Welcome to the GNI Startups Playbook.

Welcome to the GNI Startups Playbook.

The goal of this playbook is to demystify the process of launching a digital news startup, and to help you build a business that’s both financially viable and journalistically impactful.

This playbook and accompanying resources are informed by insights from many news entrepreneurs and the collective expertise of trusted partners and the Google News Initiative.

Our Trusted Partners and Contributors

These materials were built in partnership with some of the news industry’s most trusted experts in building and growing digital news startups.

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The chapters that follow will walk you step-by-step through the process of designing your news business, from identifying a target audience to testing a product idea to building your first budget.

We hope that reading through to the end of Chapter 6 will help you more confidently answer the most important question any entrepreneur must face: Am I ready to do this?

If not, that’s okay. In fact, if this playbook helps you realize that you need to develop your idea further, we’ll consider that a success.

If the answer is yes, we’ll offer our congratulations in the form of four Starter Guides designed to help you take the next steps in your business journey, including:

  • Building out your product.

  • Growing your audience.

  • Identifying your initial sources of funding and revenue.

  • Setting up your operations.

These guides include tips, templates, and other resources you can borrow for your business — and like the rest of this playbook, they are living documents that we plan to update and refresh over time, hopefully with your help.

Introduction
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Chapter 1

An introduction to journalism startups

Why do journalism startups fail?

Let’s start with the bad news: Most startup businesses will fail , and journalism startups are no exception.

The good news: Businesses often fail for many of the same reasons, and knowing how to avoid those common pitfalls will improve your odds of succeeding:

Pitfall #1: Building more than necessary to test a business model theory.

It’s a natural instinct for traditional journalists to complete their reporting and write their whole story before releasing anything into the world.

But that instinct doesn’t translate well to entrepreneurship, where strategic pivots are almost inevitable.

The goal for aspiring news entrepreneurs should be to test the viability of their business idea as quickly and cheaply as possible — and that means starting small.

Read

Eric Ries, author of the book Lean Startup, told NPR that his advice for entrepreneurs is “think big, but start small.” Why? Because “most of our ideas are actually terrible,” and it’s better to find that out before investing too much of your time and money.

Pitfall #2: Falling in love with the idea before it’s been tested.

As you prepare to test your idea, you should approach the process like a scientist evaluating a hypothesis or a reporter fact-checking a story — with a healthy dose of skepticism.

The skeptical entrepreneur will challenge their assumptions, respond to data, and use what they learn along the way to build and refine their product. That’s a recipe for success.

On the other hand, an entrepreneur who is too attached to their idea will struggle to find fault in it, and that will blind them to opportunities to make it even better.

Pitfall #3: Adopting magical thinking about how the idea will be viable as a business.

News entrepreneurs often start with a vision for the type of journalism they think should exist in the world, and a belief that if they can just get the journalism part right, the money will follow.

This magical thinking has produced no shortage of impactful journalism — but not nearly as many viable business ideas.

In reality, news entrepreneurs need to develop detailed business plans just like any other founder, and they need to resist the impulse to focus so much on their journalism that they neglect the hard work it takes to earn revenue and build a financially viable business.

Read

Magical thinking can be hard to diagnose in yourself, so it’s a good idea to find a mentor or advisor who can give you the right combination of encouragement and tough love.

Why do we call them startups?

The word “startup” might make you think of Silicon Valley investors and billion-dollar tech companies, but that’s not what most startups look like, especially in journalism.

The simplest definition of a startup is 'an organization in the process of testing a business model.' And for the purposes of this playbook, we’re adding two conditions of our own:

1. Your business is trying to grow toward financial viability.

The word “grow” is important here.

There’s nothing wrong with starting a blog, making content for whoever wants to read it, and accepting contributions from whoever wants to chip in. But unless you’re actively trying to grow your reach and revenue, we’d consider that a hobby, not a startup.

As for “financial viability,” that could mean earning enough revenue to pay yourself, or it might mean sustaining an entire team.

The size of your business doesn’t matter. What matters is that you have a clear vision for monetizing your work and earning enough revenue to meet your journalistic ambitions.

2. Your business is new and nimble enough to pivot.

The longer a business operates, the more entrenched its habits and routines become, and the harder it gets to break away from the “way things have always been done.”

That’s what makes startups different. As new or early-stage businesses, they’re nimble enough to adapt their business model as they go, doubling down on what’s working and ditching what’s not.

Read

A newsletter about the business of hip-hop tested a paid membership program — and then pivoted to something very different.

Chapter 1
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Chapter 2

Define the problem you are trying to solve

Who is your target audience?

All successful businesses solve a problem for someone. Journalism businesses are no different.

They solve problems for audiences — both people and organizations — who need reliable information to make decisions about how to vote, how to invest their money, where to eat dinner on Friday night, and so on.

Read

Media economist James T. Hamilton identifies four categories of human information needs: our information needs as consumers, as workers, as audiences of entertainment, and as voters.

In this chapter, we’ll cover how to identify your audience’s durable, or long-lasting, needs and challenges (and then talk about designing a solution).

But let’s start with the most basic question: Who is your audience?

1. Your target audience can’t be ‘everyone.’

News and information help people make informed decisions in their lives — but that doesn’t mean they need your news and information, especially in a digital world that’s full of options.

The businesses that succeed know exactly who they’re for and who they’re not for, and the way you figure that out is by (a) developing a hypothesis about who your audience might be, and (b) conducting user research to test whether that’s true.

If you don’t have a hypothesis yet, here are a few questions to consider as you get started:

  • What geography will your news business try to serve? An entire country? A city? A neighborhood?

  • What topics and issues will your business cover? Will it go deep and narrow on a single issue like criminal justice or healthcare? Or will it emulate a traditional newspaper by covering many different topics?

  • What language(s) will your business publish in, and how will that limit or expand the target audience?

  • Which business model will you use to make money, and how does that affect the type of audience you need to reach?

If these questions aren’t helping you define an audience, consider this one:

What communities do you already belong to or feel passionate about, and what information gaps are they experiencing?

  • Do you live in a community where the local newspaper has gone out of business or stopped providing in-depth coverage of a particular issue?

  • Are you part of an immigrant community that doesn’t have access to news or information in their native language?

  • Do you identify with a political, racial, or cultural group that doesn’t see its concerns reflected by established media outlets?

  • Do you work with local nonprofits or other organizations that need help reaching their target audiences?

As you start to identify information gaps, it’s also worth considering how many people you think are affected by a particular gap -- and whether it’s enough to build a business around.

As we discuss in Chapter 5, a good product will only become the foundation of a viable business if there’s a big enough market for it, so even at this early stage, you might want to prioritize ideas that clearly fit that criteria while ruling out others that don’t.

2. You can make your target audience more precise with ‘personas.’

Once you’ve settled on a target audience, consider drilling down into the behavior patterns and distinctive characteristics common to the people you’re trying to reach.

For example, if you’ve defined your target audience as first-generation immigrants in New York City, you might ask: What languages do they speak? What neighborhoods do they live, shop, or work in? What devices or apps do they use to access news and information? What challenges do they confront in their daily lives, and what information gaps might be making those challenges more difficult?

Answering questions like these questions will help you develop a set of user personas, or fictional characters who embody the type of people you want your business to serve.

But don’t get too attached to them. As we’ll discuss later in the playbook, your user personas will likely evolve after you start conducting interviews with actual users — and from a product design standpoint, they may eventually become less useful to you than your users’ jobs-to-be-done.

Borrow

This customer avatar template from Digital Marketer will help you draft your first user personas and begin identifying the characteristics of your target audience.

3. Consider the other stakeholders that your business will need to serve

The people who read, watch, or listen to your journalism are one audience you serve, but they’re not the only one.

In many cases, your startup will also need to serve other stakeholders. Depending on your business model, these might include:

  • businesses that pay to advertise to your audience.

  • foundations that give you grants to support your journalism.

  • donors who give small or large contributions because they believe in the mission of your work.

  • clients who pay for branded content or other direct services that you offer.

  • investors who pay for a financial stake in your business.

  • board members who have a fiduciary responsibility to ensure you’re fulfilling your mission.

At this point in your startup journey, you don’t need to know exactly how you’re going to make money, or even how you’re going to structure your business. (We’ll cover that later.)

The goal is simply to start thinking about the different interests your business will serve — from your audience to your customers — and what these stakeholders might need from your business.

Case Study
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How Scalawag pivoted to address a mismatch between its product and its audience

Scalawag wanted to engage young, diverse, progressive Southerners in a new conversation about the South. But its core product — a quarterly literary magazine — didn’t reach that target audience, and its paying members turned out to be older, mostly white readers from across the country.

What problems can you solve for your audience?

Most entrepreneurs start their business journey with an idea they think is pretty good. But you won’t have evidence that it’s good until you figure out if it solves a problem for your target audience.

So how do you figure out your target audience’s problems? The jobs-to-be-done (JTBD) framework is a good way to start.

The JTBD framework is built around the idea that people have jobs to do in their life, and they hire or fire products to help them do those jobs.

In this case, a “job to be done” isn’t a task, like reading the news. Instead, it’s the motivation for completing that task, like wanting to offer an informed opinion on what’s happening in the world.

Here’s a framework you can use to write JTBD statements for your target audience:

When , I want to so that I can .

In this framework, you start with the situation (“when…”) followed by the motivation (“I want to…”) and finally the the desired outcome (“so that I can…”).

Here are a few possible JTBDs for audiences of local news:

  • When I’m living in a new place, I want to learn about the best bars and restaurants so that I can live like a local.

  • When I’m trying to save money, I want to find out about deals and discounts in town so that I can have fun experiences without breaking the bank.

  • When an election is coming up, I want to learn about the issues and candidates so that I can make a smart decision about how to vote.

  • When I have free time on my hands, I want to find opportunities to volunteer in the community so that I can meet other people who care about giving back.

Once you narrow in on your target audience’s jobs-to-be-done, you can then ask “how might we” questions to help design solutions for those jobs. For example, how might we help people learn about new restaurant openings?

This exercise might point you toward solutions you’ve already considered, but if you approach it with an open mind, you may be surprised by how many new ideas it surfaces.

Read

The key to a good “how might we” exercise is asking the right questions. Here’s some advice for getting your creativity flowing.

How do you confirm your assumptions about your target audiences and their needs?

So far in Chapter 2, we’ve covered how to define your target audience and how to identify potential problems — or jobs-to-be-done — that your business can help them solve.

But how will you know if the problems you’ve identified are accurate?

The short answer: by asking people.

User interviews and surveys are one way that entrepreneurs validate or challenge their core assumptions before making a big decision — and you should plan to conduct them regularly before and after launching your business.

Here are a few tips for getting started:

1. Make sure you’re interviewing the right people.

You can begin to test your assumptions with as few as 10 to 20 interviews, but it’s important that those interviews are with the right people — or in other words, with potential users who are part of your target audience.

Don’t know how to reach those people? Consider your networks: Are you in any Facebook Groups that are popular with your target audience? Do you have friends or colleagues with a large email list? Are there people you’ve already interviewed who could make a referral?

You might also find it helpful to revisit your user personas and identify places where your target audience is already spending time, in person or online.

For example, if you’re trying to reach parents with young children, dropping off fliers at a daycare center or posting in a parenting subreddit might be effective, if unconventional, ways to get their attention.

Read

It’s easy to exclude parts of your target audience from user interviews if you don’t recruit participants in the right ways. Here’s why that’s a problem, and how to avoid it.

2. Write a script for your interview.

The goal of user interviews isn’t to get people’s thoughts or feedback on your idea. (That’s how you end up with confirmation bias).

Instead, the goal is to understand how people experience certain problems in their lives. That’s why your questions should focus on them, not you.

For example, you might ask:

  • How do you keep up with what's happening in your neighborhood?

  • How do you find out about things to do where you live?

  • What’s something happening in your community that your friends are talking about that you wish you knew more about?

  • What’s something you’d love to do, but haven’t found here yet?

Bonus points if none of your interview questions include the word “journalism.” That term might ultimately apply to your solution, but the interview should be all about your users’ problems, and that requires thinking and talking more broadly about information needs and daily challenges.

Borrow

WhereBy.Us co-founder Rebekah Monson created this user interview template with local news audiences in mind, but you can adapt the topics to fit your product idea and target audience

3. Look to the past, not the future.

If you’ve ever changed your weekend plans at the last minute or fallen short of your New Year’s resolutions, you’ll know that humans aren’t always great at predicting their future actions.

That’s why user interviews should ask participants about things they’ve done in the past, not what they might consider doing in the future.

For example, you could ask: “How many times last week did you search for parenting advice online? But not: “How often would you visit a parenting-focusednews site if I created one?”

4. Ask for referrals and the opportunity to follow up.

People in your target audience will usually know other people in your target audience, and the end of the interview is a great time to ask for an introduction to one of them for your next interview.

The key is to be specific about what you want (a personal email introduction is usually best, if they’re willing to make one), and to follow up afterward with a polite reminder.

And finally, with every interview you do, don’t forget to ask for permission to follow up if you have additional questions or updates down the road.

If your interviewee says yes, you can then invite them to become an early adopter once you’re ready for the next step: launching a minimum viable product.

Read

The Membership Puzzle Project’s Membership Guide shares other good advice for conducting user interviews, including tips for how to make your interviewees feel comfortable.

Chapter 2
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Chapter 3

Build and measure your minimum viable product (MVP)

How do you test your business idea with an MVP experiment?

The goal of building a minimum viable product, or MVP, isn’t to test every part of your business.

The goal is simply to get started — and to answer one of the first questions that any startup business faces: Do people find value in your product? Or in other words, does it succeed at solving their problems?

The fastest way to figure this out is by launching a small-scale version of your product, getting it in front of potential users, and measuring their response, so let’s talk about each of those steps:

1. Design your MVP experiment

A minimum viable product (MVP) is the version of your idea that will allow you to achieve the most learning with the least effort.

You might also hear this concept described as a minimum feasible product or minimum desirable product, but the idea is the same: The MVP should be just big enough to provide value to your target audience — and no bigger.

So what does that mean for news startups? Here are a few factors to consider:

  • Frequency: What’s the least often you could publish while still being able to collect meaningful feedback and insights from your audience? For example, if your eventual goal is to provide a daily news product for your community, you might consider starting with a scaled-back weekly version.

  • Platform: What’s the lowest-cost platform you can use to test your idea? You don’t need to build an expensive custom website to start publishing content and gathering feedback when a simple email newsletter will do the trick.

  • Scope: Of the user problems you identified in Chapter 2, what’s the simplest or most important one for your MVP to address? You don’t need to solve every user problem right away to be useful, so this is a good time to set priorities. For example, you could start by covering just one topic or serving just one audience, with the goal of eventually expanding.

Inspiration
Need inspiration? Here are two approaches that other news startups have used to launch successful MVPs.
  • Inexpensive to launch using email platforms that charge you based on the number of people on your mailing list, or by taking a small percentage of the revenue you earn from paid subscriptions.

  • Easy to scale up by increasing your publication frequency or launching spin-off newsletters.

  • You own and operate the content you make and user data you collect, and this direct relationship with your users means they’ll reliably see the content you share.

No matter what approach you choose, your MVP experiment should be an actual experiment, designed to stress test your idea and provide you helpful feedback.

That means you’ll need to define what success looks like, identify questions you’re trying to answer, and, most importantly, set a timeline for evaluating the results.

Bookmark

If you decide to launch a newsletter MVP, this open-source guide from the Lenfest Institute and the Shorenstein Center at Harvard Kennedy School can help you develop an email template, grow your list, and measure results.

2. Recruit participants for your experiment

A successful MVP experiment will often start to gain momentum on its own — but only after you’ve recruited your first 10, 50, or 100 users.

So how can you find these people?

Many news entrepreneurs start by tapping into their personal, professional and social networks, and that’s okay.

Just make sure the people you’re recruiting are actually part of your target audiences, and that they’re not so close to you that they won’t be able to give honest feedback.

Inspiration
Want to find participants outside your circle of friends and family? Here are three strategies for widening your search and pulling in more early adopters.

Direct outreach can start with your friends and family, but it doesn’t have to end there.

Think about other places your target audiences spend time and how you might reach them there.

Ideas

  • Post on Facebook, LinkedIn, Reddit, NextDoor, or other online forums where your target audiences are already active.

  • Talk to people at events or other public spaces (e.g. farmer’s markets, neighborhood meetings, parent groups, etc.).

  • Write a Medium post or Twitter thread and encourage people in your network to share it.

  • Email people in your network and ask them to make introductions or referrals to potential users.

3. Collect feedback and evaluate user behavior

The final step in your MVP experiment is evaluating whether or not your product gained traction with users. You can answer that question by looking at three types of outcomes:

  • User behavior: Are users showing you that they value the product or service by engaging with it regularly?

  • User feedback: Are users telling you that they value the product or service in surveys and interviews?

  • Reach: If your MVP is public, is your content reaching more, less, or the same number of users each week?

It’s important to consider all of these outcomes, because neither data nor people are 100 percent reliable.

For example, some users might try to protect your feelings by giving positive feedback in a survey or interview, despite not finding your product or service useful enough to engage with regularly.

Meanwhile, other people might feel obligated to engage with your content every day because they signed up for the MVP, but when you ask for their feedback, it won’t be favorable.

That’s why it’s important to consider reach, user behavior and user feedback — and to start your MVP experiment with a plan for measuring them.

Inspiration
The exact success metrics you use for your MVP experiment will depend on what you build, but here are some common approaches to help guide you:

No matter what product you build, you’ll need to answer three basic questions to understand user behavior:

Recency: How recently did the average user engage with your product?

It’s not surprising to see a surge of interest and engagement when you first launch an MVP, because people are curious about the idea and want to check it out. But to know if you’re building sustained engagement with these early adopters, you’ll need to measure how recently they visited your site, opened your newsletter, downloaded your podcast, etc. by tracking metrics such as total active users or the average number of days since last visit.

Frequency: How often does the average user engage with your product?

If early adopters continue to engage with your product after getting their first impression, the next question to ask is how often they engage. For example, if your MVP is a weekly email newsletter, you will want to know whether the average active user is opening your emails every week or just once or twice a month, because this will show you if your product is compelling enough to create loyal users rather than casual ones.

Volume: When users engage with your product, how long do they stay and how much content do they consume?

A related measure of user loyalty is the amount of content that a user engages with each time they visit your site.

For a website or blog, you can easily measure volume by tracking the average number of web posts that a user views per visit.

It’s not quite that easy for podcasts, newsletters, and other types of products, but metrics such as click rate and average listening time can give you a similar sense of how deeply your users are engaging with your product whenever they visit.

Case Study
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How Vox Media launched an MVP for Vox.com in nine weeks

Building and testing an MVP isn’t just a step for first-time entrepreneurs. In January 2014, Vox Media announced that Ezra Klein would be leaving The Washington Post to lead the company’s seventh media brand — but that brand still needed to be planned, designed, built, tested, and even named, all within a matter of months.

How does the MVP help you improve your product?

In a perfect world, all the data and feedback you collect from your MVP experiment would point you in the same direction. But that’s rarely how things shake out.

In reality, experiments that involve real-world users are messy, and it can take time and effort to untangle what they mean for your business.

Here are a few tips and tricks for cutting through that chaos and making sense of what you’ve learned.

1. Compare your user behavior and survey results to industry standards.

As you start collecting data from your MVP, try to avoid comparing yourself to industry leaders that have much bigger budgets and audiences than you do.

Instead, identify industry averages for the key metrics that matter for your product, whether that’s newsletter open rate, time spent on page, or Net Promoter Score, and evaluate how you stack up.

Or better yet, find another business that’s making a similar product for a similar audience and use their performance as a benchmark. This peer data may ultimately provide the most useful comparison for your MVP, because factors such as audience size, audience demographics, and geographic region can make a big difference to the level of engagement you should expect.

2. Organize user feedback by themes

Metrics can be messy, but the qualitative feedback you’ll receive from user interviews and surveys is even messier. It might even be full of contradictions.

That’s okay. Your goal is not to make every user happy, but rather to maximize value for your overall target audience. And the best way to do that is by looking for trends.

Did multiple users tell you that your news product is too wonky? Too opinionated? Not opinionated enough? Not frequent enough?

As you review the responses, look for trends like these that can guide your next steps, and don’t obsess over the outliers.

3. Revisit and revise your jobs-to-be-done.

In Chapter 2, we recommended revisiting your user needs and jobs-to-be-done after completing your first round of user interviews. Now we’re going to do it again.

As a startup business, you’ll never be done learning about your users and their needs, and you should reevaluate and update your assumptions every time you complete a round of interviews or surveys.

What should you do next after your MVP experiment?

Once you’ve completed your MVP experiment, there are three options for how to proceed: you can persevere, you can pivot, or you can reset.

1. If you’ve demonstrated that people find value in your product, and you understand the source of that value, you should persevere.

That doesn’t necessarily mean you’re ready to launch a business tomorrow.

As we’ll discuss in Chapter 4, there are still other important questions to answer about your revenue model and market viability.

What it does mean is that your idea shows promise as a solution to real people’s needs, and it’s worth exploring whether that idea can sustain itself as a money-making business.

2. If you’re getting mixed signals from your MVP experiment, consider making a pivot.

Maybe people loved the idea of your product, but they didn’t love your execution of it.

Or maybe you learned from user surveys that the target audience for your product is different than you expected.

If that’s the case, your business idea could still be viable if you make the right changes. And you’re definitely not alone.

Startups pivot all the time, and those pivots are often what makes them successful businesses in the long run.

Read

Learn how the journalists-turned-entrepreneurs at The Plug, The Logic, and other digital media startups adapted and iterated until they found their sweet spot.

3. If your MVP experiment didn’t gain much traction, now is the perfect time to reset.

It’s not unusual for an MVP experiment to fall flat — and it’s also not a failure.

In fact, learning about problems with your business idea early in the process is a major victory, because it means you’ve saved yourself time and money on an idea that was never going to resonate with your intended audiences.

If you find yourself in this position, take time to reset. Thank the people who supported you. Write down what you learned. And then, if you decide to go back to the drawing board, this time you’ll have more experience and a better understanding of the challenge ahead.

Case Study
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How Lokal’s founders went back to the drawing board after their first product flopped

Lokal co-founders Jani Pasha and Vipul Chaudhary thought they’d developed a news service that would combat fake news in India and help readers stay more informed about local news. But when they launched their first product in 2018, the idea flopped, and they were forced to reset their business plans.

Read

Startups fail all the time, but that doesn’t have to be the end of your journey as an entrepreneur. Here’s some advice on what to do next if your idea doesn’t fly.

Chapter 3
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Chapter 4

Identify the mission and values that will guide you

How do you articulate and integrate your mission and values?

Writing a mission statement can be a powerful tool for articulating your business’s guiding values — or it can be a PR stunt that means nothing at all.

The difference depends on whether you have a plan for living up to your values and mission, even as you face the real-world demands of running a business. Here are some tips:

1. Put your mission statement, vision statement, and core values into writing.

Your company’s mission, vision, and values are closely related to each other, but they’re not quite the same thing.

“Mission” is what you want your business to do. “Vision” is what you want your business to become. And “Values” are how you want to carry out your mission to achieve your vision.

It’s possible your mission and vision will evolve over time, as you learn more about the user needs that your business exists to solve.

But even if you adapt your mission and vision, your values should be consistent. These are the core principles you're pledging to honor, so it's important to focus on getting them right the first time.

Read

Writing a mission statement, vision statement, and set of core values should be a team effort, even if you don’t officially have a team yet. Here’s how to do it.

2. Develop specific policies that reflect your mission and values

If a mission statement is the blueprint for the company you want to build, then policies are the instructions for making that vision a reality.

In other words, your policies should answer the “how” questions. For example:

  • If you value accuracy, how are you going to fact-check your work? And how are you going to disclose errors when you make them?
  • If you value independence, how are you going to keep your editorial work free from the influence of advertisers? And how will you avoid or disclose conflicts of interest?
  • If you value racial, ethnic and cultural diversity, how will you achieve it in your news coverage? And within your organization?
  • If you value collaboration, how are you partnering with other news businesses to deepen your respective impact? And how are you facilitating teamwork among your own colleagues?

As you answer these “how” questions, you may realize that you don’t have the resources or bandwidth to walk the walk perfectly. That’s okay.

The goal should be to set realistic expectations for yourself and your colleagues, and to put those expectations into writing so that you can hold yourself accountable to them.

3. Decide what you won’t do as a business.

Company policies generally cover the positive steps you’ll take to live up your values — but it can also be helpful to name the specific pitfalls that you want to avoid.

For example, you might decide not to cover certain types of stories because they don’t reflect your commitment to social justice. Or you might refuse to accept anonymous donations because they don’t reflect your commitment to transparency.

Drawing these lines in the sand can help move your values from the theoretical to the practical, and they can help you make difficult decisions before they arise, with your values front and center.

4. Consider the impact of your funding model on your policies.

As an entrepreneur, it’s almost inevitable that you will experience moments of tension between your values and your financial incentives and be forced to grapple with the ethical questions that come with them. For example:

  • If you rely on advertising revenue, what will you do if an advertiser complains about coverage they don’t appreciate? What if they threaten to withdraw their advertising support?
  • If you rely on subscription or membership revenue, what obligation do you have to the people who can’t afford a subscription or membership? What level of access should they receive to your content and community?
  • If you rely on grant funding, how will you evaluate whether a grant opportunity serves your mission, or just fills your coffers? Are there topics or issues that are beyond your scope? And are there grant terms or conditions that you would refuse to accept?
  • If you’re raising money from investors, how will you make sure that their growth expectations align with yours? And how will you handle any pressure they put on you to maximize profits at all costs, even if it means taking shortcuts somewhere else?

You may never be able to eliminate these tensions, but you can at least prepare yourself for the hard tradeoffs you’ll be forced to weigh by considering them in advance and making a plan for how you’ll respond.

How do you build a business that prioritizes diversity and inclusion?

The first step to making racial, ethinic, and cultural diversity and inclusion a priority for your business is to understand why they’re important, because diversity for diversity’s sake shouldn’t be anyone’s only goal.

The bigger goal should be to reflect the needs, concerns, and experiences of the communities you serve by building a team that can:

  • gain access to sources with a wider range of perspectives.
  • identify story ideas that you might not otherwise consider.
  • use language and tone that's inclusive of everyone you aim to serve.
  • find ways to reach and engage the full breadth of your community.

Once you understand how diversity and inclusion contribute to your journalistic mission, then you’re ready to start taking these steps (and others) to weave it into your business’s DNA:

1. Build a diverse team from the start

Even if you’re currently operating as a solo entrepreneur, there are still ways to address your personal blind spots and build a diverse team from the start:

  • Find yourself a co-founder. Launching a business with another person will not only make your journey less lonely, but it will also give you the chance to add someone whose skill set, professional background, and life experiences complement your own.

  • Set up a community advisory board. This group of early supporters can help you test your assumptions and think through key decisions, either on a volunteer basis or for an honorarium.

  • Recruit a diverse team of freelancers. Many news startups hire freelancers before they hire full-time employees — and sometimes those freelancers become full-time employees. That’s why it’s important to actively recruit diverse talent, rather than relying entirely on your existing networks.

  • Establish a hiring process before you need one. Whether you design your own process or you borrow one from a company like Hearken, you need a plan for recruiting diverse candidates as soon as you’re ready to hire, which might come sooner than you think.

Bookmark

Use this journalism-specific spreadsheet from the Democracy Fund to find diverse candidates and partners through a curated list of professional associations, conferences, internship programs, and other parts of the talent pipeline.

2. Be intentional about building an inclusive culture.

If you plan to hire employees for your business, it’s important to build an inclusive culture so that your teammates will grow and thrive professionally and ultimately want to stick around.

So what makes a culture inclusive? There’s no simple answer to that question, but there are a few basics you need to get right:

  • Employee onboarding. Make sure new employees feel welcomed on their first day, be clear about expectations, and give people the tools and information they need to thrive.

  • Decision making: Empower employees to weigh in on important decisions that affect their workplace environment and the work of the organization.

  • Feedback + conflict resolution: Develop processes for encouraging constructive feedback within your company and handling challenging issues that come up amongst staff.

  • Management. Set up regular one-on-one meetings with employees who report to you, decide how you want to communicate and exchange feedback, and learn their professional goals so that you can find ways to support them.

  • Company rituals. Celebrate team wins, and make sure everyone can join in those celebrations regardless of their cultural background, dietary restrictions, or drinking habits.

3. Make the business case to investors, employees, and other stakeholders.

If diversity and inclusion are framed only as an ethical imperative, then it’s easy for them to be dismissed by stakeholders who are more concerned about their paychecks or investment returns.

That’s why it’s important to understand how diversity and inclusion also impact your business’s journalism, and ultimately its bottom line.

According to recent economic and social scientific research, businesses with higher levels of racial and gender diversity are more likely to:

  • Rely on facts (rather than gut feeling) to make decisions.

  • Process information more carefully.

  • Bring new innovations into the market.

  • Outperform the average financial returns in their industry.

Understanding these business incentives might not be necessary for you to make diversity and inclusion a priority, but they can help you make the case to investors and other stakeholders, and their support will only strengthen your cause.

How do you build a business that prioritizes equity?

Diversity, equity, and inclusion are usually talked about together (and collectively labeled “DEI”), but as Lea Trusty of the Democracy Fund points out, equity often gets overlooked in these conversations.

It’s not difficult to figure out why. Compared to diversity and inclusion, equity is harder work. It means sharing and shifting power, and redirecting resources to the people and organizations who have historically been denied them.

If you value this work, don’t just put the word “equity” in your mission statement. Make a plan to prioritize it in your business, starting with simple steps like these:

1. Offer mentorship, internships, and professional development to journalists and aspiring journalists from underrepresented communities.

Because of the inequality that exists in higher education and beyond, many people from underrepresented backgrounds never get access to the training or education they’d need to become a journalist, or the professional development and mentorship they’d need to move up the ladder.

News businesses that value equity can help correct this access gap, first by providing targeted mentorship, training, and paid internships, and then by writing job descriptions that require “a willingness to learn” instead of “years of experience.”

2. Be intentional about your purchasing decisions.

News businesses buy products and services all the time, and that’s an easy opportunity to spend money with minority-owned businesses and contractors.

If you’re ordering food catering for an event, look for a list of local restaurants that are owned by women and/or people of color.

If you’re hiring a freelance writer or photographer, look for a directory featuring freelance creatives of color like this one for Portland.

If you’re trying to decide what tech tools and platforms to use, look for women, people of color, and other underrepresented minorities on the company’s leadership team.

Implementing small steps like these can make a big difference to the people and businesses you’re supporting — and all it takes from you is a little more research.

3. Pay your op-ed writers and other contributors.

News businesses often find that some people in their community are willing to submit op-eds and other content for free, which might seem like a great bargain.

The problem is that not everyone can afford to contribute content without getting paid, and the people who can afford it aren’t necessarily representative of the broader community you’re trying to serve.

That’s why it’s a good idea to at least offer to pay your contributors. If they decline, you can count it as a donation to your business. But by making the offer, you’re making your publication more accessible to more people — and helping ensure that your op-eds and other user contributions reflect a more diverse set of perspectives.

Bookmark

The Online News Assocation, the Maynard Institute, and Open News are teaming up on an effort to build anti-racist news organizations and develop industry standards for the principles, policies, and practices that eliminate institutional racism.

Chapter 4
Next Chapter
Chapter 5

Make a business plan for your idea

How do news businesses make money?

No matter how much initial funding you raise from investors, foundations, or big donors, your business will only be financially sustainable in the long run if you make more money than you spend each month.

Achieving financial stability isn’t easy for digital news startups, and it doesn’t always follow the same blueprint. But the experience of successful news startups around the world has shown that it is possible.

How’d they do it? Here are the most common approaches that digital news startups use to earn revenue.

1. Advertising

According to research by Project Oasis, nearly two-thirds of digital news organizations in North America rely more on advertising than on any other revenue stream.

Direct advertising and sponsorships are the most common types of advertising for digital news startups — and the most profitable if you’re able to build strong relationships with local businesses and other direct sales clients.

An alternative is programmatic advertising, which is sold by a third-party vendor and plugged into your content automatically in exchange for a payout.

Programmatic advertising can be a low-cost option for earning ad revenue (in part because it doesn’t typically require hiring a salesperson), but it often has lower returns, especially for emerging startups with small audiences.

The good news: You don’t have to choose one or the other. In fact, many publishers use programmatic advertising as a way to fill the gaps left by unsold direct ads, which can be an effective strategy for maximizing advertising revenue.

Inspiration
  • You own the relationships with your advertisers, and you have the opportunity to nurture and grow those relationships over time.
  • You have more control over where and how ads appear on your site, and you set the price for each ad package.

2. Direct audience revenue

Many news publishers are turning to direct support from their audiences to diversify their revenue portfolios.

Compared to advertising, direct audience revenue is less vulnerable to market cycles, more predictable from month to month, and often better aligned with an organization’s core mission.

The question is: What will your audience be willing to pay for?

Maybe it’s a custom solution to one of the user needs you identified in Chapter 2. Or maybe it’s one of the established revenue products detailed below.

In either case, Google Consumer Surveys or other survey tools like SurveyMonkey or Typeform can help test potential product choices with your audience and learn which ones they’d be most likely to pay for.

Inspiration
  • Subscriptions can become reliable sources of recurring revenue, as long as you continue to deliver the value that people signed up for.
  • Building a subscription model can help you identify the types of content that are most valuable to your users, and then focus on producing more of that content.

The sources of audience revenue that make the most sense for your business will depend on the content you’re making and the market you’re serving, which we’ll dig into next.

But you can get a sense of industry norms by reading the INN Index 2020 report on U.S. nonprofit newsrooms, SembraMedia’s report on news startups in Latin America, and Project Oasis’s research on news startups in North America.

Read

The Google News Initiative’s Reader Revenue Playbook offers a deeper dive into audience revenue and the strategies that news organizations use to develop and grow these revenue streams.

3. Client services

Digital news organizations are full of experts in creating, publishing, and marketing content on the web — and there’s a market for that expertise if you’re willing to sell it.

These client services are rarely a news startup’s primary source of revenue, but they can be an important secondary revenue stream, especially as your team and capacity grow.

Inspiration
  • Branded content is a higher-value (and higher-priced) product that you can pitch to advertisers once you’ve established an initial relationship.
  • Branded content offers more room for creativity and storytelling than traditional advertising, so your users are likely to spend more time engaging with it. (And if you do it really well, they might even enjoy it.)

The challenge with offering client services is that, unlike with subscriptions, memberships, and certain types of advertising, it requires you to do additional, custom work every time you add a new customer.

That extra work requires staff time, which costs money, so it’s important to make sure that you’re pricing these client services to make them profitable, and also that you’re keeping them aligned with your core products and services. Otherwise, they may feel distracting from your mission as a news business.

4. Grants and philanthropy

As local news has withered in many communities, a growing number of private foundations and philanthropists have stepped up to support it, especially in the United States.

A study by the Shorenstein Center on Media, Politics, and Public Policy found that more than 6,500 foundations in the U.S. awarded grants to public and nonprofit newsrooms between 2010 and 2015 — and together those grants were worth $1.8 billion.

So what types of news startups are best positioned to earn these grants? Here’s some context:

  • Most foundation grants are awarded to public or nonprofit newsrooms, but for-profit businesses can still compete for those grants by applying with a fiscal sponsor.
  • Foundations are often interested in advancing specific causes, whether that means raising public awareness about an issue like climate change, addressing information needs in an underserved community, or supporting news businesses that are as diverse as the communities they serve. The more you can do to help a foundation meet these goals, the more likely you are to get their attention.
  • Foundations aren’t the only source of philanthropy. Wealthy individuals are also a major source of charitable giving, along with large companies that award corporate social responsibility grants, so it’s worth considering what access you have to this side of the philanthropy world, and whether these funders could help you run a match campaign or other initiative that would maximize their impact.
Read

Applying for grant funding is a lengthy process with no guarantee of success, but here are 15 tips for how to improve your odds.

A final note about revenue models: Based on our research for Project Oasis, most independent news businesses that consider themselves to be financially sustainable rely on two or more of these revenue sources.

Of course, you may not have the capacity to develop multiple revenue streams right out of the gate, and that’s okay.

As with your product, you should try to adopt an “adapt and learn” approach to building your business model. Pick one or two revenue streams at the beginning, develop a hypothesis about how you can be successful, and go!

What’s the market for your product?

Let’s say you launch a minimum viable product (MVP) experiment and people love it. They read and share your content, post about you on social media, refer their friends, and maybe even send you fan mail.

That’s a really good sign that your product is useful. But it doesn’t necessarily mean you’ve found a viable business idea. To know that with confidence, you’ll need to consider a few more questions about the market for your product:

1. Is the market big enough to sustain your business?

How you define “big enough” depends on how much revenue your business needs to cover its baseline operating expenses. (We’ll dig into that later in the chapter.)

But even without exact revenue targets, you can still use opportunity sizing to evaluate the size of a market and its revenue opportunity, and then to make broad conclusions about that market’s viability.

Read

Village Media has taken a scientific and regimented approach to entering new markets, and it’s paying off. The company now owns and operates 15 brands across Canada, and its revenue grew in 2020 despite the pandemic.

By this point, you’ve probably already done some informal opportunity sizing in your head or on the back of a napkin.

For example, maybe you decided that a local news site serving the people in your neighborhood wouldn’t work as a business, because not enough people live there to sustain your ambitions. And maybe that’s why you’re now planning to launch a news site for your entire city, where the revenue opportunity is greater.

To build on that intuition, a good next step is to use the Total Addressable Market framework to calculate your business's opportunity size as an actual number. You can then compare that number with your initial revenue expectations and get a sense of whether you’re on the right track.

2. What other businesses are already competing for that market, and what can your product or service do better than theirs?

Once you know the size of your market, the next thing to consider is the competition for that market — and what gaps those competitors are leaving for a startup like yours.

As we discussed in Chapter 2, user interviews can help you identify those market gaps by revealing information needs and other user problems that aren’t being addressed by established businesses.

But if you’re not sure what to ask about in those interviews — or if the responses are inconclusive — you can also start to identify market gaps by looking for signs of the following trends:

  • The decline of watchdog journalism. As newspapers go out of business or shrink in scope, they’re doing less of the investigative reporting and other public accountability journalism that many news consumers value.

  • The exclusion of historically marginalized perspectives. Many established news businesses still struggle to reflect or represent historically overlooked communities, and often those communities have lost trust in those publications as a result.

  • The rise of media capture in your country or region. Media capture happens when governments or other powerful interests buy up private news organizations (or overhaul public news organizations) and attempt to exert influence over their editorial coverage. According to UNESCO, media capture is becoming increasingly common in parts of the world without strong laws or rules protecting press freedom.

  • Insufficient coverage of particular topics. The lack of in-depth coverage around issues like education and sports has created openings for startups like Chalkbeat and The Athletic.

  • Frustration with the “view from nowhere”. The perception that certain news outlets prioritize “balance” over truth has alienated many news consumers who prefer to support organizations that don’t feign objectivity.

  • Fatigue with negativity and sensationalism. Similarly, other consumers have tuned out from news that focuses on crime or other negative stories, but they remain interested in journalism that highlights solutions or gives them a positive sense of community pride.

As you research the competition in your market and identify the market gaps that your business will address, you can start to estimate your serviceable obtainable market — or in other words, how much of the total addressable market is realistically available to your business.

3. How much will it cost to build your product, and how does that compare to your revenue expectations?

You don’t need exact numbers at this stage, but it’s worth at least considering how much it will cost to build and operate your product on an ongoing basis, and whether that startup expense is compatible with your opportunity size.

For example, a newsletter-based product will cost you very little to launch thanks to existing platforms that offer free trials and/or tiered pricing. (However, if this is your only job, you’ll need to pay your own salary.)

On the other hand, a custom mobile app with geolocation technology might cost a small fortune to build and maintain, and that means you’d need an opportunity size big enough to justify that investment.

Case Study
case study logo
How 6AM City built a profitable newsletter network by identifying the right markets

In 2016, 6AM City launched its first local newsletter in Greenville, South Carolina, and within eight months, the model had shown enough promise that co-founders Ryan Heafy and Ryan Johnston were ready to expand into new markets.

What should you charge your customers?

Not all news businesses charge users directly for their content, but to become financially viable, they all need to charge for some product or service. And that requires setting prices.

From a business perspective, the ideal way to set a price would be to figure out what each customer is willing to pay, and then use dynamic pricing to charge them exactly that amount.

But customer data is never that precise (and dynamic pricing isn’t nearly that easy), so news organizations often use the following approaches to estimate their optimal prices.

1. Your peers and competitors can help you find the right range.

The simplest way to develop an initial pricing plan is to find successful businesses doing similar work and look at what they are charging for their products or services.

This approach is especially useful if you can find successful peer organizations in the same geographic region (because customers’ price sensitivity will vary from market to market). By evaluating what they charge for similar products or services, you’ll be able to figure out a range of prices that customers have already shown they’re willing to pay.

However, you shouldn’t necessarily feel limited by what your peers charge, especially if your business offers a unique value proposition that these peers don’t deliver.

Instead, you should think of peer data as a reference point, and then let your customer surveys and pricing experiments (which we’ll discuss next) guide you from there.

2. Your customers can tell you what they’re willing to pay.

Once you have a rough idea of the price range for your product or service, surveying a group of prospective members, subscribers, advertisers, or other customers is a good way to fine tune your pricing strategy.

Businesses often do this by describing their product or service in detail and then asking survey respondents directly what they’d be willing to pay, either as an open-ended question or as a range of options.

The downside to this approach is that people don’t always make reliable predictions about how they might act in the future, so it’s possible your results will overestimate (or underestimate) what prospective customers are actually willing to pay.

That’s why it’s a good idea to also ask your survey respondents about similar products they already buy, or similar causes they support, and how much they pay for or contribute to those on average.

These questions will give you a clearer sense of your respondents’ actual consumer behaviors, and it may help validate, or challenge, the results from your survey’s more direct pricing questions.

3. Your experiments can help you find the sweet spot.

The initial pricing plan you adopt probably won’t be perfect, and that’s okay, as long as you continue to experiment with and refine your strategy over time.

For membership or subscription products, you might even consider starting out with multiple payment tiers, or a pay-what-you-can option, and studying the patterns that emerge.

Or you could offer a discounted launch rate and then measure how many customers drop off after you increase the price.

That’s what El Diario chose to do in 2020 during the COVID-19 pandemic, and it worked. The Spanish digital news site lost only 3 percent of its existing members after a 30 percent price increase and continued to add new members at an even faster rate than before.

Read

The Membership Guide by the Membership Puzzle Project includes advice on how to find the right price for your membership product through user surveys and experimentation.

A final note on pricing: Don’t forget to consider the relationship between what you charge for a product or service and what it will take for that product or service to break even.

For example, if you learn that your average user would spend $25 to buy a ticket to a dinner event you’re hosting, then you’d need to keep the cost of food, drinks, entertainment, and staff time below $25 per person in order to turn a profit — or sell a sponsorship to make up the difference.

How do you get customers to buy your product?

Monetizing your product won’t happen overnight, and it won’t happen by accident.

To start earning revenue, news businesses need to make a plan for how to accomplish two related, but distinct, tasks:

  • Build a user funnel to make people aware of your brand, get them to consume your content, and turn them into loyal (and paying) customers.
  • Build a sales funnel to earn revenue from advertisers, sponsors, foundations, direct-service clients, or other third-party customers.

News businesses that earn all of their revenue from users — through memberships or subscriptions, for example — may not need a separate sales funnel.

But these businesses are rare, and their revenue potential tends to be much lower than businesses that also sell products or services to third-party customers.

That’s why we’ll discuss both types of funnels in this chapter — and why you should strongly consider making a plan for each of them.

1. Build a user funnel that leads to loyalty

The user funnel for any business starts with user acquisition — or in other words, getting users to use your product, often for the first time.

Organic acquisition refers to any strategy that news businesses use to grow their audience without paid marketing or advertising. These include:

  • Building an active presence on social media and using those platforms to publish and share content.
  • Encouraging early adopters and other loyal users to share your content with other people who they think would like it.
  • Implementing best practices for search-engine optimization (SEO) to improve how your web content performs in search results.
  • Developing partnerships that allow you to promote your work for free via other entities.
  • Hosting listening sessions and/or other events where people can learn about your work.

Many news businesses complement their organic acquisition with paid acquisition, which may include:

  • Boosting posts on social media.
  • Promoting your content or website in search engine results.
  • Buying advertising in other digital and print channels to promote your brand.
  • Purchasing email lists or other contact information.
Read

Sarah Noeckel launched Femstreet in 2017 as a personal project. Two years later, Femstreet had gained more than 5,000 newsletter subscribers, hosted ten events around the world, and announced plans to launch a paid membership program for its biggest fans.

Acquiring new users is an important first step in building a user funnel, but the bigger goal is to get those new users to form a habit of using your products and to become loyal to your business.

News startups draw on a variety of strategies to build user loyalty, but here are three simple ways to start:

  • Publish content on a consistent rhythm. For large established news outlets, publishing consistently often means publishing continuously — or in other words, seven days a week at all hours of the day. But that isn’t possible for leanly staffed news startups. Instead, your goal should be to publish frequently and reliably enough that your users (a) get what they need from you, and (b) are able to develop a habit around your content, whether that means listening to your podcast once a week or reading your email newsletter once a day.
  • Make your content distinctive. Your publication’s voice, tone, and style can all help you stand out from a cluttered media environment, and getting those pieces right is an important part of building a brand that users will love. But you shouldn’t lose sight of the core business challenge we discussed in Chapter 2: understanding your audience’s needs and then addressing those needs better than any of your competitors. If users get value from your content that they can’t find anywhere else, they’re more likely to become loyal users who return to you again and again.
  • Collect email addresses and other first-party user data. Getting people to share their email address is not only a promising sign that they trust your organization; it’s also an important step toward keeping their attention and earning their loyalty. An email address allows you to communicate directly to your users with their consent, and if you publish an email newsletter, it can be one of the most effective ways to ensure they’re regularly seeing and engaging with your content.
Read

To sell more digital subscriptions, The Daily Memphian focused on widening the user funnel by getting more people to sign up for a free email newsletter.

The final step in most user funnels is getting your loyal users to pay for something — whether it’s an event ticket, membership, subscription, or T-shirt.

For a deep dive into this key step, check out the Google News Initiative’s Reader Revenue Playbook and The Membership Puzzle Project’s Membership Guide, which both include great advice and resources to help you convert loyal users into paying customers.

2. Build a sales funnel to earn revenue from third-party customers

If your user funnel is successful at attracting and retaining loyal users, your business may also have the opportunity to monetize that loyalty indirectly by:

  • selling advertisements to live alongside the content that you distribute to your users.
  • applying for grants or major gifts to support the work you do for your users.
  • marketing your expertise to other businesses that want to reach, engage, and serve their users as effectively as you do.

In all these scenarios, building an audience of loyal users is a necessary step, but it’s not enough by itself.

To earn meaningful revenue, you will also need to identify and contact sales targets, confirm that they’re a good prospect for your product or service, develop a proposal, and then close the deal. And that’s why you need a sales funnel.

Understanding your sales funnel will help you monitor how many prospective customers you have at each stage of the journey and evaluate your success moving targets from one stage to the next, which is key to making smart business decisions.

For example, if you contact 500 sales targets and only receive a response from one of them, that’s a sign that you need to rethink how you’re identifying targets and approaching your outreach.

On the other hand, if you’re receiving lots of preliminary interest but struggling to close deals, then you may need to focus on sharpening your proposal development and making a stronger pitch to your prospective clients.

Ultimately, the goal is to make your sales funnel so consistent and reliable that you can predict how many deals you’ll close each month (and roughly how much money you’ll make) simply by knowing how many targets you’ll identify and contact.

However, you won’t get to that point without creating a strong process for tracking your sales funnel and analyzing the data on a regular rhythm, which is why you may want to consider paying for a sales pipeline tool to automate this work and crunch the numbers for you.

How do you build a budget for your business?

We’ve mostly talked about revenue in this chapter, but now it’s time to pull in the other half of the business equation — expenses — and to start preparing a budget.

A budget is simply a plan for getting and using resources to meet your business goals.

You will need to revise your budget as revenue expectations change and goals evolve, but here are a few tips for building your first one.

1. Think of your expenses as investments.

Unless you launch your business with a crowdfunding campaign or a major grant, you probably won’t be earning much revenue on Day 1.

If that’s the case, your goal should be to spend money in ways that will earn money for your business in the future. For example:

  • Hiring a reporter would help your business create more content, which you could use to sell more advertising or strengthen your membership or subscription offerings.
  • Buying paid social and/or search ads would help you reach new users and grow your audience, which you will need for virtually any business model.
  • Paying for an email service would help you launch a newsletter, which you could use to build audience loyalty and strengthen your user funnel.
  • Buying a camera would help you take more professional photos, which you could turn into a for-hire photography service revenue stream.
  • Hiring an accountant and/or office assistant would take time-consuming administrative tasks off your plate, which could allow you to spend more time building business relationships and seeking funding.

No matter how you choose to spend your first dollars, you should have a plan for how those expenses will lead to revenue — and how you’ll evaluate whether or not the plan is working.

Read

Matt Kizer makes the expenses for WTF Just Happened Today public so that subscribers know how their money is being used.

2. Be realistic about your revenue.

The revenue projections you make in your budget should be based on evidence and data, not wishful thinking.

But that can be easier said than done if you’re launching a new business without much evidence or data to inform your decisions.

If that’s the case, consider making two versions of your budget — one for the worst-case scenario and one for the best-case scenario. This will help you prioritize your spending and plan for the investments you want to make first if revenue exceeds expectations.

3. Keep track of your cash on hand

A startup business can’t launch without at least some cash in the bank, whether that cash comes from investors, grants, or your own savings. And the purpose of your budget is not only to help you spend that cash wisely, but also to keep track of how much you have left.

Borrow

A budget spreadsheet like this one, created by City Bureau’s Harry Backlund, can help you make predictions about your monthly revenue and expense.

In business lingo, your company’s burn rate is the pace at which you’re spending down your cash on hand, and your runway is the number of months you can operate with that burn rate before running out of money.

Both of these numbers are vital signs for your business, so it’s important for your budget to forecast how they’ll change from month to month — and then keep track of the actual results.

Startup Revenue Simulator
Use this simulator tool to estimate how many users you can expect to acquire, and how much revenue those users will need to generate, on average, to sustain your business.
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Chapter 6

Define success for your business

What makes a news business sustainable?

Many news entrepreneurs think the obvious answer to this question is money — but money alone doesn’t make a business sustainable.

The hypothesis developed as part of the GNI Startups Lab is that a news business’s sustainability should be thought of across three categories: financial health, operational resilience and journalistic impact.

While financial health is the bedrock of sustainability, it won’t ensure the longevity of a news business. For example, if you and your colleagues are burnt out from working around the clock, you won’t be able to retain the team that’s making the money. And if you don’t have evidence of your journalism’s impact in the community, you might not be able to get grant funders or members to renew their financial support.

Your business will be financially healthy if you develop reliable sources of revenue that exceed your minimum operating expenses.

Your business will be journalistically impactful if you ensure your journalism fulfills its mission for the communities you aim to serve.

And your business will be operationally resilient if you build a company culture, compensation plan and workflows and systems that help you retain and professionally fulfill talented employees, including yourself.

Note: These measures of news business sustainability are not boxes that you check. They are benchmarks that you work toward, and in the rest of this chapter, we’ll discuss how you can start measuring your progress.

Which financial metrics do you need to track?

To become financially healthy, your business needs to consistently bring in more money each month than it pays out in expenses.

That milestone might seem months or years away at this point -- but the building blocks of financial success may already be in place, and knowing how to measure them will help you demonstrate your business’s revenue potential to investors, board members, and other key stakeholders.

  • User acquisition cost: How much it costs to get one new user to visit your site or sign up for a free product such as an email newsletter.

  • Customer acquisition cost: How much it costs to get one new customer to buy a subscription, membership, advertising package, or other paid product.

  • Conversion rate: The percentage of your unique users who move from one stage of the user funnel to the next (e.g., readers who become subscribers).

  • Churn rate: The percentage of your customers who cancel their membership or subscription (or otherwise discontinue their paying relationship) each month.

  • Average revenue per user: How much revenue you expect to earn from each customer, on average, over the course of their entire business relationship with you.

  • Customer lifetime value: How much it costs to get one new user to visit your site or sign up for a free product such as an email newsletter.

  • Accounts payable: How much money you owe to other businesses — or in other words, how many expenses have been incurred but not paid.

  • Accounts receivable: How much money is owed to you by customers — or in other words, how much revenue has been earned but not paid.

It’s not hard to find formulas and calculators for these financial metrics online, but most of them aren’t specific to news businesses.

That’s why we recommend requesting an invitation to the News Entrepreneur Community Slack group (for English-language speakers) or joining another professional network where you can connect with people who have done this work before.

These networks are full of industry-specific expertise and knowledge, and they’re a great way to learn how to calculate metrics like these in the context of your particular business model.

Which journalistic metrics do you need to track?

If you’re like most journalists, you didn’t get into this industry for fame and fortune.

You also want to make a difference in the world, whether that means exposing corruption, inspiring action, or helping people connect to their community.

Ultimately, demonstrating these types of impact will be critical to justifying your effort to prospective investors, employees, partners, users, customers, and yourself, so here’s how to look for and measure a few of the most common ways that news businesses make a difference.

1. Are you making a difference in individual people’s lives?

If your journalism helps someone discover a new restaurant, plug into a social movement, meet a new friend, or make a more informed voting decision, that’s impact.

The hard part is finding out when those individual impacts happen.

To capture as much as you can, use a spreadsheet, Slack channel, or open-source tool like this one from The Center for Investigative Reporting to log the anecdotal impacts that users share with you via email, social media, or in-person conversations at events.

Then build on those data points by conducting a quarterly or annual user survey and asking people directly if and how your work has provided value in their lives.

2. Are you making a difference in your community?

Your journalism doesn’t necessarily need to cause big, structural policy change to make an impact in your community.

In fact, many of the community-level impacts that news businesses make are much more subtle: a things-to-do calendar leading to better event turnout; a restaurant review leading to a busier lunch hour; a candidate forum leading to more widespread civic participation.

You might find that these impacts are hard to measure directly, but there are often ways to piece them together indirectly.

For example, if you profile a local Kickstarter or GoFundMe campaign and then see its donations spike over the next 24 hours, there’s a good chance you had something to do with it, and you should feel free to log that as an impact in your spreadsheet or other impact tracker.

3. Are you making a difference in the industry or profession?

Even if your journalism doesn’t change the world by itself, it might inspire other news organizations to build on your work and dig even deeper on the same topic, which is a sign that you’re impacting the broader profession.

Another sign: journalism awards. They arguably get too much hype in our industry, but even so, winning an award for public service, media innovation, or any other accomplishment is an important validation of your approach to journalism, and it’s worth logging in your impact tracker alongside everything else.

Read
The digital news startup WhereBy.Us created a taxonomy to categorize its impact and used Airtable to track them over time.

Which operational metrics do you need to track?

The third measure of a sustainable business is the one that most often gets overlooked: operational resilience.

Or in other words, are the people who make your journalistic and financial success possible (including you) going to be able to do so for months and years to come? Or are they at risk of burning out from long hours, low pay, or, even more worryingly, a toxic workplace?

Whether you’re launching with a team of one or ten, you should be thinking about these four questions and the metrics you’ll use to answer them for your business.

1. Are you taking care of yourself as a founder?

For your business to succeed, the first employee you need to take care of is yourself -- and that means prioritizing these personal health metrics as much as any others:

  • How much you’re working: Skipping vacations or working through weekends can contribute to fatigue, burnout and a lack of productivity during the work week, and it’s not a sustainable solution. Instead, be realistic about your workload, set an expectation for yourself (and your audience) that you will take time off from publishing, and don’t get in the habit early of bending your rules.

  • How much you’re earning: If you aren’t able to pay yourself a salary right away, you should at least set a timeline for how long you’ll work on your business for free. Otherwise, you might find yourself subsidizing your business for longer than you can afford to, and you might scare away potential investors who’d rather spend money on a business that can stand on its own.

  • How much support you’re getting: Launching a startup can be a lonely journey, but it doesn’t have to be. By seeking out other entrepreneurs like you who are just starting their business journey, you’ll set yourself up with a de facto support group you can learn, grow, fail, adapt, and commiserate with.

Read

The MLK50 team took a summer break in 2019 — and used it as a chance to reshare some of their best work.

2. Can you attract and keep talented staff?

Think about jobs you’ve had in the past – why did you accept the offer? Why did you ultimately decide to leave? Here are a few example metrics to consider in whether you can attract and keep good employees:

  • Hiring process: Do you have a standardized hiring process that includes reaching candidates from diverse backgrounds, communicating your values through the interview process and ensuring candidates have time to ask their questions?

  • Compensation: Is the role compensation (including benefits) competitive compared to other similar jobs in the industry and/or in your area?

  • Inclusivity: Does your business have a culture of inclusivity? In other words, is a new colleague likely to feel welcomed and included based on who else is currently on your team?

  • Role clarity: Does each person on your staff have a clear idea of their role and responsibilities and their colleagues’ roles and responsibilities? Are they satisfied with their work and with the work of the news business overall? Are you setting them up for success?

  • Burnout: Are any of your existing employees burnt out? Do you have processes and systems in place to ensure all employees have a reasonable workload (including you as the founder?).

3. Do you have a plan and process for how to grow your team over time?

Having a strategic vision a year, five years or ten years out can feel premature for a business just getting started, but it is essential to at least have a process for thinking about your potential growth and some strong hypotheses to test. Here are some metrics to consider:

  • Organizational chart: What does your current organizational chart look like now versus three years from now? Do you know who your next one to three hires could be and how those roles would impact your financial health and journalistic impact? questions?

  • Role prioritization: Do you know which roles are most core to your mission and your business? If you had to cut a position immediately, what role would it be and why?

4. Could your news business live on without you?

This can feel like an odd question to ask yourself as a new founder, given that you’re pouring so much of your time and energy into this work. But if you want to build a business that doesn’t depend on your day-to-day involvement forever, you will need think early on about these types of metrics:

  • Documentation: Does everything live in your head or have you written it out so that anyone else in your business knows how to do the work?

  • Identifying other potential leaders: Is there someone in your organization — a cofounder or another senior leader, for example — who you can start grooming to take over your role?

  • Strengthening other structures: If you’re a nonprofit and have a board, or a for-profit business with advisors, have you talked with them about how you may eventually transition out and how they can help?

Lean Canvas Exercise
Problem
List the top 1-3 user problems that your business will aim to address
Exisiting Alternatives
List how these problems are solved today
User Segments
Identify the target audience that you’re trying to reach
Early Adopters
Identify the key characteristics of your core users.
Unique Value Proposition
Identify what will make your product different (and better) than anything that already exists.
High-Level Concept
Explain your product idea in ten words or less
Solution
Explain how your product will solve the user problems you identified
Unfair Advantage
Identify the expertise or experience that makes your business uniquely qualified to build this product.
Revenue Streams
Explain how you expect your business to earn money.
Early investments
Explain how your business will spend money in order to earn money.
Key Metrics
Identify the benchmarks your business will use to measure its success.
Platforms
List the ways you will reach and connect with your users.
Chapter 6
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Section 2

Next steps for launching your business

If you've made it this far, you've answered some critical questions about your business idea. Taking those steps should improve your chances of success -- but there’s still work to do.

To launch a sustainable news business, you’ll need to refine your product, grow and engage your audience, identify your initial sources of funding and revenue, and set up your operations.

These are enormous challenges for any news entrepreneur. If you haven’t done so already, at this point in your business journey, we recommend connecting with a professional organization in your region and tapping into their training programs, mentorship opportunities, and other resources for founders.

Aspiring or early-stage North American publishers can also apply to entrepreneur training programs like the GNI Startups Boot Camp or the Tiny News Collective.

The support system you create for yourself and your business will be critical to your success, so don’t skip this step. Find a personal mentor and business advisor. Connect with other entrepreneurs in your community. Learn everything you can from people who have done this already.

Watch

Santa Cruz Local co-founder Kara Meyberg Guzman talks in this interview about launching a news startup and what advice she’d give to other first-time entrepreneurs. Spoiler alert: Finding great advisors is one of her top tips.

In the meantime, we’ve curated some of the best resources available to help you take the next steps in launching your business — and we’d love your help making the following Starter Guides even better.

After reviewing the Starter Guides, tell us what resources or tools are missing that would be most helpful as you launch your startup. We’ll be updating this Playbook periodically, and your insights will help us make it even more useful, both to you and to future entrepreneurs.

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Dig deeper into your product

A news product is more than the sum of the content you publish.

To develop a product that people love, you’ll also need a suite of tech tools and platforms that facilitate discovery, delivery, consumption, and sharing of your content. This technology is collectively called your “tech stack.”

In this Starter Guide, we’ll share tips to help you refine these aspects of your product strategy — content and tech stack — as well as other resources from digital news startups that have also grappled with these questions.

How should you focus your content strategy?

Even if your ultimate goal is to build a news organization that covers as many issues and stories as a traditional newspaper, you probably won’t have the resources to do everything on your wishlist right away.

Instead, as a scrappy entrepreneur with limited time and funding, you will need choose an editorial focus and set priorities. Here are three tips to help:

Tip: Revisit your audience’s jobs-to-be-done.

Journalists are often trained to think about serving the public, but as an entrepreneur, your goal isn’t to serve the whole public. Your goal is to serve a small subset of the public — your target audience — and the success of your business will depend on how well you serve that target audience’s needs and solve their problems. In Chapter 2, we discussed how to identify these needs and problems using a jobs-to-be-done (JTBD) framework. This is a great time to revisit those JTBDs and use them to help you set priorities.

Read

The digital news startup WhereBy.Us used a jobs-to-be done framework to make its daily email newsletters more useful to its audience.

Tip: Segment your target audience by geography.

Depending on your resources, you may need to prioritize certain parts of your target audience over others. Geography is one way to do that. For example, you might not have the resources to be an investigative news source for an entire state, but can you start with a single city? Narrowing the scope of your news coverage means you’ll be serving fewer people. But if it allows you to better meet those people’ needs, then it’s probably a tradeoff worth making.

Read

PublicSource launched as a nonprofit covering the whole state of Pennsylvania, then pivoted to focus on the city of Pittsburgh.

Tip: Consider the unit economics of the content you’re making.

In other words, how much do different types of content cost to produce relative to how much revenue they could earn? This isn’t always easy to figure out for a fledgling news business, but doing some rough math can be a valuable exercise. For example, say you want to launch a weekly email newsletter and a weekly podcast, but you only have the resources to do one right away. To set priorities, you might ask: What’s it going to cost — in time and money — to produce each newsletter? What’s it going to cost to acquire the first 1,000 users? And once you acquire those 1,000 users, how much revenue could each newsletter earn through advertising, membership, or another revenue stream? Then answer the same questions for a podcast, and see if the unit economics are more favorable.

Read

The unit economics for a news business are more complicated than for a coffee shop. But the principles are the same, and understanding those principles can help news entrepreneurs (and the journalists who work for them) better prioritize the work they do.

What tech tools and platforms will I need to launch my business?

The “tech stack” for a news business usually includes a web host, a content management system (CMS), a customer relationship management (CRM) platform, an email client, a project management tool, and a point-of-sale system — and often even more.

Getting set up requires a lot of research and a lot of important decisions. That’s why figuring out your initial tech stack should be one of your first priorities as you prepare to launch a business.

Tip: Revisit your user funnel and sales funnel to identify your needs.

One way to figure out what tech solutions you need is to consider what problems you have to solve to start earning revenue. How are people going to discover and engage with your content? What’s going to get them to sign up for an email newsletter? Or create an account and buy a subscription? By asking these questions about your user funnel, and then your sales funnel, you can begin to pinpoint what tech solutions your business will need and which ones it won’t

Read

Public Media Stack created a scoring system to evaluate different tech solutions and provide pros and cons for each one. The guide is designed for public media organizations, but most of its material is relevant to news businesses of all types.

Read

SembraMedia built a registry of the most popular membership tools, payment platforms, content management systems, and more. [Spanish]

Tip: Consider who and what pays the bills.

If advertising is your primary revenue stream, your tech stack will need to prioritize getting digital ads in front of your audience. On the other hand, a news business focused on subscriptions or memberships will have to prioritize designing clear and obvious calls to action (CTAs) for their readers to donate or sign up for membership across their platforms.

Read

News businesses that sell advertising can also sell subscriptions or memberships, but getting your tech stack to meet the needs of both sets of customers is often a difficult balancing act.

Tip: Weigh the costs of building versus buying.

Most news startups don’t have the budget to custom build parts of their tech stack themselves (as opposed to paying for off-the-shelf solutions). Even if you do have the option to build instead of buy, you should consider the hidden costs. How much time will it take to find a contractor or hire an employee with the expertise you need? How are you going to maintain the tools they build? Will those tools be compatible with other platforms you’re using? Ultimately, it may be better to settle for an existing tech solution that doesn’t have all the features you want, rather than paying to build something that you might be forced to replace later. Sometimes it’s useful to apply minimum viable product logic to your tech stack — what is the minimum you need to test and learn what your long-term needs are and inform the right tech decisions down the road.

Read

The Norwegian publisher Aller Media is big enough to have a Chief Technology Officer on staff — but it still buys tech solutions more often than it builds.

Bookmark

Tiny News Collective is assembling a suite of popular tech tools and platforms and preparing to make them available to independent local news startups in the United States for a small fee.

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Grow and engage your audience

As tempting as it might be to focus all your time and attention on making your product perfect, a news business is only going to succeed if it’s equally committed to getting that product in front of new users as quickly as possible.

In Chapter 5, we introduced the basics of organic and paid user acquisition, from search engine optimization to social ads.

In this Starter Guide, we’ll share tips and resources to help you implement those tactics and take the next step toward building a loyal audience.

How do you build a brand for your business?

A brand isn’t just a name and a logo. It’s a story about why a company exists, who it's for, what its values are, and what makes it stand apart from the competition.

This brand story will be key to your efforts to attract and retain new users, so here’s some advice for how to get it right.

Tip: Embrace non-linear thinking and human-centered design.

If you lock yourself in a room and try to invent your brand from scratch, you might find yourself short on inspiration. Instead, try using human-centered design techniques to get inspired. Look for common themes from your user interviews. Use sticky notes to jot down words and ideas that resonate with you. Create a photo collage of your community and look for colors to inspire your brand’s color palette. And keep a notepad near the bed in case your best ideas come in the middle of the night.

Give it a try

These human-centered design exercises can help you get the creative juices flowing as you come up with a name, logo, color palette, and brand story for your business.

Read

A brand needs to be consistent to be memorable, and achieving that consistency starts with developing a style guide.

Bookmark

You no longer need expensive design software to develop a professional logo and other brand assets. If design comes naturally to you, online tools like Canva can help you build your own graphics — or you can look to websites like Typewolf and Coolors for inspiration and then hand off your vision to a professional.

Tip: Use language and branding that’s accessible to everyone you aim to serve.

Your brand not only communicates who your business is for, but also who it’s not for. It’s important to make sure you’re not inadvertently sending the wrong message. For example, if you use abbreviations like FWIW (for what it’s worth) and BTW (by the way), you might be signaling that your brand caters to a young, plugged-in audience, while excluding people who aren’t fluent in text or internet shorthand and don’t know what those abbreviations mean.

Read

Accessibility includes making your brand accessible to people with visual impairments and other disabilities, and this Medium post by Pablo Stanley covers seven ways you can begin to do that.

Tip: Tell your own story early and often.

Journalists are experts at telling other people’s stories, but as an entrepreneur, you need to get comfortable telling your own story, too. Why did you create this business? What problem are you trying to solve? What makes you different from the other news businesses in your market? Once you answer these questions for yourself, consider how to tell that story to your prospective audience early and often to help you stand out and earn their trust.

Read

De Correspondent co-founders Rob Wijnberg and Ernst-Jan Pfauth are experts at identifying a flaw in mainstream news and then framing their work as a solution to it. This Medium post is one of dozens they’ve written explaining how they’re different from the competition, and it’s a great example of how strong brands are much more than a name and a logo.

Watch

The Venezuelan news site Efecto Cocuyo produced a two-minute video explaining its mission and encouraging viewers to become paying contributors.

How do you use word-of-mouth marketing to grow your audience?

The most cost-effective way to grow an audience is to get early adopters, business partners, and other ambassadors in your community to use their platforms to promote your work and encourage their networks to check it out.

That promotion might happen organically, but usually it’s going to take a little planning and encouragement on your end to turn word-of-mouth marketing into a meaningful growth strategy.

Tip: Establish a referral program to challenge and reward your ambassadors.

For your biggest fans, the prestige of becoming an “official ambassador” might be all the motivation they need to start sharing a referral link or code with their friends, family, and colleagues. But you can also offer incentives to sweeten the pot. For example, maybe 10 referrals earns someone a shout-out in your newsletter, 50 referrals earns them a sticker, and 100 referrals gets them a free annual membership. These prizes cost little to nothing for your business to provide, but they can go a long way to helping your ambassador program gain traction.

Read

Girls’ Night In, The Hustle, and these five other email newsletters have all built referral programs that help them reach new readers and grow their audience.

Tip: Partner with mission-aligned organizations that are already engaging your target audience.

It’s often hard to set up growth partnerships when you’re brand new and have little promotion value to offer, but as you gain traction, you might find that local nonprofits, neighborhood groups, alumni associations, and other organizations want to connect with your audience, and vice versa. In some cases, it may be more valuable to your business to focus on selling advertising to those organizations. But if that’s not an option, consider whether a free promotion swap could help you both grow your audience in a way that’s mutually beneficial.

Bookmark

The New Tropic uses unpaid partnerships to grow its email newsletter list, and it provides transparency to readers and prospective partners by outlining its partnership guidelines directly on its website.

Tip: Look for opportunities to make a splash.

A single viral story isn’t going to make or break your business — but it can help you get the initial traction you need to start growing your audience and gaining organic referrals. For example, the founders of The 19th* used their personal connections to schedule conversations with British royal Meghan Markle and then-vice presidential candidate Kamala Harris within a month of launching, and they were rewarded with earned media coverage in Vogue and other national publications.

Read

We can’t all land interviews with Meghan Markle and Kamala Harris, but even interviewing smaller-name influencers can help you build your audience by reaching their fans.

Tip: Use data to decide where to double down.

As you test different approaches to growing your audience, make sure you’re also collecting data on what’s working and what’s not. This can be as simple as creating a spreadsheet where you track how much time you spend on each growth tactic and how many new users each one brings in and then calculate an average per-user acquisition cost for each approach.

Read

The digital news startup WhereBy.Us used a simple “growth tracker” to measure the results of its unpaid growth experiments and decide where to double down.

When should you spend money on paid acquisition?

The ideal time to start seriously investing in paid acquisition is the exact moment when the average cost of acquiring a new user dips below the average revenue you earn from each user.

Of course, the hard part is knowing when that moment has arrived for your business — and then finding the cash you’ll need in order to scale up your paid marketing. Here’s some advice for how to solve both those problems at once.

Tip: Calculate a user acquisition cost by experimenting with a small budget.

You don’t need thousands (or even hundreds) of dollars to start testing paid acquisition on social media platforms or search engines. For $100 or less, you can run a paid campaign, measure how many new users that campaign brings in, and then calculate a user acquisition cost by dividing the number of dollars spent by the number of new users. Once you know a baseline acquisition cost, you can then tinker with your marketing language and tactics in future experiments and work to lower that cost over time.

Read

The success of your paid acquisition campaign will largely depend on the quality of your paid promotions. Here are 10+ examples you can learn from.

Tip: Estimate customer lifetime value and other key revenue metrics.

To understand the revenue side of the equation, you need a way to predict the average lifetime value that each new user will bring to your business. That’s not always easy to do, especially as a startup business without years of data to analyze. But you should at least be asking the questions and tracking the metrics that we introduced in Chapter 5: What percentage of your total users go on to become loyal users? What percentage of those loyal users buy a membership, subscription, or other product? How long, on average, do they remain a member or subscriber? And so on. The goal is to understand roughly what return you can expect to earn from your investment in paid acquisition, not only to inform your paid marketing strategy, but also to help you make the case to investors that their investment will lead to profits.

Read

The Spiegel Research Center at Northwestern University is studying how news businesses can improve their customer lifetime value by retaining a higher percentage of their subscribers year after year.

Read

The Membership Puzzle Project’s Membership Guide provides a simple formula for calculating the customer lifetime value of members or subscribers.

What relationship should you have with your audience?

As new users join your audience, you’ll need a plan for how to build a relationship with them and earn their loyalty over time. The question is: What does loyalty mean for your organization, and what kind of business outcomes do you need it to generate?

Are you trying to get tens of thousands of users to spend more time engaging with your content, for example, so that they see more advertising?

Or are you trying to get a few hundred early adopters to feel such a strong and personal connection to your mission that they become your first paying members?

The business challenges you’re trying to solve will shape the ways you connect and engage with your audience, and keeping those business challenges front and center can help you prioritize your time and resources.

Tip: Define engagement for your organization.

Audience engagement has become a buzzword in digital media, but it doesn’t have a single definition. For some news businesses, engagement is the science of getting users to click more links and consume more content. For others, engagement is the art of building trust and relationships on an individual scale. What should it mean for your business? Again, look at your revenue model. If earning money depends on delivering content to a massive audience, then you’ll need to think of engagement as part of your digital distribution strategy. But if it depends on getting a smaller group of loyal users to contribute directly to your business — by buying a membership or attending an event, for example — then your approach to engagement might benefit from a more personal touch.

Read

The type of engagement that makes sense for your business might depend on how you answer this question: Are you trying to grow an audience? Or are you trying to build a community?

Read

The Trusting News Project has identified “engaging with users” — by inviting feedback, crowdsourcing information, hosting events, and more — as one of the key strategies that news businesses can use to build trust with their communities.

Bookmark

If your engagement strategy involves a lot of social media posting, tools such as dlvr.it and Sprout Social can help you publish and schedule posts for multiple platforms at the same time.

Tip: Look for ways to own the relationship with your audience.

No matter what type of relationship you’re trying to build with your audience or community, it’s important to develop ways to engage with those users directly, without platforms such as Facebook and Twitter serving as an intermediary. This doesn’t mean you can’t use Facebook Groups and other social media tools to engage with your audience. (You can and should.) But you should also be proactive about collecting email addresses and other contact information that allows you to communicate with your audience directly — and that won’t be affected by social media algorithms you can’t control.

Read

Most news businesses still rely on platforms to reach and engage their audiences, but they’re starting to reclaim control over how those audience relationships are monetized.

Read

The Washington Post and other news businesses are learning how to collect and utilize the kind of user data that social media platforms have been gathering for years.

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Find the money you need to launch and sustain your business

The smallest news startups are able to launch on a shoestring budget. The biggest ones start with a seven-figure annual payroll right out of the gate.

But no matter the budget, all news businesses need at least a little money to launch and grow their operations, and they all need to find that money somewhere.

In this Starter Guide, we’ll share tips and resources to help your business with both parts of the money equation — raising seed funding and earning recurring revenue — as well as templates and sample documents to help you prepare your pitch deck and budget.

How can you raise money to launch your business?

From crowdfunding to angel investors to foundation grants, there’s no shortage of options for raising the money you need to launch or grow a news business.

However, depending on your business model and tax status, your personal connections and background, and where you live in the world, you might not have access to all these opportunities — or you might choose to forgo them to avoid the strings that often come attached.

Note: If you haven’t done so already, this is a great time to seek advice from a mentor or business advisor who’s been through the grueling fundraising process and knows the business environment in your region. But in the meantime, here are a few tips for weighing your options and bringing in your first dollars.

Tip: Decide if you can self-fund your business, and if so, for how long.

If you have the financial means, investing your own time and money to launch your business is a good way to get started quickly (because you won’t spend time pitching to funders) and to retain full ownership of your business (because you won’t give away an ownership stake to third-party investors). The downside is that self-funding is risky. If the business fails, it’s your time and money that you lose, and you won’t have a paycheck to show for it. That’s why it’s important to set clear benchmarks if you choose this option: How much are you willing to invest in the business? How long are you willing to work for free? And what revenue goals do you need to hit to justify continuing your business after the initial launch phase?

Read

Nearly 60 percent of entrepreneurs self-fund their businesses. Here’s some advice if you decide to follow in their footsteps.

Tip: Learn about your other options for raising money.

Aside from self-funding, the most common ways that news businesses raise money include crowdfunding campaigns, foundation grants, angel capital, venture capital, and investments by friends and family. The breadth of options might seem overwhelming, but you can narrow them down by studying the funding pipeline in your region and identifying the most realistic opportunities for a business like yours. And remember — just because one funding type isn’t available to you now doesn’t mean it won’t be in the future once you start growing your audience and showing signs of traction.

Read

The world of startup funding is full of complicated jargon. Here’s a guide to help you make sense of it all.

Read

De Correspondent in Holland, Krautreporter in Germany, and El Español in Spain all used crowdfunding campaigns to launch or grow their news businesses. Here are some lessons from their success.

Read

The funding pipeline for journalism startups isn’t anything close to the funding pipeline for tech startups. Here’s why that can pose a challenge to news entrepreneurs.

Read

The COVID-19 pandemic highlighted the importance of reliable, independent local news — and led some U.S. foundations to consider doing more to support it.

Tip: Build a slide deck and practice your pitch.

Even if you’re just pitching your business idea to friends and family, you’ll need to create a short presentation that explains what audience you will serve, what problem(s) you will solve for them, and how you will monetize your unique solution. Then you’ll need to practice. A good pitch should be clear and concise — and it may take lots of practice in front of the mirror to make that happen.

Borrow

These pitch deck templates from the Founder Institute include options for short and long pitches, as well as examples of good and bad ones.

Borrow

The Beacon used this pitch deck to help raise seed funding for its expansion from Kansas City to Wichita.

Read

No matter who you’re pitching for funding, these eight tips from Poynter will help you strengthen your presentation and set yourself up for success.

Tip: Look for fellowship opportunities and accelerator programs.

If you’re not quite ready to pitch your idea to funders, you can also apply for fellowships or accelerator programs that will offer training, and sometimes capital, as you continue to develop and refine your idea. Many of these opportunities won’t provide enough funding to launch your business, but they can help underwrite your research and development costs, as well as provide deadlines and structure to keep you moving forward.

Bookmark

The Google News Initiative’s Digital Growth Program was designed with industry experts and news publishers across the world to help small- and medium-sized news organizations grow their digital businesses through a range of free playbooks, interactive exercises, digital workshops and labs.

Bookmark

The Facebook Journalism Project’s Sustainability Accelerator Project provides coaching and training to news startups in the United States and other countries.

Bookmark

The Craig Newmark Graduate School of Journalism at CUNY offers a 100-day certificate program in news entrepreneurship, often with scholarship opportunities.

Read

This list of media and journalism accelerator programs around the world is now three years old, but it’s still the most comprehensive (and mostly current) round-up of global opportunities.

How can you start earning revenue that’s consistent and reliable?

As hard as it can be for news businesses to start earning revenue for the first time, it’s often even harder to earn recurring revenue — or in other words, revenue that your business can count on month after month.

Recurring revenue is important because it can give you the confidence you need to hire employees and make other long-term budget decisions, and it can help you avoid the unpredictable peaks and valleys that come with one-off sales or donations.

The reality for news businesses is that some revenue (from subscribers, members, sales clients, etc.) will always be fleeting, but here are three tips for how to ensure as much revenue as possible is consistent and reliable.

Tip: Set up automatic renewals for memberships or subscriptions.

One of the simplest ways to earn more recurring revenue is to enable recurring payments that renew automatically until a customer cancels them. This isn’t always possible for certain products — like advertising, for example — but most payment vendors will allow you to set up subscriptions, memberships, and contributions as monthly or annual recurring payments. Setting these as the default option is one way to encourage your users to support you long-term.

Read

The Membership Puzzle Project’s Membership Guide includes a section on member retention, including tips for how to optimize the billing process.

Read

Pico, PressPatron, Memberful and other platforms all specialize in managing membership and subscription programs. Here’s how to choose the best one for your business.

Tip: Nurture your relationships with business clients.

Once you’ve done the hard work to establish a client relationship and close your first deal — with an advertiser, sponsor, foundation, etc. — it’s essential that you nurture that relationship and try to convince the client to work with you again and again. That starts with (over)delivering on your first project together, but it should also include a personal touch. Send thank-you notes. Introduce them to people in your network. Invite them to lunch (in the post-pandemic world). These little things matter, and they can help you earn lasting clients who you can count on for recurring revenue month after month.

Read

These 11 tips for building great business relationships cover the basics of how to turn a first-time customer into a reliable source of recurring revenue.

Tip: Survey your customers to understand why they’re paying for your product.

Especially if you’re selling bundled news products, such as memberships or subscriptions, it won’t always be clear why people buy something from you. Is it because they want access to exclusive content that’s only available to subscribers? Because they feel guilty about reading your free content without paying for it? Or is it because they wanted the limited-edition tote bag? Analyzing your user data and engagement metrics might give you some answers to these questions, but conducting ongoing research, like surveys, one-on-one conversations or focus groups with your readers, can give you even richer data that can inform your product decisions and improve customer retention.

Read

The Google News Initiative’s Reader Revenue Playbook includes sections on how to survey your audience and strengthen the value proposition of your paid products.

Read

The Media Insight Project interviewed more than 4,000 news subscribers about why they pay for a subscription and what they value most after they subscribe. These insights might not necessarily apply to your business, but you can take inspiration from their survey design.

Tip: Don’t forget about the top of the funnel.

Earning reliable revenue isn’t just about retaining your existing members, subscribers, or other customers. It’s also about adding new customers at a predictable rate. That’s why the top of your user funnel and sales funnel are so important. Think of it this way: If you know that 20 percent of repeat visitors to your website become free newsletter subscribers and 5 percent of your newsletter subscribers become paying members, then you know exactly what you need to do to sell 10 new memberships each month: acquire 1,000 new repeat visitors (20 percent of 1,000 is 200, and 5 percent of 200 is 10.). As long as you keep hitting that target, you can expect to sell 10 memberships month after month, which allows you to count those future membership sales as recurring revenue.

Read

News businesses that want to add more members or subscribers rarely spend much money advertising memberships or subscriptions directly. Instead, they use most of their paid marketing budget to boost content and advertise free products (such as an email newsletter), then they work to convert those new users to paid memberships or subscriptions over time.

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Starter Guide 4

Get your operations set up

The least glamorous part of launching a news business is also one of the most important: getting your operations set up, from hiring employees or contractors to developing client contracts to filing taxes.

In this Starter Guide, we’ll share tips, templates, sample documents, and other resources to help you with some of those operations tasks. But full disclosure: Not everything in this section will apply outside of the United States, so you should consult a lawyer or business advisor to learn more about the specific tax laws and other regulations in your country.

How do you begin to build a team?

If you’ve made it this far in your startup journey, you probably have a good sense of the core business and journalism skills that you already possess.

Now it’s time to address the ones you lack.

That might mean bringing on a cofounder whose skills complement yours, or it might mean hiring employees or contractors to fill a specific role.

Either way, there are a few basic principles of hiring and team-building.

Tip: Use budget modeling to decide what investments will deliver the best return.

As a general rule, startups should only add new staff if they expect those additions to help generate revenue to offset personnel expenses. That’s where budget modeling comes in. Budget modeling is not an exact science, but it can be a useful way to compare potential investments and decide which are mostly likely to deliver a positive return. For example, hiring a part-time sales person could help you sell 80 percent of your advertising inventory each month, instead of the 20 percent you’ve managed on your own. Or hiring freelancers to write and produce content could free you up to pursue grant and sponsorship opportunities that you’ve been neglecting. Even if they’re not perfect, predictions like these can help you consider the relationship between money spent and money earned — and give you benchmarks to evaluate success moving forward.

Tip: Establish a rigorous hiring process.

Texas Tribune co-founder Ross Ramsey has simple hiring advice: “Don’t hire assholes.” But finding the right person is often a little more complicated than that. Will you prioritize experience or talent? Technical skills or people skills? And how will you recruit talented and diverse candidates? Do you have an outreach plan that goes beyond your own networks? All these questions need to be answered before you start looking for candidates — and the answers should become part of a consistent, transparent hiring guide that you use every time your business has an opening.

Read

The audience engagement startup Hearken created a hiring guide that helped them attract more talented and diverse job candidates. Here’s how they did it.

Watch

Ariel Zirulnick and Jessica Best from the Membership Puzzle Project shared a hiring guide for membership newsrooms at the Splice Beta festival in 2020.

Tip: Spend time setting expectations and building trust with your colleagues.

Once you take the big step of bringing on a co-founder or making a key hire, the last thing you have to nurture is that relationship. Talk about your communication styles and professional goals. Write an accountability chart that clarifies who is responsible for what tasks. Create an onboarding checklist that specifies what tools and platforms you’ll need to train a new colleague to use. However you choose to approach it, don’t leave these relationships up to chance. They’re too important for your business and too hard to repair if you get off on the wrong foot.

Read

Developing a RACI matrix can help you set clear expectations around who’s responsible, accountable, consulted, and informed for different projects that your business is working on.

Read

Some businesses ask their employees to write personal “user manuals” that explain what makes them tick — and what ticks them off.

How do you choose a tax status and business structure for your startup?

We’ve used the word “business” a lot in this Playbook, but that doesn’t mean your startup needs to be a for-profit business.

In the United States, many news startups choose to become 501(c)3 nonprofit organizations, which are exempt from paying federal income taxes — and even the startups that become for-profit companies can choose very different business structures.

So what path is right for you? Here are three tips to help you decide.

Tip: Identify your priorities as a founder.

In the United States, 501c3 nonprofit organizations cannot be bought or sold and cannot make political endorsements, and they’re required to serve the public interest under the leadership of a board of directors. If that all sounds great to you, then going nonprofit might be worth it for the tax exemption and other benefits. But if you’d like the option to sell your business, make political endorsements, or set your budget (and make other strategic decisions) without approval from an independent board of directors, then a for-profit business might be a better fit.

Read

Nonprofit and for-profit news businesses often operate in very similar ways — but there are several important differences that founders should consider.

Tip: Consider how you want to raise funding and earn revenue.

Nonprofit news organizations are more likely to receive foundation grants and other philanthropic funding, and they might find it easier to develop revenue streams around memberships or recurring contributions (because contributions to nonprofits are tax-deductible in the U.S.). On the other hand, only for-profit businesses can receive capital investments from venture capital firms and other investors, and only for-profit businesses can sell certain types of advertising. There are exceptions and workarounds to these rules, but they’re at least worth considering if you find yourself torn between which option to choose.

Tip: Consult a lawyer about different for-profit business structures.

For-profit businesses in the U.S. can be set up as Limited Liability Corporations (LLCs), C-Corps, B-Corps, S-Corps, partnerships, sole proprietorships, co-ops, and more, and the rules and regulations for each one vary from state to state. That’s why we recommend consulting a small business lawyer if you decide to take this path — or at least talk with a business advisor who has experience navigating this part of the process.

Bookmark

The nonprofit public interest firm Lawyers for Reporters provides pro bono legal services to news organizations in the United States.

How do you manage taxes, accounting, and other administrative tasks?

Balancing the books, filing taxes, running payroll, approving time-off requests, and managing other administrative tasks is a big and important job, especially once you start hiring employees.

For many entrepreneurs, these hidden costs of running a business come as an unpleasant surprise, so here’s some advice to help you prepare:

Tip: Hire someone to do the administrative work.

It can be tempting to save money by doing admin tasks yourself, but as a startup founder, entering numbers in spreadsheets, drafting contracts, and filing paperwork probably isn’t the most valuable use of your time. If you’re tight on budget or need help with a specific project or a few recurring tasks, you can research virtual assistants or freelancers on sites like Upwork and Fiverr.

Tip: Use a software platform to streamline the process.

If you can’t hire an admin assistant yet (or even if you can), paying for an online accounting tool and/or human resources platform is often a good way to reduce the burden on a small business. Just be sure to consider the price structure and platform features carefully and try to find a solution that will work for your business now and five years from now as you grow. Otherwise, you may have to migrate to other tools or platforms down the road, and that migration can cost you precious time and money.

Read

This Hubspot list of 19 accounting and bookkeeping tools includes advice for how to pick the right one for you.

Read

This PCMag list of the 10 best HR software platforms explains the unique advantages of each one.

Tip: Borrow and adapt document templates from other businesses.

Whether you need an offer letter, employment agreement, advertising contract, or document retention policy, it’s almost certain that another news entrepreneur has a template for that — and we’ve learned that many of them are happy to share. To tap into that collective expertise, request an invite to join the News Entrepreneur Community on Slack, or feel free to borrow and adapt any of the templates that we’ve sourced from news businesses in the United States.

Starter Guide 4
Credits

About

Startups Playbook

In partnership with a wide array of experienced news entrepreneurs and industry experts, we've designed resources to help you build and grow an independent, sustainable news organization. These resources will support you in developing your news product, identifying your target audience, iterating on your idea and setting your first budget.

In partnership with

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Written By
Ben DeJarnette
LION Publishers
Contributor
Anika Anand
LION Publishers
Conor Crowley
Google News Initiative
Doug Smith
Architect of Tables Stakes and Media Transformation Challenge
Phillip Smith
Journalism Growth Lab
Researcher
Anita Li
The Other Wave
Chloe Kizer
UNC Hussman School of Journalism and Media
Kelsey Ryan
The Beacon
Lauren Arevalu-Downes
Hustle & Hustle
Ryan Tuck
Blue Engine Collaborative
Reviewer
Alan Soon
Splice Media
Anita Zielina
Graduate School of Journalism at CUNY
Ariel Zirulnick
Membership Puzzle Project
Ashley Woods Branch
Detour Media & Google News Initiative
Chris Krewson
LION Publishers
Emily Zajac
Milk & Cereal
Harry Backlund
City Bureau
Janine Warner
SembraMedia
Josh Mariscal
Frontera Free Press
Kara Meyberg Guzman
Santa Cruz Local
Lina Timm
Bayern Media Lab
Maria Archangelo
Chalkbeat
Melanie Sill
NC Local News Workshop at Elon University
Mij Ebner
SembraMedia
Nico Lumma
nma.vc
Pauline Tillmann
Deine Korrespondentin
Pete Ramirez
Frontera Free Press
Samson Yee
Business Insider Japan
Sherrell Dorsey
The Plug
Simon Galperin
Community Information Cooperative
Stacy Feldman
The Boulder Reporting Lab
Wes Panek
New Media Ventures
Sibel Lowin
Google News Initiative
Ben Monnie
Google News Initiative
Arun Venkataraman
Google News Initiative
Contributing Publisher
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calmatters logo
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m logo
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