Entrepreneur start-up: From disaster to profit
Tuesday, February 5, 2008/
For Lisa Messenger, turning around the fortunes of her business required radical changes. But with lessons learnt, Messenger Publishing is now able to take full advantage of the evolving marketplace. By AMANDA GOME.
By Amanda Gome
Lisa Messenger, in her mid 30s, went from running a basketcase of a business to running a profitable fast growing company in just a few years. But it involved radical changes to her business, strategy and her attitude.
She tells Amanda Gome about her new company Messenger Publishing, and how her publishing business is taking advantage of the same trends driving social networking sites.
Amanda Gome: You were in your early 30s when you started your own business. I imagine you could have earned a heap in a marketing role at a big corporate. So why leave?
Lisa Messenger: I was earning about $90,000. But I think I was Gen-Y before the expression was coined. Even when I was working for others I wanted to be the managing director or have equity in my own company. My father ran his own business. But when I started my own sponsorship agency in 2001 it was the only time I ever say him cry. I think my grandfather was my inspiration. He is a politician (John Fuller) who is aged 90 and is still very busy networking, going to one or two breakfasts a day.
So what was the impetus to start your own business?
A guy was promoted over me. So I essentially set up in opposition. I started a sponsorship agency with $4000, and in six weeks I had moved into offices and taken on my first staff member. Naivety was a great thing. I didn’t have time to be scared and I was so excited to have my own business.
What was the business?
Getting sponsorship for arts and entertainment clients. I thought laterally about how I could leverage relationships. So I would say to artists ‘I will get you $200,000 and I will come up with the sponsor and the benefits for the sponsor’. Benefits might include access to IP, corporate tickets to events, brand exposure.
So what went wrong?
We started just after 11 September (2001) and corporates wanted safer bets. I also lost my focus. I began writing for marketing magazines and industry magazines about sponsorship and marketing. I also got lots of calls from small businesses asking for help, so suddenly I was all things to everyone. I was getting revenue of about $50,000 paying for an office and a staff member on about $30,000 and not paying myself anything.
So you didn’t get business?
No; I was passionate about helping others and I kept saying money is not important, passion is.
That’s not sustainable.
No. Fortunately three and a half years ago I got fed up. I went on a spiritual retreat for eight days and decided to take a different path. I love writing, so I decided to write a book Happiness Is. It’s a compilation of thoughts from 300 Australians about what makes them happy. It took five months from the decision to the printing.
How did you pay for it?
I didn’t have money to publish the book, but I have always been a big thinker. So I approached corporate sponsors like Mercedes, Macquarie Bank whom I had relationships with. I also cold called companies like Officeworks and Clinique. I sent Officeworks a copy of Happiness Is and they said thanks we’ll have 8000. They said their mantra is to surprise and delight customers and it would make a great thank you to PAs who, in the main, buy the stationary.
And how did the book go?
It’s had three print runs and sold 36,000 copies. I also did 50 radio interviews in the first few months. The first print run paid all the costs and by the second and third print run I just had to pay for the printing costs and the rest was profit.
After that I did a one-day self publishing course and a one-day publishing course. I then decided to set up Messenger Publishing.
So you decided to set up a publishing business when publishers are struggling and everyone is moving online?
Yes. I started it two years ago and it quickly went from $100,000 revenue to $2.4 million, with 48 books and winning lots of awards. We now have 91 clients.
What was the idea?
Publishing is a very old industry, but we were approaching it with a point of difference based on my ability to market a project in a different way.
How did you start the business?
I did a lot of mind maps and decided to educate a whole lot of different markets at once. So I decided to run workshops, mentor, consult, project manage – to appeal to different markets in different ways with the same information.
The first workshop I did in April 2006 was a morning session on how to write a book and an afternoon session on how to fund it, distribute it, and market it. I only charged $570 for the day, and people told me they would pay that for a few hours, it was so successful.
Mistakes with the model?
We had to change the pricing structure four times in two years. We completely undercharged at the beginning. Some people called us every day because the book is their baby. We went to their house warming parties. There were no boundaries around demands from clients.
I charged my first three clients $4000 to manage the entire book process. We lost money hand over fist with one client when it took 18 months to publish his book! We just didn’t know how to charge. Also the client got a whole lot of separate invoices from designers, photographers, printers… so now we have clients on a monthly retainer. So it doesn’t matter if they take 18 months. So say it costs $50,000 to put together, they pay us $10,000 a month with all costs included. (It costs $8 to $15 a book.)
That includes working with them on how they will make money for the book and what is the purpose of the book. I say let’s pre-sell to corporate partners and recoup the money, and I work with them on the strategy…
Do you regret the early days?
No. It wasn’t a bad thing to overservice because it created a lot of goodwill and word-of-mouth.
What is the difference between vanity publishing and what you do?
We try to be a smart marketing alternative, not a vanity publisher. We turn a lot of people away. We are not interested in publishing people unless they have a market, so they have got to have some profile, great corporate clients. We ask them who is going to buy this book?
Why do people want to publish a book?
They can do it to get credibility with a corporate; it opens doors and they are perceived as experts if they can cold call with “I am the author of…”. It might help them on the speaking circuit or assist their business. It might be a give away at workshops or help them in their consulting businesses.
Why do corporates buy them as marketing tools?
Well in Australia it is really just starting. It’s huge in the US where corporates buy books in the US for marketing. But it’s an untapped market.
Take a real estate agent selling a house. Imagine leaving on the front bench a book on how to renovate a house. It’s a great value-add.
What has been a big obstacle?
We grew so rapidly that people hired to do one job were doing a different one three months later. We didn’t manage those expectations. A few of the people came from corporates and they couldn’t adapt. I am flighty and visionary, and they needed structures. This was a surprise to me, because I felt like I was creating something extraordinary and fun. On the other hand when we started to outsource processes, some people left because they didn’t like it – particularly a few Gen-Ys. I had given them too much rein.