Profiling Shoba Purushothaman of The News Market ahead of Knight's News Entrepreneur Boot Camp

Purushothaman, born in Malaysia to a Sri Lankan family, found herself at the intersection of PR and journalism after spending time working in both fields. With a BA in English literature and Japanese language from Monash University in Malaysia, she worked in journalism at Malaysian Business magazine before attending a six-week fellowship in the U.S. That led to graduate school at American University where she studied business reporting in 1987. Dogged persistence yielded her an eventual internship with The Wall Street Journal where she covered economics and Japan-centric trade issues. She was hired full-time by the Journal in 1988 and covered financial markets in New York before working for Dow Jones Newswires in London until 1994.

At that point, however, Purushothaman made a career leap, co-founding Bulletin International, a new broadcast PR company, with Anthony Hayward.

"I happen to be convinced that journalism is a fantastic learning ground for entrepreneurship," she said. "The skills of communicating, the skill of going through lots of information, finding out what's important, discarding the worthless stuff or not-so-useless stuff, and being able to ask questions. ... The thing that journalism doesn't really expose you to is managing people."

Because of those differences, Purushothaman said the Bulletin jump was much bigger than the leap she took in launching The NewsMarket.

"It was not just jumping from journalism to PR, but it was really jumping from being an employee to something very entrepreneurial," she said. "It was jumping from working for Dow Jones and The Wall Street Journal in Europe to an unknown brand and organization."

While growing Bulletin into a respected international PR agency, Purushothaman became aware of a growing market need that was not being served by any existing entity: The delivery of broadcast-quality video in a timely manner to journalists. The methods used at the time were inefficient, expensive and difficult to scale, involving either satellites or couriers and tape.

What could Purushothaman and her partner Hayward contribute to meeting this need? She cites "the understanding of the tension between PR and news. There was a need on the part of both journalists and PR for what the other had. That whole relationship could change. There was a more efficient way. The world was changing."

Purushothaman and Hayward established a proof of concept for The NewsMarket through their existing dealings at Bulletin. While self-funding and landing an angel investment of $1 million in 2000 to launch The NewsMarket, they also lined up existing, big-name clients. Early clients included people at large global brands such as Rolls-Royce and Motorola.

"We went to some of these brands and said 'We can't raise money to build this idea, but if you trust us and believe in this, would you pay us a year in advance to product develop?'" Purushothaman said. "And they did."

Initial-year revenues of $300,000 combined with the investing of $2 million from the 2001 sale of Bulletin proved essential to The NewsMarket's early survival as it tried to establish itself in a challenging market, post-tech bubble.

Purushothaman said she and Hayward had to overcome both issues of perception and lack of connections to potential venture capitalist investors.

"I was an Asian female and my business partner was a British male," she said. "None of us had real links into the community here. We didn't have classmates that went to Harvard and Yale and Wharton who are now in venture capital firms and law firms or accounting firms.

"There was a reluctance to fund sales and marketing people," she said. "People were writing checks for engineers, for technologists and scientists or whatever, but not necessarily the kind of people with our background."

Instead of letting such potential obstacles set them back they chose instead to exploit that which set them apart.

"I started exploiting the fact that I was from a different part of the world, a fast-growing part of the world that American brands wanted to try and reach and that we had built companies, we had started a business in London and grown it in Asia," Purushothaman said. "This is why we were uniquely qualified."

They also made a conscious decision not to get too caught up in jargon or buzzwords when pitching their service.

"We started really talking about the pain points in marketing and describing very, very visually," she said. "We would take Beta tapes into our fundraising pitches and say, 'This is how people are sending it, and here is the FedEx envelope, and this is a label, and this is a shortlist. Can you imagine doing this?'

The approach worked. To date the company has raised about $20 million from angel investors, founders and venture capital firms.

The NewsMarket's business model relies solely on the content creator paying while the journalism entities receive the content for free.

"Everything that we do, we do ... with the journalist in mind," she said. "We're actually building a product and a company that is serving the entity that doesn't pay it. It's a very, very difficult thing to do as an organization because your tendency is to please the person who is paying you. So it's a constant tension and battle to reengineer the organization to say, you know what? It really, to some extent, doesn't matter what the client wants. We need to satisfy the user.

"And yes, you do care about your customers, but the trick is that the customer is going to be satisfied if you please the user."

The company's revenues have grown steadily, Purushothaman said, including some years where they have grown 100%. While she would not disclose exact figures, Purushothaman said the company's earnings last year fell between $10 and $20 million and they expect to see double-digit growth this year.

Despite this success, the company was not immune from needing to make cuts during the worst financial crisis in decades.

The company recently underwent a round of layoffs to reduce its workforce from 80 to 65, which Purushothaman says highlighted the fact that they had grown too big.

"We've lost some really good people ... But the bottom line is we've now come out on the other side of the cuts, and we're not feeling it, which meant we probably needed to take those - we definitely needed to take those cuts. We were probably overstaffed. And I think that's a pretty big structural shift that everyone's feeling.

"These kinds of severe downturns are an opportunity for the survival of the fittest. And I think that that's the mental shift, that you have to go from forgetting that this is business as usual."

Purushothaman said she has developed a wide-ranging advisory network of support.

"I categorize the kind of help that I need into different components. There is some industry help, and there are a few clients that I am close with who I have a lot of respect for, and vice versa. Really understanding how their organizations are thinking, what they're thinking about, doing, how they're spending, what services they need. And then I have some investors that are fantastic. Some of them are very successful entrepreneurs, people who have been in the news industry or the marketing industry."

That network is not limited to people she knows in person.

"I actually consider the ether quite a valuable voice as well, so I read quite a lot. And I think there's some terrific writing. That's the beauty of things right now. There's so much great writing and analysis going on, that if you're looking for that kind of stuff you can find it in the public domain."

The announcement of James Lonergan as CEO is intended to provide operations support to a small but global company that is looking to scale larger. Lonergan, who has more than 15 years experience in managing and growing information businesses, left his position as Executive Chairman and Director of publishing company Sports Information Group. Prior to that, he was President and COO of media and publishing company TheStreet.com from 2001 to 2007.

Purushothaman described the move as putting The NewsMarket into "'all systems go' mode."

"Having seen the company through a very tough infancy, it's good for us to mark the 'growing up' and new era with a new CEO who can take us to the next level. As you know from many examples, many founders bring on professional management pretty early on while others pick a moment.

"I guess we picked our moment and think this is it!"