Last week at MIT’s annual Future of News and Civic Media conference, I stood on the stage with Knight Foundation CEO Alberto Ibargüen and made an announcement.
FeedBrewer Inc., a new company I co-founded with two other Printcasting team members, is donating 6 percent of its corporate stock to a brand new Knight Media Innovation Fund. Our hope is that our future success can also enable success for others who, just as we did with the Knight News Challenge, will receive grants that allow them to create new innovative media tools and programs. You can read more about our company and the donation on our site and at the Knight Foundation blog.
After the announcement, I got two reactions from conference participants. The dominant reaction was very positive: “Way to go!” “You did the right thing!” “That’s awesome.”
But there was also another, more pragmatic reaction. A few asked me point blank, “What are you getting out of this?” “Is there any new funding attached?” “What motivated you to do something you didn’t have to do?”
What Are Your Values?
The second question is the more interesting one, because I think it speaks directly to the real value the Knight Foundation has created through four years of the Knight News Challenge. this value has nothing to do with money. But just to be clear, the answer is that no, there is no new funding attached to this donation (which would make it a purchase versus a donation), and there is no tangible, quid pro quo benefit.
But we feel we are definitely getting something out of this. We’re showing with our actions that we want to remain a partner with the Knight Foundation and its community of media entrepreneurs in writing the story of innovation — whether or not they’re writing us more checks.
Empowering Publishers, and Future Innovators
Just as we’ve used Printcasting to empower new local publishers, and will use FeedBrewer to expand that mission to mobile and eBook publishers, we hope that we can one day say that FeedBrewer’s financial success helped empower new innovators. And in the spirit of open source, we also know we may benefit from their contributions just as they may with ours (Printcasting code was open sourced on Drupal.org this month).
I think this is a really important thing for future media entrepreneurs to understand, because ultimately it comes down to values.
I’ve been going through a tech entrepreneur training and mentoring program called The Founder Institute in Denver, and every Tuesday night we hear presentations from successful CEOs and entrepreneurs. I was struck by what Bruce Dines, a principal at venture capital firm Liberty Global Ventures, recently told us.
“What is your culture, and what are your values? Make sure your behavior is consistent with your values,” he said. “You are building a corporate identity that is consistent with your brand. Everything impacts your brand. It is a precious thing that can be destroyed in a minute.”
I found it interesting that this was coming from someone who manages an investment portfolio for the purpose of getting a hefty financial return, which for VCs is typically five to 10 times their initial investment. What this says is that values are important even in the context of making money, and that bad values can hurt your bottom line.
I wish more newspapers had paid heed to this over the last 20 years. Falling circulations led many to capitulate on core values — for example, the now widespread practice of charging for obituaries that were previously seen as a core community service. Values and brands are tightly connected, and once you lose your brand, you’re toast.
How Equity Works in Incubators
I’m learning a lot of great lessons through the Founder Institute, just as I did through the Knight News Challenge. The Founder Institute also has its own “pay it forward” concept. If I proceed to graduation in two months, I and my board will sign a document giving the institute a warrant to take 3.5 percent of FeedBrewer stock in the event that we receive significant future funding.
That isn’t unique to the Founder Institute. Most tech incubators, such as Y Combinator and TechStars, require some sort of equity in exchange for funding, training and connections. However, the Founder Institute is unique in that every graduate also shares in a pool from that 3.5 percent.
Up until very recently, the Knight Foundation required nothing in terms of equity, etc. in return for the grants it gave out, but it is moving in that direction with the Knight Media Innovation Fund. I think that’s a good thing, so I’m glad to support it up front with this first, non-mandatory equity donation.
FeedBrewer’s Road Ahead
So what’s ahead for us with FeedBrewer? Riches? Fame? Glory? Not initially, if ever, but there will be a lot of hard work as we strive to achieve our vision for simple multi-platform publishing solutions. And if we succeed in that vision, whatever else comes after is icing on the cake. We’re running a startup because we think we can do a better job achieving our vision than if we were operating in a large company, not because we anticipate an immediate windfall.
The other thing I’ve learned through the Founder Institute is that I am a hair short of insanity for starting a new business. My co-founders and I are already bootstrapping our path to the future, taking on consulting projects that leverage our expertise while keeping a percentage of our time free to work on our own concepts (such as BookBrewer — more on that later!)
Contrary to what you may think, the vast majority of startups do not attract enormous multi-million dollar investments or acquisitions. They work project by project, sale by sale, and some result in sustainable businesses. (Shameless plug: yes, we have room for more consulting projects. Learn more about that here).
The Real Value of the Knight News Challenge
The bottom line is that without the Knight Foundation’s support, I would never have had the time to study and learn what I have through Printcasting, and FeedBrewer simply wouldn’t have been possible due to lack of confidence. I also wouldn’t have had the opportunity to share my thoughts with the large audience that this Knight-funded Idea Lab blog provides, or present my wacky ideas at countless conferences around the world. And I doubt I would have had the honor and privilege to be part of such a fun and inspiring Knight News Challenge community.
So I want to thank the Knight Foundation and its late creator John S. Knight — who it turns out shared my birthday — and all of the innovators past, present and future that emerged as part of his legacy. That community is the real value of the Knight News Challenge. I’m looking forward to seeing more projects pay it forward like we have done.