Editor's Note: Entrepreneur's Startup of the Month column spotlights the launch stories of noteworthy new companies.
Brittany Hodak and Kim Kaupe have a serious case of Bieber Fever.
The New York City-based duo launched ZinePak (pronounced ZEEN-pack) in January 2011 to create custom entertainment magazines for musicians, celebrities, brands and entertainers.
In the past two years, they’ve sold more than a million 'ZinePaks' at Walmart for artists like The Biebs, Taylor Swift, No Doubt and KISS, and brands like Dove, Dr. Pepper and KIDZ BOP.
"We combine a custom, small-format fan magazine with original merchandise and media, usually a CD or DVD," Hodak says. "We write and design the exclusive content in each ‘ZinePak and manufacture one-of-a-kind merchandise for every package.”
Hodak and Kaupe describe ZinePak's growth as staggering. With just four full-time employees and about 20 freelancer writers, designers, proofreaders and fact-checkers, they managed to rake in $2.6 million in revenue last year, with projections to exceed $4 million this year.
We think their story is pretty impressive, so ZinePak is officially YE’s April Startup of the Month. With that comes bragging rights for life, along with a copy of Entrepreneur Press’ latest book: Ultimate Guide to Link Building and a digital subscription to Entrepreneur magazine.
We chatted with the now 29-year-old Hodak and 27-year-old Kaupe about starting up, overcoming obstacles and refusing to take on investors.
Q: Where did the idea come from?
BH: Kim and I met at an ad agency in 2010. My background was in music and hers was in publishing, so the product was born of both of our loves. We were inspired to start the company because we felt that our ideas weren't being heard or considered at the company we were at. We wanted to create a new configuration for fans to enjoy entertainment.
Q: How did you startup?
KK: Once we had the idea for the company, the first thing we did was come up with a name for the product. Then, we called Walmart and asked if they would be interested in purchasing it from us. We pitched our first client, KIDZ BOP, as a proof-of-concept. Once Walmart saw it was successful, they helped introduce us to the Academy of Country Music who became our second client. After that, we took meetings like crazy to meet everyone possible and line up future projects.
Q: Was it tough starting up at such a young age?
BH: We love it when people are surprised that the “brains” behind the business are two twenty-something women. It’s always fun to see the surprised looks on the faces of old-school executives when they mistake us for “sales girls” and ask us who is in charge.
Q: Where did you get the cash to launch?
BH: We used personal savings. Our startup costs were only about $60,000 total, because we lined up clients almost immediately and used income from our first few projects to help fund our growth.
Q: Why haven’t you taken any outside funding?
KK: Last year we grew 350 percent, and we’ve been able to sustain our growth from our profits. We hope to put off a Series A round for as long as possible because we love not having to answer to investors.
Q: What's been your biggest challenge, and how have you dealt with it?
BH: Growing the company. When we started, we were working on only one project at a time. Now, we might be working on eight projects simultaneously at any given time. That means eight different sets of deadlines, clients, writers, designers -- all happening at once. It’s taken a lot of organization to come up with systems that work, and it’s definitely still a work in progress. We do an all-hands-on-deck debrief after every project to talk about what worked well and what could work better. We learn something new with each project, and our goal is to keep getting better and more capable as the company grows.
Q: Words of advice for other young ‘treps?
BH: Just go for it. Although it can be scary to go out on your own -- especially if you’re leaving a steady paycheck behind -- it’s nowhere near as frightening as the idea of working for someone else for the rest of your life. If you believe in your idea and are willing to work hard, sooner or later things will fall into place.
KK: Something that has always worked for me is to ask, “What's the worst that can happen?” If you are okay with the answer, then collect $500 and pass go. If the worst thing that’s going to happen when you try to start your own company is that you fail miserably, live on someone’s couch and in three months have to go find a “real” job, it doesn't seem like as scary of a leap anymore.