Don’t let it be said that the media industry is anti-innovation. Journalism schools sponsor hard-hitting studies saying news organizations must reinvent themselves to survive. A leaked innovation report from the New York Times shows that the venerable paper is serious about doing exactly that, even if it’s still struggling to figure out how. And KQED, one of the oldest public broadcasting stations in the country, is a founding partner at Matter, the San Francisco accelerator that’s openly supportive of startups working to disrupt old media business models.
Matter—not to be confused with the online science and technology publication of the same name—hung out its shingle in 2012. The accelerator admitted its first group of startups in early 2013, and recently welcomed its third class of entrepreneurs. I took the occasion to visit the Matter garage on Bryant Street in the startup-riddled SoMa neighborhood and ask managing partner Corey Ford how the original mission—to foster sustainable new media businesses, while hopefully discovering technologies that shore up existing public media institutions in the process—is working out. My full Q&A with Ford is included below.
My impression is that Matter is well on its way to becoming the key place early stage media startups go to access expert coaching and feedback, as well strategic connections with customers and investors. In that sense, it’s striving to fill a role similar to the one played by Mountain View, CA-based Y Combinator in the world of Web and mobile startups.
“The breadth and caliber of the applicant pool is only growing stronger as Matter’s signal reaches further,” says Jake Shapiro, founding partner at Matter and executive director of the Cambridge, MA-based Public Radio Exchange. PRX is an online marketplace where public radio stations can find and license content from independent radio producers; Matter started out inside PRX in 2011 under the name Public Media Accelerator. (In a bit of a coup, PRX announced this week that it’s taking over delivery of the public radio series This American Life.)
The six new startups now beginning their five-month term at Matter range from community publishing to civic data collection, demonstrating the breadth Shapiro is talking about.
“With this new batch I’m excited first and foremost about the strength of the founders and teams; so much depends on their character and sense of purpose,” Shapiro says. “I’m also interested in the marketplace network potential for several of them—something I know a bit about from PRX.”
Ford, too, says the Matter experience is really about finding and boosting entrepreneurs who are committed to changing the media business, whether through their current startup or the one after that. “Even if all of the startups fail, the experience will propel them to be leaders in the space in the future,” Ford says.
Startups admitted to Matter get $50,000 in initial funding, paid from a $2.5 million investment fund provided by KQED and the John S. and James L. Knight Foundation. Ford and Shapiro say the partnership with KQED has been beneficial for Matter startups, and for the station itself. “KQED has been an extraordinary partner both as an LP and more as a learning collaborator, helping inspire their own internal staff and pull out Matter teams to benefit from KQED’s scale as a major media outlet,” Shapiro says. “There are lots of insights packed into their involvement with Matter that we find extend to many other media institutions trying to address disruptive innovation inside and out.”
Here’s a transcript of my talk last week with Ford, a former Frontline producer who taught at at the Stanford d.school and created the Runway incubator program for Eric Schmidt’s Innovation Endeavors fund. One striking point Ford made was about leaving aside the “nouns” of the past—by which he meant newspapers, television, radio, and the other familiar channels for media distribution—in favor of the “verbs” of the future. After all, Ford pointed out, the point of good journalism and powerful storytelling technologies isn’t to perpetuate media institutions, but to inform, engage and empower their audiences to be smarter citizens and consumers.
Xperience: Matter is two years old and you just admitted your third class of startups. What have you learned so far about the best way to run an accelerator for media technology companies?
Corey Ford: Matter is a prototype and it always will be. I can’t ask my entrepreneurs to approach their companies like startups unless I do that myself—otherwise, why would they follow me?
We have learned a lot. It’s mostly small adjustments and tweaks rather than huge shifts in strategy. The big change we did within Matter is that when we launched, we didn’t have a New York demo day on the schedule; it was just San Francisco. I realized it would probably be a really good idea to be able to open up the New York market of media investors and press, so we tacked on an additional six weeks [to the first Matter session] to have a New York demo day. There was such value in that that we said New York is now part of our program, but now we do San Francisco on a Thursday and New York the next Tuesday, so it’s back to back, without slowing things down.
X: What are you learning about the screening process? Is there a good supply of qualified teams?
CF: We are getting better and better about what we do there. A lot of it is based on pattern recognition, as well as recognizing little mistakes we’ve made along the way. We now have a very robust due-diligence process in terms of things like legal structures and the cap table—the boring stuff. We get companies at different stages. Some have never incorporated. Some have incorporated and made terrible mistakes that need to be corrected. So, one huge value-add that I never really thought we would provide is using the application and investment process to really get them legally and financially in tip-top shape, so that the only question on demo day and beyond is, are we excited about this company? That’s totally boring but it has really dramatic benefits.
X: Do you feel that the reality of Matter, reflected in the kinds of companies actually going through the program, is aligned with the original vision, which was about attracting entrepreneurs who believe in the spirit of public media?
CF: I do believe that the vision that we started with and the reality are completely aligned. From the outside, we have always said we are looking for companies that are not projects but ventures, and who take the idea of a sustainable, viable business model quite seriously. We don’t like to frame what we are looking for in the nouns of the past, but in the verbs of the mission of what they are trying to accomplish, so they can look like something completely different from what we ever expected. To inform, to engage, to empower are the verbs we wrap everything around.
A newspaper might inform, but we are not framing this around the future of the newspaper. We are framing it around the future of informing.
X: Typically, though, the companies that have gone through Matter so far aren’t media operations that are doing the actual informing. They’re mostly providing technologies to support that. Is that fair to say?
CF: In terms of the companies coming in, you could break them down into two categories: B2B and B2C. There are companies that very clearly have media institutions, content creators, et cetera as their end user, and their job is to support them. ChannelMeter and Beatroot are examples of that. Then you have ones that are more standalone platforms of the future. They may or may not need or care about existing media institutions. Zeega is an example of that, even though NPR used them.
And so we have these clear buckets. Part of our strategy is that we actually think this ecosystem should support both. There should be companies where a KQED can say, ‘Hey, that is something that can help me solve a problem.’ Media companies can meet innovators here and work together with them. Hopefully the entrepreneur gets distribution and a large customer, and hopefully the media company gets a great product and an amazing team working on a problem that needs solving.
But fundamentally we also need a category where people are truly working outside of the innovator’s dilemma. That means not having media companies as their customers. Having that element services a fundamental purpose of our original mission, which is enabling other media institutions to have an outside innovation strategy through Matter. This is a place where people can experiment without the traditional boundaries of the point of view of an institution, and through this community they can get exposed to that.
The relationship with KQED has been great. The cross-pollination that happens between the KQED leadership, their employees, and their board and the Matter culture and experience and process has been tremendous. We have an open-door policy with the station. Last night, at our “design review zero,” we had probably 20 people from KQED in the room. I led 50 KQED employees through a one-day Matter boot camp so they could really experience that. KQED held a board retreat here, and I facilitated that. And we have had KQED employees be inspired enough by what we do to apply to Matter.
X: Technology has been a hugely disruptive, some would say destructive, force in the media business over the last 20 years. I can imagine some people who work at traditional media companies like newspapers looking at the Matter portfolio and saying: ‘Oh, great, even more Silicon Valley startups out to destroy our business.’ Do you ever run into that attitude?
CF: We’re investing in people above all else. It’s easy to say you are investing in Company X that does Y, but that is just the surface. It’s the people behind it who are truly important; even if all of the startups fail, the experience will propel them to be leaders in the space in the future.
But we cannot be afraid. This is a place where disruption can happen. If anybody here builds something that a media institution that we love is afraid of, or that threatens to destroy their business, we will be the wind at the entrepreneur’s back. We have to. If we don’t, then it’s not a truly innovative place.
Do we want to [destroy old media]? Is that our goal? No, it’s to create a win-win relationship between entrepreneurs who are unburdened by that point of view and institutions that we care about. But you can’t help existing institutions by starting in a place of fear and protection.
It’s more likely that something is going to come out of here that helps newspapers than hurts them. And in the event that something comes out that does hurt newspapers, well, there’s a likelihood that [the entrepreneurs at Matter] are creating something new, and when that old ship sinks, there is a new raft they can get on. Just because an institution dies doesn’t mean the people within die.
X: What’s your favorite example of a Matter portfolio company that does these things: forging a new path while also benefiting existing media institutions?
CF: They are all my favorites. But SpokenLayer is a good example. Will Mayo is the founder and he’s dyslexic. He grew up “reading” the New York Times and magazines and getting all this great informative content via his dad reading into audiocassette tapes. Through that very specific pain point, he came up with a vision for building a spoken layer across the Internet. When great information is trapped in text, it can be liberated through audio, not just to serve people who can’t see the text, but also to enable publications to form deeper relationships with their audiences.
X: How did being part of Matter help Will Mayo?
CF: On a number of levels. First, and this is true for everyone, he became a better, more efficient innovator, by learning how to validate with users, test prototypes, and kill things that weren’t working. I also think he grew tremendously as a leader. He established relationships with a number of media brands that he is now doing deals with. He also discovered a fundamentally great strategy. He changed his strategy during the session, by about 90 degrees, to position himself in a really interesting slot between content creators, voiceover artists, and distributors of content. Where at first he was just a service model for magazines, now he is in this very interesting spot to make the vision a reality. They can actually become the central marketplace, the plumbing that actually does liberate text into audio and either brings in new readers or listeners or deepens the relationship, in a way that people who are worried about sinking ships can connect with.
X: Most accelerators these days teach companies the basic lean startup techniques, such as how to iterate rapidly and listen to customers. What would you say are the specific, unique advantages that Matter can provide to media startups? Is it about connections to a network of partners and investors in the media world?
CF: I want to push back on that point you just made. I don’t think all accelerators achieve that. We have a really high-touch experience that does that deeply. Our experiential learning is super, super deep. I would not concede that you get that just anywhere, to be blunt.
But second, you are also surrounded by media entrepreneurs, loosely defined—these other teams with interesting skill sets. There is magic in that. Most of the design work on SpokenLayer, for example, is being done by people from other teams within Matter. So the connections there are important. Also, lots of the investor relationships that get developed for people who are interested in media get developed because these entrepreneurs are part of Matter. So it all comes together.
Ultimately, this is what I am driven by. The fundamental human transformation that goes on here is the true thing that is going to last. Matter lasts beyond demo day in the people who we have produced.