Want to feel better about the future of journalism? Then read this IM Interview Leonard Witt conducts with Jesse Villanueva, the 20-year-old advertising director of San Diego State University’s The Daily Aztec. He won the first First National Sustainable Journalism Concept-2-Reality Competition sponsored by the Center for Sustainable Journalism at Kennesaw State University.
Catherine Shen, one of the judges and a former newspaper executive, says, the Fourth Estate Mobile concept was a winner because: “This project knew its target market (college publications and students) extremely well and had a staff that knows that market and has worked within that space. It had a game plan for the next five years that has a good chance of being realized within two years.”
So here is the interview, enjoy:
Leonard Witt: Hi Jesse, first congratulations on winning the First National Sustainable Journalism Concept-2-Reality Competition sponsored by our Center for Sustainable Journalism at Kennesaw State University. Maybe you can give us the elevator pitch for your winning Fourth Estate Mobile concept in a way an average, everyday person can understand it.
Jesse Villanueva: Thank you, Leonard. What we have created at Fourth Estate Mobile (FEM) is a Software as a Service (SaaS) platform that allows newspaper publications to submit content onto an application accessible across multiple smart phones. Through our proprietary Content Management System (CMS) editors can easily upload content onto the application. Thousands of publications will be provided a new medium for disseminating news, as well as a new source of revenue, without the significant time and costs of developing an application themselves. With Advibez, our unique online portal, advertisers can instantly update their offerings directly onto the applications that will provide a shared revenue source with the publications.
Witt: So how might this help save or reinvent high quality, ethically sound journalism?
Villanueva: Well as Advertising Director at The Daily Aztec, San Diego State University’s campus publication we were able to see first hand how the newspaper industry was declining.
Witt: So how does this prevent the decline?
Villanueva: We saw that the main problems publications were facing were increasing print costs, lost advertisers pursuing new digital and interactive ads, and lost circulation/readership — and also saw the increasing trend in smart-phone usage and how dependent our generation was becoming on these devices.
So just as we saw a major shift from print to online, we predicted that the next transition would be to mobile, so that motivated us to develop a platform that would allow every publication to make the transition without the significant monetary and time costs. At the same time providing the publications with additional revenue sources from the ad sales across the application.
Witt: So why do you think mobile phones will provide more revenues than internet ads?
Villanueva: We don’t see mobile as a replacement of online but more of as a complement to it.
Witt: But right now the internet ads are not generating a high enough CPM to support journalism, how will providing journalism oriented apps to smart phones make a difference?
Villanueva: Our research shows that the click through rates on ads across mobile devices are slightly higher than those of online ads, which would provide more revenue as our fees are based on a Cost per click (CPC) and Cost per thousand impressions (CPM).
We are also able to provide a number of other functions and features through our application which would not be capable with an online or print version.
Witt: Like what?
Villanueva: We have GPS based ads, as well mobile coupons scanable directly from the phone, as well as offering the reader the ability to have the news at his fingertips whenever and wherever they desire.
Again we do not expect the mobile to completely replace the print or online versions but complement them, because the truth is that publications are losing advertisers who no longer see return on their investment when buying print advertisement, and have very few ways to track tthe success of their campaigns.
Witt: Any other revenue sources?
Villanueva: Yes, our core group of founders has started a previous venture of coupons distributed to local universities which we are transitioning to mobile via this application, offering the publications a new revenue source as well. Our three revenue sources for us are Licensing fees, advertisement and the “Deals” (mobile coupons).
Witt: Allow me to change the subject a bit. You are just 20 years old and still an undergraduate at San Diego State University, what makes you think you can pull this off?
Villanueva: Well first I am not alone I have surrounded myself with a core group of people who are very motivated and dedicated to the success of Fourth Estate Mobile, along with the support of many San Diego business individuals helping us in any way they can.
Myself and the other Founders also have five years experience in the newspaper industry, where we were able to see first hand the problems publications face and what we can do to help them.
We also co-developed our technology with a number of publications around the country to ensure that we developed a solid product.
Witt: I’m impressed and so were the judges. Where does your motivation come from? Any lessons for young — and old — entrepreneurs?
Villanueva: Just the drive for success, I have a lot of friends who have gone through the motions and ended up at jobs which although may pay well are ultimately unhappy, and just could not see myself going that route. I wanted the freedom to be able to create my own schedule and have a passion for creating value of nothing.
San Diego State and its Entrepreneurial Management Center also provided me, as well as many other students, with many opportunities to take action upon my ideas.
Witt: Tell me more about value from nothing.
Villanueva: Well the fact that one is able to start with nothing, and create something that investors see value in that people are able to put a price on.
Witt: What’s the price on your idea now and how do you arrive at it?
Villanueva: Personally myself and my team put no price to the company until we have sold it and received a check with that amount on it, but our mentors and investors have valued our company at just under $900,000, as we are currently seeking a $350,000 investment for 40 percent equity in the company.
They arrive on that number based on how much we have invested into the company to date, and the revenues/value they see developing within the next few years for the company.
Witt: How can those potential investors and just curious folks like myself, learn more about your project? I know you have an extensive business plan.
Villanueva: Correct, the extensive business plan is for investor eyes only but if interested in that they could email me at: email@example.com, but if interested in learning more about the company you can visit our company website at FourthEstateMobile.com
Witt: Perfect, two more hypothetical questions: So let’s say your concept or something similar to it works, what do you predict the business of journalism will be like in let’s say five years?
Villanueva: Would that be as an industry, or for our company?
Witt: I was thinking industry, but will settle for your company?
Villanueva: haha, well as an industry we feel that we will have allowed for thousands of publications to take their publications mobile making sure they lose no market share by not transitioning or transitioning too late. I still see publications having print editions but do expect circulation of print to decline as they transition more of their readers to their digital mediums. I also expect to see a lot of new publications popping up with just online and mobile versions allowing them to operate with very low overhead.
As a company we see ourselves building up a large network of a few thousand publications which we offer applications to, and then being acquired by a larger company with in 3-5 years.
Witt: So you are obviously the future of journalism, are you an optimist or a pessimist and why?
Villanueva: Optimist. Fourth Estate gets its name from the traditional name for the press referring to it as the “fourth branch” of government, indicating the importance of a free press in a democratic society. Journalism will always be here, but will need innovative businesses like Fourth Estate Mobile to keep it flourishing.
Witt: A perfect way to end. Again Jesse congratulations to you and your team for a great idea to kick off the first of what we hope will be many Concept 2 Reality Journalism competitions.
Villanueva: The Pleasure was all mine. Thank you again for everything I enjoyed every bit of it and will keep you updated with the success of Fourth Estate Mobile.
Witt: Thanks, please do.