Finding the Formula
Wiesner Publishing CEO Dan Wiesner's launch ambitions took off in earnest when he bought the Centennial, Colorado-based b-to-b and regional homes and lifestyle publisher from his father Patrick in 2002. In the last four years he's launched 16 magazines and three tradeshows.
The self-described "operator and builder" has not been as active in selling properties, but he orchestrated the seven-title homes and lifestyle group sale to NCI last year for approximately $20 million. A close look at those titles reveals a launch formula that Wiesner has perfected that can tell him he's got a winner within a few months.
"People say, ďľ‘How do you start a magazine?' and it's not something you plan for," says Wiesner. "It's more or less serendipity in that sometimes things just happen." Wiesner adds that he doesn't start magazines with the intention of selling them. "I don't set out to say I'm going to start this to sell it."
Take, for example, Wiesner's financial group, which includes Senior Market Advisor, Benefits Selling, and Boomer Market Advisor ("Anything you put the word ďľ‘boomer' on is going to make money these days," says Wiesner). All three titles were launched as a result of a suggestion from a friend Wiesner ran into at Home Depot. Senior Market Advisor does close to 2,000 ad pages per year and the group, which includes two tradeshows and 12 e-newsletters, accounts for 75 percent of the company's revenue.
Wiesner expects the group's growth rate to be 25 percent this year. "You get that [growth] because you can grow start-ups really fast. You probably couldn't do that with an acquisition in the same way. Start-ups come in starting from zero and acquisitions are starting from, say, $4 million to $6 million. Starting with a mature $4 million magazine in a market is very difficult to grow that fast," says Wiesner who adds that a successful start-up should be able to reach $4 million in four years.
The seven titles that Wiesner sold to NCI were essentially all based on the same formula Wiesner cracked with the purchase of Colorado Homes & Lifestyles in 1989. Subsequent purchases Southern Homes and St. Louis Homes were changed to Atlanta Homes & Lifestyles and St. Louis Homes & Lifestyles. Then Wiesner started Seattle Homes & Lifestyles, Mountain Living and Log and Timber Style. All were based on the same formula;a high-end local home design magazine with local editorial and vendor advertising and a 35,000 circulation with one-third newsstand, two-thirds paid subscriptions. "Basically what we did there was start six magazines by copying a formula to a different city," says Wiesner.
Wiesner says his companies have never used investment capital for start-ups, relying instead on capital generated from within the company. Trial launches are capped between $300,000 and $500,000 and must meet a $1 million revenue benchmark before they're able to make any money. "$300,000 to $500,000 is $50,000 to $60,000 per month, so it's not like you have to come up with it all at once."
As for acquisitions, Wiesner won't buy anything beyond 80,000 to 100,000 circulation "because the economics there could sink you." Maintaining that kind of circulation at $50 per subscriber is too prohibitive for a company like his, says Wiesner.
Startups, says Wiesner, should have legs within three months. If they don't, you may have a $500,000 dud on your hands. "It doesn't take five years to build a good magazine," he adds. "In a year you'll know if it's a failure, in three months you'll know if it's a rocket ship."
Healthy advertising is one indicator that you've got that rocket. "If you do it in the fall you get the contract season going and you get to look almost 12 months down the road. That's our formula."
ďľ• Launched 16 magazines in four years.
ďľ• Applied a regional editorial and sales formula to seven titles resulting in a $20 million sale to NCI.
ďľ• Words of Wisdom: "Don't get emotionally attached. Pick a number that you're willing to spend and don't go past it."