Media entrepreneurs: Five myths can stop you before you start up
Let's begin with this sobering statistic: nine out of 10 startups that get funded will fail.
Reliable and comparable numbers for news-related startups aren't available, but it's a good guess that any journalist thinking of venturing out on his or her own faces huge odds.
Three experts urged attendees at an Online News Association session Thursday to avoid five myths that can derail any news enterprise before it gains traction.
Myth #1: I’ll make money through advertising!
Harry Lin, head of business development for the Internet Movie Database (IMDb), an Amazon subsidiary, said the amount of traffic required for a website to pay the bills through advertising is "ridiculous." More often than not, he said, startup sites end up running network ads, and after the network and ad agencies take their cuts, the sites are left with 25 cents per 1,000 page views.
"Which is why major media are in big, big trouble," Lin said.
But some sponsorship models work, said Jeremy Caplan, Tow-Knight Center for Entrepreneurial Journalism director of education. One example, the New Haven Independent, draws sponsors for its hometown news because people believe in what the website is doing, he said.
News entrepreneurs can also barter or sell services to small businesses that may need better content, video or photos for their own sites. Another approach is native advertising, which Lin noted is actually a form of advertorial. (This method has been used successfully by BuzzFeed.)
Myth #2: People want what I’m selling!
Doug Jackson, principal at Shared Vision Marketing, said what entrepreneurs believe is irrelevant and they owe it to themselves to test whether a demand exists for their business.
"Do your research on the front end and it will save you a lot of pain on the back end," Jackson said.
Myth #3: People will work for free!
Your supporters may start out working without pay, only to turn out to be unreliable and fail to meet deadlines.
"What are you going to do — fire them?" Lin asked.
There are sites that offer free content, but the quality is sketchy, Lin warned. Sites such as Crowdspring offer another approach, Caplan said: An entrepreneur can name his or her price for design or writing services, get back completed work and then choose the professional to work with.
Myth #4: No one has ever done this before!
Lin said it's been his experience that someone -- and sometimes many someones -- has thought of your idea first.
But competitors can also serve as potential partners, said Caplan. And, he added, it's useful to know that competitors have validated a concept's viability.
Quora, a community site for sharing knowledge, offers examples of startup founders recounting how they approached their businesses and discussing their successes and failures, Caplan said, adding that media entrepreneurs can learn which pitfalls to avoid by checking out Quora's many discussion topics.
Myth #5: This’ll be fun! I’ll balance work and life!
The reality is entrepreneurs can expect to work all day and all week, Lin said, and the financial rewards may be long in coming.
"If you are going to do your own startup, be prepared to be very poor for seven years," he said, suggesting that journalists uncomfortable with that “go work for the man."
Jackson agreed. "I think the reality is you work all the time," he said, but added that while that may be the worst of times, it can also be the best of times as entrepreneurs pursue their passion.
Caplan said starting a new enterprise needn't be an all-or-nothing pursuit. Some journalists work at a job and build their enterprise on the side. "Yes, it is hard," he said, but building a successful startup is a credential no one can take away from you.
The ONA session is a part of the NewsU Startup Loft, a series of workshops aimed at journalists planning the jump into entrepreneurship.