'Don't do as I did,' warns Venture's Lipper; former principal admits faults; new publisher sees return to zenith

Folio: The Magazine for Magazine Management, Sept, 1989 by Jean Marie Angelo

'Don't do as I did,' warns Venture's Lipper

New York City--"Do as I say, not as I do or did," is the advice Arthur Lipper III, former publisher of Venture, is giving to the business magazine's readers. Lipper, who recently announced that the controlling interest in the magazine is in the hands of Drake publishers, Inc., told his side of the story in an article drafted for the September issue of Venture.

Here Lipper comes clean and takes the blame for the magazine's downfall. Started in 1978, Venture has never run in the black. It has reportedly soaked up $13 million since 1982, the year the venture banker assumed control of the title. Lipper had become an investor in the magazine on an "involuntary basis" when Venture was unable to repay loans that he had guaranteed, he says.

In the deal with Drake, Lipper will recoup his investment and more if Drake is as successful with the title as Lipper expects the company to be, he says.

"I made many of the mistakes about which I frequently warn others," he admits.

"The greatest mistake I made was in continuing to fund operating losses in a business that did not hold sufficient attraction for me to devote my full-time attention. I was really interested only in developing and improving the editorial product and not in publishing per se," he says. Lipper ran Venture on a part-time basis while continuing to pursue other business interests.

He admits that Venture would have benefited from a high-ranking executive recruited from one of the other, successful, business magazines in the field.

A major oversight was not recognizing the amount of money that it takes to compete, he concludes.

Observers say that Venture's main problem was a lack of focus. "It was never clear where the marketplace was," says Charles Rodin, a consultant who aided in launching Inc. and Venture. While Inc. initially targeted businesses with sales between $1 million and $25 million, Venture was somewhat more fuzzy about its target audience. "They wanted to reach the venture capitalist and the entrepreneur," he notes. Inc. identified its audience, but Venture was left in the tough spot of straddling two different positions.

Since this emerging market of small business owners and investors had never been served before, Venture was able to get by, and even prosper, says Rodin. But as the competition heated up, the discrepancies became more prominent, he adds.

Staffers argue that the editorial was not the magazine's downfall, rather it was management's reluctance to spend money on trade ad campaigns, sales promotion and direct mail to boost subscriptions. This lack of promotion hurt efforts to improve the magazine's image, they say.

In any case, the magazine hit hard times in the mid-'80s, when the computer industry, a major category for the small business magazines, hit an advertising slump, damaging all business titles. In addition, many auto makers pulled their advertising out of business magazines after the stock market crash in 1987.

As Venture's fortunes sagged, Lipper began looking for a buyer. It was set to be sold last year to Family Media for a reported $20 million, but the deal fell through. This created more ad sales problems because advertisers became hesitant to buy space in a magazine with a shaky future.

Lipper continued to shop. He approached Entrepreneur as a potential buyer several times, says Clare Thain, president and publisher. Although the price kept dropping, the deal was still not attractive. "A property has to have marketing viability," says Thain. "Lacking that, no price is a good price."

U.S. News & World Report showed interest in buying and merging Venture and Success, a competitor, but the deal never materialized. Success, which recently underwent a redesign, was also looking for a buyer last year, says Thain.

In 1988, Venture lost a significant amount of advertising pages. The total ad page count came to 698, down 16.4 percent from 1987, according to the Publishers Information Bureau. The three other magazines geared to the small business marketplace, Inc., Entrepreneur and Success all gained. Entrepreneur, recently revamped to target the person starting a new business, made an especially strong showing, gaining 55 percent in ad pages for a total of 1,281--approximately 50 pages higher than Inc.'s total.

Return to glory

Venture was once considered a hot property, having made it onto Adweek's 10 hottest magazines list in 1983. The new management team sees no reason why Venture can't return to its former glory. The magazine's premier advertising category was once automotive, says Sherwood Katsoff, the new publisher, who once held the same title on Psychology Today. The magazine will again go after auto manufacturers, along with trying to beef up its financial services and office equipment ad bases.

"There is no reason why this magazine--graphically, editorially, promotionally--should not once again reach its zenith. The marketplace is growing," says Katsoff.

Katsoff adds that new owner Drake is investing substantial dollars in Venture, but would not disclose the amount. However, staffers note that Drake cut the editorial team from 12 to five in June and moved the magazine to smaller quarters. The magazine joins Drake's other properties: High Society and Playgirl, two adult entertainment magazines; Swimsuit International; and revolution, a music magazine.