Topic: Laurel Touby on How to Start an Internet Media Company
Laurel Touby: So I came to found mediabistro through kind of a very circuitous route. It all started with my own need for community and mediabistro is a community web site so the first customer was me. Basically, it all started offline as a cocktail party and this was in 1994. I had been in the media for about eight years and I was lonely and I was disconnected because I didn’t have all the tools of technology at the time that we have today. So for example we did not have cell phones. We barely had voice mail. We did have answering machines. There weren’t a lot-- There was-- There were not a lot of technologies to connect people so I started with a friend a little cocktail party to connect with other media professionals and to meet people because I had been so lonely working from home in my bedroom with no daily routine with other coworkers or colleagues, I was writing a column for Glamour magazine, and this cocktail party once a month became my way of actually touching and feeling and talking to real people because most of the time I dealt with my editors and I dealt with other writers on the phone. And so the cocktail party started with ten people in Jules Bistro- at Jules Bistro, a little bistro in the East Village, and people felt the same way. I realized that I had tapped in to a need. I had ready-made customers and they were all my friends. They were the other people- they were the other people in the media who similarly needed to reach out and touch someone once a month and needed to talk shop, to talk about ideas, to talk about issues that were affecting our work lives and to really- and some of us wanted to date of course. So there were lots of needs that were being met at the parties, that some people got dates and some people got some extra freelance work on the side and everyone was happy.
Question:When did you decide to developmediabistro into a business?
Laurel Touby: In the beginning, mediabistro did not start as a business. It just was an offline community but then what I realized was all of these people coming to the parties and by- within a very short amount of time I had hundreds of people on my list and then thousands of people. All of these people kept saying to me, “Laurel, the parties are great but they’re once a month. I’m getting work reference. I’m getting referrals for work. I’m meeting people that I love hanging out with. I’m hearing about opportunities. I’m hearing about other events. I’m hearing about apartments.” So it was kind of like Craig’s List in a party form if you know what I mean and so people would say, “You need a web site so we could all go there all the time, 24/7. We don’t need to go there just once a month.” And that was a very good suggestion that someone made. In fact, I know who made the suggestion.
Question: What were the first steps you took when creating the website?
Laurel Touby: So I’m one of these people who I listen to my customers. Even though they weren’t paying me money and they weren’t formally my customers, they were just my friends, I thought if this turns in to something these could be my customers so I listened when people suggest you should have a web site, you should have an e-mail newsletter, all these things. And I basically took it all in and I talked to a programmer and he was referred by one of the editors and this person put up the first web site in 1996. It was basically a directory on his web site. It was a little nothing of a web site but it got huge traffic immediately. People responded like that. It really did serve a need. And so it started with that first little web site and then a couple of years later I started charging for the job listings. Those became quickly the most popular area, the job listings and the bulletin board, and it also had an events page and it had a resources page, and so it was like Craig’s List basically for a very targeted audience, media professionals only. And in 1999, I started charging money for the web site.
Question: How did you maintain customers when you started charging for the site?
Laurel Touby: Well, the best customers are happy customers. Right? So I never want a customer to pay if they’re not happy so I made that my policy very early on. If you’re not happy, don’t pay me; only pay me if you’re happy. And I would send out e-mails every month to the list of people who posted jobs and I’d say, “Hey, consider this your invoice. Send a hundred-dollar check to this p.o. box if you’re happy with your job listing.” And literally the checks started flooding in and that doesn’t mean everybody paid or everybody always pays but the ones who are happy are happy to pay.
Question: When did you start making a profit?
Laurel Touby: In 1999, I realized that the job board was really the beginning kernels of an actual business. Prior to that, it had been a happy social gathering. It hadn’t been a formalized business but I was developing an audience and now this audience was paying me back in a sense that the job listings were a valuable commodity. So I realized in 1999 that this was what was going on. I started writing my business plan and by 2000 I got funding so I took the- I took my what had been business that I started in my bedroom with two cats and two interns and with funding I could actually get a real office space and start hiring, and that’s when I started hiring and I started with just a handful of people.
Question: What advice would you give to business owners hiring their first employees?
Laurel Touby: When you’re hiring people when you’re first starting out you have different needs at different stages of the business. When you have a very small business the people have to be very flexible and wear a lot of hats. What you can’t do is hire really senior management people who have been in middle management for three years and are making hundreds of thousands of dollars. You have to hire junior-level people who are going to just take the ball and run and get things done and they’re not going to worry a lot about getting permission or systems and processes. They’re just going to get the stuff done and that’s the most important thing. As you evolve in to a bigger company, that’s when you need routines and procedures and meetings and budgets and all kinds of structure, and so that comes later on and I realized that later on when I started getting a very- having a very chaotic workplace because all of these people were just creating chaos. They were getting stuff done but we weren’t having- we weren’t getting a lot of- we weren’t- we needed systems at a certain point.
Question: When did you realize the company needed more structure?
Laurel Touby: The transition to a more structured work environment once your company grows from being a little startup in to let’s say a mid-sized company--I don’t know what that means--a mid-sized, small company, the transition for us was very slow and gradual. As people left the company, the next person we hired always had a little more experience and a little more structure and so we kind of added that accretionally. We didn’t just stop business and then hire a whole new staff. That would be crazy. We just waited until there was attrition and then we developed the internal staff as much as we could and then sometimes we’d have to let a person go because we realized they weren’t fitting the needs of the company now that it was bigger.
Question: Did you make any one mistake that you felt you learned from?
Laurel Touby: The one mistake I would say I learned from-- I know not everyone has this lucky problem but I created a pool of stock early on even when I- the stock was not valuable at all, and in the beginning I didn’t have a lot of money to pay people so I would pay people with stock, but since I didn’t value the stock and since to me it was just a number, it was just millions of stock, I ended up giving a certain chunk of it to a person who did not deserve it. He was a consultant and he went to Harvard and maybe he talked me in to it--I don’t know--but he had a set of deliverables and he did not follow through and so when it came time to sell the company and I did sell the company that stock was worth a lot of money and he never gave me the value for the stock. And I feel like I was kind of hoodwinked and I’m upset about it to this day.
Recorded on: 06/26/2008