The McKinsey & Co. managing director has been involved in the project since spring, when Hellman brought her in to help define the need and a business plan. She has nearly nine years in media and business experience but her educational background was in chemical engineering and her resume starts with jobs in other fields. An edited transcript of our conversation follows.

Why is someone from your background the right person for this?

Lisa Frazier: I have almost nine years of experience in the media industry; that’s what my focus has been at McKinsey & Co., and as part of that I’ve had the opportunity to look at various types of different business models, in the online space, the news space, information, television, you name it. This is a true asset to the Bay Area News Project, because that’s what this is about. What we need to fill the unmet need here and support journalism—which I’m very passionate about—is to create new models. That’s what we’re here doing and that’s why the business and media expertise that I have, I think, is one of the key elements why the organizations bringing together the Bay Area News Project, why they approached me to be CEO. I was very surprised and thrilled. It’s something I’m very passionate about. I was so excited to get the offer. I can’t wait now to build this thing with Jonathan. 

Jonathan, you come from such a different background, having started a publication as editor but what you’ve been doing for the last few years at New West, what do you think that gives you coming into this experience?

Jonathan Weber: I think that at New West, as you know, we’ve been at it for five years, building a new kind of media company that’s really focused on online and creating new ways of doing journalism and more collaborative ways of doing journalism and different kinds of contribution models, not to mention all the kind of technical and business side aspects that have gone into that—building a site, selling ads, and doing conferences and all those things. Those experiences are very directly relevant to what the News Project is doing. ... Previously I’d been at the Industry Standard. Probably two things I would take from that that are especially relevant: one being the experience I had in building and managing a staff. I built the staff from scratch and we had a terrific team; I certainly learned a lot and I feel I now understand a lot about how to hire and how to create a great team. The second thing that I focused on at the Standard,  and that I think will work well here, is developing a kind of a voice and style of the publication.

You were building a sustainable profitable organization in New West? How does a non-profit differ?

Weber: For me, there’s a big difference in that I am not in charge of the business side of the Bay Area News Project, unlike at New West, and I’m delighted that Lisa is going to be leading the business side. In terms of profit versus non-profit, I’ve certainly been an advocate of the for-profit model. I do think there are for-profit models that work, but at the same time, the reality these days is that investment capital is not going into for-profit companies where the primary use of proceeds of that capital is to pay journalists. For whatever reasons, investors have not seen that as a big opportunity to date. There may be a few exceptions in narrow niches but certainly for general news there’s been very little investment of that type.

I think Lisa and the folks she’s worked with have done a great job in building the business model for this organization. It’s a non-profit business model but certainly has some of the kind of elements and considerations.

Can you describe the business model you’re working off of for Bay Area?

Frazier: There are a couple of elements I’ll highlight for the model we’ve put together. First, there are multiple funding streams. This is a community-supported organization so there will be opportunities for individuals to contribute but also foundations as well as opportunities for sponsors, corporate and otherwise. The second part is around collaboration; this is about creating partnerships, co-creating content, co-distributing content with other organizations in the area. This is not about an organization being standalone. It’s about working with the other wonderful assets of the Bay Area.

How do the finances work with the New York Times? Are you paid directly? Revenue sharing?

Frazier: I can’t go into those details. There is a financial arrangement but I cannot share the details.

What happened with KQED?

Frazier: Let’s step back for a second and apply a little bit more context about where we are and what their involvement has been to date. Somewhere in the summer, we approached KQED with our idea of a news organization to fill the void that’s been created by the loss of journalists in the last five years. They were taken by our analysis and were energized and excited to support the Bay Area News Project and provide it with advice and news counsel. Very early on, we all mutually agreed that this needed to be an independent organizations, needed to stand alone and innovate around journalism. There were some discussions around governance model and a role KQED could play potentially on the board of the new project but we decided an independent organization with an independent board best meets the needs for the BANP. We’re now working on building the newsroom and starting to create the content, and we’re very excited to continue conversations with KQED about the content collaboration piece now and very open going forward with KQED and others as part of our model.

But Berkeley (the UC Berkeley Graduate School of Journalism) is still listed as a founding partner?

Frazier: Berkeley has been involved for almost the same amount of time They’ve been advising the team, giving their advice and counsel, establishing what are the challenges in local journalism … Our relationship with Berkeley has a number of elements to it, which includes R&D and innovation around the craft of journalism, bringing the education piece to the practicing piece of an active newsroom. They’ll also be potentially the portal to other schools at Berkeley, whether it be the engineering school or other schools to help us innovate. The students themselves will be involved. We’re creating jobs here. ….

Jonathan, when do you start producing pages for the Times?

Weber: It will likely be in late spring. My hiring is kind of official in the last kind of day or two and I’ve obviously got a staff to hire, a team to build up before we can start producing pages. We’re looking at late spring both for the New York Times collaboration and also for the launch of our own products, the website and mobile. Just to clarify, the Times (is) certainly a very important partnership for us but our own website and our own products are going to be very important, too. The mission of the organizations is not strictly to create pages for the NYT. I have a very good relationship with the NYT and I’m very confident that’s going to proceed smoothly. It’s certainly going to be a lot of work but I’m very confident. They were a little bit involved in my selection and I think they’re very comfortable with me.

Where will your salaries fall and how much of a budget will you have to run the newsroom?

Weber: From a newsroom standpoint, the goal, I think in your post the other day you wrote 12-15 journalists in the first year, which is probably slightly on the low side. We’re talking more like at least 15 by the end of the year. And we certainly expect to pay competitively. You can do the math and figure out what some of that looks like from a salary standpoint. It’s critical that we have a very talented team.

Frazier: We’ve been focused on a five-year model, so getting to sustainability in five years and our aspiration in the outer years is to have an operating budget of $8-12 million. ... My salary—the offer is a $400,000 salary. What was important to all the organizations that were involved in the BANP was that they had someone with business and media expertise to complement a strong editorial lead and I was very thrilled and excited when I received the offer. I’m very passionate about journalism and I’m very excited to have the opportunity. … Other salaries will be worked out but as Jonathan says, we believe we’ll be competitive.

You’re talking about not trying to do a hey, gang let’s put on a show. This isn’t for profit, this for education and the greater good of the world and we aren’t going to run this like a business.

Frazier: This is very good for the community and a lot of cities are suffering similar to the Bay Area. We’ve lost a lot of journalists. The coverage of the core civic beats has declined twice as fast as more local-interest beats. This is about creating jobs for journalists and enabling them to practice their craft. We’re building an institution. We’re here to provide this community service to the Bay Area for years to come. 

Weber: To elaborate on part of what you were asking, that is correct that we’re not going to be out there saying you need to write for us for charity and the public good. We very much see this as a public good, and there are a lot of positive things associated with that but we certainly don’t see the public spiritedness of the people involved as being a substitute for a salary.

We don’t have equity to give. If you’re hoping to make $10 million in an IPO, this isn’t it. If you want to do great journalism and work with a great group of colleagues and be part of an organization that’s having an impact on the public sphere in Northern California, I think it will be a great place to work

Lisa, what about your staff?

Frazier: It will be a progression as we go. We also need a small tech team, a business team to support the newsroom. (She said my overall estimate of 25 was probably too high.)

Weber: In particular we are currently hiring a technology and product director. This is the kind of position I think a lot of media organizations have not really had in the past and that is an expression of our commitment to a sort of product-oriented way of thinking about what we produce, and I wanted to emphasize this point if you know of anyone who is good for that. I couldn’t resist because I know the readers of paidContent are right at that intersection of tech and media.

Can you talk a little bit about your competition? This is a competitive sport—collaborative and competitive at the same time.

Weber: I’ve always had this question when I’ve run journalism organizations. I hadn’t really thought of this before but the answer is always actually kind of the same, which is there are many different kinds of competitors in different areas. … The nature of the environment currently is that in a lot of situations you’re going to be both collaborating and competing with the same entities sometimes. I don’t think there is even a competitor or a competitive set per se. It’s a very complicated set of interlocking relationships.