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Tuesday, July 24, 2007

The story of the "New West"

How New West got started:

This is a great article for those who want to start there own online business.

By Jonathan Weber , 6-27-07
Almost every week, I get at least one call from someone who is interested in starting an online publication in their city/ town/ region and wants to ask my advice. I try to be helpful, though since I started New West I’ve also tried to avoid punditizing about this sector and instead prove that I can actually make a successful business. But now that we’re more than two years in and doing pretty well, and interest in this kind of venture only seems to be growing, I thought I’d offer some public answers to the proverbial Frequently Asked Questions. Hopefully these thoughts are worth a bit more than you’re paying for them, but no promises!
Why did you start New West?
In 2002, I was invited to be a visiting professor of journalism at the University of Montana. When I came to Missoula, I got very interested in what seemed to be a big story - the dramatic growth and change happening in this part of the country. At the same time, I had covered and participated in the emergence of online media from the very beginning, and by 2005, with the growth of broadband and other factors, it seemed that online media was reaching a tipping point. I thought if I could marry a big story that wasn’t being covered much as such with a new approach to journalism there might be a business there.
Did you raise money from investors? How did you go about that?
Yes, we raised a high-six-figure sum from a group of angel investors. There are some friends and family in the deal, and there are also professional investors who did it as a personal angel investment. The success of the fundraising was very much dependent on my track record and reputation as editor in chief of the Industry Standard, and required relentless networking and cajoling over a period of almost a year.
Can you get venture capital funding for something like this?
In general, no. VCs are looking for very specific kinds of deals that have the potential for very high returns. Despite what common sense might suggest, the vast majority of VCs are unmoved by an idea which might have less risk and require less capital upfront but does not have the potential to return twenty or thirty or fifty times the investment in the event of smashing success. VC media deals require ‘conquer the world’ business models, and I don’t recommend trying to conquer the world. Conquer your neighborhood first.
Should I consider doing this as a non-profit?
Yes, that is worth considering in some cases. For now at least there is a lot of foundation money out there to support innovative new journalism projects, and depending on the specifics this could be an easier route. Personally I think the discipline of being a for-profit is healthy, plus I don’t want to spend the rest of my life (as opposed to only a year of my life) raising money.
What is the revenue model for New West? Advertising?
Online advertising is the core of the model, yes. However we also have several other revenue lines, including a small indoor advertising business, a custom-publishing business, and a conference & events business. Multiple revenue streams are a lovely thing. It remains difficult to make money on online advertising alone unless and until you have boatloads of traffic, and it is especially difficult to achieve that with a local site.
Speaking of traffic, how do you get the traffic? How do you market the site?
We have focused on good editorial as the key traffic driver. Good stories get links from other sites, those links help drive Pagerank on Google, and Pagerank helps drive search traffic, which drives more links. We have not done any real advertising to date. We have however also found there are limits to what you can achieve in small local markets with the kind of viral marketing described above, and we intend to be more aggressive with marketing in the next phase.
What kind of technology do you use?
We use a piece of software called Expression Engine as our main platform, you can think of it as a sophisticated high-end blogging platform or an inexpensive CMS (content management system). It is not open-source, but the license is very inexpensive and it is “open-source-ish” in its approach. It’s PhP-based and runs on top of Apache, MySQL and Linux, and we host the site at a local Web hosting company in Missoula. I do recommend Expression Engine. There are other good solutions, both commercial and open source, and if you have a good coder it can still make sense to roll your own (as we did with our event calendar sites). I do very much recommend the so-called LAMP stack (Linux, Apache, MySQL, PhP) as the basis for whatever you do. We use OpenAds as our ad server and it’s excellent.
Do you pay a lot of attention to search engine optimization?
Yes, though SEO is a strange world and it’s not always obvious how to approach it. What I think of as basic SEO really has to do with observing best practices on things like HTML tags and URL structure and link building, and we certainly do our best to make sure we’re doing the right things there. The next level of SEO has to do with whether the overall structure and architecture of the site is as search-friendly as it can be, and this can be a much more ambiguous issue. Beyond that there are all sorts of people trying to sell you SEO services, and many them employ tricks to game the search engines. We stay far away from anything that looks like gaming, but the distinction between “white hat” SEO and “black hat” SEO is not always entirely obvious. We have not spent money on SEO consulting but we do try to learn as much as we can and work it internally.
Do you sell your own ads, or do you use an ad network?
We sell our own ads. We do run Google Adsense on the site and we make some money from that, and we have looked at some of the other ad network options and may try some other things in the future. However, we get much, much higher CPMs on ads we sell ourselves then on anything we have seen from a network, and we expect direct sales to remain the core of the model.
Who are your main competitors?
Newspapers still dominate the local news and information business, especially outside of the major metro areas. The local newspaper here in Missoula – a Lee Enterprises paper – has been extraordinarily hostile and even unethical in its competitive response to us, though that has not been so much the case in other markets. There are various small, independent local sites that are competitors on some level but few that have any real traction. TV station and yellow pages Web sites are also becoming bigger factors in the market.
Are there other people doing what you are doing?
There are a lot of different kinds of online community journalism efforts underway these days and I’m certainly not aware of all of them. A few of my favorites are Crosscut.com in Seattle, L.A. Observed, Sun Valley Online and VillageSoup in Maine.
How big a staff do you have? Are your writers paid?
We have a full-time staff of seven, which includes managing editor Courtney Lowery, assistant managing editor Matt Frank, event calendar editor Colin Hickey, sales and marketing associate Jennifer Calhoun, designer Marshall Hibbard, a Webmaster who will start next week, and myself. We have “city editors” in each of our markets who are on contract. We also have a handful of other writers on regular monthly contracts, and we have some people we pay based on the traffic their stories generate. We also have a number of unpaid contributors.
What about citizen journalism?
We have found that the “if you build it they will come” approach to citizen journalism does not work at all. You can’t simply put up a site and invite people to come in and write stories and expect them to do so. However, we have also found there are a lot of non-professionals out there who can and will do good journalism if we work with them and encourage them. We think of this as a “high-touch” model (which depends heavily on the indefatigable energy and talent of the above-mentioned Courtney Lowery). Overall we think of our approach as “pro-am” journalism rather than “citizen journalism” or traditional professional journalism.
What about photo and video and podcasting?
We have had great success with contributed photography. We do some podcasting but find it’s a lot of work for not that much return. We have done a little video and expect to do more in the future but it requires more attention and talent then people sometimes think and it’s hard to do everything at once.
Have you looked at aggregating local blogs and other kinds of content rather than producing it all yourselves?
Good question! Aggregation is a key function of almost any publication these days; no one can pretend to be the source of all news and information. We have found though that aggregating news and headlines from other publications – even if we do it by hand and try to be clever about it - is not what drives readership for New West. We have also found that simple automated feed aggregation of local bloggers and the like is not very useful; you lose all context. On the other hand there are some very interesting new efforts in this area, including Steven Johnson’s OutsideIn and Lisa Williams’ Placeblogger, and I’m sure different forms of aggregation will be an important part of our future.
Do you consider what you do to be “journalism?” Or is it blogging, or something else?
The short answer is, yes, it’s journalism. The longer answer is, I don’t think discussions about labels are generally that interesting, and people can call it what they want. The content on New West ranges from traditional hard-news reporting, to analysis, to straight opinion, to more personalized blogging. We are not big believers in the formulas of “objectivity” traditionally employed by American newspapers – one person said this, another person said that, we reporters have no view on who is closer to the truth. We aim to be conversational in style and open about point of view.
We do believe in the core principles of traditional journalistic ethics: we strive to be fair and accurate, we correct errors of fact promptly, we welcome counterpoints and opposing views, we clearly distinguish what’s paid advertising, and we aim to avoid conflicts of interest and disclose them when they do exist.
How do you handle comments and contributed content? Do you review them before publication? How do you prevent inappropriate things from being posted?
We do not review comments in advance, nor do we require registration for comments, but we do require that people agree to the terms of service. If those are violated - with personal attacks, for example, or inappropriate language, or copyrighted material – we will remove the comments. Online arguments can easily get very vituperative and we wrestle with how to deal with this. On the one hand we are very reluctant to remove comments. On the other hand a lot of readers don’t want to read or participate in nasty arguments and we have to respect them too.
Stories posted to the main pages of New West either come from a New West writer that we know and work with, or they are reviewed by an editor. Stories posted to the “unfiltered” section require the user to be registered but otherwise are not reviewed prior to publication.
Generally we have had relatively few problems with malicious and inappropriate contributions. Spam is a much bigger headache.
Do you intend to do anything in print?
We’re considering a variety of ideas that might involve print, yes. (Now that I’m descending into PR-speak I should probably wrap up.)
Is the business working? Are you making money?
Yes, the business is working and we expect to reach profitability later this year. We think the opportunities are large and growing. We’re also very proud of some of the journalism we’ve done; we’ve won a few big awards and I think we’re making a real contribution to the conversation in this region.
Are you going to get rich?
I hope so. But if getting rich is the only goal I’d suggest real estate or Wall Street.
Anything else I should be aware of before I take the plunge?
Undoubtedly. But I’ve given away about as much as I can for the price.

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