The Paper Trail No one invested...they went years without making a profit. Was this publishing duo's path pigheaded or visionary?

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

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

Shocked by The Weekly's untimely departure,Hastreiter and Hershkovits, former style editor and associatemanaging editor, respectively, decided to fill the void by startingtheir own weekly publication. Their style and ideal audience wereclearly outlined. But having no start-up experience made it achallenge. They did know having a style section would getadvertising. "All that existed in those days were brainlessstyle magazines that got all the fashion ads, or things that wereall content and no style, like The Village Voice, that wouldget local ads but no fashion ads because they didn't lookgood," says Hastreiter.

With boutiques and restaurants appearing around SoHo, an offbeatneigh-borhood where artists lived in the '70s, and sensingtheir friends (like fashion designer Vivienne Westwood; herhusband, former Sex Pistols manager Malcolm McLaren; and artistsKeith Haring and Kenny Scharf), were on the verge of stardom,Hastreiter and Hershkovits were confident a print publicationmeshing style, music and politics would be a green light not onlyfor advertisers, but also investors. They looked for money, butwithout a proven concept, all they saw were bad offers-likecapital in exchange for control of the company. "David and Ijust saw [in watching The Weekly's demise] that thepeople with the power and money didn't understand they had thebest magazine in a market just beginning to explode," saysHastreiter. "We knew the market exactly and didn't want togive away our idea just to become employees and get fired."Investors even dangled money in front of the two for months, onlyto pull out at the last minute. It only inspired them.

Anyhow, Anyway, Anywhere

"It was naive of us to ask people for money. We wereeditors, not publishers," admits Hershkovits. "Butit's good to be naive sometimes, or else you don't getanything started."

"Sick of it," as Hastreiter says, they decided topublish a monthly without funding just to get something-evenif it was small-time-produced, hoping an existing periodicalwould attract equal-share partners. Inspired by a poster in thesubway, Hershkovits devised a plan: Print 16 pages without cuttingthem, make it fold out like a poster and sell it for 50 cents.Hastreiter, Hershkovits and two friends who were art directors fromThe New York Times each pitched in $1,000 to print 6,000copies, and friends who owned SoHo clubs, restaurants and storesbought ads for $250 apiece.

They even had makeshift offices. "We did our first fiveissues at The New York Times during the weekends," saysHastreiter. "Our partners paid off the photo developers andtypesetters. We had the ads delivered to The Times, andproofread at their cafeteria."

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

"We were set on calling people's attention to reallyinteresting things not being covered by the media," saysHershkovits. "We weren't a political magazine, but we werecoming at it from that generation trying to save the world in oneform or another."

Using The Weekly's former distributor, Paper landedon New York City newsstands. The operation moved toHastreiter's loft after they severed their connection to TheTimes. But friends from various magazines came over once amonth and stayed up "all night for many nights" to cutand paste (pre-Macintosh) the magazine together. Pooling theirconnections, they constructed Paper (which has evolved into itscurrent 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 NewYork Times' rulers, the type from CBS and Xeroxes fromCónde Nast."

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

Beginning to See the Light

Being humbled by years of experience has kept the people atPaper grounded. "Here, everyone has access to me andKim," says Hershkovits. "I think they feel very involvedin the process, and there's no alienation." Keeping their36 employees from running off to higher-paying Internet jobs or tocorporate-owned magazines is tough, but like Paperenthusiasts, Paper employees revel in the final product.

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

To date, the founders have only sold about 10 percent of PaperPublishing Co. to friends and family via a smalloffering-only to stay afloat. Otherwise, it's been allthem. Sure, when Hastreiter flies to Milan to cover the runwayshows, she "schleps back to economy," passing InStyle editor Martha Nelson in first class. "I'm alwayslike, 'Oh, Martha,'" says Hastreiter. "But shealways says, 'You have equity.'"

In reality, Paper and Papermag.com are sitting on agoldmine: an unparalleled brand geared toward a specific group ofstylish, literate and political pop-culture junkies that noone's really targeting-especially on the Internet. Andthe undermarketed Paper, with national distribution at about110,000 and 1999 sales of $4.8 million, has survived intact whereindie-gone-corporate magazines like Details haven't.It's hard not to imagine what a little monetary help coulddo.

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