This article is part of the series, "Innovators in Latin American Journalism," published by the Knight Center for Journalism in the Americas, with the help of Open Society Foundations' Program on Independent Journalism.
When I founded Nómada, the media outlet of which I am the director and main shareholder, I hardly imagined just how difficult it could be to finance quality journalism. Four years later, in the business and financial field, we are beginning to see the light at the end of the tunnel thanks to our business model.
The first step (in 2015) was to approach a business incubator called Alterna. It supports projects in their initial stage to build their business models with a very attractive offer: You are charged as your sales grow. Surely in most Latin American countries there are business incubators.
From this moment on, we started to implement a basic business principle: You can not put all your eggs in the same basket. You won’t have all the answers after incubation, but you learn as you put the ideas into practice.
Two years later (during 2017) it seemed to me that we were heading for an answer to this diversification question:
- 'Normal' sales of advertising and commercial products
- Sponsorship of recreational and academic events
- Content Agency, Nueve
- Grants from foundations (represent 47% of income)
Nómada’s income in 2017 was US $585,000, which represents 87 percent of our budget. We are very close to breaking even in our fourth year of operation.
This is easily done if you inherit a fortune. I did not.
The first thing I did (2014) was to convert possibilities for consulting for international institutions, foundations and NGOs into journalistic investigations that could be public (or not). This increased the agility for reading and the impact for donors. And for me, I financed journalism. This allowed us to start demonstrating with facts that we could be a quality investigative media outlet.
That is not enough capital to have a journalistic team that would allow us to grow in our mission as a company and a media outlet, and I also sold shares to impeccable public figures. The price of 1% of the shares has grown from US $10,000 to US $20,000 in four years.
Additionally, a relative entrusted me with a property to mortgage and I requested a bank loan that started at US $230,000, increased to US $450,000 and now decreased to US $360,000. Of course, we have always paid on time.
The most important thing is to decide how to invest these funds: journalism, social welfare and, key: positions and projects that can generate funds.
To my generation of journalists, who decided to found more independent media than traditional media, we had to learn entrepreneurship (or nonprofit management) more out of necessity, as I think is the case with all entrepreneurs.
To try out this diversification of sources, you need to invest, to bet. You can not get enough income to finance a team of 8 journalists (including me) with only part-time interns or contractors, you need a commercial team.
So from 2016 to 2018 we started investing in several positions:
- Fundraiser and administrator
- Sales Manager
- Event manager
- Audiovisual producer
- Second graphic designer
- Second audiovisual producer
- Third graphic designer
- Second sales manager
- Administrator (full time)
- General manager
- Manager of Strategy (Growth & Engagement)
That is, one has to bet, invest, and work so that this investment generates income.
That is to say, the commercial team and the technical team (design and production) now number more than the journalistic team (9 people) at Nómada.
I have news for you. Prosperity is not in advertising.
It is a wonderful tool for companies and institutions. For US $1,500 you can reach up to 500,000 views and associate your brand with a media outlet that is appreciated by your readers for our work for transparency, democracy and a vanguard society (which promotes values, for example, such as gender equality or diversity).
But Google and Facebook ate the digital market and that means we can not charge for advertising that gets 500,000 visits more than what is charged for a page of a newspaper viewed by 50,000 people.
Similarly, digital commercial products, such as travel guides, videos of entrepreneurs or tools/games about brands, continue to be 43 percent of our income.
Inspired by the International Symposium on Online Journalism (ISOJ) and the Texas Tribune, we had three objectives in mind for the production of Nómada events:
- Give our community of users other avenues for knowledge (Dixit talks, in the style of TED talks)
- Form a bond with the community and with each other (Festivals, Flea markets)
- Give our clients a sponsorship tool in which they can interact with our community in person.
Entrepreneurial journalists, while a banner has a price of US $1,500, sponsorships for events range between US $500 and $20,000.
In terms of a team, one of the lessons is that you need to hire a person full time to organize it (you can start by hiring someone free-lance or part time), one or two people to look for sponsorships (plus the involvement of the director of the media outlet), and to have dedicated time from the administrator, the design team and the community manager.
Also, have a small fund to invest (you can start with a well-managed credit card or charge food companies for selling at the event). To rent the places for the events, to bring the lecturers or to buy the drinks and meals before the attendees arrive is not free. Additionally, sponsorships can take up to three months to become effective with large companies.
At the event, the participation of the whole team is necessary. Both for the relationship with the community of readers and so that the organization does not increase costs.
Ideally, you should think about getting twice the income of the investment. And income should be sought from consumption and attendance, but especially in sponsorships.
We have made Dixit conferences about media and the future, about women changing the world, about technology for social innovation and about corporate social innovation. The biggest we have done was in partnership with Duolingo (founded by Guatemalan Luis von Ahn, who is a shareholder of Nómada) at the National Theater in August 2017; there was an audience of 1,500 people and seven sponsorships that together with attendance and consumption totaled $40,000 in income, 50% in profit.
We've done parties for anniversaries, Halloween, before Holy Week or events like an erotic toy market. The most successful was Halloween 2016, with 2,000 attendees, revenue of US $15,000 and a 50% profit.
To contextualize, those two profits, on their own, would finance half a month of Nómada’s operation. A combination of events is needed with other sources of income to finance the remaining eleven and a half months of the year.
Inspired by GK (Ecuador) and VICE-Mexico and taking into account that there were companies that were interested in hiring our video, design, social media management and specialized political analysis services, we founded our agency Nueve.
The challenge involves managing the schedules of the audiovisual production, design and editing team.
Here we have made commercial alliances for large clients such as banks, the steel industry or beverage companies.
The good thing about this source of income is that it does not require more investment than what is already done, and having a quality team for audiovisual production, design and political analysis is good for journalism as well.
7. Strategic financial-business alliances
In our fourth year, in which we have already begun to be part of companies with a social impact, we have sought two new alliances. One is with the Media Development Investment Fund, with whom we are about to restructure most of our debt (US $310,000) to obtain better interest rates with technical advising. And also another one with the Qomon Capital fund of Grupo IDC (Central American) that includes its income as shareholders (5%), restructuring of another part of the debt (US $50,000) and technical advising.
In short, being a media entrepreneur is an adventure and a lesson as intense as being a journalist.
*Martín Rodríguez Pellecer (1982) is the director and CEO of Nómada. He is Guatemalan, persevering and cheerful. He started in journalism in 2001 in letters from readers. In 2011, he founded Plaza Pública for the web, and in 2014, Nómada. He received his bachelor's degree at the UFM and a master's degree in Latin American Studies at the UAM. He was a finalist in the FNPI award in 2013 and 2017. He won the national journalism prize in 2004 and 2017. He is a polyglot and a feminist. @revolufashion
Note from the editor: This story was originally published by the Knight Center’s blog Journalism in the Americas, the predecessor of LatAm Journalism Review.