For every splashy new online news venture with a big name backer, from New York’s DNAInfo to Hawaii’s Civil Beat, there are a dozen smaller startups inching their way toward profitability. One such tiny new news venture, operated out of its managers’ homes, is a financial niche site that generated more than $200,000 in revenue last year.
I talked with RIABiz Editor and CEO Elizabeth MacBride via e-mail to find out how she did it and what she’s learned about the nuances of running a news startup. You can read our edited exchange below.
Jeremy Caplan: How did you get started with RIABiz.com?
Elizabeth MacBride: In early 2008, the budget for my [contributing editor] job at Crain’s New York Business was cut, and although I was still working for the paper and for other places, I had more time on my hands. An old friend of mine from my Central Penn Business Journal days, Brooke Southall, called and asked if I wanted to join him in a venture: a new B2B online publication targeting investment advisors.
He’d been writing about that rapidly expanding world for about a decade. I knew next to nothing about investment advisors, but I was and am intensely interested in online journalism. Because it costs so little to start an online publication, I thought, “What do I have to lose?” So after talking to some people and doing some research on the industry, I said yes.
In moving from being a reporter and editor to running a niche news site, what did you learn?
MacBride: I’ve always been an editor at heart, even when I was reporting, so some parts of running a niche site weren’t new to me. I had to get us on track organizationally speaking, which meant deciding how many stories we were going to run every day, setting up a story flow, and an editing process — all those basics and many more.
I’d never set up a company before, though — and that’s been a real learning experience. Though I’ve written and edited hundreds of stories about startups, the question of whether to set up an LLC or a S-Corp seemed overwhelming. How does one find a good lawyer? Where do you get libel insurance? I learned that my networks of colleagues were one key source of information. I got our accountant from my next-door neighbor. We joined an association — the Specialized Information Publishers Association — which is how we finally got our libel insurance.
You have financial advertising, a directory, and a partnership with Forbes. How well is the site doing revenue-wise, and how does the situation look going forward?
MacBride: Last year, we had more than $200,000 in revenue. About midway through the year Brooke and I were able to start paying ourselves. We have two other partners, too, our sales director and our chief technology officer.
Our first revenue goal is in 2011 to make enough money to equal what we’d all be making working for someone else. I’m pretty sure we’ll get there this year.
What are the three most challenging aspects of running a startup niche news site?
MacBride: The fact that it’s a huge amount of work is a given. For most of last year, while I was still working nearly full-time for Crain’s to keep the money flowing, I was working till midnight four nights a week and at least six hours on the weekend. That takes a toll, especially if you’re a mid-career journalist with a family.
If RIABiz hadn’t started making money, I would have had to bail out after last year. One good thing about the Internet is that you know fast if it’s going to work — within six months, probably, and definitely within a year. Since the startup costs are low, I think if it doesn’t work, you just move on.
The breadth of skills required is hard. If your goal is just to get a blog site running, you can focus on the writing. But if you want to build a business, that’s different. That means spending a lot more time on organization, marketing, building a team of people, etc.
It is challenging to do the high-level journalism projects that sites that are “backed” by someone can do. I can’t forsee us doing real investigative pieces for a few years.
We break a lot of news in our industry, mostly because people like us well enough to give us stories. We also rely a lot on sheer brain power. We do much more analysis than our competitors, and our stories are different because they have a sense of intimacy and creativity. My partner Brooke is mainly responsible for that tone that’s worked really well for us — he studied many blog sites before establishing RIABiz.
What are some of the key skills that have proven particularly important?
MacBride: The ability to work hard and to multitask. In a startup, it’s important to communicate very clearly with the rest of the team. There’s just no time for misunderstandings, business or personal.
What have you learned about building advertising revenue that might apply to other niche or local news sites?
MacBride: We started with an ad director as a partner, and I can’t imagine doing this without him. He had sold in this niche before and had lots of relationships he could build on.
Maybe the most crucial thing about a startup niche site is picking a niche in which there are advertisers willing to pay high rates. Financial services is obviously one of those. Otherwise, you probably have to go to some kind of subscription model, which would be difficult right off the bat.
What role do directories have as a potential revenue source for niche or local news sites?
MacBride: We are still figuring that out. Our directory — which wouldn’t exist without our fourth partner, a 23-year-old Google Apps engine developer — is mainly a traffic source for us. It gives us a lot of page views. But we are exploring other ways that it could generate revenue. It’s a hard asset for the business, which is a good thing.
What other lessons can you share with journalists starting up news sites?
MacBride: Well — I’d say partnerships are another tricky thing. They are very fluid in the Internet world. We get approached just about every week from someone who wants to partner with us — but what does that mean? We have to drill down to figure out if it’s really to our advantage, which hardly any of them are. Lots of big news organizations want to just take our entire stories and post them on their sites for free with some vague promise of traffic. Not happening.
As an aside, it reminds me of the time when I wrote a story for the Lancaster, Pa., newspaper that relied on long-cultivated sources among the Old Order Mennonites. And a New York Times reporter called me and said, “I”m working on a Sunday feature … can I have all your sources?” I think as a startup it’s easy to get stars in your eyes and not stay level-headed about the best use of your time.