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Chapter One

Congratulations! Your passion for truth telling and your desire to be your own boss has brought you to this point.

Starting a nonprofit business can be an overwhelming endeavor, but this Startup Guide will navigate through the process. It has lots of questions you will need to answer, and the tools and resources that are right for your concept.

This process is not easy. You may be tempted to skip some of the steps. But in our experience working with startups, we have found that shortcuts end up costing time, energy and money.

The skills required to run a nonprofit news business go well beyond great reporting and editing expertise. With this guide, you will be able to fully develop your concept and test its feasibility. It steers you through the complexities of forming a nonprofit entity and lays out a tactical launch plan with a timeline to keep you on track.

We hope you will find the guide beneficial. It is a living document and we will continue to add information over time in collaboration with the INN community. We welcome your feedback.

Info Sessions for Startups: Our monthly one-hour INN Sessions are designed to give you a realistic picture of what the nonprofit startup process entails. Click here to book your 30-minute spot. 

Being a successful business owner requires investing your own money, time and effort. You may be attracted to the idea of being your own boss, but are you cut out to successfully meet the demands of owning a business? The only thing certain in business is that nothing is certain. Are you comfortable with being uncomfortable? Can you handle taking educated risks and surviving the constant ups and downs of operating a business?

Running a successful business is not just about having great ideas. It’s more about strong execution. If you have a hard time staying focused, if you are uncomfortable generating revenue, and if you are averse to managing all aspects of the organization — not just the editorial component — then entrepreneurship may not be the way to fulfill your journalistic passion.

It is important to have a realistic picture of the characteristics and skills you bring to this venture. Perhaps more important is understanding why you want to take this challenging step. Here is a questionnaire with some tough questions you may want to consider before embarking on this journey: Entrepreneurial self-assessment worksheet.

Essential Qualities for Business Owners

You can be a successful business owner even if you don’t possess every skill needed to run a small business. However, certain qualities are essential for success.

  • Willingness to sacrifice: You must be willing to accept the fact that, as a small-business owner, you are the last one to be paid. Your vendors and employees are in line ahead of you. You must be willing to sacrifice much of your free time. If you like working set hours and taking three weeks of vacation every year, don’t go into business for yourself.
  • Strong interpersonal skills: If you thought getting along with your boss was tough, wait until you have to deal with suppliers, funders, employees, lawyers, accountants, government officials, and everybody in between. Successful owners are able to work with all personality types, and they are able to find out what their customers like and don’t like.
  • Strong leadership skills: Successful owners understand that others are looking to them to be led to the promised land. Others will be looking to you for answers, and if you have to be ready for that responsibility.
  • Strong organizational skills: Successful owners are able to keep track of everything going on in their business, set priorities and get things done. They know that if they lose track of what’s going on, they’re sunk.
  • Intelligence: Being able to score well on standardized tests is great, but having street smarts and common sense — being able to quickly think on your feet — is essential. Successful owners are able to anticipate problems before they arise and take preemptive steps to avoid them. They know how to solve a crisis after it occurs.
  • Management ability: Operating a small business is all about managing relationships — with your audience, your clients, your employees, your suppliers, your funders and with your family.
  • Business experience: Without solid business experience or access to business expertise, it may be challenging to get funding for your idea. Funders will want to know about your journalism experience, but they will also want to know if you have the business savvy to sustain the enterprise long-term.
  • Risk tolerance: How will you react when your business isn’t going as well as you expected? A risk avoider may fold the tent, but a risk-taker believes in the business and will keep going.

RESOURCES:

All beginnings require exceptional care if they are to result in great harvest. — The I-Ching

Many entrepreneurs get excited about their idea and move forward without thinking through all the components involved in starting a sustainable business. That’s why it is important to spend time on a business plan.

Your business plan should provide the narrative that explains your concept and demonstrates to funders, potential board members, employees and others how well you understand the complexities of how your enterprise will function. Who will find value in it? How will it operate sustainably? Why should it be funded?

Given the importance of the business plan, why don’t more entrepreneurs pay attention to creating one?

One answer is that business plans are perceived as being repetitive, using language that is foreign to most entrepreneurs. And because business plans are written in a linear fashion, entrepreneurs often lose sight of the interconnectivity among the various components.

The animated video series “From Idea to Business” can help you and your organization quickly articulate your business concept and the key components necessary to execute it using a business model canvas.

Once you understand how a canvas works, you can use this business model canvas tool to plot out the nine building blocks required for your concept.

The canvas includes the key questions for each of the nine segments of the canvas that have been adapted for nonprofit news organizations.

Idea Generation and Value Proposition

The value proposition is a statement that explains to members of your target audience why using your product or service would solve their problem or improve their situation. If other options are available to your target audience that meet the same need, the value proposition explains why your concept is better.

The value proposition helps you define the news product you are going to create, as well as explain it. For a startup to succeed, it can’t just meet your idea as a founder of its value – it has to provide something that your audience finds valuable to meet a need or make an improvement.

To craft a compelling value proposition – the next step in building your business model – you will have taken time to research the target audience your news will serve. Your knowledge and understanding of who they are and what they value in news will be essential. To find the information to build your value proposition, you must get that information from those you seek to to serve with your news coverage. In other words, market research, by talking to as many people as you can who are part of, or knowledgeable about, the audience your news organization plans to serve.

Our Value Proposition Builder Worksheet provides a framework for developing your value proposition. Here are some additional questions to help you assess the environment in which your business would exist. In the worksheet, you will have identified any alternatives your prospective customers have to the service you are envisioning.

  • If there is an alternative that meets most needs, would partnering with that existing news source or organization allow you to fulfill the need without starting an organization from scratch?
  • What is the funding landscape for initiatives such as yours? If projects like yours are not being funded, why not? What funding alternatives have you considered?
  • Is the market of people who want this big enough or do you see a high enough level of need to support your operation or win funding for it? This is particularly important to estimate for local operations, which may not serve a large population. Some news organizations serve small, influential audiences that are valuable to sponsors and funders, but you’ll want to consider whether your target audience is large enough to support an independent news outlet. If not:
  • Can you think through a value proposition in terms of partnerships? Might you fill an unmet need by providing specialized coverage to media, libraries or other organizations that share your goal to provide credible public information?
  • Are there societal trends that support or challenge the long-term sustainability of your value proposition?

RESOURCES: The Traction Model Overview

This topic’s author, Tim Windsor, has more than 20 years of experience in leading or helping media companies and other organizations develop and improve their mobile and digital strategies and technologies, grow audience, and build sustainable digital revenue. Here he discusses why you need a product-centered strategy.

Strategy Overview

Start off by asking what you are going to do for your audience. You can’t just answer that you are going to cover a particular community or topic, or even a broad topic within that community, such as covering crime in your city. You must think deeper about what the people in your target audience really care about, and then put together a list of five or so specific topics that are really compelling as of your launch time.

Either you know for sure that your readers cannot live without this information, or you have tested out the topics on a sample of your audience. The fewer the people working with you, and the more competition you have, the more your topics must be narrowly focused so you can provide sustained and distinctive coverage. (Some narrowly defined topics are self-limiting, but if you have done a good job of connecting with your audience as you cover a story to its natural end, your reporting or the response from your audience will lead you to a new topic.) You also can test your topics by trying to come up with a list of story ideas. If you can’t fill out a whiteboard in a half hour with story ideas you are excited to pursue, those topics won’t work out and you’ll have to revise your list.

Next determine what you can sustainably deliver and at what frequency. Are you a daily, a weekly, an hourly news source? Make that expectation clear at the beginning and deliver on it. We’ve all seen news sites that start strong but the gap between postings gets longer and longer, and then they are gone. They disappear not because of a lack of interest by the content creators, but because they did not have the time, energy or resources to continue to deliver at the frequency they started out at.

In my own career, as an editorial director at Patch.com, I saw the reporters for the hyperlocal news site killing themselves trying to cover everything that moved in their communities. What made the best editors stand out is that they understood what mattered in their community. They aggregated a lot of news, but had limited their scope of original reporting to a list of five or so topics on which they could break news.

Defining the product

In a product-centered strategy, you start off by asking, “What are you doing for your users that they cannot do for themselves?” Clayton Christensen, a Harvard Business School professor known for his theories on disruptive innovation, describes the strategy as a marketer realizing that the customer is hiring a product or service to get a job done.

As you define your product you have to ask whether it will solve an urgent need in the lives of your target audience. News does fulfill an urgent need for those who absolutely must know what is going on in their community. Just having something fun and entertaining to read can fulfill an urgent need for some people. But it is not enough for your product to be interesting. Before you just start posting interesting news, ask what your product does for the readers:

  •      Is it a time saver?
  •      Does it save them money?
  •      Does it boil down essential information they need?
  •      Does it provide a trusted filter where there is too much information?
  •      Does it allow them to connect or collaborate with other users?

If the product does one or more of these jobs, or meets some other urgent needs, then you have designed a marketable product. Thinking of your product like it came in a box on a shelf, you would know what the box says on the outside. More practically, you have a sentence or two to use prominently in your business plan and donor appeals, because your product is what gives your journalism impact.

Startup Product Trio: Web, Newsletter, Syndication

An earlier section covered the content distribution strategy, but let’s look at it again with a product-centered approach: How will the customer use the product?

If the content distribution will rely on a website, how will the customer use that website? The answer increasingly involves a smartphone, so it would be dangerous to design a website that is not mobile-friendly, and soon if not right away, a mobile app might be the product. A survey by Pew Research Center in 2018 found 58 percent of U.S. adults often get news on a mobile device, 19 percentage points higher than the 39 percent who often get news on a desktop or laptop computer.

If you are covering topics that are relevant to different target audiences that are unlikely to visit your website regularly, you may have to distribute your product to them with targeted newsletters or syndicated content in the publications they already read.

If the job you are doing for your users involves giving them a way to interact with you or each other, that need will affect the design of your product. For example, any website can create a forum for user-generated content but it will only be successful and sustainable if users have an urgent motivation to be active on that forum.

Syndicating content through well-established publications can be an effective way to get information to those who urgently need it. But the syndication must contribute toward your strategy of sustaining coverage of your topics (See the section on Distributed Audiences in chapter 3).

To borrow a concept from the technology industry, once you think you have a product that meets an urgent need, you’ll want to take it to market in some simple way as soon as possible. If you wait until you perfect your product or build every possible distribution channel, a competitor may corner the market. And if your product does not succeed in its current form, you can pivot by asking, “What else can I do in this space?”

The Product Manager Role

If you want your organization to stay small, you have to start simple and say “no” to a lot of ideas. But if you are planning to grow, your business plan (discussed in chapter 6) will have to envision sufficient staff to manage all aspects of your product.

As a startup, you need to know how much time it will take you to manage your minimum viable product (MVP in tech-speak). Then as you develop your business plan you can consider strategically adding features to that product gradually over time as long as you have the revenue to pay for staff to manage and support the growing product.

Suppose you start a newsletter as your MVP and charge enough for subscriptions to pay your costs. Over time you add more newsletters, need more elaborate social promotion to get enough subscribers, and start sponsoring events and considering some other initiatives to keep the subscribers engaged. Because adding too many features to a product can make it bloated and unsustainable, you or your team must periodically test, measure and evaluate what you have created. You must either set aside time in your work schedule to handle that work or delegate it to a product manager.

All this talk about product can be disheartening to those journalists who see their calling as breaking news and telling stories, and leaving the business talk to others. But in the next chapter we will connect this product-centered groundwork back to your news mission.

Resource: News Product Alliance Product Kit (2022)

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