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Local firm attracts $6.5 million for startup

Ebyline co-founder shares his experiences with members of the SCV Startup group Tuesday

Posted: April 25, 2013 2:00 a.m.
Updated: April 25, 2013 2:00 a.m.

Bill Momary, founder of Ebyline, speaks to membersof SCV Startup at Small Dog Creative in Valencia.

 

A startup online marketplace that connects publishers with freelance journalists was created in the Saugus garage of its co-founder Bill Momary in 2009.

Speaking at the SCV Startup meeting Tuesday night, the Santa Clarita entrepreneur said his company, Ebyline, was just an idea back then as he and co-creator, Allen Narcisse, worked to build a platform that responded to the changing business models in America’s newsrooms.

In just a few years of operation, Ebyline has attracted two investments worth $6.5 million from The E.W. Scripps Company.

Both veterans of the L.A. Times, among other media companies, Momary and Narcisse came up with the idea of creating a “virtual newsroom,” where news organizations - struggling to operate with increasingly smaller staffs - can gather original content.

Today Ebyline has 2,500 pre-screened, vetted journalists on board whom freelance, Momary said.

“We only accept 10 to 12 percent of the applicants – reporters - we get,” Momary said. “It allows us to offer high quality, original content.”

The online company works with over 500 publishers, processing more than 350,000 projects through its system each year, he said.

Ebyline has since expanded its services to other industries requiring qualified content. Customers include Intel, Dun & Bradstreet and the L.A. Times.

Intel approached the company because it needed content coverage to market brands, Momary said.

“Diner’s Club also asked for gourmet dining reviews from around the world,” he said.

And Ebyline also began offering freelance video and photo services, in addition to print copy, Momary said.

“We can scale and grow quickly by satisfying a variety of news needs,” he said. But, the road to a growing success came one step at a time, Momary told SCV Startup members.


Risks
About three-quarters of venture-backed businesses fail to return investors money, according to recent research by Shikhar Ghosh, a senior lecturer at Harvard Business School.

His findings are based on data from more than 2,000 companies that received venture funding, generally at least $1 million, from 2004 through 2010.

But, failure doesn’t always mean closing the doors, Ghosh found. There is a difference between liquidating all the assets and failing to make a projected return on investment.

Instead, the study found investors might lose money in 30 to 40 percent of all startups – but investors continue looking for those companies that do succeed – and succeed big.

Garage mode
Spending an evening in an L.A. bar, Momary and Narcisse – who were employed at the time – sat down to pencil out their idea on a sheet of notebook paper, which Momary still has today.

The key to staying true to their vision, he said, was in asking themselves three questions: How am I making a difference? How are we helping? Does anyone care?

When in startup mode, Momary advises other entrepreneurs to do a lot of research. Every aspect matters and business owners need as much information as possible.

When pitching a startup business, there are four things investors care most about, Momary said. The company’s market size, how the company can grow, who its competitors are and what the exit plan is, he said.

In building their business, the two men built a payment tool into Ebyline, streamlining the whole process for news editors and freelance journalists alike.

The company collects 8 percent of the fee for each assignment; there is no charge to the journalists, Momary said.
As the business launched, Momary and Narcisse tweaked their business along the way.

Pricing was changed from a flat fee to a percentage of the fee the news organization agrees to pay the freelancer.

Ebyline also switched from offering content for sale to allowing news organizations to post their own assignments online so they could zero in on getting exactly what they needed.

And the founders spent time figuring out how to sell their business concept to customers.

“At first we focused on workflow tools — eliminating editors’ spreadsheets tracking freelancers and the hassle of getting them paid,” Momary said. “But that wasn’t sexy, it was really the plumbing.”

So he flipped the conversation to focus on the editors’ ability to generate content, by specific assignment, as needed.

In hindsight, Momary thinks the company launched its service a little early.

“I think we were a little early to market; the market wasn’t quite ready for us at the time,” he said.

In a relatively short period of time for a startup, however, Ebyline began growing.

Growth
In the first year of business, in 2010, the company exceeded revenue projections y 16 percent, he said. In 2011, it grew by 100 percent year-over-year.

And Momary sees even better years ahead as he begins closing sales with companies he first spoke with in 2011 and 2012.

The company has nine full time employees and another 15 supporting the company on a freelance basis, Momary said.

Within three years he expects the company to reach “critical mass,” the point at Ebyline becomes an everyday tool to news organizations.

One last piece of advice Momary gave entrepreneurs at the SCV Startup meeting was to remain focused on the business once it launches.

“As a startup adding customers, it’s very easy to lose sight of where you want to go and why,” he said.

 

 

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