How to Scale Local and Stay Entrepreneurial
“Local doesn’t scale.” Remember that precept from the 45 independent hyperlocal news sites that formed Authentically Local in May 2011?
While the vast majority of “indies” continue to heed that precept, at least one is betting big on scale. The Alternative Press (TAP), which quickly grew to 15 sites in suburban New Jersey (three wholly owned and the rest licensees), is now hoping to replicate this success and grow into a network of 100-plus sites.
To finance this growth, founder Mike Shapiro is seeking to raise as much as $1 million from angel investors. To help manage the growth, he’s hired veteran Internet executive Jim Lonergan, the former president and COO of TheStreet.
Shapiro told me that he can’t comment on the expansion plans at this time because of Securities and Exchange Commission rules governing private placements like the one he’s trying to put together. But earlier he did provide some details in comments published by TAP and in a two-part series by the site Career Fuel.
What’s especially interesting about Shapiro’s expansion plan is that while it has corporate-size ambitions, it will remain essentially entrepreneurial. The new sites will be sold to licensees, whom Shapiro hand picks and then trains in the TAP way. What he seeks in licensees he explained in this column in September:
“Community passion and community knowledge are important to the success of a hyperlocal. That’s how we came up with the licensing concept — find people who have that passion for their community and give them all the tools they need to start their own hyperlocal. I call it creating incubators of entrepreneurship. One of our missions is to ensure that the licensee is ingrained in his or her community but also objective and non-biased.”
Note that Shapiro uses the word “entrepreneurship.” That means licensees will not only be responsible for the success of their businesses — like the top managers at the AOL-owned hyperlocal network Patch — but, assuming the sites are profitable, they will also reap the rewards of ownership.
Entrepreneurship is usually associated with struggles with limited financial resources. But Shapiro says his licensees aren’t created in that long-odds image. “Now an entrepreneur can start a hyperlocal with a fraction of that capital because the infrastructure [provided by TAP] is already in place,” he said in that column last year.
The local digital space is becoming crowded, not only with competing sites but also with revenue middlemen who are trying to co-opt the advertising and marketing dollars of businesses. That’s what happened recently to entrepreneurial editor and publisher Mike Fourcher in Chicago’s Near North Side. As the stakes go higher, entrepreneurial publishers will face even higher risks. In almost every urban market, they must compete against well-funded corporate pure plays and newspaper and broadcast legacies. Entrepreneurial publishers may gain an edge with their editorial content, but what about technology, marketing, and advertising know-how?
Shapiro’s turnkey licensing creates a more level playing playing field for entrepreneurs. It also means more communities will have an opportunity to benefit from the kind of journalism that has typified TAP since Shapiro founded it in 2008.
How would I describe that journalism? I think I’d call it “authentically local.”
Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites that will present how communities rate in livability. Local America is featured on the Reynolds Journalism Institute’s Pivot Point site.