How I Did It: Laurel Touby, Founder of Mediabistro
As told to Eric Schine
New York City has always been a magnet for oversize ambitions and big dreams. When Laurel Touby showed up here, in 1985, her fantasy was to become a successful writer. She imagined spending her days in a big loft, hobnobbing with artists and the urban literati. In reality, breaking into journalism was a difficult and lonely affair. So Touby started throwing parties to cheer herself up and meet other writers. Good move, because she wound up building her parties into mediabistro.com, a hot job-posting and community site favored by journalists and media executives. So hot that last year, Touby sold her company to Jupitermedia, a digital content and research company, for $23 million.
I was born in Hawaii, and I grew up in Miami. I went to Smith College dreaming of becoming a writer. My father was the writer in my life, and I had put him on a pedestal. But I was forced to study economics by my grandfather. He was paying the tuition, and he wanted me to have a vocation.
I was the quintessential media outsider. If you look at the places the media elite all went to school, there is a commonality. They went to Harvard. They went to Brown. They went to Yale and Princeton. They got internships. I came to New York an unknown and unknowing.
Eventually, I got a job at Working Woman magazine. It wasn't The New Yorker, but I was thrilled to write a caption under a photo or a little sidebar. And here's the great part: I was learning about what made women's businesses work.
At the same time, I was building a database of people. I looked at my career as a thing to nurture. You always want to send holiday cards. I went so far as to send Valentine's Day cards. I was actively climbing. I call it making the best use of my resources.
I went to BusinessWeek and felt like I made it into the boys' club. But I screwed up from Day One! I thought they weren't listening to me on a story. So I went up the chain of command. My boss found out and took me aside. He said, "This is really bad. You don't do this."
I became a contract writer and editor for Glamour magazine. The worst part was working from home. I thought, How do I get out of my shell?
I started hanging out in cafés. One day a guy came in, a freelancer for The Village Voice, Russ Baker, and we were commiserating about the lonely lifestyle. He suggested we throw a cocktail party. I had five friends. He had five. That was in 1994.
From the beginning, we decided these would be media salons where we would invite senior people or successful freelancers. It became big very fast. I couldn't help but become this hostess. My grandmother was a Southerner from West Virginia. I imagined myself being her at a party. People came to me and said, "This is special." I realized I had a calling.
So we kept having monthly salons. We spent next to nothing. People bought their own drinks. I spent maybe $60 to a $100 a month on postage for invitations. And now I had a social life. I didn't have anything to trade before. Now I had this party. Because otherwise, what are you? You're just a struggling, starving freelancer like the rest of them.
E-mail started to become popular, and I saw I could save time and money sending out invitations. Then, in 1996, someone suggested I launch a website. I wanted it to be an online community for media people with job listings and such.
In early '99, I noticed that Monster.com ran an ad on the Super Bowl. The timing was perfect to ask people to start paying for listings. I sent out an e-mail to any employer who had posted a job that month. I said if you're happy, send a $100 check. I got $2,200 the first month. A year later, it was $7,000 a month.
This was way bigger than I had ever dreamed it could be. Today we have about 1,500 new listings per month. Multiply that by the number of dollars we charge for a job listing--$279--and you get a pretty big number. It's a good business.
Job listings are the anchor, but I went on to offer lots of other services, like health insurance and classes on writing for the Web and résumé posting. I kept costs to a minimum by automating listings, which were user-generated. My idea was make this as self-service as possible, without a lot of infrastructure.
I couldn't do this alone anymore--I was doing invoicing from my bedroom. At a photography exhibit I met up with Daniel Kunitz. He was working for The Paris Review and seemed to be one of those guys who went to the right school. I asked him, "Do you know any rich people? I'm expanding my website." He said, "Yeah. I went to school with rich people." I said, "Great. I'm taking you to lunch." That was the best $50 I ever invested.
Dan set up a meeting with Marty Peretz. He's an investor and a former Harvard professor. I bought my million-dollar suit. Within five minutes Marty said, "All right, I'm in. But I'm not going to be your lead investor. Let's ask Bill Ackman. He runs this hedge fund, and he was one of my students at Harvard."
Bill put me through the wringer. He asked lots of smart, hard questions about marketing, the product, the service. I really felt like I was in over my head. Bill put in $750,000, and Marty put in $250,000. By 2004, we were solidly profitable. And from 2000 to 2007, we grew at more than 30 percent a year most years. We listened to the community. It told us, "We need training. We need more skills." So we added $49-a-year subscriptions with content to help you with your career.
Bill sat me down early on, and he said, "What do you want to walk away with?" I said, "Seven million would make me happy." He said, "Seven million! That's preposterous! You need to sell for $33 million." I thought, OK, this guy is either insane or a total genius.
Alan Meckler of Jupitermedia came to me in March of 2007, and he had just bought a job board. He had been hearing about me and the company for years. He loved that we created a community and made money from it. We tussled back and forth until we came to a price of $23 million. I would have gotten more if I had waited another year. That's OK. I never became a New York intellectual, but at least I'll be able to afford the loft I always wanted.
Correction: A sentence was deleted from the original due to an error in the subject's recollection.
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