It would not be inaccurate to say that Halperin launched Smug, initially, at least, as a means to save, not to make money. The magazine finances her music habits, bringing her club invites and CDs. "I'm getting for free what I'd be spending my paycheck on," she says.
Her Faustian bargain: she's traded in her college-graduation credentials and a lucrative sideline (teaching Hebrew at $50 an hour) to live a life in which she eats and sleeps very little and parties a lot -- for business purposes, naturally. "You can't be in it without being out there," she says.
To leave work, Halperin has to leave home. Smug's nerve center is in her bedroom; her two roommates are on Smug's masthead (as managing editor and senior writer); and their multilevel Gramercy Park apartment constantly teems with writers, photographers, interns, sales reps, and couriers delivering 20 to 30 CDs a day. People come and go at all hours. There is always music, but it's the new music that Smug needs to keep up with -- indeed, ahead of. Since most of Smug's articles and artwork arrive via modem, Halperin's only regular daylight foray is her daily trip to the corner newsstand, where she peruses the stacks -- paying particular attention to music, photography, and design books -- and gets her MediaWeek and Adweek fixes. ("I can't afford to subscribe.") Her other outings are mostly nocturnal.
It's not a lifestyle she'd like to live forever, but it suits her for now. "Nothing consumes Shirley like this magazine," notes her father, Eli Halperin. "This is her life." For the record, Smug is also a little bit of his life. While his daughter runs the show, Eli Halperin keeps the books. Recently he cosigned with her for a $10,000 bank line of credit. It's a job the Goldman Sachs technology specialist says he is happy to do. "I don't think she should get involved with the numbers right now," he allows.
And it's true that while you'll never catch her with a spreadsheet, Halperin admits to no embarrassment. She volunteers her strengths instead. "I'm very good at knowing what music people are listening to and what people want to read about," she points out -- which is arguably this start-up's greatest competitive advantage. "I know that one day I will be a big publishing person of some kind," she says. "I have the ideas and the will to keep going." Music insiders invariably compliment the publisher more than her magazine. "What I find impressive," observes Jody Miller, president of JLM Public Relations Inc., in New York City, "is that there's a real panache to Shirley. She's got a forging-ahead attitude and lets nothing stand in her way."
In Halperin's business, that might be what it takes. "Passion, contacts, vision -- these are more valuable to us than business savvy. You can supplement the business savvy," states Miller, the former Time Inc. executive. Samir Husni, a professor at the University of Mississippi's department of journalism, concurs. "It takes creativity to do a magazine, not degrees," he says, noting that Henry Luce was an army private, not a publishing magnate, when he got the idea that became Time magazine. Research from Husni's annual publication of new-magazine start-up and failure rates indicates that "the creative [as opposed to the business] side will determine whether a magazine makes it. You have to be able to produce something a reader will want to read," he says.
Halperin's apparent lack of business sophistication is less a liability in her industry than it would be in, say, semiconductors. "She's in the alternative-music market, which tries not to be successful," notes Dennis Erokan, the founder of BAM, one of the most successful and well-known alternative-music publications, based in Pleasant Hill, Calif. "I never thought of advertisers or focus groups. Rolling Stone came out of love for the subject matter," Jann Wenner has said of what today is considered the music-industry bible. The biweekly generates an estimated $98 million in revenues on a circulation of 1.3 million. Wenner started it when he was 21.
So, it is possible to start out as Halperin has -- for love and not money -- and learn the business along the way, however grudgingly.
A year into her venture, Halperin finally wrote a business plan for Smug -- but only because she had to in order to raise capital. After nearly breaking even on first-year revenues of $70,000, Halperin is looking for $500,000 to take Smug "to the next level," as she puts it. That would mean upgrading its paper quality from newsprint to a semiglossy stock, shrinking it in size from a folded tabloid to a stapled magazine, and, most important, beginning to pay her staff. She hasn't raised the money yet, but her solicitations are giving her a crash course in publishing. For instance, she balked at one potential investor's suggestion that she increase the claimed pass-along rate (the estimated number of readers per copy, handy when figuring out a publication's readership) for Smug, which at 2 seemed too conservative to him. "I worry about lying," she says. But she reconsidered after learning that People touts a pass-along rate of 11, and Time and Newsweek a rate of from 5 to 6 and a half. After posting observers in college cafeterias and clubs to track the life cycle of a single issue of Smug, she felt comfortable lifting its rate to 3.
