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Want to Start a Website Business? Find an Unmet Need

Robert Niles
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Published: January 23, 2013 at 10:38 AM (MST)
The following is an excerpt from Chapter 1 of Robert Niles' "How to Make Money Publishing Community News Online," a guidebook for people thinking about starting their own website businesses.

Here's the first question to ask yourself, before you build a website:

"Why would anyone pay me money to do this?"

I've heard plenty of answers to this question — almost all of them wrong. You might think this question too personal to have a "wrong" answer, but people who think that are the ones most likely to come up with a wrong answer.

You see, no one cares why you want to start a new business. No one cares about anyone's award-winning-career as a newspaper reporter. No one cares about your heartfelt passion for your hometown. No one cares about the bills you have to pay or your need to find a new way to make some cash.

Get over it. Accept the fact that no one cares about you. But people do care about themselves, and if you can meet an unfilled need for people, they will pay you money to do it.

Starting a business — whether it's a news website, an auto repair shop or an organic grocery store — is all about finding an unmet need in a community and providing a good or service that takes fulfills it. Want to start a business? Then start by looking for the need in a community.

This is the only acceptable answer to the question I asked above. Your answer to the question, "Why would anyone pay me money to do this?" must be: "Because I will meet a need no one else can."

Now, what is that need? And how will you meet it? Those are the personal questions you will need to answer as an individual. But never forget that the core concept behind any successful publication is always the same: it meets a need for its customers. Keep your focus on that core concept and you'll have a chance at success in publishing.

Ultimately, you will be in the business of helping your customers. Plenty of people have started websites for selfish reasons — heck, I've done it a few times, too. But the people who have succeeded in making those websites into profitable businesses have found ways to meet the needs of paying customers along the way. The sooner you change your focus as a publisher to customer service, the sooner you'll be earning the income that can transform your publication into a sustainable business.

Who is your customer?

If your mission is to serve a customer, you first must know whom that customer is. Too many publishers fail to identify their customers. So who is your customer? Here's the easy answer, taught to me by Tom O'Malia, Director Emeritus of the Lloyd Greif Center for Entrepreneurial Studies at the University of Southern California's Marshall School of Business:

"A customer is anyone who writes you a check."

Simple, huh?

Yet it's depressing to see how many publishers fail to understand that. Too many online publishers think that their customers are the readers clicking around online — people who never pay them a dime. Too many newspaper publishers think their customers are home delivery readers, whose subscription fees hardly cover the cost of printing and delivery — forget about the cost of reporting and producing the paper.

Unless they're collectively paying you enough to cover a significant portion of the cost of doing business, those readers are not your customers. They're your audience, instead.

Audience is important. Without an audience, you've got no chance of landing paying customers. Serving an audience therefore will be an important part of your publishing business. But for most news publications, the audience is not the customer. So, then, who is?

Now, if you are a current news reporter or a journalism student, don't stop reading after the next paragraph, okay? This will all work out fine, just stick with me for a few more paragraphs. (And if you're not a journalism veteran, just ignore this paragraph. You probably aren't coming to this book with the news industry's philosophical baggage — which teaches that thinking about money is bad and which prevents many news reporters from becoming successful publishers. Be thankful for that.)

Remember, the customer is "anyone who writes you a check." So for most news publishers, your customer is... your advertiser. If you're going to succeed publishing an ad-supported publication, you've got to meet the needs of your advertisers.

Unfortunately, decades of ethics training in the journalism industry have taught news reporters not only that they should ignore the needs of their publication's advertisers, but that doing anything to help an advertiser constitutes an egregious violation of professional ethics. So when I write that a publisher's primary responsibility as a business person is to meet the needs of his or her customers (in other words, advertisers), I suspect many news reporters will want to quit reading, abandon their dreams of becoming a publisher and look for another way to make money instead.

But whom would that help? Not communities that need more and better coverage. Not the business owners who need simpler, more direct ways of connecting with their local community than trying to get noticed through Google. Giving up on your dream of community publishing really only helps existing news publishers, who will have one fewer competitor to face.

Journalism leaders originally developed these ethical principles to ensure that reporters didn't end up writing glorified ads for sponsors, instead of reporting accurate news stories. The idea was to prevent writers from putting the needs of advertisers over the needs of the audience.

But journalism ethics fail if they discourage new publishers from getting into the business. In this book, I will argue that you can serve both your readers and your customers. That's because the best way to meet the needs of advertisers is to serve the needs of your audience. Businesses have a huge need to connect with people who aren't yet their customers. They need to reach an audience of people who might likely be interested in their business, but who haven't been motivated enough to walk in (or click over) and buy anything yet. Publishers meet that need by selling access to their audience, through advertising.

So if you don't have an audience that advertisers want to reach, you can't meet the needs of those advertisers.

Your challenge, as a publisher, is to meet the needs of an audience so that enough of them read your publication to make it an attractive channel through which to meet the needs of your customers (advertisers). You can do both, and you must.

Thinking about going the non-profit route, to avoid that whole icky advertiser thing? Keep this in mind, then: As digital entrepreneur and journalist Tom Davidson said at a Knight Digital Media Center boot camp, "Non-profit isn't a business model. It's a tax status." The core principle behind the business remains the same. Instead of getting money from advertisers trying to reach your audience, you'll be soliciting money from foundations and other organizations trying to reach your audience. You're still selling access to your audience, either way. Plus, you'll need to deal with reams of tax forms and regulations that many for-profit publishers can ignore.

What about direct sales, some would-be publishers might ask? Why not start a publication that readers pay for directly, so that you don't have to worry yourself with meeting the needs of advertisers or foundations?

People are paying publishers billions of dollars a year to read a class of publications that has no advertising or foundation support. These publications are books, and smart news publishers are taking advantage of a revolution in eBook publishing to cash in with them. I'll write more about eBook publishing later, and I'll make an argument for why they should become an important part of your publishing strategy.

But even with eBooks, you won't make many sales if you don't build an audience first. So before we think any more about customers, let's start with our audience and finding a need you can address that will build an audience large enough to become commercially viable — no matter whom your customers turn out to be.

To learn more about start-up online news publishing, please read the rest of "How to Make Money Publishing Community News Online," available for $6.99 [eBook] or $11.99 [paperback] from Amazon.com.

Robert Niles also can be found at http://www.themeparkinsider.com

© Robert Niles. Read more in the column archive.