BackFence CEO Resigns Amidst Downsizing

BackFence CEO and co-founder Susan DeFife has resigned from the company, amidst a major downsizing. Co-founder Mark Potts will serve as the company’s interim leader as the company looks to solve what he calls “BackFence 2.0.” Potts initially said that “roughly” 12 of 18 employees were let go, but now says that his estimate — made after 3 months away from the company — was inaccurate. He said the company won’t be revealing specific employee information

DeFife says she will join with VPs Amanda Graham and Bob Kelly to form a consulting team that will focus on reach, engagement, and “getting high CPMs” from local businesses. She notes that Backfence has built 13 sites in three metro area (DC, Chicago and Bay Area), sold 550 ads to local businesses since April 2006, and got two percent of community members to register in its most mature communities (i.e. Reston, McLean and Bethesda).

“Ultimately, we did not share the same strategic vision for the company as the Board of Directors,” says DeFife. BackFence had received $3 million in funding from SAS Investors, The Omidyar Network and several DC-area investors back in October 2005.

29 thoughts on “BackFence CEO Resigns Amidst Downsizing

  1. This just goes to show that even great local content sites need a solid sales and revenue plan.

    It’s a shame that these folks were let go, but unless there is a meaningful amount of revenue coming in, any property can’t expect to survive long term.

    Viva local sales!

  2. Without more information than this, it’s hard to say much about this development. But, in the spirit of citizen journalism, let’s give it a shot!

    Perhaps BackFence isn’t aiming at the right target. Stories that appeal to an audience across a 50,000 to 100,000 population (e.g., “city council enacts smoking ban in restaurants”) may best be reported by professional journalist, as has been the case for generations, and supplemented by bloggers. Stories that appeal to residents of one neighborhood (e.g., “utility work closes Maple St. and Birch Ct. to through traffic this week”) are not of interest to the other 49,000 people in town.

    So, a BackFence model runs the risk of combining (A) stories with broad appeal that may not meet professional journalistic standards with (B) lots of micro-stories that are each only interesting to a very small slice of their readership.

    This brings to mind Cathy Resmer’s piece yesterday about local news and community newspapers.

    For comparison sake, after four months, Front Porch Forum has about 6% of metro-Burlington, VT signed up while in early start-up mode.

  3. Michael hits the nail on the head. I run/own a local site in a resort town (Sun Valley) where we blend a modest professional journalism team with an army of bloggers. Way back, I was a part of the early team at Microsoft Sidewalk (later rolled into Barry Diller’s citysearch) so I learned how it’s easy to hemorrage money with local websites :)

    In the 2+ years since we launched the site, it’s become the #1 source for local information reaching a broader audience than the local papers, TV, radio, etc. and we are profitable (barely) but on a nice trajectory. We run very, very lean so there’s a hundred things I wish we could do but the top of the list is serving our community and making money and we are a bootstrap operation so some of those things will have to wait.

    We’re always appreciative of feedback if you want to check out the site at sunvalleyonline.com. The thing I’m proudest of is how we’ve ignited the community to contribute news, pictures, personal stories, classifieds, etc so 80-90% of our content is created by the community. You can reach me at dave – at – (sunvalleyonline) – dot com if you want to provide me feedback.

  4. Frank Barnako notes on his site that much of Backfence is of little compelling value, and sounds slightly “corporate,” which I found interesting, and responded thusly:

    It is interesting that the content on Backfence, all of it the creation of its users, could be considered “corporate.” The neighborhoods Backfence serves in DC (I live in one of them) are not filled with people ready to disparage their neighbors, lay down accusations, or otherwise needlessly “ruffle feathers.”

    It turns out that the content/community model adopted by Backfence carries with it the natural social communication constraints one finds at a local art show, along a game sideline or other public settings where people mingle.

    The way to actually find out whether you can create an online audience that cares about this, of course, is to put something in place like Backfence. It is always good in this day and age to find a place that encourages civil behavior, but it’s hard to sell.

    To my mind, the model to watch is Baristanet, serving the hyper-hyper neighborhoods along Bloomfield Ave. by Montclair, NJ (I once lived there!) The lead on that site comes from the Baristas themselves, who carry personality and point of view up and down the avenue.

    I can’t tell how quickly the ad revenues are filling the Barista’s tip box, other than by observation there are more ads. And they are doing more cheap and useful things (a mashed map of coffee shops).

    As has been observed about “hyper local,” and as Baristanet and many neighbrohood listserves demonstrate, when you are working a very dense local market like those around any metro area, it is tough to get sufficiently hyper and build a business model around it.

    If Mark Potts can assume a Barista-like personna, he’ll still need to isolate the neighborhoods within say Bethesda, which has scores of them. He could do worse than to go to centralized Starbucks and put up a 3×5 card that says “B-town Baristas wanted.”

  5. One of the things I think they’re missing in the equation is that you do need trained editorial staff. They’ve had a ‘hands-off’ approach since the beginning. It’s not working. The other, imho, is their clinging to ‘online-only.’ There’s still a little money to be made (in the short term anyway) from print sales. This could fund a small news operation (editor, reporter, sales, interns) for each of the regions, I believe. They’ve gone through a lot of funding so far. Best of luck to them, though. Hope they take these words to heart.

  6. I had contacted backfence with regard to some potential advertising. I’ve got a local business in the DC area with very strong serps on a regional basis and am fairly savvy with regard to taking advantage of local visibility and seo.

    The backfence salesperson with significant costs. Frankly the content wasn’t great for our audience. maybe we contacted them too close to this change in direction and the handwriting and pressure were already in existance.

    BTW they never gave me a feel for traffic. So how could they justify advertising rates.

    Its awful tough to make something like this work within a community.

  7. I never understood how backfence planned to make money (which is ultimately what publishing is about. Editorial is simply there to stop the ads bumping into each other.)

    How was backfence ever going to sell advertising? No plan, no experience. They recentlly bragged about having 500 advertsers in ALL their properties. The average Big City paper has 5,000 adverters!

    The minute they did start making money –if they ever did– their local monoploynewspapers (the San Jose Mercury News, Washington Post, etc) could have taken all their advertisers away overnight simply by creating their own “backfence'” sites, then offering backfence advertisers free ads on that site, plus disocounted ads in the main paper. Newspaper ad reps are hardcore, and they have a great product to sell. Backfence would have been gone in less than six months, once their local papers took serious aim at them.

    It’s taken the well-meaning, but naive founders this long to find out out that there was no future in this ill-conceived venture.

  8. When it comes to being local – the old saying applies – Think locally – act globally – Her only problem was that she was to slow to obtain cities…you have to have numbers on the internet…Like http://www.DiscoverOurTown.com operates with 2000 USA cities..as everything cycles, some cities are seasonal on the internet while others are year around destinations…it takes girth to be successful!

  9. The biggest problem in Backfence.com’s thinking was believing they could generate sufficient funds simply from advertising. Small-town/suburban hyperlocal paper publications often have to supplement their ad revenue stream by providing other services–or are parts of companies that have other revenue streams besides advertising.

    Even with the best content and great blogging personalities, sufficient online revenue is *seriously* difficult to generate–unless you’re a crafty splogger gaming the search engines, or participating in some other kind of click fraud. Odd how online revenue seems to work in favor of the dis-honest than the industrious.

  10. No surprise here. I feel bad for the folks that were let go, but again, they drank the kool-aid. Local portals relying strickly on banner ads and some google adsense revenue will fail no matter how much money is thrown at them. A “community” is smaller than 50,000 people. We already get enough news at this level from newspapers.

  11. If revenue, much less profit, remains elusive in local online efforts like Backfence.com, let’s not give up on the idea of connecting people online based on local geography.

    At E-Democracy.Org, we’ve been hosting very active online local Issues Forums for over a decade with extremely limited resources. We are now in seven communities in Minnesota and England. Our model starts with the low low cost “forum” at the center including a local volunteer forum manager and steering committee (think Rotary) and builds out from there. See: http://e-democracy.org/if

    I think the starting point for local citizen media should be what can you do online for almost nothing that is sustainable and engaging. Then build up from there as your grow your participatory audience.

    Steven Clift
    E-Democracy.Org

  12. I’ve seen millions, and in some cases tens of millions, pumped into cityguide sites. AOL Digital City almost got it right…but overextended the cost side by deploying discrete market-based and self-contained teams…very few centralized efficiencies. However, Digital City did have deep rich local flavor and passion in its core 10-12 markets…in fact, “chunky and sticky” was the mantra for all the content staff. There was real opinion and editorial. Ad packages were ROI-based…with decent renewal rates. Sounds like Backfence was missing most of the passion, depth and thus, value…I hope they can survive and revamp…perhaps go narrow and deep in limited markets.

  13. I, for one, loved the name Backfence, even if I wasn’t really interested in the content. It may have been another story if there were a Backfence/North Vancouver, but I’m not sure. If the communities served by Backfence are anything like mine, they are served by three local community newspapers that are delivered free to the door. They all make money in a “community” of about 150,000. They also all have unremarkable online presences that could benefit from citizen reporting. A blend of local professional journalism and citizen journalism may be a more likely model. As someone who sees a lot of citizen reporting on http://www.orato.com, I agree with the comment that citizen journalism needs to be backstopped by professional editors who are respectful. You also need to have at least a few stories that are simply great fun to read.

  14. When there is credible, often exclusive content on a local news Web site, it will attract an audience. WestportNow.com, the 24/7 news and information source for Westport, Conn., has been at it for almost four years.

    We get thousands of visitors a day who know they’ll often find content here they will see nowhere else (of if they do, its second-hand info days or weeks later).

    Our stories and pictures are often cited and reprinted by others, ranging from the local cable news operation to The New York Times. Our package of 2006 Year in Pictures included 360 photos from more than 50 photographers.

    When the content is good, credible, and presented in an attractive, professional manner, local Web news operations can succeed.

    Gordon Joseloff
    Publisher
    WestportNow

  15. Backfence news may not appear to be the most interesting nor the most relevant unless you actually live in one of the towns it serves. As a resident of one of their communities it was a good place to get all the local information, find out who had eaten in a restuarant down the street and what my local politicos are saying… and yes they were all active on the site. Sure its not Hollywood simply a small Northern VA town and yes I do care about the dog park and the school playing fields.As for advertising well at least I can findmy local stores there not the big flashy big box retailers. I hope it survives all the speculation and continues to serve my communityregardless of its internal upheavals.

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