Why Newspapers Must Act More Like Startups Transcript

John Paton

If you’re not willing to take those risks, and because it’s media and newspapers and all of the negative press you’re going to get. You have to embrace it or you’re going to fail permanently.

Lloyd Armbrust

Hi, I’m Lloyd Armbrust and you’re watching Broadsheet: The Business of News.

In this episode, we talk about why newspapers need to act more like startups. We’ll hear from some long-term industry professionals who have seen success and failure in this model, and we’ll explore why newspapers need to work directly with startups in their community.

Steve Dorsey

Hi my name’s Steve Dorsey, I’m the Vice President of Innovation and Planning at the Austin American-Statesman in Austin, TX.

Especially today, I think it’s really important that newspapers act more like startups as much as possible. Part of my job is that we’re trying to create startups in certain parts of the paper, but in general, the newspaper should be more like a startup because it can try things, it can experiment with things, it can be more nimble, it can fail quickly, and learn, and move forward. When you think about it, the newspaper is a prototype every single day. We put something on the street, we put it online, every single hour, every single minute, and it can change, but we’re stuck in the past, where we’re always trying to be the same thing all the time.

Tim McDougall

My name is Tim McDougall. I am the Vice President of Strategic Innovation at The Gazette Company, which also includes Fusionfarm and Vernon Research Group.

If you have 130 year old company that needs to act more like a startup to become 150, 160 year old company and thrive, then you need to find ways to instill that in and it’s not going to be natural for the team to do that. In fact, most people here, you know, there is a lot of very talented people here most of them whom did not sign up to come into an area that was going to be heavily disrupted and changing all the time.

Most of them signed up because this was a very stable place, it’s one of the most stable places you can work in this community, so to get that you have to find ways that are non-threatening, educational and ways where people can feel free to learn and also free to screw something up as they learn and not feel like they just blew a big client or did something terrible.

Kelly Homewood

My name is Kelly Homewood. I am the Director of Digital Marketing Products at Fusionfarm in Cedar Rapids, Iowa.

We do still have to act like a startup. The challenge with that is media companies traditionally don’t think like a startup. There’s usually a lot of things that need to be proven before money is spent and there isn’t a lot to prove as a startup. You have to just prove your concept and then you have to go out and try things. You have to be willing to fail, you have to be willing to take some risks, and that’s not traditionally part of a successful media company’s makeup.

Steve Dorsey

What we’ve tried to do is we’ve tried to go out and connect with certain segments of the audience, and if something’s not quite working, we let it go and we try something new. I think in the old model, we would keep trying the same thing and hammering it down, down, down, and then eventually saying, “Oh, we’ll try something new.”

A startup would never do that, a startup would never come back with an iteration that’s the same and the same and the same. It would always be changing, and trying, and testing. We need to be more like that in order to survive.

I think a great example of the old model is what newspapers used to go through when they tried to redesign something. Really when you think about design and design thinking, that’s where the old model really failed a lot. A newspaper would spend a lot of time and money, a lot of very clinical research, to redesign itself.

Then it would say, “OK, we’re done. The design is set. There’s a style, there’s a platform, good.” Then it would be 10 years later. Then we might actually say, “Oh we need to refresh that, we need to change.” That’s not good enough anymore. We need to be changing all the time, every day. Whether that’s digital, print, services, events, marketing, advertising solutions, it’s always got to be refined and refining.

Austen Trimble

Hi my name is Austen Trimble and I am the Director of Sales for OwnLocal.

I think newspapers need to think about the things that make a great startup, like trying to make the biggest difference with the smallest amount of money. The hacker ideal of trying to put something together on limited resources, instead of thinking what’s the biggest budget and how the way that I could blow this out the most, but rather try to make something really impactful on a more lean budget.

I think that they could also try to listen a little more. I think as a startup, you want to develop your customer, and you want to find out “what do they want” and is it something they are willing to pay for if it is what they want. What you’re really trying to get at is what problem does the customer have.

Kelly Homewood

We have to keep up. We have to evolve our products to be able to deliver as people are wanting to consume news, but we also have to be able to monetize that and that’s what become more and more tricky for newspapers and for broadcast.

Steve Dorsey

A lot of what we’re doing is trying to make it OK to try things in some cases. We’re in a project right now where we’re actually working in a whole different method than we’re used to. We’re trying to move quickly, and not have the project fully defined in terms of every little detail as we go forward. We’re trying to be a little more agile. I don’t think it’s fair to call it fully agile. I think there’s an awareness that we need to be more like startups but we’re not very good at it.

We’re just trying to as we can, make sure that we’re comfortable being uncomfortable to learn as we go, and to not necessarily have a single silver bullet targeted, but be ready to fire lots of bullets, re-aim, re-shoot, and re-target.

Lloyd Armbrust

It doesn’t always work out though, sometimes you have to fail to learn. Take Thunderdome as an example. John Paton created a startup inside Digital First Media that was meant to take national news and bring them to the local level. It didn’t exactly work out, but they learned a lot in the process. Let’s walk through with John and see what happened.

John Paton

I’m John Paton, I’m the Chief Executive Officer of Digital First Media which is the second largest newspaper company in the United States, about a billion two in revenue and about 7,000 employees, and we have 75 daily newspapers, about 800 products in all digital and print, and we are in 18 states with about 65 million customers a month.

Not all work but the ones who do work well. Sure, Thunderdome was a great idea, it was mine but it didn’t work nearly as well as I’d hoped it would work, particularly in creating the kind of viral content that say the local newsrooms wouldn’t create.

It did have some remarkable successes in areas that we now do very well in all of our local newsrooms that we couldn’t do well until there was a Thunderdome. Thunderdome became an educational tool that help the company understand some of the things that it needed to do particularly in the fields of data journalism, early stages in mobile and early stages in video for sure.

As I sat back as chief executive, one of the things I have to do is allocate resources and it became really clear to me that despite this vast audience that we have, locals were our bread’s butter. Pushing a lot of the services that thunderdome provide to the company back into the field, saving a bit of money because in transition and transformations, saving money is always part of what you need to do, it became clear that that was a step that we had to take.

If you’re going to get into the multi-platform business and try to be as flexible as a startup and creating new things and very quickly, everybody says you’ve got to get in there and you’ve got to fail fast. Fail fast means making decisions like Thunderdome when you think it’s not working.

That’s the hard part, it’s easy to say again and very difficult to do. I would do it again in a heartbeat.

Lloyd Armbrust

Even though failures okay, when we start a new project we have to be going for success. There’s a lot to be learned about how startups build projects and iterate on problems.

Tim McDougall and Chris Edwards talk about how they implemented a program that taught this at the Cedar Rapids Gazette in Iowa.

Chris Edwards

I’m Chris Edwards, I am the Vice President of Sales and Marketing at The Gazette Company which is comprised of a number of legacy brands as well as our digital advertising agency Fusionfarm.

Tim McDougall

We’ve also taken some of the lessons that we’ve learned working in the startup environment and brought them back here, so a year and half ago we had something called e-commerce camp. The goal behind that was to say we think as a group at Fusionfarm, we need to increase our acumen on e-commerce, it’s not as strong as it should and we also need to learn to work better across functionally which good startups and good, very agile teams do.

Chris Edwards

We created an environment where we didn’t really know a whole lot about e-commerce, but we knew that long-term, we think that e-commerce is going to be the thing that really displaces advertising as probably our largest revenue-driver. It may not be next year, but it’s probably going to be in the next decade.

We figured we needed to learn from that, and so we challenged all of our employees to create little e-commerce businesses.

Tim McDougall

We were also at the time merging a lot of groups that hadn’t really worked together before at the same time, and so we offered anybody on a volunteer basis who wanted to join could join e-commerce camp, they would form teams, and we’d give them up to $5,000 to start a small e-commerce website, sell a real product. If they blew all the money and didn’t make anything that was fine, that was a great expense for their education as long as they learned. If they did make money we’d split that with them if they actually make a profit on it.

To do that though they had to come to a weekly class every Friday at 1 o’clock; we had a weekly class that said, here’s another aspect of e-commerce. They had to go through that and learn the process of doing it, so it was a combination of educating them on e-commerce, educating them on how to act better as a cross functional team, to know each other better and to respect what everybody else does because there’s a wide range of skills we have here.

Also, to get them to think like a startup would think as well and to think more creatively where here’s just not the assignment here’s the edge you need to produce today, but go figure out a category, go figure out a niche, go create a brand, go create an e-commerce website, go figure out how to connect it to a credit card verifier, go figure out shipping. All of those things having them go through that whole exercise made the team a lot smarter. We had 40+ people participate in that.

Chris Edwards

We had a couple of employees that were actually on the creative side, came up with an idea to sell coffee online and customize the labels for coffee. They did their own creative. They developed a website. They began putting things together.

They also learned a ton about how do you actually market a product. Beyond just developing something that’s esthetically pleasing, how do you actually take it to market, and what are the tools that you use, and then how do you form a business model? Those folks did that all on their own.

Tim McDougall

I think they got a healthy appreciation for just how hard good e-commerce can be, but I also a lot confidence that if they went and did it again they can knock it out of the park.

Chris Edwards

It wasn’t like these businesses are now multi-billion-dollar businesses they developed, but we took an idea that somebody came up with from the front lines and turned it into something that we educated 25 to 30 people on the basics of how e-commerce works so that, as we develop our own products and go to market and more importantly help our clients, those people already have that experience.

Lloyd Armbrust

Learning from and even mimicking startups is one thing, but newspapers should consider investing in, and even partnering, with local startups to help them succeed, especially startups that are in the newspapers’ own communities.

Mike Hodges

I’m Mike Hodges, I’m the President and COO for U-T San Diego.

One of the things that we’re looking at is how can we partner with more start-ups that are in local area that can really sort of leverage the audience that we have, the background that we have, the management skills and it also provides capital to them. I think that you’ll see more media companies invest in new startups because there’s an opportunity to leverage all the assets.

John Paton

We’re very close to the startup community and taking and scanning it all the time for new developments. It helps us stay informed inside the company with the kind of things we may need to do as opposed to waiting for that new development, I’m on lots of calls and in lots of meetings that our company where executives are talking to us about things that they see as the next big thing and we get to try that out.

Mike Hodges

We’ve invested in a couple of different local start-ups and are looking at other opportunities but our home run would be to actually build a tech incubator within our building here. Once again, leverage the advertisers, leverage the audience, leverage the newsroom, leverage our digital team and see if we can take these startups to the next level. I always contend that if it works at 1 newspaper it quite honestly should work at most other newspapers so if we can be the sort of launching off point and play a part in that, that would be great for the company.

Tim McDougall

A lot of what I do is either scouting or the investments that we do have in some startups, kind of managing those from the investment end and then trying to help out as a mentor on that end as well.

Then, I also do a lot of work with the local startup and tech scene just trying to help that grow, because I think if we don’t help it grow in our own backyard we’re not that credible if we out elsewhere and try and find it, and there’s a lot of latent talent here locally as well that over time if developed could be beneficial to us and could help us out a lot as well.

Lloyd Armbrust

So this is the challenge, this is the controversy. What are we supposed to do? What’s the solution? How are we going to transition the business model from print into digital? How are we going to survive, to keep journalism alive?

All of that, all of those things, that’s Broadsheet. That’s what we’re doing here. With your help we can answer those questions, we can survive. With everyone working together we can figure it out.

Brian Timpone

What’s unique about a startup is that startups aren’t afraid to fail. In a big company everyone is afraid to fail because they are afraid of losing their cushy salary and their job and because they create a culture like that. If you are afraid to fail you are never going to succeed so you might as well hurry it up and get it over with.

John Paton

If you don’t take those risks, you will fail permanently. It’s easy to say fail fast, it’s easy to say we have an entrepreneurial spirit inside our company. If you actually don’t really have one, you’re dead, absolutely dead.

Lloyd Armbrust

So this is Broadsheet: The Business of News. Thanks for watching! We want to hear your thoughts on what’s working and what’s not, and what strategies you’re implementing locally. You can join the conversation on LinkedIn or follow us at BroadsheetLabs on Twitter.

Also head over to our website at Broadsheet.org and make sure you sign up for the weekly email newsletter. We’re going to let you know every time we send out a new episode and that’s going to be a very important part of the conversation.

Thanks for watching. Again I’m Lloyd Armbrust and I hope to see you again next week!

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