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From AJR,   April/May 2012  issue

Leaving the Newsroom to Launch Online Startups   

Journalists embracing the entrepreneurial spirit. Weds., May 2, 2012.


By Carl Straumsheim
Carl Straumsheim (@cfstraumsheim) is a graduate student at the Philip Merrill College of Journalism.     

When Jeanne Pinder received a $1,419 medical bill in March 2007, she raised a question she says most Americans covered by employer-based health insurance rarely bother asking: Why?

Pinder's spark of curiosity became the catalyst for her next career move. Today, the former New York Times editor runs ClearHealthCosts, a Web site dedicated to bringing transparency to the healthcare market, which she calls "the last big opaque marketplace."

Veteran journalists like Pinder sometimes admit to falling behind the new-media curve as their industry embraces the Internet. But a growing number are taking the skills learned in the newsroom and their personal brands to launch online startups.

These journalists are regional experts, international correspondents and investigative reporters looking for editorial freedom―and the Internet lowers the entry barrier for them to fill gaps in the media landscape with aggregators, consumer databases and hyperlocal sites.

But leaving a well-established newsroom for unexplored journalistic territory doesn't always come naturally. In Pinder's case, she enrolled in an entrepreneurial journalism class in fall 2010 at the City University of New York taught by Jeff Jarvis, another veteran journalist.

Jarvis created the class six years ago "not to teach entrepreneurship but to use entrepreneurship as a device to teach journalists the business of journalism." To his surprise, Jarvis says his students go on to actually start the businesses they were taught to pitch―thanks in no small part to a $50,000 pot awaiting the best ideas at the end of the semester.

The $20,000 Pinder left the class with helped smooth the road to launching ClearHealthCosts in January 2011, but she also credits a more intangible capital―namely, the more than 20 years she spent at the Times, where she worked for the foreign desk, technology section and human resources department. "I think that prepared me well for the sort of uncertainty and sharp left turns and complete full stops and full speed aheads that characterize the world of Internet startups," she says.

Pinder is by no means the only journalist/entrepreneur to use her personal brand as a selling point for her startup. In Aspen, Colorado, Brent Gardner-Smith launched Aspen Journalism, an investigative outfit, in January 2011. A staple on the local media scene since 1983, Gardner-Smith has worked for Aspen's two dailies, the Daily News and the Times, and served as executive director of Aspen Public Radio.

"It helped immensely that I had connections and relationships with editors and news directors who were willing to work with me," Gardner-Smith says. "That's the reality of a long-term tenure in the community―as opposed to coming in from the outside and starting a new organization."

Yet other journalists are doing exactly that―like Lissa Harris and Julia Reischel, who left the Boston media market to launch the Watershed Post, which covers the Catskill region in southeastern New York. The Catskills contribute about 90 percent of New York City's water supply, and coverage of the area has been a victim of shrinking newsrooms, which Harris says has created a "news desert."

"Obviously, with two people, we're not at the level of being a newspaper for the entire region," Harris says. "But the middle of our region is kind of a black hole as far as the dailies are concerned."

Harris and Reischel described the floods following Hurricane Irene as the Watershed Post's defining moment, as organizations like CNN, Democracy Now! and WNYC Radio all turned to the startup for on-the-ground reporting.

"We were like information traffic controllers for about two weeks," Harris says.

Harris' and Reischel's work attracted praise from the local Chamber of Congress, and Harris even found herself on a list of nine people to watch in the Hudson Valley in 2012.

While the Watershed Post focuses on a five-county area, Maria Balinska's Latitude News covers as broad an area as the name suggests. Balinska, who spent nearly 20 years as an editor for the BBC in London, argues startups can be successful on an international scale as well.

"The U.S. has never been more interconnected with the rest of the world than it is today," Balinska says. "That aspect―how our daily lives have changed―and the stories that come out of that, I don't believe are being covered by the mainstream media in the way that they could be."

Balinska says Latitude News' approach to international stories seeks to connect global events to local concerns. "We, as human beings living in the 21st century, share passions with people around the world," she says. "We're finding stories that other people are not reporting on. I do believe there is a gap in the market, and I do believe there is an appetite for that kind of information."

Latitude News, based in Cambridge, Massachusetts, recently ran articles detailing how such countries as Sweden and Indonesia were tackling the problem of bullying in schools. It also ran a feature showing how Brazilian aircraft producer Embraer's plans for international expansion will help boost the economy of Melbourne, Florida.

As different as their missions may be, these startups all face similar challenges: attracting a loyal readership and staying alive. While niche reporting may be the key to the former, many entrepreneurs are seeking multiple revenue streams to keep their enterprises running.

Grants usually provide the startups with the influx of capital needed to launch. Gardner-Smith started with a one-year grant worth $55,000 from the Manaus Fund. Harris and Reischel, Balinska and Pinder all won $20,000 grants from the International Women's Media Foundation―Pinder also took home $14,000 after she was named one of the McCormick Foundation New Media Women Entrepreneurs in March 2012.

But grants don't last forever, and most startups look for other sources of money to stay afloat.

Reischel estimates the Watershed Post could make about $10,000 each month in advertising revenue―as long as she can force herself to make the sales calls. "Nobody stops advertising with us," she says. "I have to scale up and make more efficient my sales regimen."

But some entrepreneurs, Gardner-Smith among them, have no interest in having ads on their sites. "I just think most news sites are terrible.... I have to say that I can consider most of them horrid messes of advertising and promoting," he says. "They buried their core product."

Running his Web site advertising-free has given Gardner-Smith complete control of his site's layout (even though he admits to consulting his 25-year-old son, Austin, for advice). "It's great for me to be able to present information in a way that I find compelling," he says. "I don't have to go through a few layers of bureaucracy to get something on the Web. I just love that freedom to be able to tell the story directly."

As a substitute for advertising revenue, Aspen Journalism relies on funding from a number of philanthropic and community foundations. "There are many buckets of potential revenue, and we'd like to see some in all of them," Gardner-Smith says.

Perhaps because more journalists are succeeding with their startups, other universities are developing their own entrepreneurial programs. In Washington, D.C., American University is launching a master's degree in media entrepreneurship starting this fall―a program targeting student and veteran journalists.

"One key is to help emerging entrepreneurs understand that what they want to launch has to be more than a work of art," says Jan Schaffer, the School of Communication's entrepreneur-in-residence. "It has to have plans for growth, including growing audiences and growing ways to be sustainable."

Both American University's and CUNY's programs drill their students on keeping their expectations realistic when building their business models. Still, Jarvis argues that the Internet can soften the impact of a failed business, as entrepreneurs can crowdsource ideas before actually launching them. "It is much, much easier for them to produce betas and learn from their users, working collaboratively to put out better and more responsive products," he says. "And it is frankly easier to fail―because less is lost―and learn and try again."