Lessons from the launch

Mike Orren is the President and co-founder of Pegasus News.

Over the summer of 2004 we wrote what we thought was a business plan to bring a second newspaper back to Dallas, Texas. 27 months later, with some angel capital and a dedicated team, we launched Pegasus News, an interactive news and information service with no plans for print; with content from staff, professional partners, bloggers and site users; and with designs on rolling out in major markets nationwide. In between, we launched a prototype entertainment site; won an EPpy award; nearly fell to pieces; and made more mistakes than we can count — But we’ve learned some invaluable lessons about local digital media along the way. Here’s a sampling of some of the things that we think we know now.

Launched is better than not. But not launched is better than launched and empty. From inception, we’ve held a steadfast belief that “user-generated” content is the holy grail in terms of authenticity, often in expertise and, admittedly, in price. But we’ve equally held that a site that is not reasonably comprehensive and frequently updated in whatever topics it purports to cover will suffer from an “empty room” problem in which the golden egg of user content never comes to fruition because there is no goose of information and conversation to midwife it into existence. That’s why it took us so long to launch. While we didn’t require megamillions to cover a metro, we were determined not to do so until we could cover all local neighborhoods and niches with enough relevant content to engage our community. That’s why we took a baby step in limiting ourselves a local music site when we had only the most meager resources and why we think we’re getting fairly positive reviews and comparably strong traffic on Pegasus News so far.

That said, we must have seemed to many to be do-nothing blowhards for a long time. And every time we launched something, we were instantly glad we had. It took patience and discipline, but with the myriad Web X.0 services launching by the minute, the market is unforgiving. Launch as fast as you possibly can, but not until you can deliver something you believe is unique and irreplaceable. We think our adherence to this difficult tenet is a primary reason that we’re generating more than 100,000 unique visitors and more than a million pageviews per month at this early stage.

People will display unreasonable loyalty and tenacity for a cause, particularly when that cause is media. Last summer, Ben Compaine interviewed me for a study on media entrepreneurism, and asked what, if any, advantages media entrepreneurs had over entrepreneurs in other industries. “If we were building widgets,” I replied, “no one would work for us for free.” We had more than 30 people work on this project without any paycheck or ironclad promise of compensation. Nearly a dozen of those worked full-time for over a year. They wouldn’t have done that if we were a cement-mixing concern and they didn’t do it because I am a charmer. People want to be a part of the media, particularly if they think they can change it. If not for that fact, our business wouldn’t exist today.

The concept of “citizen journalism,” at least in a pure dogmatic form, is a myth. Myths, however, are critical to our understanding our world. We are often lumped in with the “citizen journalism” movement, and based on that movement’s ideals, I am honored we are mentioned in that context. However, after much reading, arguing and reflection, I’m done with that moniker. There are journalists – people who regularly utilize a set of commonly agreed upon rules to ensure that information is communicated in a fair and truthful way. Some get paychecks for that work and some don’t. And there are human beings who aren’t worried so much about rules or frequency or consistency, but who like telling stories, both visually and verbally. The Venn diagram of the latter completely encompasses the former. Journalists of any stripe are a relatively small portion of the population. They people tell stories with high frequency and are surrounded with others who tell interesting stories when they feel like it. They are a much smaller group, and you can’t count on them day in and out unless you hire them.

Panlocal. Like citizen journalism, another term we’ve started eschewing is “hyperlocal.” Hyperlocal, by nature, means a limited audience. And there are an even more limited number of people in a particular neighborhood who are engaged enough to seek out hyperlocal content. But, when you make that content easy to find (via customization) and deliver it in the context of the citywide news, NFL scores and places to hear music tonight, we think the audience is larger. We’ve taken to calling that sort of broad and deep coverage “panlocal.” On the downside, that means a wider-reaching and more expensive content team. But, by leveraging aggregation, content partners (major media and bloggers), and user-submitted content, we think you can completely cover a metro – and generate more substantial audience and advertising – with about 20 people.

On the local level at least, data is what drives visitors. Stories bring additional pageviews, but more than 75% of our traffic is data – interactive calendar listings, band profiles, restaurant listings, political campaign contributions, drink specials and the like. Most of our listings aren’t found on the other local city guides – something for both traditional media and upstarts alike to think about. We’re always gratified when people dig deep into stories or blogs, but we know that the reason most people come in the door is to find out where to go and what to do. It’s our job to compel them to stay longer with good narrative content.

Local advertisers are hard to reach, but easily impressed. Local retailers, many of whom may not even have websites, are a huge class of business that is not flocking to pay-per-click ad services. And while that presents a huge opportunity, it means the hard work of picking up phones, knocking on doors and feet on the street – just like with traditional local media. However, once you get them on board, local advertisers are amazed at the precision, flexibility and business intelligence provided by online advertising. Restaurants used to paying a flat fee for ad space in a weekly are shocked that their bill is lower if you deliver fewer pageviews. Stores are aghast that you can change their sale ads every day. And entertainment venues love that you can tell them exactly which bands draw traffic on a site – and presumably to their venue.

The more obscure the content, the better. Once you’re playing on the local level, we’ve found (in general) that traffic to a piece of content is inversely proportional to how niche and obscure that content is. If we run an interview with a local band with a national audience, it’s no big deal. We’re lucky if they mention it in their blog. But, when we run an in-studio with a kid we found playing guitar in a coffee shop, he e-mails his friends and family who in turn do the same. He posts bulletins galore on MySpace. He links it in his e-mail signature. Good, but obscure content is great marketing.

Amateurs are bigger perfectionists than pros. One of the surprises I’ve found in working with amateur content providers is that because they are truly doing this for the love of the game and not to make a required deadline or beat quota, they take much greater care than most professionals I’ve worked with over the years. And because they are in the driver’s seat as to when and how their content appears, you can’t count on deadlines. You can’t even count on running the content if the submitter doesn’t think it’s up to snuff. This argues for a hybrid of passionate amateurs and (hopefully also passionate) pros whose paychecks depend on keeping the newsflow going.

Don’t fear user comments. Comments are the easiest, lowest-impact way to get users to participate and are the gateway drug to more prominent contributions. The trick is to really join the conversation and make clear what flies and what doesn’t. Most of the moderation comes on the user’s first comment, and by explaining why we’re moderating we’ve found that most of them reform themselves and become regular posters. We’ve had nearly 6,500 comments and have moderated fewer than 20. It isn’t a burden on our small staff to follow the comments – in fact, we find enough story leads in those comments that I can’t get folks who aren’t responsible for moderation to stop reading them.

The rules of local are different. One of the biggest challenges – and opportunities – in the local marketplace is the paradox of scale. You actually need more resources to cover a more limited geography because, by nature, you have a smaller participant pool. There aren’t enough locally focused users of services like Digg, for instance, to find and self-edit news. And that is magnified on the neighborhood level. But, if you believe that local businesses want and need to reach local Internet users, you have to dedicate those resources. Frugality is key, but I don’t believe there will never be a completely user-generated, user-edited local news and display advertising product without some content resources. We have roughly a dozen full-time equivalents, and we’d add a few more, particularly in sales, if we had the resources to do so. What’s the right level? We’ll tell you in a few years.

About Mike Orren


  1. This is a debate that Tom and I have been having offline for the last few weeks. And, while I appreciate what he’s saying, I think this is a good exemplar of how our model is different from both the Potemkin Villages and the crumbling fortresses.

    Have we bitten off more than we can chew? Absolutely. It’s time that somebody in the alternative online media provided the kind of daily destination breadth on a local level that you get from The Daily Paper AND the niche expertise that the best local bloggers provide. The question is this: Do you do a few things exceptionally well for a limited local audience, or do you do enough to draw a wider audience and get off a few great shots while you can?

    In a perfect world, you do both.

    The fact is that in the end, if you want to make a business (beyond MAYBE supporting a solo blogger) you have to have a service that reaches the largest local audience possible. Today, the way to do that is by hitting as many niches as you can as well as you can.

    I may have pulled some punches in my original column, but to make it clear, our business starts with the proposition that covering anything less than the entire metro may produce some great content, but it will not be able to generate enough advertisers provide a viable alternative to embattled daily newspapers, alt-weeklies, direct mail, etc. And that is what we’re here to do.

    We think that our approach on this is why we’ve been able to generate significant local traffic pretty quickly. We are broad and deep where we can be, with an eye towards doing more as we gain more paid and unpaid contributors.

    As I said, Tom and I have been having discussions like this by email for a while — and I respect his point of view on this immensely. And although I agree with much of what he says as a journalistic ideal, I see the in-the-trenches reality very differently.

    Take the example of the drivers’ license story that was, indeed, a press release. And I don’t think our style their does anything to mask that. I further think that the open comments on all of our content provide more than enough opportunity for anyone who knows better to differ or question.

    And while the editor in me would love to pursue the story angles Tom suggests, here’s the flip side of that. We were the ONLY media outlet in town to pick up that story the day it broke. And considering the hotbed of controversy over immigration in our area (Farmers Branch, anyone?), it is a big story.

    I don’t have the resources at hand to dig deeper right now. Who does? The Daily Paper picked up the story the next day. Paid a reporter to spend time on it. And herein lies one of the big secrets of mainstream media: The reporter did no original reporting and had LESS information than was in the press release. That happens far more often than I ever believed before we launched.


    I’m not picking on Our Daily Paper here — every paper in the country does the same thing. And I’d argue that they’d all be better off to do what we did. Run the press release with all the info. Leave open comments so those who know better can ring in and move on to cover something that no one else is covering elsewhere.

    The larger point is this– We’re not going to hold back news from our community because we haven’t the time to go Woodward & Bernstein on somebody’s heinie.

    Tom suggests that we put a citizen journalist on the case. This strikes at my original point about citizen journalism: Cit-J’s aren’t growing on trees waiting to be plucked. You have to cultivate those relationships and provide breadcrumbs to suggest that someone with an interest follow a trail — a trail on which their input is welcomed. That’s what we do when we run shallow coverage across a lot of niches. In many cases, that bears fruit. We have content partners covering the Dallas Stars, South Dallas Neighborhoods, restaurants, Dallas City Hall, local television, energy policy, homelessness and lots more. Similar superficial coverage in a southern suburb lead to our finding a citizen journalist who provides coverage of his city council and ISD that would make any cityside reporter blush with jealousy.

    So maybe we pick fewer neighborhoods off the bat? What if we picked the neighborhoods without a “socratic gadfly” at hand? And why would citywide advertisers be interested?

    I do understand where Tom is coming from as a journalis — And he should be taken quite seriously as I know he’s taken the time to use our site regularly as a “virtual resident.” But (and I think this is one of the reasons we haven’t yet found all the resources we’re seeking from the larger media community), it’s hard to get the full picture if you don’t know the area.

    The story Tom cites had relatively few comments, largely because so much had been said the prior day on an unrelated, but similar piece:


    Agree or disagree with the points made, but that’s a lot of knowledge being exchanged. Knowledge that frankly wouldn’t have been out there if we’d been to proud to run a press release.

    (That said, I see too many local news outfits deciding that neighborhood news has to be all soft and fluffy — nothing but press releases and pictures of puppies. You have to give some meat with the candy, but a diet of only one will kill you.)

    We don’t lack the resources to cover this story because we’re small and young. Apparently, one locally has the resources to cover that story. We’re going to put it out there though and hope that someone — either from our staff or the larger community — has the time and interest to pick it up. And meantime, we cover lots of niche and neighborhood news that no one else in town gets, while providing enough useful data to drag self-interested readers in every single day.

    I’ve got nothing against grassroots journalism. I love grassroots journalism. It’s the adrenaline that fuels me daily. But the rational brain knows that I can’t practice grassroots journalism if we don’t make money.

    In the end, Tom’s criticism is correct. And it’s also an indicator that we’re doing exactly what we think we should be doing right now. I live for the day that we get a release like the one he mentions and I’ve got a full rolodex of “volunteer reporter[s] to take his/her video camera to a Latino neighborhood and see the predicament of illegals first hand.”

    In the meantime, we’re going to post our press release and hope that the large audience we’re attracting has some folks in it that will do that video later. It’ll certainly still be interesting in a week or a month. And we’ll use the resources we have to cover the local stories that don’t get press releases.

  2. Tom Grubisich says:

    Mike Orren brings a sharp, unblinkered mind to the development of hyperlocal grassroots sites. Oops I used two words “hyperlocal” and “grassroots”

  3. Mike says,

  4. Lucas, I mostly agree. However, I don’t think the larger advertisers are a pipedream — they’re just not the primary diet.

    I never said “large,” though. Look at our advertisers. We know that our bread and butter is small business.

    But the comic book store, the record store, the opera, the cafe — all draw customers from throughout the metro. Cover a limited subset of the metro, and you’re not all that interesting to them.

    I’m also a firm adherent to the advertisers-follow-readers school. Unfortunately, one of the reasons local is so hard is that you can’t just turn it on and watch it grow. It requires people which means capital. And by trying to run such a business with a lean mindset, the need to find advertisers becomes more quickly acute than it would be for a more “black box” solution.

  5. Tom Grubisich says:

    What Mike is saying here, and elsewhere, including on his blog, amounts to a nervy model that pushes local-local beyond the never-land that was dreamed up by the silver-keyboarded prophets and soothsayers to the rude, real world where “feet meet the street.” If anyone gets hyperlocal right, it will be Mike and his crew at Pegasus News.

  6. Thanks for the kind words, Tom. I hope we can live up to that.

    Nerve is, I think, the new ambition: