Hungry For More
Carl Landau is one of the rare magazine entrepreneurs who's experienced launching magazines in both the b-to-b and consumer categories. In the mid-eighties, then-27-year-old Landau, with a total of two years of magazine experience as advertising director at Miller Freeman's Dr. Dobb's Journal, saw an opportunity in the fledgling micro computer environment for a publication called Computer Language, targeting professional programmers.
"I didn't know anything," says Landau. "Originally, I went to a magazine consultant and asked about launching a magazine with an initial paid circulation of 25,000;they said that would cost $350,000 to achieve."
Landau went back to the drawing board and figured that it would take $50,000 to do a direct mail launch. "The biggest difference between then and now is you could do direct mail and the response rates were fairly high," he says. "We did a hard offer asking for money and got an 11 percent response rate with 75 percent of that cash-with-order."
Backing came from the usual suspects: friends and family. Landau sold 10 units at $5,000 each. "It was really difficult because we had no track record. I had never been a publisher. They probably felt like they were throwing money away. "
Computer Language raised $100,000 off subscriptions upfront and Landau never had to raise any more money. He reinvested that $100,000 in more direct mail and raised another $100,000 on top of that. "Through direct mail we were promising this magazine that at the time didn't exist, and we raised $200,000. There's no way you could do that today," he says.
The first issue sold more than 30 ad pages and under Landau's ownership, Computer Language never published an issue with less than that. "We were in the black on our third issue," he says. That single title evolved into CL Publications, which included AI Expert and a 200-person conference. Sell-through averaged about 60 percent for the two magazines.
Two and a half years later, at age 29, Landau sold CL Publications to Miller Freeman for $5 million. While most would consider the venture a huge success, Landau laments selling too soon, particularly after watching Miller Freeman turn the conference into the 5,000-person Software Development show. "I wish I hadn't sold so early," he says. "There was a lot of growth on the conference side. Maybe we couldn't have developed it to the degree Miller Freeman did but the profit margin on shows is huge;it can be 60 or 70 percent while a magazine is usually 10 or 20 percent."
Landau worked as a part-time consultant for Miller Freeman for the next 10 years but felt the urge to launch a magazine again. "It was a good experience but I'm an entrepreneur," he says. "I knew how much work was involved. You have to dedicated your life to it."
In 1995, Landau started Niche Publications, which published Brew Your Own, a home brewing title. The magazine debuted at 25,000 circulation and Landau later sold the title to his circulation consultant with 40,000-strong audience. "It only cost $100,000 to launch," Landau says. "I knew ad dollar-wise, we could never ask for too much. We needed to build several different magazines. Every year we either launched a new magazine or conference." Landau eventually sold for between $2 million and $3 million.
"My theory is b-to-b is easier and you end up making more money," says Landau. "Everyone wants a fun consumer magazine but there's more competition. In my experience, the success rate for b-to-b is much higher."
Landau counsels entrepreneurs to stick to their skill set and hire somebody to do the rest. "My advice for entrepreneurs is to find out what you like. If you don't like administrative work, hire someone to do it."
Does he feel the itch to go back? "Oh yeah, and I will. Right now I teach ad sales seminars but I still have my fingers in publishing. My kids are at an age where they want to hang out with me. In two or three years, I can focus on starting a new magazine."
ï¾• Launched CL Publications with an initial investment of $50,000. Sold 2.5 years later for $5 million.
ï¾• Launched Niche Publications in 1995 with initial investment of $100,000. Built company into $2 million business.
ï¾• Words of Wisdom: "My advice for entrepreneurs is to find out what you like and what you're good at doing and if you don't like administrative, hire someone to do it."