Interview with Leonard Brody, CEO of NowPublic

NowPublic started a little over a year ago under the premise that the majority of mainstream media have lost the ability to do proper first at the scene reporting. Most of the world events that were worth catching were happening outside of the media’s reach but today because of the proliferation of digital cameras, camera phones and the web, we’re now at a place where general people like you and I are actually catching the most important news today. We created a property service where we could deliver content from an army of virtual reporters, as well as where people and organizations could ask for content through the system as well. Today we are now actually the largest eye witness news network in the world with about 23,000 reporters in over a hundred and thirty-five countries.

We became very good at direct marketing and finding people we really liked that were doing interesting things elsewhere on the web, and convinced them to start writing for NowPublic as well or posting their footage to NowPublic and they began to do it. We became quite selective about finding the kind of people we wanted to get involved.

Well, there two answers to that. Part of the answer involves where we are currently with Version 3 and were we expect to be with the launch of Version 4. Version three, which is what you see on the site today was really done cost effectively in a bootstrap fashion because everything you see there was basically built on $150,000. We’ve since raised money and version four which we will be launching in the fall changes it dramatically. Currently the editorial works in a way that allows the community to vote on the content and commenting on the articles. The community is very good at catching spam and limiting its impact.

Version 4 will work quite different with more tools that will allow people to flag content. We?re building tools that will probably provide one of the more sophisticated trust systems on the web. It’s divided between the story itself and the ingredients that make up that story as well as the person writing it. We’re very keen on establishing trust relationships between our users and the readers and that’s really where we’re moving towards and we’ve hired a director of content strategy who acts as an editor in chief. Not really to push people’s content in a direction or not in a direction but to ensure the content is of high quality.

We did have a couple of outside angels. Folks that we found through angel network and through other the founders as well. It was a pretty small group of people that contributed financially as they wanted to see if it worked.

It wasn’t structured in any particularly different way. It was a classic general corporation. We’re a Canadian company so the company is headquartered in Vancouver with offices in Budapest and New York and effectively we set up a common share structure which all the angels put in and the financing was done on a convertible note basis of the original angels and that’s how we did it.

We were originally looking for a half million in seed financing and that half million grew to about two million. It was a very large seed round and there were two VC funds. We did have VC involvement in the seed round which is quite rare and most of them did I think because most of them were interested in getting involved when we did it which we’ll probably do in the next year.

This is a fairly competitive sector right now and so we’ve made a decision that when we launch the revenue model generations which we’re currently developing, we’ll announce them then but until then we’ll probably just keep it under our hat. We don’t really want to just tipping our hat yet.

NowPublic is a B2C property. It’s a customer driven site. However much of the software we’ve developed for that public is quite sophisticated and has many different uses in terms of how it can be used, not just by us, but by other corporations. We are pretty focused on three or four strategies at this point that will monetize the content in interesting ways and will also monetize the site in very different ways than advertising. We’ve working on several different ways to actually monetize NowPublic without having to do it through advertising.

When you look at the web, the barriers to entry are so low that the minute anyone starts talking about their revenue models someone can easily copy it. I?d rather get them tested and working before we start giving away our thoughts on how we’re going to make money to. Another reason is that we may be wrong.

Sometime in the Fall. What’s interesting about our product is we are effectively creating a new version of AP Reuters. We are enabling content owners, whether they’re news organizations or not, to actually get access to this rolling army of citizen reporters which is what we’re building onto the reporting structure. This changes everything when you think about it. It’s quite unique. What we’re doing is essentially changing the way that players generate the report, not just by our own citizens, but by the traditional media infrastructure as well.

I would say it happened a little earlier than that. Hurricane Katrina was a huge example of that in North America. Our site was only five or six months old during hurricane Katrina, and during the disaster we had more people reporting in the affected area than the total number of Reuters? reporters. We had over 2,000 people reporting on hurricane Katrina from the affected areas. During the London bombing, the BBC still has 20,000 unopened emails from that day. They couldn’t get to it from a volume perspective.

That’s the million dollar question. When Betamax came out, people said the theater business is dead. People are going to be able to watch whatever they want in their house. It was a big clash of entertainment businesses. With every piece of new technology that allows the delivery of content, typically the market share for that content has actually grown, not receded. The introduction of CDs and DVDs created new market. Journalism is exactly the same thing. Originally there were all these discussions about citizen journalism replacing professional journalism but I don’t believe that for a second. Jeff Jarvis was correct when he created the concept of network journalism, which is a virtual circle between the professionals and the amateurs. I think that’s exactly where we’re going. There is a difference between reporting and journalism. Journalism is, no matter what anyone says, an art form. It is a skill set. To be a good writer requires skills and the understanding of content packaging and putting together a story that’s interesting and well fact checked. Reporting is a little bit different. Reporting is, “I saw something, here’s what I saw.” And somebody else says, “Well, I was standing behind the person and here’s what I saw.”

The flip side is it also opens up the web to every lunatic with a keyboard the ability to start writing. Over time, the percentage of noise becomes larger. The good news is that, in fact, the noise is often relevant to a statistically significant group of people when you disaggregate them over a period of time. So while a story might not be interesting to the audience of the New York Times, there may be a piece of the population, whether 100 people or 50 people, that it is interesting to. So the job of the publisher is to make sure that the content is getting to the right people who are interested in it. If there are 50 people, we need to make sure that those 50 people know how to find it. If it’s three million people, we need to make sure they know how to find it.

Well I think it changes based on the nature of the stories and based on the time of year and the people. It’s a tough thing to pin down, but generally speaking our audience is pretty active. I think it is our goal to try to have a breakdown of about 30%-40% that are very highly active and another 60%-70% that are just casual participants. Our concept is about on demand reporting, which doesn?t require 100% participation at all times.

This space is still very young. Citizen journalism makes up almost 8-9% of the internet population. So you’ve got 92% of the web population that doesn’t doesn’t have a place to write about something. Where do they put it? Where do they participate? So there’s a huge audience there that allows participation in different ways and in different forms based on contextual interests. There really aren’t that many players today, there’s of course the citizen editorial sites, the name trackers like Digg and memeorandum.

OMI News in Korea is one of the founders of citizen journalism. It was created about six years ago and it is an actually online newspaper, written totally by citizen journalists, and it is now the most popular and probably the most powerful news outlet in Korea. In fact the company had an enormous impact on changing the direction of the most recent election there. They’re the newspaper model, we’re more of a Reuters model, we’re more interested in taking the content of what we see and hear from our contributors and although we have a destination site, just like Reuters and AP have a destination site. We’re more focused on the redistribution and re-usage of that content for both bloggers and citizen journalists.

This is my fifth company. Frankly, there’s no divine inspirational moment. I’m just a bad employee. I don’t answer to people particularly well and I tend to be a much higher level thinker so where my thoughts are typically fifty thousand feet in the air, it’s very difficult I think, when you’re working in a larger organization to be creative.

There are very few organizations that allow you to truly be creative. I know Google is one of the organizations that have really mastered that and done well at it, but if you think about it… I had a lesson early on in life which was how shitty work life can really be.

Twelve years after starting my first company I realized that have a job is quite luxurious. You show up there’s a desk and a phone. There’s lunch. You don’t have to worry about who is keeping the lights on. You do your job, you work and typically you go home and the stresses of work, while you may carry little bits of task related things you have to do, the overall direction and strategy and vision is not really in your hands. There is an element of peace of mind you’ve got that you wouldn’t have if you were an entrepreneur.

The luxury that you trade off for that is having to deal with other people’s politics and the organizational problems. It is an intense ride being an entrepreneur. I think most people underestimate that. I think they think it’s the easiest thing in the world. It’s a wonderful thing to work for yourself and there’s no stress. Stress is ten times what it would be in the workforce, but I wouldn’t have it any other way.

The truth is, when you look at it, it’s not complicated in terms of the lessons that are important in entrepreneurship. They usually don’t make a lot of sense to you until you actually see them work for you. I’ve really focused on immersion and vision. The key for me has been envisioning success.

I think the most successful entrepreneurs are the most resourceful. They don?t need to be the brightest, nor the smartest. I think smart is a commodity. You can hire smart. There are millions of smart people, but there aren?t millions of resourceful people, and they are the most handy, they are the MacGyver’s of the business world. That’s who you want, that’s who you need to be.

These individuals can envision success in a much more concrete way than others can. When they say I’m going to do something they see it in their head as a forgone conclusion, and it makes it very difficult to stop them from that while they’re on their path. That’s the one really big lesson.

There’s also a difference between owning a smart business and entrepreneurship. If I want to make a living for my family and I can’t get a job or I want to work for myself then I’ll buy a franchise. I’ll buy a Subway or Ben and Jerry?s franchise.

Entrepreneurship on the other hand shouldn’t be about money. It really needs to be something that you’re ultimately connected to and passionate for. Because the minute you’re motivated by money you might as well be a stockbroker. That’s not what it’s about anymore. The people that I know that are the most successful are the people who are the most connected and interested in what they’re doing. Not just passionate, again, that’s one of those terms that people throw around. They are truly connected to what they’re doing.

Resourcefulness. I think it is the most important skill set because everyone you hire is going to be incomplete. There is no perfect hire. If I hire a CTO they are guaranteed to be missing skill sets that I need. What I care about is do they have the base standard that is required? Do they have the minimum? How resourceful are they to be able to overcome what they don’t know and don’t have? Being smart is not relevant anymore. There are just too many smart people on the market. And smart is the base lowest common denominator. I expect everyone to be smart.

The difference between the average smart person and someone who is a great entrepreneur or a great employee within an entrepreneurial organization is their ability to be resourceful. Entrepreneurs by nature are not logical people. If you look at the classic entrepreneur stories like for example Fred Smith and FedEx. He was ridiculed, and his professor wrote on the paper, “This will never work.” 90% of the smart people in the world would have said, “He probably knows what he’s talking about, I’m going to move on.”

But Fred Smith didn’t.

Macy’s department store went bankrupt six or seven times. A smart person, a logical person would have said, “Ok. This clearly isn’t working. I give up and am going to move on to something else.” But that’s not how it works; they were passionate about what they were doing. They could visualize the success and more importantly they just really enjoyed he pursuit of what they were doing. And so the rest just doesn’t matter.

Inevitably they just figured I’ll get eight doors slammed in my face and inevitably that ninth door will open. And I’m willing to tough it out until that ninth comes around.