When Is A Media Model A Revolution, And When Is It A Unicorn?

by Clay Shirky

I stepped in it earlier this week when, as I was trying to say something about the economics of media, I mischaracterized NSFWCORP’s business. Paul Carr, their CEO, replied, I apologized to Carr in the comments, he accepted that apology, and, mercenary bastard that he is, even found a way to extract reparations, via the Conflict Tower, which turns conflict-of-interest reporting into a revenue stream.

So, with that all settled and a parade of rainbow-flavored unicorns once again frolicking in the dells of New Media Land, let me take another stab at what I wanted to say about the media business and what we can — and can’t — learn from NSFWCORP. The last thing anyone needs is more concern-trolling about mainstream media, so here’s some now.

You can’t understand NSFWCORP without understanding Las Vegas, and not just Vegas in general, but Vegas right now. And you can’t understand Vegas right now without understanding the Downtown Project, Tony Hsieh’s moonshot-scale attempt at bootstrapping a thriving cultural hub, no small job in a city where electronic dance music counts as high art.

Hsieh is serious about this, investing a quarter-billion of his own money to spur his planned urban renaissance. (Urban naissance, really.) He’s re-located Zappos there, and not to the “marble everywhere” Vegas of the Strip. (Iconic restaurant: Spago). He’s relocated Zappos to the “cigarette butts everywhere” Vegas around Fremont Street. (Iconic restaurant: Heart Attack Grill, where patrons over 350lbs eat free.)

Hsieh has bought up an extraordinary amount of real estate in the unlovely area around the new Zappos offices. He uses The Ogden, the building where he’s leased his penthouse and dozens of other apartments, as a base of operations for the project, as well as a venue for housing both visitors and new businesses, all while he tries to figure out how to weaponize the creative class and turn a previously failed neighborhood into a destination.

Though the Downtown Project is small (the whole Vegas tech+design scene could fit in a Bushwick warehouse), it’s genuinely lively and interesting, and a bunch of third places have sprung up to service the Zappotistas and their ilk. The Coffee Shop Where HTML5 Is Discussed has appeared, as has a nice little tech library and co-working space called /usr/lib (bonus points for filesystem jokes), along with a video-game-laden bar, Insert Coins, which is — and as a New Yorker, I say this reluctantly — the best drinking establishment I have ever been in.

Between sundown and last call, Insert Coins represents everything The Downtown Project hopes to get right. It attracts a crazy number of groups that, in a big city, would each have homophilous little boîtes, but there they all are: gay, lesbian, straight; black, brown, white; people with a junkyard of facial piercings alongside people whose only body modifications are fillings. There are pasty-faced geeks whaling on Street Fighter, ignoring and being ignored by party girls sporting Just Covers My Pudendum hemlines, and presided over, last I was there, by a skinny Asian DJ in comically large headphones, digging through her vinyl to spin some Biz Markie. It hosts more subcultures than the West Village ever did; if Jane Jacobs had been a lush, she would’ve drunk herself to death at Insert Coins.

Which is where NSFWCORP comes in. If you want interesting drunks in your bar at 2 a.m., those selfsame drunks have to have work nearby at 2 p.m., and drinking and writing have been besties since the Phoenicians invented the alphabet. Most Vegas nightlife exists to service the weekend’s worth of morally compromised behavior every American has in them, but if you want to lively-up your neighborhood with a cadre of citizens willing to exercise questionable judgment night after night? That takes writers living nearby.

Carr has concluded that he faced Sophie’s Choice between being a drunk and being a boss, but his employees have no such dilemma. For Hsieh’s vision to work, people like Carr have to be able to attract and hold talent, and for NSFWCORP to work, downtown Vegas has to have enough places like Insert Coins, and /usr/lib, and The Beat coffeehouse, that those talented people can imagine sticking around.

This helps explain why Hsieh’s Vegas Tech Fund, NSFW’s biggest investor by an order of magnitude, tendered what Carr’s lawyer calls ridiculously generous terms when they invested in NSFW, why Carr located World HQ in The Ogden, and why he wants to help the area become more than just “Zappos Town.” The media investment benefits the real estate play and vice-versa, which makes the NSFWCORP and Downtown Project a terrific fit.

But here’s what that fit is not: Broadly replicable. And that is what I was trying to say about NSFWCORP in that interview — I like what they’re doing (I’m one of their earliest print subscribers), but I don’t think they represent How We Media Today.

You couldn’t stick your little finger through the part of the Venn diagram that holds NSFWCORP — brilliant founder, small capital outlay, tight control of costs, bespoke infrastructure, no legacy assumptions, or habits, or pensions. No fixed beats. No local audience. A staff eager and able to try new things. A strategic investor who needs the employees to like hanging around the neighborhood after work, all in a city whose real estate collapse amounts to a monthly rent-check subsidy.

Now one possible response to this list is that NSFWCORP isn’t so unusual, that every successful media outlet exists in some unique confluence of opportunity and capability. And what’s so crazy about that seemingly plausible reply is that it’s not true, or at least it wasn’t true in the 20th century. In the Good Old Days, you could basically copy your way to profitability — if Baltimore has a successful alt.weekly magazine, then maybe Phoenix could too!

Or you could MadLib a new category. Do you like to accessorize? Do you like movie stars? Because InStyle thinks maybe you would like a magazine about how movie stars accessorize. Or just rifle the card catalog. “Baseball, football, golf, soccer… Hey! There’s no magazine about volleyball. We could call it… Volleyball Magazine!” (Lest this seem an exaggeration, recall that Cigar Aficionado turned out to be a good idea.)

So when media companies talk about “the solution” or “the answer” to their current economic problems, what they really want to know is “Who should we copy?” Because the media business has always been about copying 95% of some existing form, then adding 5% accessorizing movie stars or whatever. And now that most of the obvious candidates are no longer imitation-worthy, people want to know which new organizations to copy. Because if survival comes down to the geniuses in the corner office figuring it all out on their own, a not inconsiderable subset of the existing media business is screwed.

I want NSFWCORP to succeed (and as of Tuesday, I’ve bet a few hundred dollars that they will). I also love downtown Vegas, and I hope it helps and is helped by NSFW. But when Step 1 for your business is “Take most of your investment money from a visionary and patient .com multi-millionaire/real estate mogul with a heart of gold,” it kinda doesn’t matter what Step 2 is, replicability-wise.

In the current upheaval, the desire to anoint someone else’s model is the mainstream media’s Achilles’ Leg. The real lessons of NSFWCORP are a bitter pill: Locate in an inexpensive city. Keep costs brutally low. Stand out from your peers. These can be good lessons in the right hands, but they aren’t the parts that are easy to copy.

So (here’s a sentence I never imagined writing) I wish Paul Carr was more prone to bragging, because his ‘We’re figuring this media thing out!’ posts actually understate how unusual his position is. The curious alchemy of combining two odds-against projects — saving an American downtown, and launching a profitable media venue — and ending up with something so crazy it just might work is wonderful. But it isn’t a template for much else, at least until Macau becomes a media hub too.

Clay Shirky is an Associate Professor at NYU.