If The Huffington Post co-founder Ken Lerer were to invest his own money these days, he says he’d invest in either the local web or real-time distribution. That’s exactly why he’s on the board of NY-based Betaworks, the company that brought the world Bit.ly, Outside.in and TweetDeck. Betaworks describes itself as “a new kind of media company.” And CEO John Borthwick joined Lerer yesterday to talk to students at Columbia University Graduate School of Journalism about media startups and the future of the web.
A New Kind of Company
In the beginning there were modems. They commandeered phone lines and made epilepsy-inducing noises when talking to each other, but they enabled people to connect to information. Soon bulletin boards, email, and finally web browsers became ubiquitous. With the world wide web and the birth of the browser, search quickly evolved as the premier information medium. Search has, for the past decade, dominated the web, giving rise to the new industries of SEO, paid search marketing, and analytics.
“Our thesis at Betaworks is thats changing again,” said Borthwick. What’s emerging now, he said, is real-time social (think Twitter, Google Wave), and that’s the realm where budding media entrepreneurs ought to set their crosshairs.
“As things progress and move beyond search, how do people find things online?” Borthwick asked. “The page is no longer the primary navigational metaphor.” Since Andreessen’s debut of Netscape Navigator, the prevailing paradigm of the web has been pages, bookmarks, and destinations. Even if parts of a webpage are generated dynamically, the content itself has always been grounded in the past tense.
The concept of a real-time web changes that. “The webpage is being atomized into lots of different parts,” Borthwick continued. “At Betaworks, we think of the web as a stream.” Rather than seeing simply what happened in the form of an article on the front page of a news website, many users are watching news that is happening, via Twitter stream or Facebook news feed. And they are hearing about news socially through their networks on these sites. Things like TweetDeck keep that stream in a familiar form. TweetDeck, for example, has columns of information. Look familiar? Think newspapers in their early stages of short bits of information for readers.
A perfect example of the real-time revolution is analytics, or statistical tracking and reporting of activity on a website. The popular Google Analytics platform can show a website owner how many people visited their site each day, where the users were located, what pages they looked at, and how long they stayed.
ChartBeat, one of Betaworks’ companies, takes these traditional web analytics and injects them with a dose of real-time. Borthwick demoed ChartBeat, showing students the home page traffic of a nonprofit site. Students watched the ebb and flow of traffic: 526 visitors. . . 514 visitors. . . 531 visitors. In contrast to other analytics platforms, Borthwick demonstrated, ChartBeat can show traffic referrers for any time of day. In the example he showed, Huffington Post was responsible for perhaps 1/3 of the website’s overall traffic, but upon close inspection, one could see that at a certain time that day HuffPo was responsible for over 90 percent of the site’s visitors, indicating that it had posted a link to the site at that moment.
Furthermore, Borthwick explained, real-time search takes advantage of traditional search’s inability to quickly manage updated content on sites that aren’t in the news index. Companies that capitalize on these kinds of things are the ones that Betaworks, and other investors, to be sure, are looking for.
Investing in Innovation, not Profit
Curiously, many of the budding companies in Betaworks portfolio are yet to become profitable, however, that isn’t a deterrent to their attractiveness to investors like Lerer and Borthwick. “Revenue is a distraction,” Lerer commented. “If your technology is good enough, monetization won’t be a problem.”
TweetDeck, for example, hasn’t even attempted to squeeze money from its millions of active users, but Borthwick said that doesn’t mean it won’t eventually. “Sticking up banner ads on Tweetdeck would be dumb, dumb, dumb,” he said. “If you try to monetize too early you have a tendency to slap old business models on your new product and kill it.”
When asked if a company has to be making any money in order to approach Betaworks for investment, both Lerer and Borthwick up their hands and said, “Oh no, no, no!”
It’s no question that the media landscape is evolving and ripe for innovative journalists and entrepreneurs to build something monumental. “For me it’s really similar to 1995 when the first browsers came out,” said Borthwick. “It’s interesting and exciting to say the least.”