Hipsters, Hacks & Hustlers: #hhconnect unpicked

I was fortunate enough to attend the first London Hacks/Hackers Connect conference. Here’s what I took away about journalism start-ups:

According to John Spindler, CEO of Capital Enterprise, I am a hipster. But that’s not all bad because, apparently, it means I have nailed one of three “types” required to make a start-up work: the Hipster (who “gets” what’s cool and sorts the UX), the Hacker (who can build tech to meet these needs) and the Hustler (who sells to users). I would suggest journalists often encompass at least two of the three H’s. It was striking just how entrepreneurial many journalists at the event were. Maybe this shouldn’t be such a surprise given many start-up disciplines are already part of the hack’s day job: spotting trends and scrutising assumptions, pitching the piece (let’s call it a product), negotiating resources/money, and then creating a product that is then iterated to meet an audience’s need. Furthermore, hacks are used to building audiences, increasing engagement, working awful hours for little money on tight deadlines (not unlike sprints), problem solving and adapting quickly to what Twitter’s mark little termed the DKB (daily kick in the bollocks). The problem is the missing ingredient: the elusive hacker. It feels like there are many more hustling hipster hacks than there are hackers.

There’s lots of money waiting to invest in media start-ups. Indeed, investors believe they can make vast sums from publishing. Itxaso Palacio, investment director at Lepe Partners, politely berated one journalist for suggesting there was no money to be made in publishing unless you built another Buzzfeed. Why else would Google News Labs and Seedcamp sponsor the event?

There’s lots of innovative ideas out there. If the Hacks/Hackers event demonstrates anything it’s that there are lots of hacks out there who clearly read the Nieman Lab bulletin religiously and have an appetite to leave their respective publishing stables to create new ways of doing better journalism. Some are looking at publishing models, some are exploring tech innovations in the news room, while others are focusing on ways of disrupting the dissemination and consumption of content. All very exciting. But not all tech start-ups, and not all actually need significant investment beyond seed funding. Either way, the Connect event was a catalyst for building on the foundations of Hacks/Hackers meets to form an exciting community.

Innovative ideas with huge potential are not enough. They need to be demonstrably scaleable — because that’s the only reason VCs invest. They need ten times returns on their money so, go big or go home. Also, there will be no investment without the aforementioned team of hipster, hacker and hustler in place, a working prototype, with user traction and a costed business plan. For consumer products traction equates to having more than 1,000 engaged users, and for B2B this means having at least three clients. That is really hard.

Journalists seem to be motivated by improving journalism. No hacks I spoke with talked about money. Some didn’t mention tech. Most seemed focused on finding ways to viably produce high quality journalism of social importance (notably *not* necessarily popular content) without commercial compromises. In short, for most hacks, great journalism is the end rather than the means. In many ways, this is more of a not-for-profit approach than a start-up approach. A report published last year called Publishing for Peanuts (Innovation and the journalism start-up) concluded the same thing:

“The leaders at most organisations we interviewed were motivated by a desire to produce high quality journalism rather than meet particular financial or audience goals. The vast majority are overworked, with a belief in the value of good journalism that motivates them beyond financial reward.”

But investors are almost entirely motivated by money. Duh, obviously. My point is that there is a big question mark over the extent to which many journalism start-ups are really aligned with the needs of investors.

High quality journalism is a low value commodity. Another “duh”, you might say - but most journalists struggle to reconcile this fact with our profession’s less tangible democratic/social value. The Connect event was no exception. As Neil Thackray, founder of The Media Briefing, argued using a (truly depressing) graph, compared to other paid-for services, news is easy to produce and of relatively low importance to users. That is evident by how few pay for it. As a result, he advocates making news free to view in front of paywalls, using it to then funnel users towards higher value paid for products such as data or events. This approach is up for debate. But what is undeniable is that in a saturated market of free content, it is harder to discern high quality journalism from lower quality journalism.

Quality journalism is valuable and clearer in new markets. Political change can create new markets, and in such markets journalism free of overt political influence is a novelty so has a high value. Turi Munthe, founder of Demotix, spoke of the huge potential for investors in Arabic news publishing in the Middle East.

In saturated markets hacks are cutting out the middlemen. The easiest way of doing this is bypassing the the publisher, severing reliance on advertisers and, instead, forming direct relationships with readers. This can allow journalism to be profitable (or at least worthwhile) to journalists.

Without a publishing brand it’s hard to establish credibility. A problem discussed at length by a group of journalists involved in such projects was one of reputation. People buy The Times or The FT because they trust the name. The middleman is there for a reason. Without a publisher, or at least the presence of big name journalists, there is a risk that a new start-up will fail. The Buzzfeed approach was to create revenues that could pay to buy journalistic credibility, but few start-ups will establish the firepower to do this. So how can they bridge this gap?

Several attendees have developed crowd-funding platforms to do this. Crowd-funding is an approach I have been quietly fascinated by for some years now because, done right, it could achieve the above goal of paying journalists fairly. Matt McAlister spoke about his experiences first with Contributoria and now with Publish.org. The latter has been set up as a Community Interest Company (CIC) which seems to make so much sense given the project’s objective is to fund quality journalism. Another example is www.byline.com. The founders have moved to the US to pursue a pivot on the original idea, and have asked journalist Peter Jukes to take on the business. He has plenty of experience on this, having successfully crowd-funded projects such as the his coverage of the phone hacking court cases and most recently £10,000 for a Serial style podcast. But he discussed the challenge of improving the UX of the site and the tech underlying it. Specifically he needs to build a system for promoting and funding projects by journalists with lower social media profiles than he has.

Value can be asserted by involving readers in production. One way of doing this is giving readers a commissioning role so that they are engaged in the process — part of the “journey” — and able to revel in its impact. A mega-engaged, transparent publisher-free approach is already being adopted by a collective of award-winning freelancers called Deca. This is what might be called Prestige publishing (long reads in beautiful print and digital formats sold through Amazon with write-offs in some of the world’s biggest magazines). It’s not a new idea; it’s based on photography coorperative in the 60s, and there are several other similar collectives. But it’s beautifully executed and credible. Crucially, co-founder, Marc Herman says the business washes its face. There are various models that could make them money. But at $3 a story (and these are incredible stories), or $15 for a sub, for me the answer to growth is to match prestige publishing with prestige pricing and charge far more for novellas of high quality journalism. I’d pay. A model that looks and feels like charity and doesn’t actively discern between high quality, resource-heavy journalism is not sustainable or good for journalism. If hacks want to make important (not necessarily popular) journalism viable, then they need to re-establish the value of excellent journalism and be transparent about the costs of production and unapologetic for charging for the product.

Hacks are trying to form local journalism start-ups. This is so, so welcome. Some of these approaches are variations on news-letter models with very high levels of engagement among smaller readerships. Others are looking at hyper-local publications, and creating networks. It’s not all consumer focused either. One hack I met is looking at mapping localised economic activity. A few people discussed models whereby the publication positions itself as local community interest champions. This makes a lot of sense. Communities are tight knit and have big collective spend that can be used to cross subsidise less issue-focussed content. Rebekah Monson, founder of Miami-based start-up New Tropic outlined how the publication was arranging events and content marketing to link mega-engaged readers with advertisers in creative ways.

Conspiracy theory of the weekend: Twitter will buy Blendl. The micro-payments company from the Netherlands was praised by Twitter’s Mark Little (founder of Storyful before it was bought by News Corp) who said that if he was investing right now that was where his money would go. Given Mark’s day job entails forming partnerships in the EU for Twitter, several attendees strapped on their tin hats over a pastry (courtesy of Google), and speculated that an acquisition could be on the cards.

But a Blendl model for B2B publishers won’t work. This was the view of Neil Thackray on the grounds that a.) users don’t pay for access to B2B (generally businesses do), b.) it’s too difficult due to dissipated publishers and payment friction, and c.) the margins would be small. I’d be really interested to hear from anyone in this space (who has tried and failed so others don’t need too...) about whether they agree with this analysis.

Lean/agile principles don’t necessarily work in the news room. Scrums and project management systems like Jira et al may be bread and butter for developers, but for journalists in the news-gathering process they can be stifling. That doesn’t mean the aren’t key to any kind of collaborative product build — and it certainly doesn’t mean editors should give them a try. If the Hack/Hackers Connect event was an MVP then it has surely been a successful one.

If you write on a white board with permanent marker you won’t look clever. I know, because I was that guy. Sorry about my stupidity, and huge thanks to the Hack/Hackers team that laid on such a cracking event: SarahMarshall, Joanna Geary, @cassiewerber, Peter MacRobert, Jeremy Walker, Phillip Smith .