From the July 2000 issue of Entrepreneur

Few inhabitants of mainstream USA expressed interest in anything "indie" before 1996, when Oscar-winning films like Fargo and Shine engaged audiences with small budgets and little-known actors. Younger consumers discovered indie in the early '90s, when the once-underground "grunge" aesthetic infiltrated mass-market music, film and fashion. But years before anyone was watching obscure movies, and before kids deemed flannel-wearing fashionable, "grandma and granddaddy of indie" Kim Hastreiter and David Hershkovits were pointing people in the direction of hip as publishers and editors of Paper magazine. Never heard of Paper (launched 16 years ago) or Papermag.com (live in 1994) or Paper Publishing Co.'s 1999 book From AbFab to Zen: Paper's Guide to Pop Culture? That's probably because Hastreiter and Hershkovits have always run their New York City company on a shoestring and accepted little investment. But no one's ever told them what to do, either. And they like it that way.

The last time Hastreiter, 48, and Hershkovits, 52, answered to anyone was in 1981, right before former employer The Soho Weekly News, a Village Voice-esqe publication unique in its style coverage, folded after its owners failed to focus on the downtown scene about to erupt. "They were English and didn't really understand New York City," says Hastreiter. "They just couldn't deal with punk-rocker types with green hair working for them."

Shocked by The Weekly's untimely departure, Hastreiter and Hershkovits, former style editor and associate managing editor, respectively, decided to fill the void by starting their own weekly publication. Their style and ideal audience were clearly outlined. But having no start-up experience made it a challenge. They did know having a style section would get advertising. "All that existed in those days were brainless style magazines that got all the fashion ads, or things that were all content and no style, like The Village Voice, that would get local ads but no fashion ads because they didn't look good," says Hastreiter.

With boutiques and restaurants appearing around SoHo, an offbeat neigh-borhood where artists lived in the '70s, and sensing their friends (like fashion designer Vivienne Westwood; her husband, former Sex Pistols manager Malcolm McLaren; and artists Keith Haring and Kenny Scharf), were on the verge of stardom, Hastreiter and Hershkovits were confident a print publication meshing style, music and politics would be a green light not only for advertisers, but also investors. They looked for money, but without a proven concept, all they saw were bad offers-like capital in exchange for control of the company. "David and I just saw [in watching The Weekly's demise] that the people with the power and money didn't understand they had the best magazine in a market just beginning to explode," says Hastreiter. "We knew the market exactly and didn't want to give away our idea just to become employees and get fired." Investors even dangled money in front of the two for months, only to pull out at the last minute. It only inspired them.

Anyhow, Anyway, Anywhere

"It was naive of us to ask people for money. We were editors, not publishers," admits Hershkovits. "But it's good to be naive sometimes, or else you don't get anything started."

"Sick of it," as Hastreiter says, they decided to publish a monthly without funding just to get something-even if it was small-time-produced, hoping an existing periodical would attract equal-share partners. Inspired by a poster in the subway, Hershkovits devised a plan: Print 16 pages without cutting them, make it fold out like a poster and sell it for 50 cents. Hastreiter, Hershkovits and two friends who were art directors from The New York Times each pitched in $1,000 to print 6,000 copies, and friends who owned SoHo clubs, restaurants and stores bought ads for $250 apiece.

They even had makeshift offices. "We did our first five issues at The New York Times during the weekends," says Hastreiter. "Our partners paid off the photo developers and typesetters. We had the ads delivered to The Times, and proofread at their cafeteria."

But by the sixth issue, Hastreiter and Hershkovits were left as a duo after the art directors decided Paper was too much effort for zero pay. "You're an entrepreneurial person, or it makes you uncomfortable," explains Hastreiter, daughter of an entrepreneur. But she and Hershkovits embraced adversity. Hastreiter supported herself by freelancing for GQ and Vanity Fair and subcontracting her fresh Daily News-magazine-style column to a writer eager to learn the trade. She even held onto past apartments and sublet them. Hershkovits freelanced for magazines and newspapers, and penned an unauthorized biography of Don Johnson.

"We were set on calling people's attention to really interesting things not being covered by the media," says Hershkovits. "We weren't a political magazine, but we were coming at it from that generation trying to save the world in one form or another."

Using The Weekly's former distributor, Paper landed on New York City newsstands. The operation moved to Hastreiter's loft after they severed their connection to The Times. But friends from various magazines came over once a month and stayed up "all night for many nights" to cut and paste (pre-Macintosh) the magazine together. Pooling their connections, they constructed Paper (which has evolved into its current 8-by-10-inch format) using everyone else's tools. "We were completely guerrilla," laughs Hastreiter. "We had Women's Wear Daily's waxes, The New York Times' rulers, the type from CBS and Xeroxes from Cónde Nast."

"Pony Express-style," Hershkovits bicycled around the city, picking up and delivering copy. Hastreiter's dad played taxi on weekends. And Hastreiter's mom? She eventually handled subscriptions for free (although she retired a year ago).

Beginning to See the Light

Being humbled by years of experience has kept the people at Paper grounded. "Here, everyone has access to me and Kim," says Hershkovits. "I think they feel very involved in the process, and there's no alienation." Keeping their 36 employees from running off to higher-paying Internet jobs or to corporate-owned magazines is tough, but like Paper enthusiasts, Paper employees revel in the final product.

Hastreiter and Hershkovits aren't "Las Vegas entrepreneurs." They've stayed alive because the former is a self-proclaimed purse-string holder; they never spend more than they have. And while building a sales force in 1995 helped put them in the black, Hastreiter, who didn't take a salary for 10 years (Hershkovitz took a minimal one a bit earlier), feels you're not really profitable until you have an excess of money you can use to expand-which they're aggressively doing at the moment with Papermag.com.

To date, the founders have only sold about 10 percent of Paper Publishing Co. to friends and family via a small offering-only to stay afloat. Otherwise, it's been all them. Sure, when Hastreiter flies to Milan to cover the runway shows, she "schleps back to economy," passing In Style editor Martha Nelson in first class. "I'm always like, 'Oh, Martha,'" says Hastreiter. "But she always says, 'You have equity.'"

In reality, Paper and Papermag.com are sitting on a goldmine: an unparalleled brand geared toward a specific group of stylish, literate and political pop-culture junkies that no one's really targeting-especially on the Internet. And the undermarketed Paper, with national distribution at about 110,000 and 1999 sales of $4.8 million, has survived intact where indie-gone-corporate magazines like Details haven't. It's hard not to imagine what a little monetary help could do.

"We did it, and we can say we're successful. But I don't think I would recommend struggling for 16 years," says Hershkovits. "I think those days are over. People want to pay their dues for a couple years and then get paid. But that's why we're optimistic about the future. We know there are more people out there who want to know about us."