When I launched my second business, a publishing company called Sigma Communications, I was filled with passion but knew next to nothing about publishing a magazine. Without proven competence, I desperately needed guidance. Sure enough, I came to learn that the Chairman Emeritus of Time Warner, Dick Munro, was in the neighboring office. I could not imagine a better advisor for our startup publication and decided to introduce myself.
As I walked down the hall for our initial meeting, I wondered if someone of his stature would take the time to speak to an entrepreneur new to publishing. It turned out that Dick was more than willing to open up to me. He listened carefully as I told him about my idea for my magazine. But I was surprised when he cautioned me that publications usually take a long time to become profitable.
“You’ve got very lofty goals,” Dick said. “When we started Sports Illustrated, we didn’t make a profit for six years. Are you prepared to wait that long? Do you have enough funding to last six years, if necessary?”
I assured Dick that we would do whatever was needed to make our journal successful. In the back of my mind, I had a different thought: We had launched USI and turned a profit in four months. Why couldn’t we accomplish the same with Sigma? I was determined to beat the normal ramp-up to profitability in the publishing industry.
By the close of our discussion, Dick agreed to be our advisor. He immediately started reaching out to his network and introduced us to the publisher of Garden Design magazine. Garden Design‘s publisher was amazingly friendly and generous with his time and knowledge.
As he took us through the mechanics of starting a publication, he, too, explained that magazines take a long time to make money. First, we would need to build an audience. Then, we’d have to sell advertising space. He warned us that revenue from advertising would not start flowing immediately, and even then, it could be just a trickle for several years as we built our subscriber base.
Garden Design‘s publisher was straightforward and very honest. He shared that publishing a magazine was an ongoing challenge. Achieving profitability was a constant struggle with progress measured in years, not months. Because I was used to moving at breakneck speed and expecting immediate returns, I felt we could outperform the publishing industry norm. Rather than listening to my advisors, I allowed my passion for our magazine to distort my views about timing, funding, and reaching breakeven – a fatal mistake.
My unbridled enthusiasm for becoming a publisher, combined with my lack of distinctive competence, put blinders on me. I did not heed the advice of industry experts with superlative track records. Allowing my passion to overrun the common sense of listening to my advisors was Failure Point #4.
4 Failure Points that Can Undermine Your Business
In this series we have shared four failure points that can undermine the efforts of even the most seasoned entrepreneurs. Why not learn from my mistakes?
Failure Point #1: Starting a business based on your passion, rather than building a business based on your distinctive competence.
Failure Point #2: Convincing yourself that “the world will beat a path to your doorstep” without securing preorders to prove your business model.
Failure Point #3: Taking the risk to launch a business without sufficient funding to reach breakeven.
Failure Point #4: Allowing your passion to overrun the common sense of listening to your advisors