If you’re looking for a trend in hyperlocal news, keep looking

An investor once called them “the cockroaches of local media” (because they should have died and didn’t). But Mike Orren and his team at Pegasus News are probably the best example of what works and what doesn’t for a hyerplocal news startup.

In the five years since Pegasus News launched in Dallas/Fort Worth, the company has survived near-death experiences and been sold twice. As recently as May of 2009, in the middle of the recession, the site was setting records for page views and advertising revenue. So Orren knows what it takes to survive the roller-coaster ride of an independent journalism startup, making his recent blog post essential reading.

Last week saw a number of developments in the hyperlocal space. While it’s natural to try to draw a trend from deals, launches, closures and acquisitions, it doesn’t usually work. Orren wrote:

In the market space in which I presumably operate, there were great examples at both ends of the spectrum last week. My pals at Everyblock sold their company to MSNBC, and instantly, Hyperlocal is a Business Now. Seemingly moments later, the Washington Post shuttered its “hyperlocal” site for Loudon County, VA — and voila, Hyperlocal is Dead. My friend, Greg Sterling, quickly saw the fallacies flying.

Orren analyzes his own experience with Pegasus News as an example of what a typical startup is likely to go through. In the end, he boils it down to this:

• Data is as important as news.
• Individual behavioral customization is the road to winning readers and delivering effective advertisers.
• What happens in your neighborhood or to people you know is as important, if not more so, than the three-alarm fire downtown.

Those are the core concepts Orren built the business plan around in 2004. “Today, these sound laughably obvious, if not pedestrian.,” Orren observes today. While five years of experience has taught him that his instincts were mostly right, it has also taught him that execution is everything:

Anyone who’s worked on or invested in a start-up will tell you that there are two parts to the business: the concept and the execution. While both are critically important, I’ll argue that a flawed concept with great execution has a better shot than the inverse.

If you’ve read this far, then you’re obviously bitten by the hyperlocal startup bug so be sure to read the entire post.

- Mark Briggs