There’s a rule of thumb that three points make a trend. I realized this morning, as I was talking to a private equity investor, that I have seen three clear events that tell me that we close to a bubble bursting.
I can’t pretend to be objective about Topix or the job that Chris Tolles, their CEO, has done. I am part of the team and Chris’s number one fan.
After a strong ten year run as a news aggregator and community discussion board site, the business was challenged by changes in the marketplace. Rather than bitch and moan as some managers would and have done, Chris and his team re-engineered the business. It’s now several times bigger and much more profitable than it was prior to the turnaround. It’s also beautifully aligned with where the media and ad business is heading. They’ve done the hardest thing, built a profitable, fast growing media business that’s funded by programmatic ads. The secret is that Topix has always invested in technology. I have had a front row seat from the Topix Board of Directors.
Here’s a link to the Inc.Com Profile About Topix
Horan MediaTech Advisors is excited to announce that we have invested in local news startup, Spirited Media, and that Peter Horan will be joining their board of directors. Although many are concerned about the future of local news, we believe that now is the perfect moment to invest our cash and our effort into a very promising startup run by a team that we love. Although we are just formalizing our relationship with Spirited Media, we have been working closely with Jim Brady and his wife/partner, Joan since the earliest days.
We fundamentally believe that we can create a model for great local media that will engage readers, be profitable and grow. We also believe that, over time, the model that is working in Philadelphia, Pittsburgh and Denver, can be rolled out across the country. You can read more about the company in this Wall Street Journal Article about Spirited Media .
The old truism is that “all politics is local”. It’s pretty much also true that “all news is local”. People innately care about what’s happening in their neighborhood and their town. With the collapse of many newspapers, there has been a tremendous void. I don’t want to waste much time describing the trials and tribulations of the newspapers business. Enough electrons have given their lives documenting that saga. But I will say that they have been caught in a downward spiral that has left readers–particularly younger readers–without local news coverage that they can care about.
The relevant part of the decline of newspapers is that declining revenues has resulted in staff cuts which in turn resulted in less news being covered. The product became less relevant and compelling. Which has resulted in readers becoming bored and moving on.
Spirited Media, under the leadership of Jim Brady, believes that people are hungry for great local news. Jim is a GREAT editor with a resume that includes early work with the Washington Post’s digital team, TBD (part of Politico) and Digital First Media. He’s also the current public editor for ESPN. I don’t know anyone who has worked harder to figure out what a winning model for local media is in a digital age. He’s also a very close friend.
Jim has also assembled a great team of investors and advisors including Gordon Crovitz, Kevin Ryan, Charlie Hale of Hale Global (owner of Patch), and Joanne Lipman, Chief Content Officer at Gannett.
So what are we doing that’s different?
- Be laser-focused on creating content that readers LOVE and maybe pay for
- Have lots of style and attitude
- Build a balanced revenue model that is not advertising dependent
- Integrate an events strategy that strengthens readers’ ties to each other and the medium
- Focus on younger readers
- Keep the cost structure of a lean startup
- Mobile. Mobile. Mobile
Horan MediaTech Advisors is focused on helping media companies identify profitable business models within the 21st Century publishing ecosystem. We have a hands-on approach and a wide base of experience. We currently work with and/or have invested in Purch, Topix, Skift, Outdoor Project, GearJunkie and Zoom Media.
The WSJ article characterizes Spirited Media’s mission as “fighting” the collapse of local media. But this is not the Battle of Stalingrad. This is a joyous effort to figure out the future. We are very glad to be joining the team.
I have recently believed that executives should watch more disaster movies and read fewer business books. Granted, I think that most business books are simplistic and redundant, but my biggest beef is that they do little to prepare executives for the titanic changes that seem to be occurring with greater rapidity. Instead they wallow in trivial incrementalism. In a sense, they pat executives on the back and pass out participation ribbons for making layups.
Is it the best of times? Or the worst of times? Are ad tech and performance marketing companies crushing it? Or are the on the edge of a precipice? There are people arguing all sides of the question and an ocean of data to support any viewpoint.
The relationship between media owners and their readers and viewers continues to get more complicated. For many years advertising was the unavoidable tax that subsidized media. Now, with the rise of ad blockers and increasingly stringent privacy laws, consumers are becoming much more astute about the value of their time. Jun Group, where I am on the board of advisors, has developed compelling ad products that provide smart incentives for consumer engagement.
One of the most precious resources in any business is time. And yet, the same businesses that dispense nickels like they are manhole covers squander time like it’s water.
I had the opportunity to spent a exhilarating hour talking with my good friend, Lori Schwartz (@TechCatGirl) , about technology trends, how companies can be FutureFit, and why strategic planning processes turn out so badly, so often. You can here the episode here.