For Web 2.0 Success - Think Local, Act Local

Ever since washingtonpost.com reported the drastic downsizing of Backfence, a company which runs a collection of sites focused on specific towns, there’s been blogosphere speculation about the viability of a local strategy.  Given Chris Anderson’s great formulation “our interest in a subject is in inverse proportion to its distance (geographic, emotional or otherwise) from us”, shouldn’t a local strategy be a shoo-in?  Given that it’s much easier to reach a critical mass of buzz in a local market than a national one, shouldn’t local be the way many Web 2.0 startups get traction?

Maybe.

Quoted in the washingtonpost.com article Vin Crosbie, managing partner of Digital Deliverance, a Connecticut media consulting firm says “realistically, it's going to take close to 10 years for the business models to be there and for there to be enough advertisers willing to give money to hyperlocal start-ups.  Backfence's problem is that it was too early.”

Is Vin right?  Is it just too early?  I don’t think so.

If your plan is to start a local site or two, get great local penetration, and then roll out clones covering every other berg in the country, fuhgetaboutit.  That has been close to what the Backfence model was.

Local content has to be intensely local and local people need to be intimately involved with the production of that content.  You can’t create local sites from Silicon Valley or Silicon Alley or suburban Washington, DC.  They have to be created locally.  Just like local newspapers.  Sure, local newspapers get rolled up into conglomerates (and often lose much of what made them good in the process); but conglomerates don’t drop local newspapers into communities like fast food franchises and expect them to work; they buy existing local properties.

Some of the futures great local sites will spring from existing newspapers: in  New Orleans Pulitzer winner nola.com, founded from The Times Picayune (but run separately), is a great example of that.  Some will come from local radio and TV stations.  Others’ll get their chance to succeed either because there is no competent local media or the local media has decided to take an ostrich approach to the web.

The local web sites have advantages over their traditional media predecessors: they are accessible to homies whether the homies happen to be home at the moment or not, they don’t have a legacy of replicating national and international coverage which they need to shed, and they don’t need to own expensive physical plant like printing presses and broadcast towers.

A critically important advantage local web sites can have is linking people together much more intensely than letters to the editor, the society page, and personal ads ever did.  Stowe Boyd is dead on when he criticizes Backfence: “they opted to roll out a journalistic user experience just about as social as the local paper sitting in a puddle of water in your driveway.”   

I think Stowe is wrong, though, when he says: “it's not about getting the right angle on issues that people are passionate about, like crime or whatever.”  People ARE passionate about what they’re passionate about.  Successful local sites will be GREAT at local coverage AND they’ll have a powerful social element and support Google mashups and the other things Stowe recommends.  They need both; they can accomplish both.

Moreover, the social aspect’ll be part of the reporting and vice versa.  That’s what citizen media is all about.  Blogs and wikis and other neat stuff built into successful local sites will make the content not only social but better than it would be with a strict separation of “we” and “media”.

The disadvantages that local sites face are real, too:  they have to build an audience; since startup costs are low, they’ll face plenty of competition for attention and advertising (just as the original local newspapers did); they need to build a local advertising sales force and train local advertisers on using the web.

Starting a local web site is probably NOT suitable for national VCs to invest in.  The exit may not come until the industry “matures” and someone starts consolidating the successful local sites.  That may be ten years. It’ll also take patience and local, local, local focus to make a local site succeed.  If the founders are looking over their shoulder thinking “how do I replicate this model in a thousand other places so I can get fabulously rich”, they’ll probably fail to meet the local need.

However, in order to succeed, local sites can’t invent every aspect of their existence any more than each local newspaper invented the printing press.  More on the national opportunity to help local sites succeed:

Web 2.0 – The Global Opportunities in Local

Comments

[sudipta]

The old adage Think Global, Act Local is fine for businesses selling nationally distributed consumer products and services, but for the majority of small business and the advertising agencies who represent them, it’s best to Think Local, Act Local.

Free conference call from http://www.nocostconference.com/

[John Bloch]

Hi Tom, I have suffered a complete crash and am now rebuilding, so could you re subscribe me to your Fractals for Change? Also I would like to submit my name for a place on the telecom entity as a end user rep. Any Ideas as to how I should go about this?
Thanks
John

[Dave]

Tom,

As another ex-Microsoftie, you might be interested in what I believe is the first real story of what happened to Sidewalk vs. what was spun to the media as well as twisted for the benefit of Sidewalk's newspaper competition.

After reading an interview with Steve Ballmer expressing regrets and chatting with the founder of Citysearch about Sidewalk, I thought people might find it interesting to hear the real story in my post "Sidewalk: Insider's view of why & how it was killed (aka sold) and why Steve Ballmer now regrets it" at http://marketvelocity.blogspot.com/2007/02/sidewalk-insiders-view-of-why-how-it.html

[Jonathan Trenn]

While you were writing this post, I was addressing similar issues re revenue one my own at www.digitalstreetjournal.com.

I have to agree with Vin Crosbie in that it will take several years for a lot of these hyper local citizens media sites to takeoff. And I don't mean the Backfence model.

My point, and perhaps Vin's, is that many in the general public isn't quite used to the concept going out there and being citizen reporters. That's because we're not only changing the way people receive news, we're looking to change the very relationship peopole have with the news they receieve. Yes, we'll see some successes, but overall, I think it's going to be a tough road.

Two years? Five years? Ten years? It will depend on the community.

Another critical aspect is bringing in local ad dollars from the small local advertisers that may be reluctant about any type of advertisment - especially the internet advertising.

[will]

local is actually a huge investment area(and probably the most profitable domain investment category) for domainers that picks up , for example, sanjose.com, and build a local site around that url. As a portfolio of destinations and domains, they might be worth consideration to VC's as a cashflow play.

[Craig Plunkett]

The problem is that not enough people access that local content. Currently, the majority of web access is through a desktop or portable computer. Until mobile devices, sites, and the networks that they attach to are actually useful and accessible in a time and location sensitive way, a local content approach will bomb. Mobile websites need to be as easy to use and access as an ATM, because that's the most sophisticated interface that the majority of consumers are capable of using. There's a few good reasons why AOL had so many subscribers at one time, because they made it easy to access online content and hid everything else under the covers. We're currently at the beginning of the third screen revolution and things are wide open for the next new AOL to come along, and that new thing won't have to build its own infrastructure this time.