Web Special: “It’s like cable news for your neighborhood.”    

A Q-and-A with the founders of the new citizen journalism Web site Backfence.

In May, Mark Potts and Susan DeFife launched their all-local citizen journalism startup, Backfence, featured in AJR's "Dotcom Bloom," June/July, about a new wave of stand-alone news Web sites. Visitors to Backfence share their take on community events, ask their neighbors for advice, post photos and see it all immediately on the site. Backfence's creators expect the site to make money by selling local advertising and enhanced online "yellow pages" listings.

Potts, Backfence's chairman and chief creative officer, and DeFife, president and CEO, launched their first two sites near their homes in suburban Washington, D.C., but they have national ambitions: They plan to launch 10 local community sites in each of 15 metropolitan areas during the next three years. They've also discussed potential partnerships with nine major media companies. Here, Potts and DeFife talk more about their expansion plans, the media companies' reaction, and why and how they expect local citizen journalism sites to be successful.

Q: How do you plan to expand after launching your first two Washington, D.C., area sites?

Mark Potts: It's extremely ambitious but hopefully we'll be able to come in with a formula of technology and how you go into the community and how you sell advertising. It's pretty much Backfence-in-a-box as you go into each one of those communities.

Susan DeFife: The biggest amount of work has already gone into it now. It's building the technology, it's starting to put together the cookbook of how you market into the community, how you sell the advertising. The next thing, really, to figure out is exactly where this works best. We know that some of the keys are income, Internet usage, broadband penetration, but now we're starting to see what the other keys might be.

Potts: Broadband penetration just slipped north of the 50 percent mark nationally. It's probably 70, 80 percent in the first couple markets we're going into, and I think that's the target. We'll probably come up with a list of seven or eight or 10 magic attributes that make a market work, and hopefully we'll match as many of those as possible.

The expansion is also going to depend on how we partner with media companies down the road. Some people going into this have been very, like, "We're going to kill all those media companies, those mainstream media companies, those mainstream media guys, we're just going to knock 'em dead." But we don't look at it that way, and we've talked to all the major media companies. We've had very good ongoing discussions with them and they pretty much unanimously understand that we are very complementary to them. We sort of complete the last mile for them. We can get them into citizens' journalism in ways that they haven't been able to themselves because they're blocked by their infrastructure or their branding or their various other issues. And so, as we move forward with our partnerships with them, that'll probably determine where we go next as much as anything else does.

DeFife: The media companies understand the power of the technology. They understand the need to be far more local than they are, and they understand their own limitations. There's been a dialogue going on in all these companies about how you best reach into those markets, how do you do it cost effectively, how do you do it without hurting your brand, because it is unedited content. And so, those conversations have continued to evolve. As the market continues to heat up, those conversations take on a greater urgency.

Potts: We get things like, "Gee, this is really something we want to do, but we don't have a lot of resources, because we're putting out fires everywhere else." They see us as a way to jump in with a partnership or get some experimentation going without tying up their own resources.

There tends to be, oftentimes, but not always, a little bit of conflict on the editorial side between what the brand stands for in the marketplace. You know, "We are edited journalism, we filter it, we decide. We report, we decide." But citizens' journalism is a free-for-all in a lot of ways. And that makes a lot of editors really nervous. So there's a question of how you separate that. Do you do it at arm's length with a different brand?

I talked to a very smart, very old-line traditional editor the other day who said, "Well, geez, if you label it [as citizen journalism], why is there a problem?' And I said, "Well, you're more evolved than most people." So it's sort of all over the map. But everybody's looking at it.

DeFife: There are people who are skeptical and afraid of this right now. There are people who, rightly so, are cautious because they got burned in the last [Internet] bubble. We've had people say directly to us in face-to-face meetings, 'You go first.' And you know what? Great. Great. I'm happy to go first... We're at the beginning, and we're at the right point in time and I think that if you start to do this six to 12 months later, you're too late.

We give [big media companies] a whole array of options, from consulting with them on what they're doing to joint ventures to investment.

Potts: Some say, "Can we just license your technology and do it ourselves? Can you come in and show us how to do it or can we buy a chunk of your company or can you come do it for us?"

They're kind of glad to see us. They're not hostile. There's a lot of fear out there right now. That business is really kind of scary right now. I think they're looking for solutions. And we come in and say, "Look, we're not out to kill you. We may be a solution." And I think that makes it a very friendly conversation.

We've had some really amazing talks. They say, "We can't do this and we really want to do this, would you help?" It's really interesting. They're making the sale to us more than us making the sale to them sometimes because they're smart guys and they realize the box they're in. They do everything industrial strength and they'll spend three million bucks to build something rather than doing it small. They'll put 20 people on it. Just tracking along how long it's taken the client we're working with in the yellow pages to build what they're building and try to get it to test and market research it and focus group it and everything else. Relative to how quickly we've done what we're doing. We started after they did. We'll be out the door before they are with something that's a lot more ambitious than what they're doing. It's just the nature of their companies that things move very slowly. There's a lot of approvals. For us it's pretty much, "Susan what do you think?"

DeFife: It takes about 10 seconds for us to make decisions.

Potts: We had a big media company say, "Geez, if you're going to do this and you really build it out, you're going to need a gigantic call center to do all the advertising." I went, "No, you need about two ad sales people on the telephone in each market, selling across 10 sites in the market because, you know, you basically walk from one end of the shopping center to the other." They just don't think that way. They think in terms of these gigantic markets. They also have a problem in that they can't experiment on a small scale because their properties aren't small-scale properties. If you're the Washington Post, you really can't do something only in McLean or Reston, Va., because you've got to explain to the other 48 markets in your community and town why you're only doing two places. They have to think in terms of the whole metro area, so that makes it really hard to do this kind of experimentation.

DeFife: Over the last six months, we have seen a shift, a very fast shift, from where people were before to, "It's fascinating, I see it," to "Alright, we need to do this and we need to understand how to do it."

Q: How much do you think a citizen journalism site should be edited?

DeFife: The community does a wonderful job of policing itself in terms of making sure the culture is what you want it to be. We set the tone at the beginning. We give them a mechanism to report anything that is bad, but we let the community decide what they want to cover, how they want to cover it, and how they want to govern the culture.

Nobody will have the editor title.

Potts: They may have the skills but they won't have those titles. And we're not going to create content ourselves. One of the things that we've heard [from other sites] is that every time they got involved, the community dried up. Every time they jumped in and said, "Here's what we think or here's what you should be discussing," the community said, "Forget it, it's our site, leave us alone, get out of our community."

There's an ownership thing that people get with online communities, and we want to encourage that. We trust the audience. The audience knows more than we do and we want to let them show that.

DeFife: What bubbles to the top in each of those communities is going to be different. It might be youth sports in one. It might be transportation in another. That is what we can't wait to see. We're not going to decide that. We can give them a structure, but they're going to decide what's important.

Potts: It's going to be a little of everything, but if there are a lot of arguments about zoning, if there are a lot of arguments about Little League and that bubbles to the top, great. The hope is that the people who come for the Little League will stay for the zoning and go to the classifieds and use the yellow pages and buy some ads.

Q: Why do you think "all local" citizen journalism will be successful?

DeFife: Look at the drop-off in newspaper subscriptions. It's because people are coming online and getting their news online.

What's missing is that local news. You can't get it anywhere else on the Internet. And the demographics have changed so much. When we grew up, you'd sit on the front porch at the end of the day and you'd talk about what was going on in the neighborhood. Somebody's mother always stayed home, and so you knew what was going on. You don't have that sense of community anymore.

People read local weeklies. But what you get is top-down news, what the editors determine is important at a public hearing. There may be 10 issues, and the editors determine one is important, but there are three or four others that are more important to you. They come out weekly. And they're not interactive. If I decide to respond, I write a letter to the editor that appears next week, maybe. Your response appears, maybe, the week after. The issue is dead. The Internet has allowed you to take that local information, get a lot of local information and to make it interactive, and to get many different sides of an issue.

My favorite story is still the listserv for Cleveland Park [a neighborhood in Washington, D.C.], where all of these helicopters were flying overhead one day. And somebody [who wrote to the list] said, "What's going on?" and within 20 minutes, everybody knew that there was a robbery in the neighborhood and they were looking for these guys who were on foot. That's important information for me to know. Now.

Potts: It's like cable news for your neighborhood. One thing that's changed is the nature of the daily papers as the metro areas have gotten bigger. When the areas were smaller, the papers were a little more focused. You could get a lot of coverage. But now, for the [Washington] Post, as great a newspaper as it is, it's got just too much ground to cover... You just can't cover a metropolitan area of 4 or 5 million people with any kind of efficiency. Because of their cost structure, to truly cover these areas the way they need to be covered with their kind of journalism, the math doesn't even work.

DeFife: And selling local ads, the cost structure is too prohibitive. What we're hearing from the community is we'd like to see an alternative, that even the weekly newspapers are expensive. [As a local business owner] you don't want to advertise in the Washington Post because [you] only need McLean. You don't need to advertise in this large metropolitan area. The weekly newspapers and even some of the mailers that go out--they're expensive for a local business. So what we have said is, let's make this a cash-register decision. Let's give you an alternative that's also measurable.

Potts: A 1/8 page ad in a weekly newspaper can be $500. It's mind-blowing. It's not targeted, it gets thrown out and it's mixed in with all the other ads and it's just kind of lost. And it's black and white.

In some ways the growth of the weekly papers proves us. The Falls Church [Virginia] paper has gone from 16 pages to 44 or 48 pages in three years. It's just fat with ads. There's no alternative. There's no place else to go if you're a local business. You're not going to the Post; radio isn't going to help you. There are not a lot of places to go. It's become almost a monopoly for them.

The big media companies, the metro dailies, they probably don't have a problem with us. The weeklies, that's probably where our competition is.

Q: Do you expect your yellow pages to compete with existing newspaper sites and other sites that help people find restaurants, florists, etc.?

Potts: People ask about Citysearch all the time... The Post uses it as its entertainment guide... They try to do entire metropolitan areas, which is really hard to do as it turns out, if you're doing 4 or 5 million people at once. You get in search situations where you search for Vietnamese restaurants in Falls Church and they show you a Vietnamese restaurant in Silver Spring [Maryland]. I've never been to Silver Spring for Vietnamese food. Don't waste my time. You've got to be really microscopic.

Q: Some independent sites have become attractive purchases for media firms. If Backfence is successful, who will own it in the future?

DeFife: There needs to be an exit strategy. Here's the other thing that makes us very different from a lot of the companies that are out there. We're thinking about this as a business. And so, if you're going to invest in us, you know that we are looking at this as a business and we're looking at generating revenue, we're looking at how you generate profits. We are looking at what's the exit strategy.

Potts: We're looking for return on the investment. It's not a social cause.

DeFife: Exactly. These days, IPO is not a realist scenario. For any company, let alone ours at this point in time. The market's not there. You see how fast the market's moving and how fast the consolidation is going on, and I think you have to realistically say, absolutely, we would consider [selling]. What is it going to take to build this company to the point that we want to build it? Is it investment? Is it an acquisition? We don't know, and you can't make those decisions today. You make them on a daily basis when you see how the market's going and see how the market's responding and you take a look at what might the competitive scenario be and what would the return on investment be for us? What would the return on investment be for our investors? The market's different than it was during the bubble as well. We watched a lot of greed and arrogance take a lot of really good companies down. And I hope that the gray hair and the sort of lessons we've learned give us a more tempered view and [the ability to] say, "OK, let's do the right thing. And let's not have our head in the clouds about what might be in the future."

Potts: We lived through the '90s. We've lost companies. We both had companies die out from under us. We've lost jobs because companies were dying out from under us. Things just happened, and we watched it happen to friends. So as a result, we're mature.

You see what's going on here. You're not, "Oh, this is great, we're going to build this thing, we're going to have a Netscape IPO, we're going to make a billion dollars." No. It's not going to happen. But we are building a business...We're building something that will look like a media company because it will hopefully have multiple sites in multiple cities, but if, you know, Company X or Company Y calls us up and says, "Hey, here's x dollars, we'll take the whole thing because we think it fits great in our portfolio," I think you'd look at the offer for sure.

Q: What are your thoughts about competing efforts?

Potts: There's likely to be three or four of us out there. There's a lot of markets in this country. Knight Ridder and Gannett and Hearst--they're all in the occasionally overlapping market, but they pretty much have all their markets to themselves. I think it would be very hard for two of these to exist in one market, but that doesn't mean that we couldn't be in Chicago, Seattle, Boston and Atlanta, and somebody else is in San Francisco, Philadelphia and Miami. Hopefully we'll be everywhere, but there's room for a lot of different things. We've been somewhat surprised there hasn't been more competition.