Media coverage is very important for startups. It is how they gain respect in their community, it is how they can win investors, and it is invaluable in helping to recruit staff.
Positive media coverage will also help gain users of their products and services, providing valuable marketing services that could cost tens of thousands of dollars.
But the only reason media coverage of a startup and their product is valuable is that the media coverage is seen as a neutral third party -- it has no financial bias in its reporting.
The only acceptable bias is a thirst for a great story and selecting the best startups to write about.
If a startup cannot get media coverage on their own, they have some options:
- Hire a public relations company to act as a proxy and lobby reporters with telephone calls, email, and in person. This is expensive, typically in the $12 to $15K a month range.
- Buy advertising to promote their products and services. This is expensive, and advertising doesn't work well online, less than 1 in 1,000 ads get a click. And advertising doesn't carry the same cachet as a news story or feature report by an independent media organization.
Readers, will quite rightly, value a reporter's news story much higher than that of an advert or advertorial paid for by the company. An unbiased reporter provides a tremendous amount of credibility and trust.
And in today's world, where there is so much media being produced, of all types, it is extra important for startups to have good media coverage. If you aren't seen, you don't exist.
However, what happens if a leading news organization is conflicted in its coverage of Silicon Valley startups by the financial self-interest of one or more of its senior staff?
There's nothing much that a startup can do. If its rival startup has a financial connection with an editor or reporter, then it doesn't matter if it has a better product, or a better technology, and that means it might never receive the media coverage it deserves. It might not succeed at all. And that's a loss. It's a potentially a large loss for the world, too, if the startup has an important technology that could be widely applied.
As innovation takes root around the world, local startups deserve fair and unbiased media coverage, just as much as Silicon Valley's startups. As countries look to their ability to innovate and encourage entrepreneurism, in a bid to improve their economies, and the living standards of their people, unbiased reporting is very important. It affects not only startups but also government policy and education.
Reporting about innovation has become a tremendously important topic, precisely because it has such a large effect on society. "Innovation Journalism" is a vital research subject at Stanford University.
The Center for Innovation and Communication at Stanford University, conducts research into journalism, public relations, and public communications. It also has a Journalism Fellowship Program that began in 2004, that involves hundreds of journalists around the world.
The concept of innovation journalism was started by David Nordfors, the Executive Director of the research center, in 2003. He believes that innovation journalism is vital to the economic health of every country. Here is an early paper on the subject: http://www.innovationjournalism.org/archive/INJO-1-1.pdf.
There is also a conference every year, at which sometimes I've been invited to speak: The Eighth Conference on Innovation Journalism is coming up at Stanford University May 23-25.
Mr Nordfors says that ethics is a very important topic.
"The problem seems to me larger for Innovation Journalism than for mainstream finance/business journalism. Most stories on big companies will not make big difference for the value of the company, while a story on a startup can easily make a huge difference for the value of the company. Furthermore, startups are not listed, less transparent."
The Society For New Communications Research, a Palo Alto based think tank, of which I'm one of the Founding Fellows, is also interested in these topics for future research projects. (Here is a list of its recent research.)
It's interesting to note that media organizations of all sizes have taken great pains to institute, and police, an ethics policy that bars editors and reporters from investing in companies within the industries that they cover. That policy was discovered the hard way -- readers don't trust you if you are seen to be potentially biased. It triggers the BS detector in all of us. Disclosure of financial interests feeds the BS detector, it doesn't neutralize it.
By far the greater financial bias comes from owning shares in hot startups because the payouts are spectacular -- way more than you'll ever make from writing one million white iPhone stories...
High quality, unbiased media is good for business and its good for society -- it's a vital resource. As a society we need good data, so that we can make good decisions.
Media that is low quality, that is tainted by financial self-interest, is bad data. Software engineers have a saying: Garbage in, garbage out.
If you start with bad data, and then you process it, you get a bad result--no matter how good your code.
Silicon Valley, with its thousands of startups and its tremendous history of invention, deserves the very best media coverage -- so that it can do what it does best: producing great companies and changing the world.