Monday, April 11, 2011

Start-up Journal: So Unbelievably Tired of Talking About Money.

I RECENTLY QUIT an unpaid position working with a wealthy foundation. They are launching a journalism organization with $2.4 million. They are spending $100,000 just to hire a search firm to find the leader for the yet-to-be-formed organization.

When I protested the $100,000 cost of the search firm, I was told, "That's how things operate in business."

That statement alone was obnoxious. The condescending tone it was delivered in made it all the worse.

A business that spends that extravagantly these days is doomed to fail. It is not sustainable (especially when nearly $600,000 of the annual $800,000 budget is allocated to paying the top four people, all of whom produce nothing).

Money. It seems all I do these days is talk to people about money. And that sickens me.

Shouldn't we be doing what is right rather than what makes business sense (i.e. raking in profits)?

Our new magazine is operating on the altruistic notion of supporting the local music scene. We are not out to get rich.

We want to be sustainable - we need $5,500 quarterly to pay for printing costs. Ideally, I'd like to pay the staff for their work, which would add about another $2,500 per issue.

Our ad rates are intentionally cheap. We want everyone to be able to advertise with us. We get their money so we can continue producing content. They get promotion so their business can grow. It's a win-win.

I've already had loose conversations with people who were interested in getting specific coverage in the magazine, for which they were willing to pay. I turned them down. As an independent magazine, our credibility lies in in our editorial independence. We can't be perceived as having sold a positive story (or any story, really). That would ruin our reputation, turning us into public relations hacks.

The federal budget is suffering from partisan bullshit. The state budget is in shambles. Education funding in Pennsylvania is being slashed (like we need more poorly educated kids in Philly). And my job as a professor at a state-related university is tenuous.

I'm holding on to my principles. I'll likely lose a ton of money this year but we'll create a product that we can be proud of, I think. Maybe we can even build a new business model - financially smart, community-friendly, enjoyable all-around.

The world needs a new business model. Because the dire financial straits we're in today are rooted in the ridiculous business practices of the past.

1 comment:

  1. I think you hit the nail on the head here George.

    The status quo in capitalism is one of the biggest problems with our society. Business needs to reinvent itself on smaller economies, and consumers need to make the shift to patronizing sustainable scale businesses. It will happen eventually, but whether it's turbulent or smoother is up to how quickly people catch on.

    I look at it this way: you spend $5,000 to produce something of tremendous value. Show me something with more value to people that was produced by a fortune 500, for that price. Now that's sticking it to big business.

    Hopefully people will soon start to patronize your project to make it economically sustainable, and that will really be sticking it to big business.