How Important Is an Exit Strategy for Hyperlocal News Startups?
Should you know where you’ll end when you start a news business? Definitely, according to Rusty Coats, who has created curricula for community news trainings in the Block by Block and Investigative News Network (INN) communities. “If you have no exit strategy,” Coats told a roomful of startup news sites last month, “you have no ability to define success.”
His assertion got mixed reviews from the 30 some publishers taking part in a recent Community Journalism Executive Training programthat was funded by the Knight, Patterson and McCormick foundations, hosted by KDMC, and organized by INN. Participants came expecting to buckle down and write a viable 100-day business plan, while being coached by experts and supported by peers. But many felt “exit strategy” meant calling it quits. Many had given little or no thought to strategically ending the business they’d begun.
“Besides turning off the site?” said Jesus Sanchez, who covers several Los Angeles neighborhoods on The Eastsider LA.
“Yeah, we give up,” said Trevor Aaronson, co-director of the Florida Center for Investigative Reporting.
“More of a disaster strategy, the cliff,” said Brent Gardner Smith of Aspen Journalism.
“To me [exit strategy] means sort of like a DNR — do not resuscitate — strategy,” said 100 Reporters founder Diana Jean Schemo.
Lance Knobel, a co-founder of Berkeleyside, expressed the most basic concern: “I disagree at a fundamental level that exit strategy is what everyone should be thinking of,” he said. “I live in the Bay Area. If you look at the great technology companies that have grown there, I will guarantee you — absolutely guarantee you — that every single one of the founders started it because of a conviction and passion for what they were doing. And this vogue term of ‘exit strategy,’ it’s fine for venture capitalists and others to talk about, but for entrepreneurs to have that as an aim, I actually think is a big negative. I think it’s a really dangerous thing.”
Knobel wants Berkeleyside to become a lasting, valued community institution. Great, Coats said, but don’t ignore your exit strategy — just use a different word. “Substitute the words ‘exit strategy’ with ‘legacy’ and you get to the same place,” Coats said. “I don’t know a single startup business outside the indie news space that doesn’t articulate its exit strategy up front. That sets the path for growth and helps set benchmarks for success.”
Ned Berke, who runs the Brooklyn neighborhood site Sheepshead Bites, said thinking exit strategy led him to imagine a few different futures. “One is sell the business; one is make sure it can survive without me; or third, turn it into something larger.”
Brian Wheeler, executive director of Charlottesville Tomorrow, flipped exit strategy into succession strategy. “I’m assuming the organization will keep going, but I need a plan to make sure someone else can come in and take it over someday.”
And Amy Senk, founder of Corona del Mar Today said considering possible exit strategies gave her ideas for ways out beyond just shutting down: “I was thinking I would probably just stop doing it, and I don’t know, maybe find a job,” she said. “Now I’m thinking maybe I’d merge with another paper, or another site, or maybe I would have staff writers who I could direct and I could do more of a publisher role.”
During the exit strategy discussion, one startup news site publisher asked if the planning is any guarantee for success.
“The assumption is,” she said, “that if we do these things you’re telling us to do, the charitable world and the world of commerce will embrace us.” But, she said, it felt like “a huge experiment.” Coats could only agree.
Emily Harris is editorial director of the Journalism Accelerator, a new project designed to get people from across the news industry talking with one another about what’s working in journalism, with an eye toward long term financial sustainability.