If I was starting The Village Voice today, I would not print anything. I would not hire a ton of writers. I would build a website and a mobile app (or two or three). I would hire a Publisher and a few salespeople. I would hire an editor and a few journalists. And then I'd go out and find every blog, twitter, facebook, flickr, youtube, and other social media feed out there that is related to downtown NYC and I would pull it all into an aggregation system where my editor and journalists could cull through the posts coming in, curate them, and then publish them. I'd do a bit of original reporting on the big stories but most of what I'd do would be smart curation, with a voice, and an opinion.
The good news is I wouldn't have to build that aggregation and curation system. Our portfolio company Outside.in has built it and they launched it earlier this week. It's called Outside.in For Publishers (OIP). If you are interested how it works, you can click thru and read that post. If you want to see what the curated pages created with OIP look like, here's one from Milwaukee Wisconsin.
What would the P&L of this new local media company look like? Well Peter Kafka of All Things D and Mark Josephson, CEO of Outside.in have been collaborating on that and Peter published a strawman local media company P&L on his blog the other day.
As you might imagine, it's a "honey we shrunk the kids" story. The topline goes down by an order of magintude and so do the costs. The profits are still there (at least in theory). In Mark and Peter's strawman model, a local media business with 40mm monthly page views does about $7mm in annual revenues and almost $3mm of pre-tax income. You can go click on that link in the above paragraph if you want to see the model.
Of course, there are going to be a lot of variations on this model. At Huffington Post, I believe the formula is create 20% of the content and link to the rest. I think you could make this model work with a 50/50 creation/aggregation model but it would have to be the right locale, the right journalists, and the right advertising market.
Whether the tools come from Outside.in or someone else, I am confident that this is the direction of the local media business. As Mark says in the Outside.in post:
Quite simply, everyone is a publisher today.
And if that is true, and I think it is or will be, then the local media companies that leverage their audiences for their content, create communities and conversations, will win. And they'll be profitable businesses worth owning and investing in.
One of Mike Bloomberg's greatest achievements is the creation of the 311 service here in New York City. These 311 services operate in many large cities in the US and Canada. The first one was in Baltimore in the mid 90s.
Apparently Bloomberg is a huge user of 311 himself and he calls all the time as he is driving around the city, reporting potholes and such.
We had a pothole in our neighborhood that I passed every day on my way to the subway. It was a big one and I'd watch car after car pound the hell out of their undercarriage as they made their way from Hudson onto Bethune street. One day I stopped and snapped this photo with my Blackberry and posted it to Flickr (and then automatically to Twitter):
I added the following to the Flickr headline which became the tweet:
It would be great if you could twitter these in like: @potholenyc corner of bethune and hudson
Of course I could have called 311, like our Mayor does, and reported the pothole. But doing it this way does a bunch of things;
1) It saves the cost of staffing large call centers because computers can handle most of the processing of messages like this. There will still need to be humans at some part of this process, but the front end can certainly be automated.
2) You get an image of the pothole which should help the crews who fix them evaluate the worst ones and prioritize.
3) The photo and the twitter message is out there for anyone to see. Ideally this message would get routed, via something like our portfolio company outside.in, to the various local media in the neighborhood. If the messages have enough metadata in them, you could even create pages of local media based on the most common neighborhood issues (crime, infrastructure, schools, parks, etc)
4) The public discussion about the photo and related posts could be aggregated to create even more metadata and further identify the highest priority issues.
We see this "public channel" in action already with services like Comcast Cares on Twitter. Anyone can pick up the phone and call Comcast and tell them that their cable service isn't working. But the only people who know about that are the person making the call and call center rep taking it. When someone posts on Twitter that their cable service isn't working and directs the message to Comcast Cares, many people see that. Some of them may be other Comcast customers who might find out that their cable isn't working either. And as Comcast Cares elevates the issue, gets it fixed, and reports back, everyone gets to see that too. It's a huge win for Comcast. Anything that can make a cable company look better is a great thing and the use of the public channel is exactly that.
The public channel is just developing. It's in its infancy. Services like Twitter and Facebook are building key elements of it. But we need a lot more infrastructure to make this happen. I do not believe that the way this will happen is the creation of "enterprise services" that will be sold to local governments. I think we'll see things like GetSatisfaction and Uservoice develop that are consumer facing first and foremost that governments will be forced to adopt.
My friend John Geraci, co-founder of Outside.in, is developing a non-profit called DIYcity that is attempting to spearhead a movement along this idea. If you are interested in working on projects in this area, you should join DIYcity and start collaborating with others who are working in this space.
The public channel is the right channel for business and government. Most "customer support" issues are not confined to one person (just look at the comments on my American Express post for proof of that). So we should be using a public channel to talk to companies and institutions. They'll benefit and so will we.
I posted a few weeks back about a great music blogging experience with a new band called The Rural Alberta Advantage. The band is from Canada and had never been in the US until this week. Last night they played their first show in the states, here in NYC at Pianos. I was there and the cool thing is so were about half dozen (maybe more) members of this community. I met a bunch of readers for the first time last night. Thanks everyone for coming up and introducing yourself.
For those readers who came out, we got to hang out with the band before and after the show and were treated to a fantastic set. The only bummer was Fraser did not get to hear his favorite track off the new record, called In The Summertime. The band promised to play it when they are back in NYC next friday in Brooklyn at Union Hall.
Here's a shot of the band at work. There's just three of them, Nils is the lead singer/guitar/piano, Amy (who emailed me to start this whole thing off) plays a bunch of fun instruments and sings backup, and Paul is a crazy good drummer. They make a much bigger sound than you'd think. Here's the first song of theirs I ever heard. Click on the first play button, not the second one.
At the end of the show, instead of an encore, the band walked out into the middle of the audience and sang a song called Goodbye. You'll probably see a few AVC community members in this photo. Too bad we can't all tag ourselves in it.
I was asked at some point early last year to sit for an interview with a woman named Ondi Timoner. I wasn't exactly sure what it was for but I knew it had to do with the NYC Internet scene in the late 90s and Josh Harris. So I found myself sitting in a tiny greenwich village apartment with a camera on me answering questions from Ondi. It was an interesting experience but I quickly forgot about it.
Then when I was getting ready for the web 2.0 keynote on the history of the NYC web business, Josh Harris contacted me and suggested I use some of Ondi's footage in my talk which you can see here. When I first saw that footage I knew that Ondi had something special on her hands.
Yesterday I saw the news, via twitter, that Ondi's film, called We Live In Public, won the Sundance award for best documentary. That's fantastic news for Ondi and Josh who really wanted to see this movie made.
I am certainly going to see this film when it plays in NYC. If you are interested in the early days of the Internet and the guy who invented a lot of the stuff we now take for granted (streaming audio, streaming video, self publishing, etc), then you might also enjoy the film.
I don't blog frequently about local news and events, but I do occasionally. When I do, outside.in captures the post and geo-tags it and puts it into their radar service. Radar is a facebook style news feed for neighborhood and local information.
Any blogger who wants their content captured, geo-tagged, and presented in Radar, can go here and add your feed to outside.in. It works even if you are an occasional placeblogger like I am.
Outside.in launched a nice new service for placebloggers (full-time or occasional) last week called Blog Maps. I've just put one on this blog in the right sidebar right below my flickr photos. It looks like the image on the right top of this post. Or you can scroll down and see it live. If you hover over any of the icons, you'll see the location I blogged about and if you click, you'll see the post(s) I wrote about that location.
If you want to see a blog map for a real placeblogger, click on over to Gotham Gal and see her blog map which is on the top right of her blog. And you can click on the bottom of any blog map to get one for yourself.
Fifty to a hundred thousand high paying jobs are going to go up in smoke in NYC before this is all over. It's a mess for this city, tax revenues are going to be down, real estate prices are going to be down, restaurants will fail, etc, etc. We'll get through it for sure, we always have, but it's going to suck for a while. As my friend Mo said, "I sure wish Bloomberg would get another four years because we are going to need him"
But beyond all that, is this really that bad? I've been thinking a lot about what Howard said on tech ticker last week (roughly 3:35 min into the video).
"the brokerage business is changing, this is what's going on, ..... the stock broker as we know it is gone, hedge funds are making markets, we are witnessing the destruction of an industry"
Those of us who work in the tech business are used to this sort of thing. Capitalism is darwinism and technology driven darwinism has impacted the tech industry more than any other. Where is DEC now? Where is Wang now? Where is Novell (not dead yet)?
But technology driven darwinism is hitting every industry these days. People tend to think of the newspaper or music business when they think of industries that are being destroyed by technology, but we have to admit the same thing is happening to the traditional investment banking and brokerage industry.
Andy Kessler, a former wall streeter who moved to silicon valley and never looked back has it right when he wrote this the other day:
Analogies only go so far, but Wall Street got caught in the same
wringer (as airlines). Deregulated since 1975, balance sheets grew and grew as money
got thrown at the profitable business of trading stocks and bonds,
investment banking and money management. In the cheap-money period of
2002 to 2007, Wall Street’s thirst for capital saw no limits.
Inevitably, too many players and a bit of technology in the form of
electronic trading squeezed the profitability of Wall Streets
bread-and-butter businesses.
... With profits fading in baseline
businesses, firms discovered the trick of using their huge capital to
borrow short term cheaply and lend long in the form of subprime
mortgages.
Traditional banks can get away with this because they borrow short
term from their depositors, who are usually loyal and lazy, happy to
keep their money in the bank, under-earning, in exchange for perks like
free checking and ubiquitous ATM machines.
Investment banks have no such luxury of stupid people to borrow from. Instead, they
borrow from one another and from institutional investors: all
short-term paper. When the subprime "easy money" loans turned toxic,
the short-term facilities fled for safer ground. Hence the flushing
sound you are hearing all over Wall Street.
So now Wall Street consolidates. Should you care? Not even for an
instant. I spent 20+ years on Wall Street, competing against scores and
scores of firms, always wondering what they all really did. E.F.
Hutton. Shearson, Drexel. Heck, I even worked for PaineWebber in my
early days (daze?) on the Street. All gone. And nobody misses them.
The true money-makers all find jobs elsewhere. The worker bees in
the middle tier see disruption, but are eventually absorbed into the
reconstructed Wall Street. The bottom tier goes to work at Foot Locker.
That last bit about footlocker is harsh but maybe true. The rest I totally agree with. Hedge funds are taking over more and more of the asset management and trading business. Technology is taking over more and more of the sales and clearing businesses. The brokerage business is being redefined, rebuilt, and reorganized.
So let's not flip out too much about this brokerage bust. It's going to hurt in the short term here in NYC and the effects will be felt on main street and even in the venture business. But in the long term this is all good. That's why we need to be careful with all of this bailout activity. It's not just moral hazard, it's propping up bad businesses that need to fail so talent and capital can move to more productive efforts.
Our good friends at First Round Capital are always thinking. A couple years ago, they hacked the web 2.0 conference. Now they are cleverly taking advantage of the misery on wall street to find talent for their startup companies in NYC. They've launched a website called Leave Wall Street, Join A Startup where they list all the jobs that their portfolio companies in NYC are trying to fill.
Though we at Union Square Ventures were not that clever, we too have been trying to hire from Wall Street in the past month. In particular, we are looking for "quant jocks", people who have degrees in economics and/or advanced math who know how to code algorithms. These kinds of people have been very valuable on wall street in areas like program trading and risk management. But they are also incredibly valuable in areas like advertising optimization, search optimization, social media optimization, semantic analysis, auto tagging, etc, etc. We need such people in almost every single one of our companies, no matter where they are located.
We also have plenty of other jobs in our portfolio and here's a search results page on Indeed that lists them. At the bottom of that page, you can enter your email address and get alerted via email anytime one of our portfolio companies lists a job.
First Round says on their "leave wall sreet" website:
That's terrible news for the people involved and the NYC economy. There is no way that the tech startup sector in NYC is going to fill all of those jobs. But we can fill some of them and we will. So if you are leaving wall street (forced or otherwise), please consider joining a startup. The pay probably isn't as good, but the equity can be valuable, and I promise that the work environment is more enjoyable and that our companies don't operate at 30x leverage.
If you are interested in a quant jock position in our portfolio and have the skills and experience to do it well, send me an email using the contact link on the upper right of this blog.
I've been working on the presentation with a young man named Jeremy Bogdan. Jeremy read my post seeking a graphic designer to help me with my presentation. Although he did not meet the test of someone who had lived through the past fifteen years of NYC's Internet scene, I could not resist his energy and enthusiasm for the project.
Before I had even made a decision on who to hire (building the presentation for me is a paid gig), he was sifting through the wiki page and sending me slides. He just wanted it more than anyone else and so I hired him.
We've been working on the presentation pretty much every day for the past week and a half and it's up on Jeremy's flickr account for anyone to see. We have a few more slides to do and a couple are in there as placeholders but I'd say its at least 90% complete.
The slides are designed to be "background music" for the talk I am giving. If you don't see something you think is important in the presentation, there's a good chance it's in my talk but just didn't make it onto the slides.
That said, if you think we missed something big, please let me know in the comments.
Finally, I'd like to thank everyone who helped by contributing to the wiki. I am not sure I could have done this without your assistance. If you aren't going to make it to the web 2.0 NYC conference, I hope you will still be able to see my talk because they are filming it and I will ask them to allow me to post it.
I am leaving the political conversation for now. If people want to continue to talk about my post this morning, they can have a go at it in the comments, but I've spent all my energy I can today on that.
It is worth noting that today is September 11th. I've tried to write on this blog about that day on its anniversary every year. It gets harder and harder to do that as the memories fade and time passes.
But my friend Tom Watson has penned a good post about that day and the aftermath and I thought I'd share some of his words with you all today along with the obligatory link.
Many bloggers were born in those long hours. You could feel the
biological need to self-expression, and the parallel desire for more
information than the traditional media could provide. You could almost
feel the old web creaking, the html bending. I am absolutely convinced
that some of the energy and drive to create our socially-empowered web
was provided by those horrible events on a gorgeous September morning.
This blog wasn't born on September 11, 2001, that happened a few years later. But it was very much inspired by those, like my friend Jeff Jarvis, who did turn to the web to find meaning in that terrible experience. And so I agree with Tom that we will look back at 9/11 in the years to come and we will see things that came of it that we now view as an important part of our every day life. At least I do.
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