Why I Started a Business in a Dying Industry

By Carll Tucker, CEO of Main Street Connect, New York City
I spent 20 years in the community news business, owning and publishing newspapers in New York's Westchester County, and sometimes I thought I was wasting my time. I was never the richest guy around. Yes, I had my column, my reputation. I was a big guy in town, but all my friends were investment bankers-and in Westchester County, money counts.
But it turns out that I had 20 years of the most valuable experience anybody could have. I sang the songs at Rotary. I was on the executive board of the chamber of commerce. I went to the Little League games and youth soccer games. I lived the life of the community in a very intense way: It was my life.

I got an education in what makes a community tick. And now I'm the CEO of a startup that may change the way communities across the country get their news. Main Street Connect is a national community news business, a digital town green that's sort of a hybrid of the New York Times and Facebook. It's a replicable business model that will leverage the resources of a national company with the intimacy of locally owned and operated news Web sites.

Up from the ashes
We launched our first news site, TheDailyNorwalk.com, in March. Our second, TheDailyWestport.com, debuted in April. Our goal is to have 3,000 such hyper-local news sites up by 2013, using an affiliate model. We're hiring a few people a day; we're at 22 employees right now. We're going to spend several million dollars before we're profitable. We're in month three currently and expect to be cash-flow positive in month 20.

We're funded by private equity, and our board is extremely supportive. Our chairman is my dear friend Peter Georgescu, chairman emeritus of advertising giant Young & Rubicam. Georgescu and four others are the outside members of our board of directors. Our other directors are Stephen I. Sadove, CEO of Saks; Haresh T. Tharani, principal and chairman of the Tharanco Group, a private holding company with real estate investments, private equity investments, and an apparel arm; Wesley McCain, chairman of Towneley Capital Management; and Elwood Davis, owner of Northeast Financial Consultants.

We see ourselves filling a hole that's being created by the self-destructing newspaper business-a hole that's yet to be filled effectively by other online offerings. The problem became clear to me about a year ago, when my wife-journalist Jane Bryant Quinn, who's a columnist for CBS MoneyWatch-and I visited our country home in Beekman, N.Y., to find the local weekly paper, the Voice Ledger, had folded abruptly.

The Syrian solution
To be honest, we never cared much for the paper. But suddenly Beekman was left without any news coverage. It's a town of about 14,000 good people who deserved to know what was going on in their community. That's when the newspaper industry meltdown really came home to me.

I filed this event away in the back of my head, as grist for a future book, and that's where it stayed for several months, until Jane and I were traveling in Syria with Peter Georgescu. I woke up in the middle of the night, certain I had come up with a way to save community news. (Jane told me to go back to sleep.) The next day, traveling across the desert, I told Peter my idea, and he urged me to explore the venture that would become Main Street Connect.

I had sold my media company, Trader Publications, Inc., to Gannett in 1999. I was comfortable, and didn't need to kill myself on a new venture. But the more I explored the idea, the greater the need I saw. There are a few general models for online community news. Some aggregator sites take a 'look-ma-no-hands' approach to reporting on a community. They use web-bots to scrape news, and maybe invite in a few local bloggers. But robots make poor editors. Across the board, those sites were garbage.

There's the approach of a handful of local entrepreneurs who want to cover a community, taking a sort of bulletin-board approach. But their model wasn't sustainable, not something you could introduce to other communities. It didn't provide the needed resources.

From small towns to big business
I know that the people who understand a community are the people who live there, and the folks who own businesses there. If we can create a lot of these community websites, knit them together, and give them the resources they need, we'll have one of the largest communications companies in the country. And, hopefully, we can reach one of the audiences that is toughest for Madison Avenue to reach: Main Street moms.

We've created a site template that's fun, interactive, and visual and uses local people to report the news critical to the community. We'll provide the content management system we've developed, the designs, sales system, launch capital, monitoring, mentoring, training for reporters and ad sales reps, and everything else needed to make this business work in multiple communities.

It's getting attention. About 20 people around the country have contacted me, wanting to know more. I've pushed a few people down the road a bit, seeing if they might be interested in a franchise when we get everything flowing smoothly. The basic model would have franchisees generally investing $25,000 to $50,000 in startup costs for local sites. After 18 months, they should be realizing $250,000 or more in annual cash flow. Each franchise will pay my company 17 percent of revenue. We only succeed where our affiliates succeed.

Know your market
What can you take away from this? I say, as a matter of conviction, that any businessperson should start by knowing your market and serving your market-and then let other things flow from that. Don't start by using statistics or algorithms to try to find your business niche. Start by asking yourself what the community needs, and then build a product to serve that need. If you do that conscientiously, and your timing's right, you may end up with a big business on your hands. -- As told to Matt Wickenheiser

Before launching his latest venture, Carll Tucker was editor and publisher of Trader Publications, a community news company based in Cross River, N.Y. He founded the company in 1981 and sold it to Gannett in 1999. Earlier in his career, he was editor and publisher of Saturday Review magazine and a staff writer and theater critic for The Village Voice in New York City.
Resources

• Determine if there's a market for your business idea.
• Read more about the hyperlocal news industry.