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Anatomy of a Startup—Part I

Startups

Anatomy of a Startup—Part I image mike and family 225x3001Michael Shapiro is the Founder and CEO of a local, online news platform called The Alternative Press. Working as an attorney for many years and commuting to New York City, Mike’s life changed completely when his son was born with a heart condition requiring open heart surgery. In order to meet their son’s needs, he and his wife decided they needed a job close to home and in an ideal world, a job that would incorporate Mike’s devotion to their community.

During college and law school, Mike was president of Student Government and actively participated in community service projects. Later, while working in New York City, he still found time to volunteer for John Kerry’s Presidential campaign by speaking at MeetUps and doing grassroots work. More recently, he is President of the local Rotary Club and active in several Chambers of Commerce. “None of this is about resume building,” says Mike, “I just enjoy the people and the good work that comes from coming together to meet community needs.”

All of these experiences highlighted to Mike the need for a more dynamic platform for local news. He wanted to be able to learn about the high school football team’s game in real time, get details on a recent burglary in town or learn about a new restaurant that opened. And he wanted editorial balance—something he said was missing in the Kerry/Bush campaign, during which the local weekly paper printed nine letters to the editor in favor of Bush for every one for Kerry.

In October, 2008 as people were increasingly getting more of their information online and print newspapers were declining, Mike and his wife launched The Alternative Press in Summit, New Providence and Berkeley Heights, New Jersey. Their motto is “Your Neighborhood News Online.” By being completely digital, The Alternative Press keeps costs low, creates a highly targeted audience for local advertisers with affordable rates and helps the local community with timely and relevant content.

The Alternative Press has taken off rapidly, generating considerable revenue and unique visitors from its inception—a rarity for startups.

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Within five months, a competitive online news platform called Patch.com launched in the same few towns. As it was later revealed, Patch is owned and funded by AOL.com. In this classic David vs. Goliath race, a little upstart was now pitted against a media behemoth with deep pockets (AOL spent $160 million on Patch in 2011 alone).

Undaunted, Mike and his team began executing their strategic plan and expanding their footprint. Unlike Patch’s centralized ownership, as of 2012, The Alternative Press began selling site licenses by town to enable “a network of online community destinations that is for locals and by locals.” The way they see it, local news and advertising is at its best when individuals in each market combine their knowledge of local places and local players with an inherent desire to see their communities succeed. Licenses have already been sold for 11 sites and, so far, the metrics for the licensed sites are following the same growth curve as the first three, corporate-owned markets.

Some day, perhaps The Alternative Press vs. Patch will be a great subject for a Harvard Business School case study. This story has all the elements—a time of great upheaval in journalism, wholly owned and managed vs. license model, big media company with deep pockets and industry ties vs. startup. The unknown in all of this is a factor that is harder to assess—soul. Mike lives to serve communities and bring them together in socially and economically productive ways. An intangible like personal passion makes it difficult to handicap the outcome.

In this series, “The Anatomy of a Startup”, we will continue to follow The Alternative Press over time and see how their fortunes unfold. The next blog will explore how Mike is funding this exciting enterprise.

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