Laurel Touby’s Advice for Growing a Small Business

27 Nov

Laurel Touby at a Mediabistro event in 2008

 

By Amy Cuevas Schroeder

I cannot tell you how inspired I was to learn that Laurel Touby—a successful entrepreneur and startup investor in companies like Appboy, Fashion GPS and Biltboard—struggled with the idea of starting her own business.

“I started as a writer and never in a million years did I want to be a businessperson,” says the founder of Mediabistro, the pioneering site for media professionals that she sold for $23 million in 2007. “But eventually, I couldn’t resist it. I had started something that people valued and that made money, so I was defacto in business.”

Laurel’s story is a built-from-the-ground-up classic, in which she started as “just a girl from Miami, working out of her bedroom in New York with two cats.” Before Mediabistro, Laurel worked as a journalist for publications like Working Woman, Business Week and Glamour, but she had a hard time getting a byline in lit leaders such as The New Yorker, Atlantic and Harper’s.

And therein lies the impetus for Mediabistro. In 1994—two years before Mediabistro would become a website—she and fellow journalist Russ Baker organized a small cocktail party to bring together a handful of New York writers and editors. Her secret motivation was to become better connected in the literary community, and eventually she would end up helping others do the same.

“I barely knew anyone in New York or in the media industry, for that matter,” Laurel says on the phone, shortly after being displaced from her Manhattan apartment after Hurricane Sandy. “I used parties as an excuse to start calling strangers at magazines I wanted to work for. At first it took a lot of convincing, but then the editors came and brought friends.”

About 10 people attended the first media salon, which grew to 20 for the second, and then 80 grew to 100. Similarly, her database started with hundreds of people, which grew to thousands and then tens of thousands and now millions—“business card by business card,” she says.

As for startup expenses, the salons cost next to nothing to produce, and she didn’t spend any money on advertising. “The company grew because I put time and energy into the parties,” Laurel says. “When I started Mediabistro, I didn’t think of it as a business. I thought of it more like connection central—a network of really talented people who work in media.”

As an early tech adopter, Laurel started a web site in 1996 to help even more people connect online. (The name Mediabistro came about in 2000. Prior to that it was called HireMinds.com.) “I figured, ‘Why have just a monthly party when we can party on the web 24/7?’” For the first three years of the site’s existence, Laurel ran job listings for free. Then a few companies offered to pay. “That’s when I decided, ‘I’m doubling down.’ I thought to myself, ‘Maybe I should take this job board seriously.’”

In the first month of attempting to monetize her job board, Laurel received 18 checks. “I was just sitting in my PJs, sending out invoices. I thought, ‘Holy shit. This really is a business.’”

A week before she speaks at our Creativity is Good Business event on December 4, 2012, at Wix Lounge, I’m excited to share Laurel Touby’s advice for scaling a creative business idea…

Dream Really Big

As someone who tends to think more expansively for other people’s entrepreneurial endeavors than for myself, I really love Laurel’s advice to visualize an ideal world for your company.

“Too many people think, ‘I want to sell some stuff, instead of ‘I want to be international.’ Instead of limiting yourself to a small geographical region, think about how people all over the world might like to buy your product,” she says.

While you’re going through the process of thinking about your business on a national or international scale, be specific about how and where you plan to grow your business. “And don’t think you can do this by yourself,” Laurel says. “You’re going to need help every step of the way.”

Write a Business Plan

Ah, the business plan. As a creative person, part of me knows these numbers-filled documents are essential for laying the groundwork of moving a business idea forward, but I struggle with seeing them through to completion. Laurel feels the same way.

“Writing a business plan was the hardest thing I’ve ever done,” she says. “But the process of articulating what your business is about is gold—it will generate so many ideas and solidify what you’re all about. It’s rigorous but not impossible.”

Before you begin producing your business plan, think about it as a rewarding experience for creating your dream job. Laurel recommends getting advice from the Small Business Administration or SCORE and using business plan books and software as a guide.

“When you’re writing your business plan, you’ll answer questions like, Who’s your target market?” Laurel says. “It’s X person, who lives in X neighborhood, and likes X things. Going through that process just helped you to market to your customer better.”

And, if you don’t feel capable of doing the numerical projections for your business alone, get help with that! Go to a local business school, talk to a business professor and ask them if one of their students can work on your financial projections as a school project. There are many talented B-School students who would love to get their hands dirty and get school credit.

Get Help & Advice

One of the coolest parts about being an entrepreneur is playing Creator and Visionary Thinker. To allow you to go forth and execute your vision, it’s important to obtain business advice and guidance from somebody who specializes in developing businesses.

That and “talk to business owners who are at the next stage that you plan to go in,” Laurel says. “Invite them to coffee and ask for advice. But don’t call them a “mentor”—it’s a dirty word, because it creates a power imbalance. Instead, say, ‘Walk me through your approach.’

Follow their advice, and then ask to meet again in a couple weeks and show them the results. Laurel encourages entrepreneurs to ask other entrepreneurs, “What would you do in X instance?” And, remember to make this a two-way street. “Ask the other person what he or she needs help with—and keep your eye out for ways to offer your assistance to the person over time,” she says.

When she was developing Mediabistro, Laurel reached out to different people at different times for advice. “If you email or call someone and they don’t get back to you immediately, follow up or send a gentle reminder. If they say they’re busy, don’t take it personally,” she says. “I can’t tell you how many times I was upset when I didn’t hear from someone—and a lot of times they just didn’t have time to read my email immediately. But they replied later.”

Get Capital

I don’t know about you, but the thought of asking investors for large sums of money sounds daunting to me. Laurel makes the financing process seem relatively easy—and essential.

“When you get capital, you can hire more employees and expand into other product lines,” she says. “You can dream bigger. For Mediabistro, I decided I wanted to go worldwide. If you don’t get capital to scale your business, you’re going to stay small.”

To get started with the process of finding sources of funding and pitching to investors, Laurel recommends reaching out to organizations such as the Small Business Administration and local economic development groups. For instance, there’s money earmarked for women and minorities in New York and in many other cities.

Then, she says, think about who you know. “Who do you know who knows rich people? In the early years of Mediabistro, I asked a guy who looked like he knew people with money, and he said, ‘Yes, I do.’ I took him to lunch,” Laurel says.

Laurel adds that it’s important to create win-win opportunities by offering something in exchange to people who can help you secure business funding. “If someone offers to help you raise money, offer them 5% to 6% of that money in exchange.”

Laurel says that once you get the capital, treat it as the last capital you’re going to get. “Be smart about how you spend the money, but don’t be stingy,” she says. “Take an aggressive chance on something. Do the research to know you have a good shot at it.”

Last but not least, Laurel says it’s important to chunk out business development work into manageable tasks. “If you grow your business little by little, you get something beautiful in the end.”

DISCUSS THIS STORY IN COMMENTS BELOW: What do you think of Laurel Touby’s advice? We’d love to hear about your small business.

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