Blog Post

CEO Leaves Local News & Community Startup Backfence; Other Layoffs

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Perhaps symptomatic of the difficulties in developing the local news, community and citizen journalism ventures as a business, especially a venture backed on: Backfence, the local news venture, has seen its co-fouder and CEO Susan DeFife leave, and about 12 of its 18 an unspecified number of employees have been let go, reports Peter (and which I confirmed). The company’s other co-founder Mark Potts, who actually left the company in November last year (though he was and is still on the board), has come back and has joined as interim head of the company.
Backfence has about 13 sites in three metro area (DC, Chicago and Bay Area). The company got $3 million in venture funding in 2005, from SAS Investors and Omidyar Network, among others.
DeFife told Peter: “Ultimately, we did not share the same strategic vision for the company as the Board of Directors”. Potts told me the company will now regroup, and relaunch with all the Web 2.0 features and focus on getting back on track on sales and community development efforts.
Update: DeFife e-mailed in and said that she along with Amanda Graham, VP Sales and Bob Kelly, VP Community, have left and formed a consultancy in the local media and community sector.
Related: Launches, Latest Hyperlocal Public Media Effort
Local News Venture Backfence Gets $3 Million Funding
Backfence Acquires Bayosphere

9 Responses to “CEO Leaves Local News & Community Startup Backfence; Other Layoffs”

  1. As someone who has studied this space closely (I was the lead business and product person during the first year of New West and currently lead "long tail" publisher strategy for Yahoo! Publisher Network), I would like to point out that "local news, community and citizen journalism ventures as a business" are alive and well.

    As anyone who's successfully built a community-based company will tell you, it's authentic community cultivation first, features second — and those features should be highly driven by the desires and quirks of the community — and marketing third . There are plenty more features users want, and that have steadily rolled out, just to name two examples (one of which is highly local), yet these communities were successfully growing from day one.

    In the community journalism space specifically, I would point to Metroblogging ( and New West ( as two companies with somewhat different approaches that are both doing swimmingly. Metroblogging is in over 50 cities internationally, Comscore is tracking respectable enterprise traffic growth, their organic search engine ranking is terrific, and they've been on the front lines of breaking or monitoring some hugely important stories such as Hurricane Katrina. My own alma mater New West, while I'm admittedly not objective, continues to raise the bar for the quality and comprehensiveness of online-only local journalism (having won several online journalism awards), continues to develop recognition and loyalty as a community hub within its regional footprint, and, though it has not thus far positioned itself as a venture-scale business, is as far as I know tracking handsomely as a business.

    As for Backfence, nobody I know is surprised by their failure to take root given their "if you build it, they will come" approach, their tackling of the three needs above in reverse order, and their business decision to take venture capital to franchise and expand a model they had never proved and were ultimately unable to make work even in a single flagship location. Bayosphere's failure as a business was equally unsurprising given its failure as a community (not to mention horrible name and design); for all Dan Gillmore's evangelism of the abstract opportunity, he was never able to deliver any compelling value-added to San Franscisco's already-quite-robust online life.

    I do anticipate new models will continue to evolve, and I hope the right kind of aggregation will be part of that, but it's hard to imagine aggregation without some form of social curation. My guess is that will come from the most cohesive, engaged, organic local communities – and my hope is that the startup universe and the folks who track it will continue to encourage these.

  2. I was on a Kelsey Group pannel with Susan Defife, our topic was hyperlocal content…I approached her about the revenue models she used, and offered her some advice about how to monitize her traffic…she was polite, but told me that her company was making "very good" money and no thanks to my advice….This year will have over 700k in sales revenues – Her site had potential…had backers…just forgot to get make sales!

  3. A past Backfence interviewee

    Of *course* user-generated content is key to these kinds of initiatives. But that's not a new idea. Neither is geocoding news. Neither is the question, "how to monetize?"… And not even the three of them together into a megaquestion.

    What you still have with pegasusnews is an organization that burns its resources posting press releases from city governments and trolling their target audiences who are not inclined to post regularly.

    Trust me… when a rep from the League of Women Voters has opinions written on more than a dozen propositions (and actively tours and email blasts them), but can't be bothered to do more than send it to Dan Gillmor for a one-time mention (when he could have broken it up into at *least* 13 different daily stories)… well, you know the concept has a problem.

    And who is a suitable content partner who isn't already trying CitJ? Local, mainstream media? Alt pubs? Major players? Already trying, and when they falter, they buy start-ups like YouTube *after* the explosive organic growth. They aren't going to partner with you without something to gain.

    Local civic and governement organizations, you say? Sure, and how are you going to help them do it efficiently so that it doesn't require extra work on their part? And what will you do when a Google comes in and offers free wi-fi in exchange for feeding info to them?

    Who exactly would be willing

  4. I'm going to use this as a shameless opportunity to re-hawk our launch,
    which I sent you at the beginning of December and must've gotten lost in the shuffle.
    At Pegasus News, we (like Backfence and many others) think that user-gen content is a key part of the Holy Grail.
    We think that geographic ( and niche ( customization is key to that.
    And that content partners and aggregation can help solve the small-staff/empty room problem.

  5. this is indeed an interesting development…

    but let's think about small, hyperlocal newspapers that exist in many suburban communities. Most of those are free, and many don't make a huge profit. People read them for info on school lunches, what's going on at the Senior Center, and what's the latest program at the Y. Editors at those small papers often see what they're doing as a civic duty–more of a love for the community than for making a huge profit.

    So, can we really expect anything different from online hyperlocal efforts? Perhaps that's where Backfence went wrong–thinking that a hyperlocal online effort could make more money than a hyperlocal print effort (when, in reality, they're pretty much the same.)

    Whether a Web 2.0-ish stuff will change things is kind of a crapshoot. It helped Bluffton Today, but whether or not Web 2.0 stuff sticks with any community depends on the makeup of the people in the community and if they care about being interactive. When only 1 in 10 people who lurk on websites leave comments, there's really no way of knowing how any community's going to respond.

  6. A past Backfence interviewee

    I interviewed with this group and, unfortunately, you can take that statement at face value. The company has three problems:

    1. Company's mindset: it very much reminded me of newspapers trying to create community in the late 90s. They show the same shortsightedness.

    2. Flawed model: Backfence's target audience is barely hitting the tipping point for Web 2.0 consumption, so it is unrealistic to think that they will be active contributors.

    3. Resources: Too few, and wasted on trying to force build community. Worse, it puts them in a position of blurring ethical boundries. When interviewing, I was told that it would be necessary to create postings under a name different than my own in order to "salt" the site.

  7. Rafat Ali

    Hah…that was what was told to me, indeed. His point, I think, was that they designed and launched their sites a few years ago, and all the community features which Web 2.0-type technologies and services allow, which help build communities, were never around when they started these sites. Now, with the landscape changed with these technologies, they will be able capitalize and use these.

  8. Mike D.

    "…the company will now regroup, and relaunch with all the Web 2.0 features…"

    I sure hope that's not exactly what was said. Relaunching with "Web 2.0 features" doesn't sound like too deep of a strategy.