Community Impact's Newspaper "Flywheel" -- Transforming the Old, Nurturing the New (Part 2)

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It's one thing for a media executive to say that a dual-revenue-stream business model makes a whole lot of sense. After all, cable networks paved the way with that decades ago. But the newspaper industry has gone through a sometimes-tough learning curve when adding digital offerings to the asset portfolio.

However, John Garrett says he's found a secret sauce for dual revenue success. He is a co-founder, along with his wife Jennifer Garrett, of the Texas-based newspaper company Community Impact. He briefly discussed his very successful "phygital" strategy in a Q&A interview that appeared in MFMInSites last month. But we wanted to provide more details about what he refers to as his company's "dual transformation."

That term refers to a process whereby an established company creates a second, more nimble entity. The legacy company goes through a process of transformation at the same time that it gives the newer company both resources and assets that allow it to develop products or services that are successful. That newcomer entity within Community Impact is called Project05.

In a recent conversation with MFM's Krista Van Lewen, Garrett explained how that's played out.

Krista Van Lewen: How did you discover the concept of dual transformation?

John Garrett: I attended a virtual conference from a CEO group called Tugboat [featuring] Mark Johnson, one of the authors of Dual Transformation. I see the opportunity as truly dual: that you can both transform your print product and create a digital product -- and their success can feed off one another. The examples in the book are fascinating. In some examples Company B is an entirely different entity.

I think for smart media companies, dual transformation can actually act as a flywheel. Not seeing a lot of that in the industry, and it's a huge missed opportunity.

I heard the term "phygital" during the pandemic and realized that's exactly what we're doing: we're blending both a physical product [print editions] and a digital product [electronic newsletters].

Van Lewen: What made dual transformation different than other dual revenue strategies?

Garrett: I knew we needed to play more in the digital space, but I didn't like the models out there. How do you get the legacy team to innovate when they're very busy with their current jobs? [The dual transformation] concept said: "You're not quitting on your legacy; you can still innovate and it's important to your future. But on the digital side, you need a team with a level of independence to allow it to innovate." This was the first recipe I'd seen that was encouraging. The idea is to keep the legacy business going but also transform it in a positive way.

Van Lewen: Was there a "secret sauce" that made dual transformation work for Community Impact?

Garrett: Our legacy model is well known: it's a physical product delivered to our reader's homes each month. What's new is that we're exploring our company's DNA, which I describe as: "We are curious."

We're curious about other models out there and study them. It's being curious, doing the work, and not copying what everyone else is doing. Once you see something with legs, you go all in. You source it with people with a good, clear vision who are curious themselves and do good work. We have a beloved brand now, so when we started getting into the digital space it carried over.

Van Lewen: How long did it take to launch your second company, Project05?

Garrett: One of my goals for 2021 was for Project05 to successfully launch and be able to test the digital flywheel. Our critical transformation year for digital was 2022, and 2023 will be our critical print transformation year.

By 2024 our print product will look a bit different. It will be subtle for our readers: they already like what we're doing, but the goal is to build a more modern way of storytelling. We'll use even more infographics, photographs and explanatory journalism in a way that engages our readers on complex and sometimes divisive topics.

Van Lewen: You've called dual transformation a "difficult process to navigate." What were the most challenging aspects?

Garrett: It's mostly around my personal struggles on patience, on product, on the numbers. I want the results more quickly. A couple of navigations have been confusing, like getting the reporters for our print products to provide enough content for our digital newsletters.

Now the heads of each team are collaborating. They're getting people to do more, but not in a way that interferes with what they're already doing. Technology has moved so fast and has provided us with many resources to build great products.

On the flipside, we're benefiting from our strengths. For one, our shareholder structure is just Jennifer and me. I study everything I can get my hands on related to the news industry. Our structure, my curiosity, and our sales culture make a great recipe for experimentation.

Van Lewen: Are you still adding 600 subscribers to your digital newsletter each week?

Garrett: Yes. We're in the early phase of seeing digital revenue dollars soar. It's still a small percentage of overall revenue. What's crazy is that our print revenue is still growing -- we're both competing with and benefiting from that. That's the flywheel.

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