With most new online business startups looking to create the next Snapchat, Instagram and Pinterest, are we perhaps looking too far from home when it comes to online success? Once you read about this one website, you may just come to that conclusion.
Although it sold for a huge amount, you’ll soon see that it isn’t reaching a huge amount of visitors. I’m very tempted to follow this business model myself so I’m excited to share it here to see what you could do with this opportunity.
The opportunities shared in this gaps report include:
- One website which recently sold for $25m
- Another profitable start-up who have made over $850,000 so far this year
- A Dutch-startup which recently passed 70,000 paying subscribers
While everyone tends to be focused on creating “the next big thing”, the opportunity for success may (literally) be a lot closer to home than you thought.
Just last month, local news site Texas Monthly was sold for a staggering $25m. The site was sold to Paul Hobby, whose father, William Hobby, was a six-term Governor of Texas.
While the sum is far from the acquisition numbers we see gracing the homepage of TechCrunch, according to SimilarWeb the site was only reaching around 1 million people per month. Almost 90% of whom hail from (unsurprisingly) the United States.
Further stats on the site suggest that 41% of their traffic is coming from search, with terms like “texas sayings” and conspiracy theories around InfoWars founder Alex Jones actually being a deceased comedian bringing in thousands of visitors per month.
As you would expect, the site covers everything you can think of when it comes to Texas.
From which sporting events are happening soon to the best places to eat and relax, you’ll find it all covered in daily updates.
While the sale will not come as a surprise from anyone tracking its parent company, Emmis Communications, who had been under pressure to reduce their business debt, it does reveal a site worth a lot of money that isn’t reaching an unobtainable amount of visitors.
The Texas Monthly success alone shows the potential with a local-focused news site, but it’s certainly not the only one to be picking up traction.
The Charlotte Agenda is profitable and brought in $2.2 Million in 2019
The team of 11 behind the Charlotte Agenda, based in North Carolina, did far better than they expected to in 2016, with revenue expected to hit 850,000. In 2017 they achieved profits of over $400,000, from $1.3 million revenue.
In 2018 their revenue had rised to $1.9 million, with another growth in 2019 taking this to over $2.2 million. Despite the pandemic, their strong performances continued in 2020 with revenue once again expected to exceed $2 million, which is quite remarkable.
Self-funded since its launch in April of 2015, they have only four staff members focused on creating content, while others like Lizzy Sirkin (Digital Strategist) and Gi Hallmark (Emerging Products) focus on how to grow the brand.
Those roles have already paid off, with the team recently launching Raleigh Agenda, where they hope to replicate their success with another news site in the state.
As far as numbers go, the Charlotte Agenda received an estimated 200,000 visitors per month at the time of writing. In 2020 this had risen to a confirmed 650,000 visitors per month.
Their main sources of traffic, reported by SimilarWeb, are:
- Search: 36.12%
- Social: 21.91%
- Direct: 21.84%
- Mail: 15.63%
- Referrals: 4.50%
Since at the time they claimed to have over 21,000 email subscribers (107,900 as of June 2022) I would estimate that their traffic from their email list is higher than what is being reported.
Nieman Lab recently interviewed their co-founder Ted Williams on the success of the site. He stated that almost 500 people pay for access to premium content on the site, which costs just $5 per month.
While $2,500 is a small percentage of their monthly revenue, their future success will rely on being able to diversify their income.
Mr. Williams also had some interesting things to say about their focus on profitability.
“Unlike the strategy for launching a global media company, the strategy for launching a local media company needs to generate revenue early.”
85% of their revenue is generated from sponsorships and display advertising and though you would expect their focus is on local advertisers, they’ve also been able to attract large brands such as Uber and Bank of America.
Their social media focus consists of the usual Facebook, Twitter and Instagram triage, but surprisingly their Instagram is bigger than both of their Facebook and Twitter audience combined, currently sitting at 270,000 followers.
Testifying to both the success and appeal of a business in the style of the Charlotte Agenda, they were actually purchased by Axios in December 2020, for almost $5 million.
This acquisition by Axios is in line with their ambition to expand into local markets going forward. The early signs are that this has been successful as they have increased the subscriber numbers of The Charlotte Agenda (now Axios Charlotte) by five-fold.
Axios clearly know what they’re doing when it comes to the local news niche, their Tampa Bay publication has just reached 108,000 subscribers.
As Mr. VandeHei said, who serves as the Axios chief executive, “There is an audience — and real revenue — in cities”.
Judging by this evidence, we’d struggle to disagree.
Dutch news site, De Correspondent, recently passed 70,000 paying subscribers
Launched via a successful Kickstarter campaign in 2013, De Correspondent has one focus for its (currently) Dutch-only content: To get people to subscribe to the site for an annual fee.
Currently priced at €7 per month or €70 per year, the sites co-founder, Ernst-Jan Pfauth, states that they’re converting 1.8% of people from their free email newsletter into paying subscribers.
The Netherlands is currently home to around 17 million people so while their potential for growth is far from limitless, they are targeting an affluent market. Neimanlab reports that they aren’t willing to settle on just writing in Dutch however, and plan to reach more English-speaking readers as they grow their brand and staff.
They’re reaching an estimated 1.4 million visitors each month. We can see that 80% of those visitors are coming either directly to the site or via social media.
It’s interesting to see how much their sources of traffic differ from the Charlotte Agenda, but it shouldn’t be surprising. Since people are paying for access to content, which isn’t freely available, it makes sense that most of their traffic would be coming to the site directly.
A site covering L.A.’s tech community, dot.LA, raised $4m in funding
Launched in January 2020, dot.LA have a mission to celebrate and empower the Los Angeles startup and tech community, and inspire others all around the world.
In their own words:
We are a news and events company with a mission of shining a light on the innovation in the L.A. startup and tech community.
With an experienced CEO and team of seven reporters, the site has a lot of weight behind it. In addition, the co-founder and chairman, Spencer Rascoff was co-founder and former CEO of Zillow and hotwire.com. Spencer has also invested in companies such as Airbnb, Robinhood, and SpaceX.
Prior to launching, dot.LA raised $4m in funding from various investors and local businesses including the likes of The L.A. Dodgers and Snap, Inc.
They clearly believe in what they are doing and this level of investment would suggest that there is a real business opportunity here.
As Spencer said in an interview with Los Angeles Times:
The L.A. tech community is big enough and the business community is big enough to support this financially, and there’s a hole to fill here. I like our chances.
It’s also worth noting that whilst the site does have a YouTube channel, the fact that they have just 324 subscribers (at the time of writing) suggests they’re understandably putting their focus into written media.
Not only is this a fantastic example of another successful local news site, it also goes to show how you can still niche down to create something relevant and appealing.
Judging by the feedback I can see online, dot.LA are certainly making this work.
Why there’s so much money to be made with this business model
If you’re new to gaps, then you might not know that we don’t just report on successful startups or solo ventures, but we find gaps in the market that you can capitalise on for your next online business.
We’ve featured this story on our launch because there are so many possibilities to replicate these successful ventures. Just a few reasons why this business model works so well include…
Advertisers know what they’re getting. Any local business that caters to the Charlotte crowd know they’re reaching that exact audience when they advertise on the site or sponsor the daily newsletter. They don’t have to worry that their ad dollars are being spent on reaching an audience who can’t benefit from their offering.
Readers want content from the source. You don’t want someone from the South of England reporting on those from the North and you don’t expect the people of New York to claim they know everything about the people of Texas. The people who are going to be able to describe your town or city the best are typically from people who were born and raised there.
You can cover content others don’t have the resources to. If there is an event of national interest happening in your town then you’re going to see it covered in the New York Times or similar, but that’s probably all. The Charlotte Agenda recently posted an article on “What 19,000 People Think of the Charlotte Dating Scene” which – as one of the most popular articles they’ve ever written – attracted more than 20,000 visitors.
It’s interesting to the people of Charlotte, but a site focused on the city are the only people who would write such a piece.
You don’t need a huge team. Unlike writing for a national news site, there are only so many stories you can cover when it comes to local news. Unless you’re in a violent neighbourhood, some news days are going to be slow. The Charlotte Agenda only has four full-time writers in a team of 11, and Billy Penn, a local news site in Philadelphia, has just 7 full-time staff yet is generating similar revenue numbers.
Feature in Google News. For the local sites I’ve investigated, all of them feature prominently in Google News. Not only when you’re searching in Google News itself, but when looking for news related to a specific local area.
In fact, Googles William Vambenepe recently confirmed that the search engine was displaying more local news stories in search results than previously:
This could be a huge traffic driver for the site.
This is half of the story…
For every success story we feature, we highlight gaps in the market which reveal additional opportunities to be successful. Many are possible by simply changing the industry (or location) to focus on while others look at how to profit from other traffic sources or monetisation options.
Unlike other profitable ventures featured on this site, the other applications of this business model should hopefully be obvious: Creating a news site for other big states and cities around the world.
There’s no reason you need to start with a huge team, a huge budget or anything of the sort. Simply go and pick up a domain relevant to your local area and start setting up your website. We recommend WordPress, which gaps also uses, and Namecheap for your domain registrar.
If you’re worried about whether there’s enough people in your local area then keep in mind that Charlotte has a population of less than one million people. 792,862 to be exact. Similarly their new website, focused on Raleigh in North Carolina, will be reaching a population of less than half a million people.
The key to success here is focusing on a single area, being consistent, and writing the types of articles that people from the specific region you’re targeting would relate to.
For instance, the Charlotte Agenda has an article on The Most Expensive Homes in Charlotte. It contains no text and only 11 images yet just one day after posting it has amassed more than 11,000 views.
If you’re from Charlotte or live in the area, it’s the type of article you’re going to want to read and share with others.
If you think starting a local-news site could be the next venture for you, we’ve went into great detail on how we would tackle this challenge below.
It’s not just a few words saying “start a news blog” but shows you how to choose an area to target, how to set-up your website, great themes which fit this concept and so much more.
this is what we’re known for
Gaps in the ‘Local’ Market
— Noah 🤙🏼 (@noahpbrinker) April 15, 2020
Below this box is the text we’re famous for, but out of respect for you, we do have a disclaimer in place.
We spend dozens of hours preparing these reports and coming up with opportunities you can capitalise on, but we also don’t want to put your life-savings into an idea just because we wrote about it.
For that reason, we have an $8.88 request: Please don’t spend more than that testing out an idea (it’s the cost of a .com on Namecheap) to see if it has legs and makes sense for your business.
We’ve made many successful predictions and even ran our own case study, but we’ve also invested time and money into ideas that didn’t pay off. We’re not directly making money from this report, but still want to be respectful of your own finances.
The first thing you have to consider when building a local-news site is the area to focus on. I highly suggest either a city you’re from, currently live in, or have a personal interest in. You need to be consistent when focusing on this business, and you’re only going to be consistent if you have a genuine interest in the local area you’re going to be writing about.
I’m from Newcastle (England) yet have lived in both Amsterdam in the Netherlands and Cape Town in South Africa. If I was starting a local-news site personally, I would only consider targeting either of these three cities. While you may have a bigger potential audience by focusing on New York than Newcastle, audience size doesn’t really matter that much if you’re not going to enjoy what you’re covering and have a passion for that specific place.
The next thing to consider, is the name for your site. Although branding is important, it’s not critical to your success. Keep in mind that I have built a popular marketing blog with the name ViperChill (which only means something to me) so the name of the site is not going to be what helps you succeed.
The team behind Billy Penn, which is a local-news site focused on Philadelphia, are currently working on building out news sites for other areas. Their founder states that his naming strategy for the new sites will not be focused on some kind of generic brand, but to create site names which are relevant to that specific area.
In his own words, “cities aren’t generic, so why should the name of a site be generic”.
I suggest either having the name of the place your targeting in the domain – like TexasMonthly – or using a word that is relevant to that area such as ‘Geordie’ which is used to describe people born in Newcastle.
The beauty of this business model is that you don’t need a huge team or a huge budget to get started.
I use WordPress for almost all of my websites (including gaps) so recommend that as your CMS. Please don’t try to build a free brand on domain.wordpress.com, domain.blogspot.com or similar. A domain is just $9, and it’s worth every penny.
Since you’re building a news site, use a news theme. Here’s a resource on 30 of the best (free) WordPress news themes.
From here there are two things you need to focus on: Content, and traffic.
While it would help if you have other people working with you on this project to write content, there’s no reason you can’t do it on your own. Start looking through sites like Texas Monthly and the Charlotte Agenda to see which types of content were popular on their sites.
The Charlotte Agenda literally highlight their most popular content in their sidebar.
Content ideas that work well generally include things like:
- The dating scene in your area
- Great places to eat
- Expensive homes
- Unique places in your city people might not know about
When it comes to traffic, I recommend focusing primarily on just one channel. This will allow you to optimise what works and not spread your marketing efforts too thin.
Different things work for different sites. For the Charlotte Agenda, Instagram is a primary source of traffic, where they have more Instagram followers than Facebook and Twitter combined.
Yet for DeCorrespondent, social media and direct traffic pulls in 80% of their visitors.
Hatch out a strategy for either Facebook, Twitter or Instagram when you’re just starting out. You can definitely venture into other channels later on, but to start with, keep it focused on just one.
Finally, remember that the key to success here is to be consistent. You’re going to have to attract a following before you attract advertisers, and that isn’t going to happen overnight. If you keep at it, you can become the go-to resource for news and opinion pieces in your local area.
Since local businesses know they’re going to be reaching people in a specific area with their ad dollars, closing them as sponsors of the site should be easy.
P.S. Clicking the heart button below to lets us know what types of success stories and opportunities you would like to see more of. Thank you for reading!