The Paper Trail

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."

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This article was originally published in the July 2000 print edition of Entrepreneur with the headline: The Paper Trail.

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