Do Media Startups Have Staying Power?
It seems as if all the blogging superstars are getting their own well-funded enterprises. Matt Yglesias and my colleague Ezra Klein are starting Vox.com. David Leonhardt is starting a new site at the New York Times called the Upshot, which seems to be modeled on DealBook. Pierre Omidyar is giving substantial backing to Glenn Greenwald and Matt Taibbi, among others, for a new journalism venture. And, of course, today Nate Silver launches the new FiveThirtyEight.
Tyler Cowen asks which of these websites will succeed, and offers a list of subquestions that might help us answer a larger question:
1. Which group has a cohesive core of initial workers, loyal to each other, and loyal to a common mission and vision for the project?
2. Which group has a charismatic leader who understands his role is now that of leader, and who can credibly sit down with venture capitalists, bosses, donors, and the like?
3. Which group has the capability to scale from a small operation to a larger, more bureaucratized level, without completely losing its initial inspiration and cohesion?
4. Which group has the best core idea for how to deliver a sustainable and interesting product?
5. Which group has the tightest connection to a web-obsessed back-up firm for project development and support?
6. Which group has the best and deepest collection of talent?
7. Which group has the strongest brand name behind it?
I'm not going to offer my own answers; I know or have met many of the people in question, wish them all well, and am not going to publicly speculate about their chances. Instead, I'll add the following observations to Tyler's:
1. You can't gain much information by looking at the business plans. As Mike Tyson famously said, "Everybody has a plan until they get punched in the mouth." Fundamentally, the business plan of anyone backing these organizations is (or should be) "take a phenomenally talented person and give them money to hire other very talented people and see what they can do." In the media space, that's not a bad business plan.
2. The biggest constraint that any of these organizations will face in growing traffic and reputation is the finite time of the founders. Scaling up is a hard problem for any business, but it's going to be especially hard on these projects. The Web wants lots of Nate Silver and Matt Yglesias and Ezra Klein and Matt Taibbi. An organization is also going to want lots of them -- to organize what the organization does, rather than produce great writing.
At a lot of points in a startup's life cycle, managerial overhead grows much faster than the business, because informal systems that work really well for small groups completely break down as the group gets bigger. Those who can't clear that hurdle are going to have a lot of trouble. And there's no way in advance to tell who is going to clear that hurdle, because none of the people in question have managed a startup before.
3. The second-hardest problem they will face is monetizing the traffic they get. There's a reason so many news organizations are struggling with this. And what makes a great blogger does not necessarily make a great ad salesman or conference promoter. Again, the only way to find out whether this is going to work is to do it.
4. Most things fail. Some of these projects may not make it -- at least, not as giant new media juggernauts. When that happens, some people will point and laugh. But the folks they should point and laugh at are the people who didn't have the vision or courage to get out there and try to do something brand-new. Going out on your own like this takes tremendous guts and hard work, and I admire every one of these guys for being willing to try.
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(Megan McArdle writes about economics, business and public policy for Bloomberg View. Follow her on Twitter at @asymmetricinfo.)
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