We’ve tried to highlight some successful local news sites out there in recent weeks (and we’ll do more, so please take our survey!), but there is no question that for most start-ups life bends more towards the Hobbesian view. The story of the SeattleCourant.com, which shut down late last month, is a stark reminder of how tough things can be, especially in Seattle–a hot-bed for local news innovation.
Founder Keith Vance wrote in a farewell blog post that the Courant failed because it couldn’t bring enough money in quickly enough to support his vision for a 5-person newsroom. He figured that would cost a bit more than $500,000 per year while he worked for free for the first year. Here is Vance’s revenue plan:
I envisioned levels of customers. Some businesses might just want a simple banner ad, but the more sophisticated customer could purchase custom landing pages for events, sales, etc. Or they could buy full-blown Web applications, databases and custom business applications. The Courant would essentially be a technology firm that focused on creative online publication, advertising and business services.
Sounds like a pretty good concept. But, in the end, the Courant suffered from the same flaw that kills so many small businesses (and not just news organizations) trying to get off the ground: under-capitalization. Vance writes:
The Courant failed because I didn’t have enough cash and I didn’t find someone who could handle the business side, such as finding customers, technologists and managing projects. The trick I had to pull off was to be able to fund the Courant while I not only built a newsroom, but also a technology firm to support it. I couldn’t do it all.
My advice to anyone who seeks to create something like The Seattle Courant is to make sure you have at least enough money to get you through the first year and someone who’s as committed as you are to the business. To generate revenue, focus your efforts on providing technology solutions to your customers and not just selling banner ads. You have to be able to do something that other people can’t, or don’t want to do. Going to city council meetings and covering press conferences counts as something people don’t want to do, but news doesn’t make money it costs money. One way to think of it is that instead of a print shop that supports a newsroom, we need to build a technology firm that supports a newsroom. It’s really not that different, it just requires a different skill set.
Meanwhile, Seattle PostGlobe, a site run by reporter-refugees from the online-only Seattle Post-Intelligencer, has put out a call for new donations from readers. The start-up launched in April and now says it has enough money to keep going for 3 more weeks.