A Haven for Hyperlocal
Street Fight hopes to help the burgeoning hyperlocal industry figure out what works and what doesn’t. Posted: Thurs, May 12, 2011
By Jeffrey Benzing
Jeffrey Benzing (firstname.lastname@example.org) is an AJR editorial assistant.
Hyperlocal is exploding.
But profitability has been elusive for both startup and legacy companies struggling for viable business models. Some, like Groupon, the daily deal site, have been valued at well above a billion dollars, but many -- like the Washington Post, with its failed foray into hyperlocal news in Northern Virginia -- have found revenue elusive.
Enter Street Fight, a new Web site to spread the word on what works and what doesn't for all aspects of the hyperlocal industry.
Cofounder Laura Rich says the site, which launched April 13, plans to host live events and have a think tank to provide original research on the industry. This is in addition to the site's news, analysis and aggregation.
"It's just not enough to do a site these days -- people don't get anything out of that," Rich says. "When you have a new industry, people need and want a place to come together, and meet one another and learn."
Rich says there's a turf war over advertising among ventures like the deal-focused Groupon, AOL's Patch.com hyperlocal news operation and Foursquare, a social networking site where users "check in" to tell other users where they are. Rich says these different sorts of businesses are like the three legs of a stool that make up the hyperlocal industry, and they're all competing for a share of the $150 billion local advertising market. Hence the name "Street Fight."
As an unfunded startup with no paid staff, the project has a necessarily thrifty business model -- WordPress is free, Twitter is free. But adviser Larry Kramer says the site has a built-in audience because it's been launched at a time of rapid growth and unproven strategies.
"Nobody's got it exactly right, but everybody's doing some things right," says Kramer, who founded the startups MarketWatch and DataSport. He says Street Fight will help spread badly needed business information across the industry.
The hyperlocal news industry has been the boulevard of broken dreams for many. The Washington Post launched its hyperlocal news Web site in Loudon County, Virginia in 2007, with plans to expand to other communities in Northern Virginia and Maryland. The venture folded from lack of revenue after two years. Street Fight cofounder David Hirschman published an interview April 14 with Mark Potts, founder of Backfence, another ballyhooed hyperlocal news operation that folded in 2007 after a promising launch two years earlier. In that interview, Potts stresses the importance of a lean business model.
These challenges are what Street Fight means to address. Rich says the site is planning events focused on financial sustainability and hopes to have three to five national events each year, with numerous smaller-scale gatherings. This model helps diversify revenue sources -- advertising will be just one stream -- and makes the company into more than just a news site.
After being laid off in late 2008 as assistant managing editor of Portfolio.com, Rich, who was also a senior editor at The Industry Standard, helped found Recessionwire, a Web site for people looking to weather the economic downturn. Hirschman, whose résumé includes editorial stints at Big Think, Editor & Publisher and Mediabistro, worked with Rich at Recessionwire, and the two have collaborated on at least one project each of the past nine years. They started a friendship in late 2002 when Rich published a book on Microsoft cofounder Paul Allen and Hirschman interviewed her for Mediabistro.
Their partnership is "almost like breathing," Rich says, despite nearly 2,000 miles in distance between her home in Boulder, Colorado, and his in Brooklyn. They talk on the phone every day and exchange an average of 25 daily e-mails. The idea for Street Fight sprung from informal conversations between Hirschman and Rich last year. And in February, they started serious brainstorming about what the company would look like. A Twitter feed, started March 10, gained attention from Rick Robinson, who's come on board as adviser and columnist.
Robinson, who helped found AOL's Digital City network of local news-focused online communities, was one of the pioneers of hyperlocal in the mid 1990s and helped make that site a place for users in Philadelphia to interact and discuss the news of the day. In 2010, he started the blog Locl.ly, which covers innovations in "geosocial" and "geolocal" businesses that base their services on where a user is currently located.
Street Fight acquired Locl.ly last month and is using Robinson's expertise and connections to tap into an industry that's been around in a less robust form for more than 15 years. The recent surge of interest, Robinson says, comes from the availability of GPS technology in smart phones. Users can now find content based on their current locations. And entrepreneurs are catering to them and selling ads on the local level.
"Suddenly consumers have in their hands a device that can not only tell them where they are but can tell them where things are that they want to get to," Robinson says. "The power of that has sparked a lot of interest."
Kramer says information about business plans that work -- and those that don't -- has been largely "folklore." Street Fight hopes to change that by publishing original research on the topic and bringing together insights from industry leaders. "I see a huge number of people involved in trying to do local digital efforts and really no place to get advice and no place to learn from the mistakes of others," Kramer says.
About a month after launching, the site has a lot of growing to do, but Rich says she's heard positive reactions from the hyperlocal community. Rich said she'd like the advertising budget a big financial backer could provide, but for now they're spreading the word through Twitter. Kramer and Robinson, along with adviser Jonathan Weber of The Bay Citizen in San Francisco, will help the site move forward by promoting it to their media contacts. Doing this at the right time is crucial, Kramer says.
"When you're trying to create a media property, it has to be good from the get-go," Kramer says. "When they come to the site and it gives them something interesting, they'll come back."
So far Street Fight has about a half-dozen contributors listed on its site, none paid so far, including a news editor who came onboard this week. And even with confidence out the gate, Hirschman and Rich are looking for funding and acknowledge that putting their ideas into practice may lead them toward unexpected hurdles. They're aiming to create not just a site but a community, complete with large scale events on a national level.
"I think with any startup, you don't really know how things are going to work for the first few months," Hirschman says. "Laura and I have both worked for startups before, and it's kind of an uneven road."
For now, Rich is serving as publisher while Hirschman is focused on editorial content. But both have editorial backgrounds and entrepreneurial streaks, and they say their site fills an information vacuum for an audience that's growing quickly and looking for answers.
"When I think about why Street Fight can succeed and a lot of other things won't," Kramer says, "I think this has a preexisting market that desperately needs it."###