Go Your Own Way: Editors Turn Entrepreneurs
Three profiles of editors launching online startups.
Are there any editors who haven’t at least toyed with the idea of starting their own business? Working within the cocoon of an established publisher, particularly one of the larger players, certainly has its perks but most editors, at some point, have thought they could do it better on their own, without being hampered by budgets and restrictions that someone else set.
Today the Internet makes launching an editorial startup that much more viable. While grassroots bloggers emerge daily by the thousands, many professional editors are turning their own personal content channels into viable businesses as well.
In this article, FOLIO: looks at three editors who recently went out on their own, from hatching their ideas to securing funding to, at least in one case, seeing the money start to roll in.
Rieva Lesonsky Practices What She Preached
Former Entrepreneur editor puts her lessons to the test with a fast-growing freelance custom startup.
As editorial director of Entrepreneur, Rieva Lesonsky schooled budding entrepreneurs on launching their own businesses, from leveraging contacts to soliciting funding to the nitty-gritty of permits and applications.
Today Lesonsky is putting her own teachings to the test as founder of SMB Connects, a network that puts small business together with government agencies and organizations, and as a freelance and custom editor. Lesonsky left Entrepreneur earlier this spring after the magazine went on the sales block with a whopping $200 million asking price (but ultimately dropped its sales plans, citing a difficult market for raising debt financing).
The first steps for Lesonksy were to plan her exit and weigh her options. “Having talked about entrepreneurship for so many years, I knew you couldn’t be impulsive and just say, ‘I’m outta here,’” says Lesonksy. “You need to look at what your strengths are. I had strengths in editorial and strengths in the small business market.”
Leveraging established contacts was key. “Once a month, I have lunch with someone who I helped start a sunglasses business 14 years ago, they’re doing very well,” says Lesonsky. “When I said ‘I gotta get out,’ he said, ‘I’ll give you $50,000.’ Then his brother matched it.” When Lesonksy asked her cousin about using the COBRA health plan, he chipped in too. One of her business partners had three brand new computers sitting in storage. “To do what we’re doing doesn’t take a lot of money,” Lesonsky says. “It’s not like we’re setting up a manufacturing line.”
She also recruited other Entrepreneur editors including three of the top editors, then contacted a researcher that had worked with Entrepreneur in the past.
Change in Plan
Lesonsky thought SMB Connects would be her initial focus, possibly launching a newsletter and a live event. “But when it was announced I quit, my phone started to ring,” she says. At the same time Lesonksy and her partners were trying to launch SMB, they struck several content deals both with publishers—including AllBusiness.com and American City Business Journal—and marketers such as Toshiba and Microsoft.
For AllBusiness.com, Lesonsky writes weekly columns and hosts weekly podcasts (hers is the fastest growing column on the site in terms of traffic). For American City Business Journal’s bizwomen.com, Lesonsky writes three blogs a week. She also writes five blogs a week for Microsoft’s Office Live for Small Business and a column every other week for Microsoft Small Business.
Lesonsky got a lead on Toshiba when a friend who works there said the company was revamping its Web site. Since then, Lesonsky and her team have created resource centers on Toshiba.com for several different divisions and the company has asked if they can do two more. “My whole life has been in editorial but now I had to be a salesperson as well,” says Lesonsky.
While Lesonksy didn’t get her operation off the ground until May 1, she says they will have generated $474,000 in revenue by September and she expects to be well past the $500,000 mark by the end of the year. Lesonsky also has high hopes for several new initiatives that are currently in the planning stages. “It would be nice if we can double $500,000 next year but if we come in around $800,000, we’ll be past profitable,” she says.
Lesonsky now has personal experience with much of the advice she used to dole out at Entrepreneur. “My first call for AllBusiness, I said, ‘I apologize to you entrepreneurs because I’ve said it’s so easy to start a business,’” Lesonksy says. “The biggest surprise is the minutia. You know what you’re good at, what your passion is. But then all of a sudden, you have to get business licenses. You have to pick a phone system, which is a crazy experience. At a magazine, you know what you have to do every single day in terms of deadlines and assignments. Here, other than knowing your deadline for a column or a post, it’s always changing day-in and day-out.”
Having counseled other entrepreneurs on how to get started, Lesonsky now has some advice for editors looking to strike out on their own. “A lot of people in magazine jobs think of themselves just in those terms—‘I’m a magazine person, I’m a journalist.’ But you’ve also developed another skill, an expertise in the area you cover, and that’s more marketable than your skills as a journalist. Focus on that expertise rather than try to market journalism skills. Every day we look at each other here and say, ‘Why didn’t we do this sooner?’”
Standing Among the Celebrity Online Crowd
With a throng of competitors, former NYT Hollywood writer Sharon Waxman to launch entertainment news site the Wrap News.
Following the high profile departures of Tina Brown and Bonnie Fuller from their respective traditional celebrity publishing careers in order to launch their own online sites, former New York Times Hollywood correspondent Sharon Waxman joined those ranks in August when she announced the closing of $500,000 in first round funding for TheWrapNews.com, an entertainment news site she hopes to launch next January.
Waxman, in launching The Wrap News, is transitioning from a newspaper writer to an entrepreneur who is managing a business and, eventually, a staff spanning both coasts. “I’ve become an entrepreneur, a businesswoman, rather than merely a journalist,” she says. “This has been a crash course in entrepreneurship, learning all of the ins and outs of digital media and how that business works.”
Having covered topics ranging from studio sales to corporate mergers to the Oscars, Waxman—a native of Cleveland, Ohio—wrote about Hollywood for the Times until her departure in January. Before that, she served as a Los Angeles-based correspondent for the Washington Post, a position she held from 1995 until 2003.
Waxman has been developing the concept for the Wrap News since last summer. “I longed to do something to counter the demoralized atmosphere not just in my newsroom but in those of virtually all my colleagues at other newspapers,” Waxman tells Folio:. “It occurred to me that while the Internet can’t support the costs of an entire newspaper, it can support the essence of what journalists do—reporting, writing and editing.”
To differentiate The Wrap News from the Variety’s and PerezHilton.com’s of the digital world, Waxman wanted to develop a hybrid site; what she calls a news and information network covering the entertainment and media industries by featuring a combination of original news and aggregated news as well as user-generated content. To gear up for the launch, and to help build an audience, Waxman has been blogging at her personal site, WaxWord.net.
“The Wrap News will fill a gaping space on the entertainment landscape for smart, sophisticated news and analysis, enhanced by the contributions of an incredibly talented community—entertainment and media insiders and those who are passionate about those worlds,” Waxman wrote in a statement.
Becoming a Reality
Arguably the most important aspect of launching a media product, print or online, is securing financing. Waxman on August 11 officially received $500,000 in first round seed funding. While she declined to say who her private investors are, Waxman told FOLIO: that she believes she needs at least double that amount before her launch in January.
Waxman’s the Wrap News faces an increasingly saturated online entertainment news sector. In a recent Variety report, ContentNext Media founder, publisher and editor Rafat Ali called Waxman’s launch, along with that of Brown and the eventual launch of Fuller, “slightly late to the party.”
Will Waxman’s The Wrap News be able to surface, not only stay afloat? “If she can continue to deliver quality content and can find a niche in the somewhat crowded entertainment field then I’d say she has a shot,” says Jeff Dearth, a partner at DeSilva + Phillips. “The Web allows for instant worldwide distribution and new brands ca be established in crowded verticals,” Dearth continues. “The proof will be in how unique she can make her site, what ‘scoops’ she can offer.”
In her statement announcing the financing for The Wrap News, Waxman described the site as a network available on multiple platforms. While she declined to divulge her first year revenue projections, Waxman told FOLIO: that she will monetize her site through advertising and syndication with a number of “editorial partners.”
Waxman says The Wrap News will have a “small staff” of reporters and freelancers before the site launches early next year. “There are a million challenges in starting a company from ground zero,” says Waxman. “I see a huge opportunity here to create the smartest, most relevant, most interesting conversation about entertainment and media, from a core of high-level original content, enhanced by the contribution of a very smart, creative and knowledgeable user community. That is what we intend to be.”
Beyond Content Aggregation
Ex-AOL exec Lewis Dvorkin looks to enable content producers.
When Lewis Dvorkin left America Online in May after eight years as senior vice president of AOL’s News and Sports—where he helped launch TMZ.com among other things—he exited with an idea for a new type of online community, a handful of key contacts and, he says, an overwhelming desire to be part of the change in the way the media presents news.
“Before I left, I started thinking about things really specifically,” says Dvorkin. “I talked to some people who I thought might be interested in what I was thinking about.”
With the early-stage backing of Forbes Media—where Dvorkin used to work—and Velocity Interactive, a company headed by former AOL chief executive Jon Miller, the Wall Street Journal, New York Times and Newsweek veteran has decided to set off on his own.
Dvorkin leased office space near Union Square in Manhattan and is in the process of developing an yet-to-be-named Web community—one that “empowers and enables” content creators like bloggers, journalists, book authors and filmmakers with a large, ad-supported platform where they can build a community based around the subjects they are “knowledgeable experts” in. Each knowledge expert will have a page on the site, he says, with the ultimate goal “something that is collaborative.”
Dvorkin, who bristles at the “news aggregation” term, thinks enabling these “contributors”—hand-selected, at least initially—with a platform will allow them to “do what they do” without having to worry about things like serving ads and “the other stuff”—and create a collaborative environment attractive for advertisers.
To enable his own project, Dvorkin has hired a chief product officer, Andrea Spiegel, from AOL; a chief content officer, Coates Bateman, another AOL alum; and a chief technology officer, Steve McNally, from Condé Nast.
Embracing a New Economic Model
He’s starting off small on purpose. “The reality is, old models are evaporating before our eyes,” says Dvorkin. “Economic models of large staffs with fixed costs are having a lot of problems. You don’t have to look much further than the newspaper industry—and it’s not just newspapers; it’s going to hit broadcast TV soon.”
Dvorkin wants to embrace part of that old traditional media that he was a part of for so many years—that expertise, knowledge, professionalism—and marry those things with the Web. “Hopefully with my background, [this project] can be a bridge between the old and the new.”