My focus group of one

Fake July 4, 2009 New York Times being handed ...

Image by fredwilson via Flickr

I am guilty of making observations based on tiny sample sizes and then treating my conclusion as fact. These "samples" are usually my family in one form or another. My kids total reliance on facebook has convinced me of the vitality of that service and its dominance. My son’s approach to video games has colored how I think about gaming. And recently, the Gotham Gal‘s late but inevitable adoption of intraday news consumption has taught me something about news publishing on the web.

The Gotham Gal has been religious about reading the NY Times in paper and doing the crossword as ‘dessert’ as long as I’ve known her (28 yrs now). I haven’t cared about the NY Times in paper form for years but it’s still part of her daily routine.

So this past year, during the presidential election, when she went online 5x per day to see what was going on, you’d think shed have gone to the nytimes.com. But she didn’t. She went to Huffpo.

And that habit has not changed since early November. She reads the paper in the morning as always and then checks in with her trusted blogs and web news services throughout the day and evening, like the trader who reads the WSJ in paper form on the train in and then hangs out on his/her Bloomberg all day long. I’ve asked her to post on all the online news sources she checks every day and she just did that. Here it is.

Although I am basing all of this on a sample size of one, it teaches me some important things. First, the mainstream newspaper reader is just making this transition to intraday news consumption now. Second, they will not blindly follow their offline brand loyalty when they go online. And most importantly, publishing news online is fundamentally different from publishing news offline.

The Huffpo wants to be "The Internet Newspaper of Record." I thought it was a completely audacious goal when I first heard it. Its still a long shot but I think they’ve proved me completely wrong on one point. They have established a large and growing mainstream audience of news consumers on the web. They are a force to be reckoned with and complicate the Times and other’s goals of sustaining themselves with their online businesses.

The Journal faces the same challenges. When I invested in TheStreet.com in 1997, I thought they would do a ‘Huffpo’ on the Journal, but they did not. Neither did Marketwatch although they came closer. I think services like seekingalpha, realclearmarkets, and even tiny (but awesome) new mogul are a better model than the Journal and that’s where I get my intraday non-tech market news.

I am writing this post on the treadmill at the gym on my ‘quill pen’ so there aren’t any links right now (now there are) and I don’t have time to lay out what Huffpo and the other upstarts I mention are doing right but I’d advise you all to spend some time comparing and contrasting and you’ll get the gist pretty quickly.

UPDATE: On my morning visit to New Mogul, I found this Atlantic piece penned by my friend Michael Hirschorn. Seems like Michael has been thinking about some of the same things I’ve been thinking about. Only he’s a much better writer than me. Do yourself a favor and give it a read. Here’s a taste to incent you to read the rest:

In this scenario, nytimes.com would begin to resemble a bigger, better, and less partisan version of the Huffington Post,
which, until someone smarter or more deep-pocketed comes along, is the
prototype for the future of journalism: a healthy dose of aggregation,
a wide range of contributors, and a growing offering of original
reporting. This combination has allowed the HuffPo to digest the news
that matters most to its readers at minimal cost, while it focuses
resources in the highest-impact areas. What the HuffPo does not have,
at least not yet, is a roster of contributors who can set agendas,
conduct in-depth investigations, or break high-level news. But the
post-print
Times still would. 

Reblog this post [with Zemanta]
#VC & Technology

Comments (Archived):

  1. NE

    Everybody does this at some time or other. Probably not realizing at that time or not at all.

  2. csertoglu

    In Turkey, of the top 100 most popular websites, 13 are news sites, with 9 being websites of offline properties and 4 pure-play online news sites. traditional turkish media has lost a lot of ground in terms of garnering respect from the public. the leading offline properties fall in two camps, pro- and anti- government. all news goes through this filter. that’s why the 4 independents have a decent shot at becoming the online news source of record. that war has not been won yet but it’s interesting to watch.

    1. fredwilson

      ha! my mom would be a very valid test market.

  3. Michael_Josefowicz

    Makes good sense, but . . how do you make money at HuffPo? I notice that poltico seems to be successful. The recent deal with Reuters sounds likes it’s going to make the AP’s life miserable.But,from what I understand they make most of their money with a niche Print edition. Meanwhile, I was struck by the fact that it was the NYT + HuffPo. So , is it web instead of Print? Or is it “read for free, pay for print?”

  4. Satish

    Interpretation based on another sample on one – Myself.I get intraday news from cnn.com but i keep going to nytimes.com, wsj.com, and washingtonpost.com for editorials and opionions. So i think the place where the traditional news outlets will hold on strong is in the area of analysis rather than pure streaming news. If they can make their opeds well rounded covering all aspects of all the important issues, they might be able to hold on to the people who like to understand the issues rather than just know the news.

  5. Michael Rattner

    The HuffPost has become my op-ed center as well, along with the NYTimes, on occasion. Surprisingly I read almost no opinions from commentators in San Francisco, where I actually live.I’d estimate that half of my op-ed reading is through Google Reader on my iPhone, while on the train to work. This fact alone has me convinced that I need to buy a Kindle, to save my eyesight. But the Kindle has been sold out since well before Christmas.Are e-book readers finally the must have gadget? Have they gone mainstream? Is taking online content “offline” driving this? I’m not sure, but it feels that way to me.

  6. Jeff Jarvis

    The real intriguing part of this post is that you have the coordination to Blackberry while on the treadmill. I’d be flying back against the wall before the first comma.

    1. fredwilson

      i love the fb connect comment Jeff!i can show you how to blog on the treadmill if you are so inclined!

      1. pauljacobson

        Reading physical newspapers is more of a habit than about news updates

    2. Dan Blank

      I can’t wait for the day where Fred writes a post while doing Yoga and meditating.Loved this post by the way. I work for Reed Business Information, which publishes trade magazines such as Library Journal, Publishers Weekly, and about 70 other brands.The behavior you describe is deeply affecting brands like these. It’s my job to see this as a positive transition, and find ways to serve readers’ needs as their behavior changes.It’s an exciting time to be in publishing.Have a nice evening.-Dan

  7. fredwilson

    It loooks just like hacker news. Has to be the same underlying code, right?

    1. Mo

      Looking deeper, it is. I see comments on Hacker News about New Mogul being the financial/business version of Hacker News. nickb of New Mogul is the post leader on Hacker News.http://www.hackerne.ws/leadershttp://www.hackerne.ws/user…Cool idea, one can come with various other version of this model and aggregate in one “best of” page.

  8. Mo

    New Mogul is awesome, reminds me of Hacker News. Thanks for sharing.

  9. pmcorn

    I too, have my morning ritual of tactile news. I love to have the NYT spread out on the table while I have my coffee. I also read our local paper for highschool sports and local politics. But from then on, I am online. I go to many sources, no loyalties. I feel up to the minute when I am online. But, I would never give up my morning ritual!

  10. jquaglia

    I think your comment that “the mainstream newspaper reader is just making this transition to intraday news consumption now” may be even too big an assumption.In New York, yes probably. But in Topeka, KS, Omaha, NE, or Luverne, MN, (trying to pick three random towns, sorry to offend anyone) most working folks are probably still reading the daily press over coffee, donut, and cigarette.

    1. RacerRick

      Your wrong, actually. Newspaper readership is down everywhere – Topeka, Omaha, luverne, milwaukee (where I am).Folks still read newspapers in print, sure… everywhere they still do. But way less than they used to… everywhere.

      1. jquaglia

        Sure. Good point. I just wanted to point out that NYC residents are probably moving to online faster than everyone else. Maybe not though.

  11. andrewparker

    Interesting, I didn’t know that Hacker News had open sourced their code base. That’s great.New Mogul is a great idea, but the “new” page and the “top/front” page are nearly identical right now, which says to me that New Mogul lacks enough content submissions to source the most interesting news…. right now it’s just sourcing ALL the news.

  12. aarondelcohen

    We’ll see. They have proved me wrong at every financing and I’m still not sure.

    1. fredwilson

      who is “they” in your comment Aaron?

  13. RacerRick

    My dad is a dedicated, 50 year everyday reader of the WSJ. Over the holidays he switched to the Kindle version of the WSJ.

  14. Geno Prussakov

    fredwilson’s and RacerRick’s comments make me wonder how closely this is dependent on the age of the person. My brother, who has grown with Internet (he was either 10 or 11 when we got our first Asus laptop), does *everything* online.

    1. fredwilson

      my point, which i sort of fumbled with this, is that my generation (at least the mainstream part of it) is finally making this move. the younger generation had no move to make. they are net native by the time they are in first grade

      1. Geno Prussakov

        Yep. And I agree with you on this.

  15. chasse

    The Detroit Free Press will cut home delivery to 3 days (Thursday, Friday, Sunday) a week in March. My elderly parents will not switch to the even worse paper in town and are deeply rooted in that particular morning ritual. My dad also receives the WSJ, but needs his sports, comics and local news. So to increase your sample size, watch the Detroit metro area.

    1. fredwilson

      Those three days are the days when the inserts drop and are therefore themost profitable

    2. Michael_Josefowicz

      But they are keeping up a new version of the Print version for distribution to “18,000” points in the city..

    3. marshal sandler

      Chasse tell dad to do what his old man born in Michigan did buy a Kindle and an inexpensive laptop he can in two weeks become a real news junkie. The News and Free Press in Detroit have not had decent article in five years to them ragging a line is a term used in a Tailor Shop !

  16. Robert Seidman

    One Advertising Age columnist (link below) has a bit of a different take on HuffPo. HuffPo’s traffic, not surprisingly is way down post election, but the Jan-August revenues, if true or even in the right ballpark, are downright depressing. Other than salesmanship and fundraising (both very important) it doesn’t seem very well positioned. http://adage.com/mediaworks

  17. Alex Salkever

    That article was really interesting. I guess when something is tangible, like NYT, it’s hard to imagine it going away so quickly. But that’s actually a more realistic model of extinction — tends to happen all at once after a tipping point is passed. I think the only hope left for MSM in survival is a Huffpo model combined with a much cheaper Kindlesque device that lets you combine all your content in one place, sliced and diced as you want. BTW, why not do a post about the remergence of micropayments? Lala.com is blowing doors out there. I am hooked — am sure others, are too.

  18. pascal bouvier

    yes, we shall all make the transition. i did so by lowering my paper consumption – so no more newspaper subscriptions for now 3 years – and using google reader and rss feeds to act as my own editorial board by picking content that interests me. i guess i decided to manage myself one of the functions of a major newspaper.what i find fascinating about adding newsmogul to my daily routine is that i can peek at an aggregate of other readers editorial choices, thereby augmenting my reach. definitely a plus.

    1. rick gregory

      I’ve done similar things (and use Feedly to read my Reader feeds if I want a more magazine style reading layout). But once again, someone has to produce the content in order for it to be aggregated. For tech news, that seems to be easy – we’re naturally early adopters and much of what we report on and talk about can be dome from anywhere.I’m not at all sure that model carries over the reporting local or national news though. Someone, somewhere, needs to pay the reporters and editors. Huffpo (and TalkingPointsMemo and the Washington independent) are all interesting models… The WI has a few local/state oriented sites too… certainly something to watch, but I still wonder how the finance themselves.

  19. Scott

    I agree, in that, a lot of key insight can be unearthed by closely observing one person’s behavior (opposed to looking at some stats on a page of behavior derived from the masses)… It’s also a lot more fun using a small sample size :-)The OC Register down here in Southern California made a strategic shift to focusing on the web. They don’t even have their own marketplace/business section anymore–it’s hidden in the back section of the main section (that’s a horribly written sentence…I know lol, but whatever).Thus far it’s worked out well for them. I think we’ll see the world-wide influencing newspapers (Financial Times, NYTimes, WSJ, etc.) stick with their current strategy; but the regional players will embrace online media.Interesting times..[Made a couple edits… I must be drunk]

  20. rick gregory

    First off, thanks for the New Mogul link. It’s new to me and looks valuable.After reading the article though… I wonder if the Huffpo model works. For Huffpo to aggregate content, someone needs to produce that content. For that to happen, the writer needs to get paid. This has always been the problem of the ‘information wants to be free’ paradigm – the production of the information has to be paid for yet the consumers of that information refuse to do that. For a decade or more, we’ve been getting value without paying for that value and that’s simply not sustainable. This has been masked by other facets of the business subsidizing online news, but at some point we need to ante up and support the online news we consume or it just goes away. Before someone chimes in “advertising!” I’ll reiterate that the NYT’s 20m online visitors don’t bring in close to the revenues that the 1m print subscribers do. That could be the Times’ poor monetization of them (er, us), but still.This quote from the article struck me:As David Remnick, the editor of The New Yorker, pointed out at a recent media breakfast, the blogging and local reporting from Mumbai in the early hours of the November terrorist attacks were nothing short of remarkable. Ditto in New Orleans after Hurricane Katrina.Yes, the reporting was very good… but those are singular events. If what we want is coverage of major, outstanding events, we’re fine. But where will the coverage of more mundane things come from? Transportation debates in Seattle (which I might care about living here and others will not care about at all), the actions of a congressperson, the latest health care proposal, longer investigative pieces… the stuff that makes up the vast majority of what the NYT and most papers actually publish.

    1. fredwilson

      I post every day, I spend at least an hour a day on this blogI don¹t make a dime from itThat scales when 10s of millions are doing that

      1. rick gregory

        First, you don’t report. You opine. That’s fine and I very much like reading the site, but it’s not a substitute for news reporting. For example, in Seattle we’re debating a large transportation project… a good reporter will talk to various sources from the governor to urban planners and city officials, then synthesize that into a story. They’ll do this over and over. Bloggers almost never do that. They won’t have access to the officials and they might not even know who the urban planners are to talk to them.Second, the blog approach does NOT scale for the reader. One advantage of blogs is that the urban planner in Seattle could offer their opinion directly on a blog…that’s great, but it is one piece of a story and I as the reader have to find that. Again, a good reporter will bring together a lot of sources into one place and present the information from them in one article. With online stories, I’d like to see them link out more to things like an urban planning blog too.So blogs aren’t doing reporting for the most part. For the ones that do… what’s the aversion to finding a model to actually pay the people who are doing real reporting? We seem to have gotten the idea that we should get value for nothing, not only in this case, but in music, etc. I don’t think a direct translation of the subscription/local ads model will work for newspapers, but if we want people to spend time digging into stories vs commenting on them we need to find some way to pay for that.Edit: ironically, I just got an email from the Seattle PI’s email news service (the PI is one of the 2 major papers in Seattle). That paper is being put for sale. If no sale in 60 days it closes or goes web only. I’m not sure how my city benefits from losing a newspaper. Link: http://seattlepi.nwsource.c

        1. fredwilson

          this could be a big yellow taxi moment:Don’t it always seem to goThat you don’t know what you got till it’s gone

          1. rick gregory

            hehe… yes, absolutely. I should have known you’d come up with the perfect lyric for this… :)The probable closing of the PI pointed me to an interesting experiment too. Crosscut (crosscut.com) is an online only site for the Pacific NW that puts reader contributions and aggregation from other sites on a par with paid staff reporting. They’re still all about ads though.

        2. Michael_Josefowicz

          I’m with you on this one. Bloggers control their time and their focus. It’s much easier to find, write and opine when you’re only responsibility is to yourself, that’s a hobby. When your responsibility is to a community of readers that’s a job. To do a job you have to get paid.But, newspeople could do their jobs much faster,better and cheaper if they forgot about the “goitcha” journalism or the heroic reporter – a la Watergate. The requisite reaction quote form official x,y or z is mostly useless. The common wisdom endlessly repeated is a big bore.So, how about paying very close attention to government hearings and keep all the blablabla on the web on their radar. Then pick out the pieces that the community needs to know. Could probably do almost all of it from a nice quiet place with high speed net access.keep in mind that one of the few groups that got it right on Iraq was the State Dept Study that had no access to “classified intelligence” and no operatives in the field. So why wouldn’t that work in our communities. Just smart people sifting through public information. And getting paid to get it pretty right, most of the time.

  21. kidmercury

    evolution of news consumption:newspaper –> online newspaper (nyt, wsj) –> online newspaper with select contributors/externalized labor (huffpo, greenfaucet, 911blogger and lots of online communities that use drupal as their content management system) –> smart aggregators (digg) –> niche smart aggregators (techmeme, new mogul, hacker news)…and the next step is….filtered niche smart aggregators! like techmeme with a human editor. a bit bloggish.

    1. fredwilson

      That makes sense to meI think gabe actually does that at techmeme

    2. iamverytall

      At what point does the newspaper’s system of fact checking get duplicated in the new disaggregated value chain?

      1. kidmercury

        hi iamverytall,i would view the human filter to a niche smart aggregator as the fact checker. basically production has been crowdsourced/commoditized, value shifting to editor/filter which would leverage fact checking as a competence. with the proliferation of blogs increasing the abundance of direct sources, fact checking should become easier.IMO, that is.

      2. fredwilson

        Right here in the comments, all the time

  22. chasporter

    New models are popping up all over to replace the old. It’s an exciting time, especially with the economy forcing change everywhere. Thanks for pointing me in Michael Hirschorn’s direction.

  23. Jefferson

    Fred – I agree with you on our older generation’s newly-developing news digestion habits, but I don’t agree with the characterization of the Huffington Post as a newspaper, or as mainstream for that matter. That’s not to say that Arianna and company aren’t excellent at what they do (providing a decidedly liberal take on the news to a decidedly liberal audience), but simply that what they do is not objective mainstream journalism. To call it such only serves to further degrade the ideal of an objective media, if such a creature even exists anymore.

    1. fredwilson

      There is no such thing as objective mediaWe all have our biases, just disclose them and get on with it

      1. John McGrath

        I don’t think it’s as clear cut as that. At the least, by trying to see things from both sides, it makes it easier to sell ads to people on both sides 😉

  24. vincentvw

    Sometimes a sample of 1 is better than a sample of many. Statistics can be deceptive in that you sometimes don’t dig as deep as you would with a smaller sample. The best is that you have both and that your sample of the few is actually the audience that the product/service/subject is targeting.

  25. andreaitis

    We read Hirschorn’s current piece with great interest as well, especially in the context of Get Me Rewrite which he wrote two years ago (http://www.theatlantic.com/…. In it he suggests that “writers like Thomas Friedman will increasingly wonder what is the benefit of working for a newspaper… It will require only a slight shift in the economic model for the Friedmans of the world to realize that they don’t need the newspapers they work for; that they can go off and blog on their own, or form United Artists–like cooperatives to financially support their independent efforts.” Not many listened then, but two years later — as newspapers are crumbling and journalists are crowding the unemployment line — his words certainly ring true.As Andrew Sullivan recently said in his piece Why I Blog: “What endures is the human brand.”From our news startup perspective, we think he nailed it.

    1. rick gregory

      Yes, that’s true… for the Tom Friedmans of the world. But 1) most journalists don’t have that level of fame and the opportunities that ir brings and 2) would Friedman have the fame and notoriety he does if he’d not had the NYT as a platform? I think not.

      1. andreaitis

        mmm, i understand your points about tom friedman but today’s journalists won’t get their fame and notoriety from print publications. daily kos is an example of a news brand built online without previous mainstream notoriety. the playing field isn’t level, but it’s definitely not as far apart as it used to be.and to your earlier point about the nyt and advertising dollars…post-recession, do you think the decline of print and the corresponding up-swing in digital news usage will create a supply-and-demand increase in cpm rates?

  26. Stiennon

    I concur with all of your observations. I still read the WSJ every morning cover to cover as I have since I was 12 years old. But online I go to my iGoogle page or follow news sources on Twitter. If I ever check WSJ.com I am disappointed to see the same articles I read this morning showing up. I would read FT.com but the sight is slow to come up.Thanks!-Stiennon

  27. fredwilson

    I tried yoga and got frustrated after a couple yearsIt requires too much patience and I have too little

    1. pauljacobson

      Posting while meditating would probably involve a lot of blank spaces in the body of the post …

  28. girishwarrier

    Great post on a very relevant topic these days. Like you mentioned, the mainstream media can no longer stand apart from the ‘everyday’ journalists that we have among us. I guess many are moving towards this direction; I guess CNN’s iReport is one attempt. This could be the wave of democratization of Media…Demotix, NowPublic – ‘where people around the world cover the news’.Prime time News on TV is also probably loosing audience. Broadcast Media used to be unidirectional; but the Net makes this bi-directional.

  29. Ethan Bauley

    In addition to the above, I’ll offer that we will also see vendors in a wide variety of industries expand their blog presences to create high-quality journalism that is complementary to core revenue streams.

  30. Drew

    I’m surprised nobody has mentioned a key element in HuffPo’s bizmodel viz. don’t pay anyone. I suspect that can get to be a real drag after a few years. I’m thinking that a coop model is the only one that has legs over time.

    1. John McGrath

      Great point. I love HuffPo, but I agree, some of their practices are dubious, unsustainable, or both. In addition to not paying, they’ve been busted numerous times flat out stealing content. The most egregious example I know of was on election night, when they were hotlinking without permission to the (awesome) NYTimes flash election map.

  31. andyswan

    PoHuff is an excellent substitute for the NY Times. I’ll leave it at that.But the real story here is the drudgereport. I don’t know anyone that has drudge bookmarked that still gets a physical paper. The guy is genius and a staff of TWO is doing 30 million hits/DAY.

    1. fredwilson

      TrueDrudge is the person who showed the way

  32. Matt

    hi man! really nice blog u got here! i just finished watching `people power` episode on discovery’s `The True Story of the Internet ` and found more interesting pieces of info about you, this blog, and web 2.0 phenomenon…and i rushed to teh comp to comment on your blog…i really love your work and the ideas you spread here. keep on goin’!regards,matt from Romania

    1. fredwilson

      That’s my plan

  33. marshal sandler

    I personally enjoy your content creations also understand that creating content is hard work. With decline in readership by many newspapers ! I would like to see the Old Media buy content like yours and publish it ! I am 72 years old and have not read a newspaper in five years ! I can get more info from the Internet ! Gone are the days when I put on My Bagel Jacket and went out to buy a dozen and a copy of the Sunday New York Times ! I still send my notes on Crain Crest and also use a Quill Pen ! I read a lot and buy my books from Amazon their books reviews are all I need ! My music comes from I tunes ! My intellectual stimulation is all web based ! My wife is also an avid reader she carries the world in her purse a Kindle ,A Book of Crossword puzzles et al ! She has been reading Dave Winers Adventures with Net Books ! We have a G-4 and a Macbook ! I think a Netbook is in her future ! I know the other day she was on Adaptive Blue looking at an Asus on Glue ! Of course I have my own Kindle also ! Onward Upward with VC !

    1. fredwilson

      Man I hope I have your energy and passion when I am 72 marshal!

      1. marshal sandler

        When I cash my next SS Check i shall drink a Kir and give a toast to Gotham Lady and Mr Wilson ! I added the definition of a Kir , the unsung drink of my youth while living a 29 Rue Jacob in 1957Kir is a popular French cocktail made with a measure of crème de cassis (blackcurrant liquor) topped up with white wine.

  34. fredwilson

    So trueBut VC investing involves gut instinctAnd gut comes from personal experienceSo it’s tough one

    1. Michael_Josefowicz

      The thing about a “larger” sample is that if most of the people share the same culture. It’s about as useful as a sample of one. For example, my bet is that everyone who reads and especially responds to this very good blog, are the kind of people who read and respond to “interesting to them blogs.” We always have to remember that is a niche audience.Half of the people on the planet don’t have electricity. Most of the people look at blogs the same way they look at TV. It’s sort of one in the background and every once in a while something catches their interest. Then there are the people who respond. Most of the responses are nice enough, but merely “another voice heard from.” And then there are the very,.very few people who read carefully, try to consider the discussion and respond as thoughtfully as they can.It’s a niche market. Does it really scale?

  35. fredwilson

    I am certain that I will write a post called Big Yellow Taxi at some point this weekendI can feel my brain working on it already

    1. boikej

      An apt lyric indeed! Funny aside: Big Yellow Taxi has a “paved paradise” lyric that I believe inspired the name for a for another Seattle urban planning initiative in the works, Unpaving Paradise.http://unpavingparadise.blo…Here’s a link to our own little neighborhood news aggregator “reporting” on the Unpaving Paradise initiative: http://www.capitolhillseatt… (the site is currently down for maintenance.)

  36. Daniel Cohen

    Fred – First of all, as a Venture Capitalist, I truly admire your blog. It has inspired me many times, and I think being a VC blogger is a huge part of next generation venture capital. I have my own (http://coheda.typepad.com/ but I can’t keep at the pace that you have shown).Specifically on this post, I actually think the “sample of one” is a huge issue in the VC world. I think many VCs tend to look at their own behaviors and based on that analyze how the market will behave, and then take investment decisions. I think its crucial that we ignore our own sample, as we live a life that is very different than the average consumer.I have seen VCs say “I will never use this” and then miss out on very good deals. I can think of 2 portfolio companies that are not a fit for me, but are doing great and have a lot of consumer adoption.