The rise of the microbusiness and why journalists should embrace it

First off, an important announcement about Inside the Story: the book will go off-sale at 23:59 on Thursday 24th May London time, so this is your last chance to get a copy. I have no plans at the moment to re-release the book, so if you want it, don’t waste time. 

• • •

I write a lot about entrepreneurial journalism round here, and get to talk a lot about it too (see below). It’s the Age of the Online Publisher and an incredibly exciting time to be exploring this space.

But I see a lot of people make a big mistake when attempting an entrepreneurial venture in journalism: they think like a traditional business.That either puts them off starting in the first place, or leads to fatal errors, such as relying solely on an ad-based revenue model for a hyperlocal website, or measuring of success in terms of hits and not loyalty.

Enter the Microbusiness: the smart way to think about entrepreneurial journalism.

What is a microbusiness?

A microbusiness is, in some ways, a unique by-product of the internet age, although of course they existed before then. Generally, a microbusiness is one that is intentionally small. It usually consists of one or two people, working from home or from a shared workspace, being frugal, minimising overheads, concentrating on pleasing a small but loyal customer base and, as a result, being impressively profitable. But we’re not talking about Facebook money; one of the defining characteristics of a microbusiness is the owner aims to make ‘enough’.

In his excellent book Rework*, Jason Fried says you shouldn’t be ashamed to run an intentionally small business.

“Don’t be insecure about aiming to be a small business. Anyone who runs a business that’s sustainable and profitable, whether it’s big or small, should be proud.”

I started a video production micro-business in early 2011. I had all the equipment I needed, after saving up over the previous year. All I needed was a website which I made using WordPress over Christmas of 2010. I challenged myself to launch it in 30 days…in the end it took me only 10. I had a target for the business to make a certain amount of money every month by the end of the year…it reached that goal after just two months and continued to be busy throughout the year.

No office, no investors, no employees and all the associated baggage. It also carries less risk, so you can see why it’s a popular option for the first-time entrepreneur, and in particular journalists and publishers looking for new opportunities.

In fact, the micropublisher is already a thing: to see someone really smart building something great in this field you would be wise to check out Thom Chambers, the founder of Mountain & Pacific, a micropublishing house. It’s just him, making very well designed magazines, and working hard at building a loyal audience.

The space is beginning to get populated by more and more success stories. I’ve mentioned many before: people like Kirby Ferguson of Everything is a Remix fame and even successful hyperlocal blogs (when done well) work best as microbusinesses. Many bigger beasts in the industry started out in someone’s living room, a passion project for one or two driven creatives.

How do you set up a microbusiness?

Well, a lot of it depends on your own design – and therefore having a willingness to ignore conventional wisdom, and really create something that fits around your life and your passions. But if you are looking for a guide, you’re lucky because one has just come on the scene, courtesy of one of my favourite authors.

Chris Guillebeau is the founder of The Art of Non-Conformity and the author of a 2010 book by the same name*. It’s a must read for anyone leading unconventional careers like I do. He’s just published a follow up all about microbusiness called The $100 Startup*. (Disclosure: I get a very brief mention in the book, alongside lots of successful microbusiness owners).

It’s not specifically about journalism or publishing (there is a small section on it) but the lessons are universal. Moreover Chris talks in detail about how he has launched his own information-based products, and there’s some great advice about how to launch a new website, book, or other digital product. A lot of his advice actually helped launch Inside the Story last month with such success.

Courage and Commitment

Last month I was invited to Perugia in Italy to talk about entrepreneurial journalism for Media140, and my talk focused on microbusinesses. You can watch a video of the talk (in English) here, and the presentation itself is below. Check out the “microbusiness challenge” slide which gives you a rough run-down of what you need to do.

It’s pretty self explanatory, but I ended on a note about courage and commitment. These are the two essential ingredients that, above all others, make successful businesses. But they are often misunderstood.

We often think courage involves being fearless in our pursuit of something. Courage is nothing of the sort. Courage is feeling shit-scared, but acting anyway. I can’t stress how important this is. The only people who genuinely don’t feel fear have a pathological condition. The rest of us get on with our work despite how scared we are. You need to do this too if you’re going to start any project that makes waves.

The second is even more underestimated. To be a starter, an innovator, a leader of any kind requires total commitment. This means making a leap of faith, and betting the farm on your idea, not doing it half-heartedly or half-arsed. It means committing to late nights, often working alongside a normal job, working weekends and more. It means at the moment you feel like taking a break you push yourself to work an extra half-hour. At the moment you feel like giving up, you force yourself to give it one more try.

Do you have that commitment? 

*Affiliate links

Advertisement

5 big reasons to stay small

“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius—and a lot of courage—to move in the opposite direction.”

Albert Einstein (via 37 Signals)

Do you know how many people are employed in the two Chinese factories that makes Apple’s iPads and iPhones?

Well, according to this worrying Guardian article & NGO investigation, the Shenzhen and Chengdu factories house 500,000 workers. That’s larger than the population of Manchester, UK or Atlanta, Georgia.

The industrial concept of ‘economies of scale’ has led us to create mammoth corporations, in the hope that the efficiency makes them more profitable. It’s a daunting prospect for new entrepreneurs. But very few consider the benefits of doing the opposite – of running an intentionally small company.

If you’re a journalist dreaming of dipping your toe into business waters, staying small is where it’s at.

Five big reasons to run an intentionally small business

.01 The risks are lower: when you stick to being small your overheads are much lower and you invest less time and money. If the idea eventually fails, you haven’t lost too much, but gained plenty of experience. It’s the old adage: fail fast, fail often.

.02 You are profitable sooner: you don’t have a business until the money you bring in exceeds the money you spend. Up until that point you’re running a hobby, not a business. Staying small – keeping your overheads low – means you’ll be in profit sooner, and your profits will be higher.

.03 It’s an edge over the competition: if you’re going into competition against established brands, online magazines or production companies, your small size is a big advantage. With no office rent, stationary or admin staff to pay for you can focus on investing in the business itself. The bigger companies need to charge more to sustain their mass.

.04 You can do things a lot faster: You can launch faster. You can change direction faster. If it’s clear the business needs to go in a different direction you can move that way almost instantly; a larger company needs to consult its board, its shareholders and put strategies in place. Cue big delays…

.05 Because you can! The internet has cut the overheads of running a business right down to virtually nothing. In the past you needed to rent landlines, offices and office equipment. These days a website and some moo cards is all you need.

People make the mistake of believing that being bigger and more complex makes them better. I think the opposite: the more simple and small your business is the better your product or service is going to be.

Be small

So, if you’re toying with the idea of launching your own news business – an online magazine, a hyperlocal blog, or a design agency, then set yourself a challenge of doing it small:

• force yourself to strip your idea right down to its bare minimum
• challenge yourself to launch it on less than £100/$150
• challenge yourself to launch it in less than two weeks
• challenge yourself to make a profit within two months
• always ask yourself how you can do things faster, cheaper, more simply

Last year I launched studio .fu, my online video production company on these terms. After I wrote my idea down I kept reducing it, removing the complexity and convolution. I narrowed my offering down to just online video and motion graphics.  I challenged myself to launch it on less than £100 (it actually cost me £60) and in less than two weeks (I did it in 5 days). Within two weeks I had my first gig – which instantly knocked me into profit.

What, do you think, are the other benefits of being small? 

Revenue streams for your news business: part 2

Image credit: Meneer Zjeron on Flickr

This is a 2nd of a two-part series suggesting ideas for revenue streams for a news business. Read the first post here, and don’t forget, the deadline for entering myNewsBiz (to win £1000) is Friday 1st April 2011.

In the previous post, we talked subscriptions, partnerships, newsletters, affiliates and B2B revenue streams. But that’s only half the game, if none of those appeal, try some of these on for size.

10 ideas for revenue streams for your news business (part 2)

.06 a store

This is a method of income completely separate from the journalism, but an online a store is relatively simple to run. It relies on your content bringing in the eyeballs to your site – again, building a community of like minded folk – and then offering them products which you can be confident will appeal to them.

So, for example, say you edit an online magazine for retired people who want to be more green. Once you’ve built up a community of readers, there’s a whole range of things you could sell on the side, from jute bags and wormeries to slippers & christmas cards. You’ll most likely want to partner with a fulfilment company, who will manage sales, stock and delivery for a percentage.

Who’s doing it? You’d be surprised. Big newspapers like the Sunday Times make a mint out of their wine club, which ships wine to readers; multimedia producers MediaStorm sell DVDs and even T-shirts on their site; UK hyperlocal The Lichfield Blog recently started selling t-shirts too.

.07 events

Again, if you’ve got a loyal readership focused around a niche, events are another way to convert them into money, and this is nothing new. Everyone from Mashable to TheMediaBriefing run events tailored to their audience: think Journalism.co.uk’s successful news:rewired series for another example.

Conferences are big to organise but through ticket sales and sponsorship offer revenue opportunities. Beyond conferences there are meetups, speed dates and training.

.08 digital products

If selling someone else’s products to your lovely readers doesn’t appeal, then why not create your own? Digital products – in particular ebooks, training and podcasts now cost virtually nothing to produce. The two ebooks I have written and sold to date have paid for themselves many times over…chiefly because they cost absolutely nothing to make!

If you’re positioning your product as the ‘thought-leader’ in a particular area (as you should be), then you can legitimately package your expertise in digital form. To recall our environmental magazine example, you can create an ebook called ‘10 Ways To Grow Your Own Allotment‘ or ‘The Ultimate Guide to What’s In Season When‘

.09 by-products

Jason Fried, founder of 37Signals argues every business has a by-product. In his excellent book Rework, he describes how the band Wilco brought someone in to film them recording their album Yankee Hotel Foxtrot. It was released as a DVD called Am I Trying To Break Your Heart?. So they successfully sold their main product (the album) and a by-product (the DVD).

This clever idea can be adopted by journalists, their products and services. You don’t just make one thing, so what else are you creating? A wealth of data about a story or topic? Stock footage or images? Training opportunities? A book or DVD?

.10 advertising

And here’s the one you’re most familiar with. But it’s at the bottom of the list. Why? Because it’s the first (and often the only) revenue stream most journalists think of, and that’s why they never get very far. But it’s also so dependent on the economy. Advertising will boom again I’m sure, but until it does (and when it eventually collapses again) where does that leave you? Sure, do advertising: services like Addiply can help magazines, blogs and other products, for example.

But – in my opinion only – it ought to be the thinnest slice of the pie.

The greatest revenue stream of them all…

Which brings me neatly to the best, most reliable, and safest revenue stream: lots of them.

Having read this post and the one before it, don’t take just one single revenue stream and hope to make a living. Instead pick and choose the 3, 4 or 5 that are most relevant or appealing to you and your business idea.

If one of them doesn’t work, swap it round for another, and keep testing the soup til it works.

So who said journalism doesn’t any money? A targeted combination of several of these revenue streams could keep your idea going. But there are surely more…what have I missed off? Tell me in the comments below!

Who do you think you’re not?

Image credit: Dano on Flickr

“So, what do you do?”

It’s the question I dread at parties, bars and any social gathering.

“I’m a journalist” I say.

“And who do you write for?” is almost always the first response. The fact that I don’t write for many people (I make films or do training and consulting) plus the fact those I do write for are online publications immediately makes it all too difficult to explain.

“Oh, no-one you’ve heard of” ends up being my stock response, which makes me sound either unsuccessful or like a dick.

My problem is I haven’t really worked out what I do.  My first year in the freelance jungle and I’ve pretty much done everything that’s come my way: speaking, lecturing, films, audio slideshows, articles, copy writing, blog posts, consulting, writing books, photography; it’s difficult to tie that all into one job.

It’s not what you do – it’s what you don’t do.

It’s a similar headache when starting a new enterprise or freelance career. You think of all the things you love doing, and come up with markets to sell your markets or products to. And you end up with a list of several strings to your bow.

It’s hard when trying to establish yourself as a journalist, freelance or otherwise, to really understand what you’re about. That’s bad because it makes it almost impossible to market yourself properly. Take a look at my portfolio website for an example. What the hell am I? A film maker? A multimedia storyteller? An online video consultant?

I’m sure most people who see my site leave dazed and confused.

How to nail down what you do

Here’s a really effective way to hammer down to what you’re about: do the opposite. Write down all the things you don’t do.

You don’t make a great museum by putting all the art in the world into a single room. That’s a warehouse. What makes a museum great is the stuff that’s not on the walls.

Quoted in Rework by Jason Fried and David Heinemeier Hansson (affiliate link)

Instead of thinking of all the people you could work for, identify the people you don’t work for. For example, you might be photojournalist and you want to specialise in doing shoots for high end lifestyle magazines. That means you don’t do shoots for companies, charities or local newspapers. It means you are not a paparazzi or a hard news photographer – so don’t pursue work in these fields.

Having fewer products or offerings means you can specialise in making them great.

If you do audio slideshows, then you don’t do video. Just focus on the slideshows and make them the best slideshows around. Become known for how good your slideshows are, so people identify you and your work with excellence and quality.

Apple know what they do, but they also know what they don’t do: you won’t get customisable, cheap and cheerful computers from them. RyanAir know they don’t do luxury flights, so they don’t even try in that market.

It’s not so black and white of course. If you can do video and you get offered a great commission then don’t stubbornly turn it down. And when you’re young or just starting out, it’s hard to know who you are, let alone who you aren’t. By all means play the field a little bit.

But working out what you don’t do is sometimes the best way to figuring out what you do do.