Neighborhoods don't scale
Sunday, 1 March, 2009 — business journalism social+media
There is so much cross-pollination between starting a neighborhood site and running a small business. Jeff Jarvis posted about CUNY and the New York Times beginning a partnership for a network of hyperlocal sites. Howard Owens, formerly of Gatehouse Media, is taking over The Batavian as owner and got into an interesting argument with Jarvis. He expanded on his point of view in a full post, “VCs chasing fool’s gold in funding ‘hyperlocal’ projects that 'scale’”:
Now scale is being applied to “hyperlocal” start ups. And the meaning in this context, as I take it, is that a “hyperlocal” business needs to have the capability to expand in multiple towns and neighborhoods rapidly at a very low cost.
The “hyperlocal” approaches that supposedly “scale” don’t scale in one very important aspect: building new audience for community news.
Sure, they might appeal to a segment of the population that is already involved in a community, but they’re not tackling the “Bowling Alone” problem.
From the number and visibility of venture-backed, industry-supported hyperlocal flameouts, it’d be tempting to think that there isn’t money/eyeballs in being hyperlocal. Heck, the Washington Post failed to make a go of it. But it seems like all of the existing big media companies and venture capital-backed startups are trying to attack the problem the same way. Throw money at building a platform, put it in a lot of places. When it doesn’t work, it’s a failure. But that doesn’t mean there isn’t a solution. Just that the way a lot of people have been trying to go about solving it isn’t working.
One of the things Jason Fried and David Heinemeier Hansson of 37signals talk about frequently is doing only those things you absolutely have to do. Trying to instantly scale the platform is premature and distracts from learning what the business needs to work and executing on it.
I was ecstatic to read David Westphal’s piece at OJR.org, talking to various local sites and how well they’re doing:
Local news sites come in all sizes and shapes. Some are non-profits. Some aren’t trying to live off the operation. But for those who are, some survivable wages are being earned.
Tracy Record and Patrick Sand, another husband/wife team who operate West Seattle Blog, are getting revenue in the high five figures. Debbie Galant, co-owner of Baristanet, earned more from the site than she did from her free-lance writing business last year. And Bob Gough, who runs Quincy News, pockets $1,000 a week in wages from his startup that serves an Illinois community of only 40,000.
Right now, there are a lot of companies predicting doom and gloom and continuing to do exactly what they’ve done. There are also entrepreneurs who “don’t know” that they’re not supposed to succeed at providing a service and earning money where others have been before. But why are these sites succeeding?
Success for these sites looks different than it does for an established media company. They’re focused on solving a smaller problem and making it the problem they’re addressing. They’re risking the business on solving it. They’re climbing Everest by climbing Everest, not thinking about how they’re going to summit then climb K2 or the Matterhorn or Denali in the exact same way with the exact same tools and the exact same resources. They’re all mountains in the way that Raleigh, Miami, Paris, Mumbai and Houston are all cities.
Within those cities, distinct areas and boundaries. I’d pursue a site covering SoMA in San Francisco differently than I would one covering North Beach or the Sunset. In Paris, the Marais is different than the 5éme arrondissement. In Raleigh, Glenwood South isn’t North Hills or Oakwood. Sure, there are similarities, but you can’t treat them as the same thing. Neighborhoods don’t scale.
I suspect beyond the stories these sites are writing, they’re solving the advertising needs of smaller businesses, the sorts of businesses that live in smaller spaces along city blocks and next to strip mall anchor stores. These are, coincidentally, the sorts of businesses that don’t tend to buy any or much advertising at the major daily. Why not? Well, drawing on my own case, buying a print or section-specific ad at a typical newspaper would be beyond budget. I’m not going to reach the right people for my business, either. A neighborhood site is a much easier way to draw and address a specific audience. Plus, it’s far more likely I can see and talk to who’s selling me the advertising. With not a whole lot of luck, they’re probably a customer, too.
Maybe there is a way to abstract a platform and aggregate neighborhood sites, but, just as mountains have their own weather, neighborhoods are unique and not taking the time to dive into them and understand them is a mistake. The large, monolithic approach is not the workable one. There’s no rule saying there must be a way to build and sustain a larger business out of “hyperlocal” content.