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Aug. 26, 2015, 9:30 a.m.
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At the New York Daily News’s Innovation Lab, inspiration comes from outside startups and events

“Believe me, if I was offered full-time people, I would not say no. But people want to be involved, even if it means working extra hours or going to events outside work.”

Yesterday, Knight Visiting Nieman Fellow Freek Staps wrote about the many ways that news organizations can incorporate a startup-like mentality into their newsrooms. The New York Daily News is trying to do this by actually inviting startups in: Its Innovation Lab program, launched in 2013, was expressly designed to collaborate with the burgeoning New York City media startup scene.

The New York Daily News doesn’t have the resources of national news organizations, and it’s experienced particular upheaval in recent months as the paper’s publisher, Mort Zuckerman, floated (and then, last week, rejected) the idea of putting the Daily News up for sale. But by taking manageable steps and banking on people’s generosity and interest, Cyna Alderman, the lab’s managing director as well as general counsel for the Daily News, has built a program that now includes “office hours” and sold-out events.

“We’ll never have 200 developers on staff,” Alderman told me. “But we do have the ability to connect with startups in the community and help them, while also trying to address needs we see across the media industry.”

I spoke with Alderman about launching the Innovation Lab and keeping it afloat on a shoestring. Here’s our conversation, lightly condensed and edited.

Laura Hazard Owen: How did the New York Daily News Innovation Lab get its start?

Cyna Alderman: Several years ago, we were doing a bunch of experiments with startups on an informal basis. We were seeing all of this innovation and amazing projects happening in the New York tech community, and we wanted to be a part of that. The first two startups we worked with were [analytics platform] Visual Revenue and [visual marketing platform] Olapic.

These companies started getting a lot of attention just by being on the New York Daily News website. And we could give them a lot of feedback to help them figure out what companies like us were interested in. Both Olapic and Visual Revenue [were successful] after working with us [Outbrain acquired Visual Revenue in 2013; Olapic recently raised a fresh $15 million.]

So we started trying to figure out how we could work with startups in a more directed way, where instead of just fortuitously meeting some companies that we thought were interesting — we met Visual Revenue at a meetup and thought their analytics tech was cool — we could have more directed messaging to the startup community.

LO: How exactly did the first round work, and how does the Daily News make money off it?

CA: The original idea was that it would be a six-month program. The startups could apply, and we would [choose one] that was a good fit to come and sit in our office, right in the middle of our newsroom, and have access to all our senior people. We could give them feedback as they were building out the product. And the real value, that other programs [like TechStars and Y Combinator] don’t necessarily offer, was that we could start using the tool on our site. That would give [the startup] real feedback and a real case study as their business was growing. Then we could help them by making intros to other media companies.

The companies that come in own their tech and their IP. We help them grow. We take 5 percent equity in these companies, but that also helps motivate people internally to participate in the program. It’s not just charity, we’re not just doing it in our free time — we do have an incentive to continue working with these companies and give them the resources they need.

The first company to come in was Datavisual. They started with us in December 2013 and signed on for six months. It went so well that we ended up working with them for a full year.

In the newsroom, we had identified the need for a very simple way for journalists to create visualizations to accompany their stories, without having to go through a design queue. Reporters who are asked to write several stories a day and get them up on the website don’t necessarily have time to go through design to get a map or chart or graph to accompany their story. Datavisual is a very simple solution: You can drag and drop your data into a template, then just embed that into a story.

Kristen Lee was our editorial person on the Lab team, and she was very passionate about Datavisual. She created trainings for the journalists so they could learn how to use it. We sat [Datavisual cofounders] Danne [Woo] and Peter [Darche] right with the [Daily News] digital team so they could all be interacting. The founders were able to watch journalists interacting with the program, see where people were getting stuck or lost, and our design team was very involved in helping with the testing and the roadmap.

LO: Since 2013, the Innovation Lab has added events. You’re doing one with Twitter next month.

CA: As we were trying to get the message out that we wanted to work with startups, we attended all these great events. We found pockets of people who were interested in digital publishing and innovation around media, but there was no one event that brought all these people together. That’s why, last summer, we started our Conversations event series, to create a hub where conversations could happen.

New York Daily News Conversations credit Daily News

Microsoft came in as the lead sponsor, so all the events are at [Microsoft’s New York office]. We’ve created an amazing community where publishers from old media, new media, disruptive publications, and traditional publications come together with startups and journalists and people from the venture tech community. We’ve had events about social media in the age of the algorithm; how publishers can create audience streams separate from relying on Google and other search engines. We had a one-on-one with Vivian Schiller. Those programs all sold out; we had over 200 people at each of the events.

LO: So are these events generating revenue for the Daily News?

CA: Our goal is to have them be break-even. We’re not doing it as a way to make money. But Microsoft has renewed its sponsorship, and [law firm] Davis Wright Tremaine has also come on as a sponsor.

You have to be really flexible and keep your mind open. When I started this, I never thought I’d be interested in doing an event; that wasn’t on my radar screen at all. Now, though, I think these events are one of the best things we do. Working with one or two startups at a time is great, but you’re really only impacting those one or two startups. When you have events, you’re reaching 200 or 250 people at a time.

We’re also doing office hours. It’s an opportunity for startups that want just a small amount of feedback. Companies can come into the Daily News, meet relevant people on our team, and, as they’re developing their products, get some real-time feedback from someone who could end up being their customer. We originally thought of that program as a community giveback, but it’s been eye-opening for us, too, to see what’s coming. We’ve seen some incredible startups come through the Lab, and all of these interactions open your brain to new kinds of thinking and new ways of approaching problems.

LO: Who’s staffing the Innovation Lab? Is this your full-time job?

CA: No. I’m the general counsel of the Daily News. When I originally wanted to start this lab program, I pitched it to my boss as a Google-like 20-percent-time thing. In reality, depending on what’s going on with the lab, it takes more or less than 20 percent of my time. At this point, we don’t have any people full time. It’s just employees at the New York Daily News who really care, and who want to be part of the evolution of media.

In the beginning, it wasn’t easy. I had to manage expectations of what the Lab would be — the goal couldn’t be, oh, we’ll work with 10 companies and within seven years we’ll have a whole new revenue stream because we’ll have all this income coming in from all the exits that are going to happen.

The reason to start a program like this had to be about just getting out and being part of the community — getting the Daily News name out there as a company that cares what’s happening; showing the staff that we’re not just sitting back and waiting for the end of the world with media.

A more realistic goal than finding the next Twitter or Instagram was just getting one of our development initiatives addressed. With Datavisual, we have people in the newsroom who are trained in the tool and can use it to embed visualizations in their stories. That wasn’t something we were able to do before.

Those were achievable goals, and it’s why we were able to get signoff at the high level. Grant Whitmore, our head of digital, has been incredibly supportive of the Innovation Lab, and I tap a lot of people from his team.

LO: But instead of pulling in those people full time from the inside, you went outside for the startups.

CA: The idea of bringing in outside people who had a completely different perspective was very attractive. The whole idea that’s allowed the Innovation Lab to grow is the recognition that no one media company has all the answers.

It’s okay to plug into a bigger ecosystem and start sharing information. We don’t feel that we have to own these products. Our expertise isn’t building new tools to address new problems, though we are building out our development team — we just brought our mobile app and mobile website in-house, but historically, we hadn’t been building new products in-house. That just didn’t seem to be an option to me. We’re not Gannett or Hearst or The New York Times. I knew that we would never have 200 developers on staff, but we do have the ability to connect with startups in the community and help them while also trying to address needs we see across the media industry.

LO: You just chose the second startup, Optimera, for the program.

CA: It’s a little different this time around. The founder, Keith Candiotti, is already a Daily News employee. This time around, I didn’t actually go out and ask for applications to work with a startup. With the announcement that the company may be up for sale, I didn’t feel comfortable going out to the startup community and asking them to make a commitment to us.

But Keith actually came to me in the legal capacity to make sure that what he was doing was okay and wasn’t violating any of his obligations to the company [by also working on a startup]. [Optimera focuses on] ad tech viewability, [and that] is an area that people are very interested in. We had to build out a separate type of program for him: We liked him working at his job [in ad operations], so we had to change how our program worked. We created a milestone where we earn equity based on achieving different milestones as he builds his tool out. So, for example, once he completes QA, we get a certain amount of equity, progressing up to 5 percent.

LO: So will he be spending a certain percentage of his work time on the startup?

CA: He’s not supposed to be working on the startup during the day. We’re going to have to figure it out as we go, but it’s not supposed to be interfering with his job obligations. That’s just the way everyone works with the Lab; they still have their job responsibilities; they just also do a little bit more. He’s writing the code on the weekends.

LO: In an ideal world, would he be doing this full time for you?

CA: I’d love to have full-time people. I’d love to have more resources, but all media companies are facing a lot of challenges right now, and you just work with what you have. Believe me, if I was offered full-time people, I would not say no. But people want to be involved, even if it means working extra hours or going to events outside work. People will surprise and impress you.

Photos of Cyna Alderman and Conversations by the New York Daily News. Photo of the Daily News building by Derek D. used under a Creative Commons license.

POSTED     Aug. 26, 2015, 9:30 a.m.
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