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Backfence

The business, the turning points, and the decisions behind them.

Founded2004
Event year2007
FundingUS$3M

01 / WHAT IT BUILT

What the company did

Backfence was a hyperlocal citizen journalism pioneer based in Falls Church, Virginia. Founded in 2004 by news veteran Mark Potts and Susan DeFife, the company ran 13 community news sites from the Washington D.C. area to Chicago and California where ordinary residents could write and publish their own articles, announcements and neighborhood reports with no editors in between. The idea was that user-generated local content could challenge the traditional top-down news model. The company raised $3 million in venture capital from SAS Investors and the Omidyar Network in October 2005, and posted a shutdown notice on all 13 of its websites on June 29, 2007.

02 / Backfence FAILURE REASONS

Failure reasons

Backfence failed because it could not turn its hyperlocal model into a self-sustaining business before its money ran out. Co-founder Mark Potts later wrote that the company raised and spent $3 million but was unable to make the leap to self-sustainability, pointing to fundamental internal problems. The company scaled too fast, launching 13 community sites before winning real traction in any single town; residents were given little guidance, so content never took off and traffic across all 13 sites never reached a level that measurement services could even track. Media analyst Vin Crosbie called the concept roughly a decade too early for the local advertising market. In January 2007 CEO Susan DeFife resigned and staff was cut from 18 to 6, and on June 29, 2007 the sites were shut down.

03 / EVENT HISTORY

Events in the structured record

  1. Operations ended

    Poynter reported that on 29 June 2007 the hyperlocal network Backfence announced it was ceasing operations; Potts told PaidContent investors chose to shut the sites rather than run them without sufficient support while still talking to possible buyers.

04 / CONTEMPORARY REBUILD ASSESSMENT

Difficulty of rebuilding this project today

Material for this section is being gathered and checked. It will appear here once ready.

Rebuild difficultyPending assessmentNot completed
Scoring basisNot completed
ScalabilityPending assessmentNot completed
Scoring basisNot completed

Overall assessment: Not completed

05 / CAUSAL CHAIN

How the factors connect

  1. 01

    The company raised $3 million in venture capital from SAS Investors and the Omidyar Network in October 2005.

  2. 02

    In January 2007 CEO and co-founder Susan DeFife resigned and the company reduced staff from 18 to 6 to conserve cash.

  3. 03

    On June 29, 2007 Backfence posted a shutdown notice on its 13 websites and ceased operations, having spent the full $3 million without reaching self-sustainability.