

“We partner, supplement other media, not supplant it,” Cutie said. “We license content to half the dailies in the state.” Partners include NPR, business publications, and diversity publications.

His $700,000 budget covers seven reporters including a Washington correspondent (the only one from the state).

Brian Steffens is the director of communications at the Reynolds Journalism Institute. Read his other blog posts here, and talk back at steffensb@rjionline.org and @BrianSteffens on Twitter.