Two former Penton sales reps take on the big boys.
Competing against established players like Reed and Penton is a daunting task for any startup (especially for one that’s just barely over a year old). But WTWH Media (which stands for “Willing To Work Harder”) has gained solid market share thanks to a sophisticated online strategy (as well as a little help from a strategic partner named Hearst).
Founders Scott McCafferty and Mike Emich were both former Penton sales reps with their own independent sales rep firms. But each had the itch to get back into the publishing side. In January 2006, McCafferty and Emich started putting together a business plan. “We worked with $200,000 cash until we established a line of credit for $1 million,” says McCafferty.
But getting the product off the ground wasn’t that easy. Several Penton editors initially agreed to join the startup but then backed out to stay with Penton.
The Online Difference
The initial pitch was also a challenge. “The response from the market was, ‘You’re crazy, starting a print magazine in today’s age?” says McCafferty.
The first issue of Design World debuted in October 2006 to mixed response. “While in pre-sell our mock-up looked great, we quickly found that it missed the market,” says McCafferty. The company surveyed its readers and made design changes for its next issue in December 2006.
Despite the slow start, Design World, which boasts a 40,000-circ, went on a two-week run outside its core territories where it picked up major accounts for every issue of 2007. “Once those came in, the worst case was we would break even in 2007,” says McCafferty. With two issues under its belt, Design World generated $245,000 in 2006.
Building Out Online
WTWH experienced growing pains with online as well. “We didn’t want to create just another magazine Web site,” says McCafferty. “We began offering e-newsletters and online ads immediately but quickly found that simply launching a Web site doesn’t mean you will have traffic. In January 2007, we had 2,000 unique visitors and 8,000 page views. We could have sold all those page views to one person.”
McCafferty hired Marshall Matheson, a former advertising client, as WTWH’s vice president of new media. Matheson had expressed his frustration as an advertiser working with publishers online. “We used his experience to build a robust back end,” says McCafferty.
WTWH builds product landing pages with customizable widgets pulling feeds out of manufacturer’s sites that can tie in with relevant edit and video. “In the design engineering market, people weren’t doing that yet,” says McCafferty. “We’re perceived as the so-called ‘smart online guys.’"
Still, the magazine remains a key component of the overall strategy. “We view the magazine as an aircraft carrier,” says McCafferty. “The magazine gives us the necessary media authority.”
In June 2007, WTWH bought 3DCAD World Network, a series of registration-based sites, and just before the end of 2007, closed on Mcadcentral.com. “We overpaid on the first deal but it gave us the opportunity to say, ‘now we have 300,000 page views and we can do run of network advertising’ as opposed to just Design World,” says McCafferty.
Hearst Takes a Chance
WTWH got an additional credibility boost when Hearst’s Electronic Products Magazine tapped the startup as a partner in a project called Mechatronics, which features a quarterly print product, a wiki site, blogs and e-mail newsletters. The revenue budget for the venture is around $300,000, according to McCafferty. “Design World added value in ways that absolutely helped us grow our business,” says Todd Christenson, publisher at Hearst Business Media.
In 2007, the Design World franchise—including print and online—will generate about $1.8 million, according to McCafferty. In 2008, WTWH’s goal is $4 million although McCafferty believes $3.5 million is probably more realistic. The company will continue to leverage its mix of print and online products, including a new offering called Digital Manufacturing Review, which includes a quarterly print product, a wiki site and an e-newsletter. “We’re going to surprise people with a series of new Web sites in the markets we’re serving,” says McCafferty.