business

Mediabistro: It Started Over Cocktails

The fourth of eight ways entrepreneurs, investors and savers have made a million. Find out how they did it and read all eight.

Millionaire Lesson No. 4

Success on the Internet isn’t serendipitous. Don’t court investors until you have adequate traffic and initial revenue.

Laurel Touby’s $23-million Internet bonanza started with a time-honored tradition of social networking: the cocktail party. Touby was a freelance writer working out of her New York City apartment in 1994, and she was eager to connect with other creative professionals who spent their days trapped in cubicles, studios and home offices. So she began sponsoring middle-of-the-week cocktail parties at a bar in the East Village, where guests bought their own drinks and swapped business cards (and where Touby donned her trademark feather boa as a way of identifying herself to new arrivals).

The media mixers were an instant hit, and by 1996 she had built a database that included thousands of names. Touby took the growing community online and dubbed it Mediabistro.com. Soon, people from all over the country were posting job listings and clamoring for local parties, and she was happy to oblige.

At that point, Mediabistro was still a hobby, and Touby was supporting herself by freelance writing. In mid 1999, she began asking people who posted job ads on her site to send $100 per listing to a post-office box. She received $2,200 the first month -- not bad, she told herself.

Two months later, she collected more than $3,800. By the end of 1999 she had taken in more than $65,000 -- nearly twice her earnings as a writer. "That’s when I realized that I’d better invest in this baby," says Touby, 45.

So she tapped contacts to help her write a business plan and find in­vestors. By 2000, she had lined up $1-million commitments from two investors in exchange for an ownership share. Mediabistro managed to weather the bursting of the dot-com bubble, the stock market’s nose dive and the 9/11 terrorist attacks. Frugal with her investors’ money, Touby created a new revenue source by offering online classes and seminars for a fee.

Last year, Jupitermedia bought Mediabistro -- and its robust online traffic of seven million page views a month -- for $23 million. Touby’s personal share is $12 million before taxes -- and more if future financial goals are met. She and her husband, journalist Jon Fine, continue to live in their Brooklyn apartment while searching for a loft in Manhattan. "After getting this huge amount of money," she says, "we want to be careful not to lose it."

EIGHT MILLIONAIRE PROFILES

1. The Video That Took on a Life of Its Own

2. Know When to Make the Call

3. Pounce When the Time Is Right

4. It Started Over Cocktails

5. A Thirty-Year Plan to Make a Mil

6. Breaking With Family Tradition

7. Accumulating A Fortune on $11 a Hour

8. Suddenly It Clicks

Most Popular

Tax Wrinkles for Work-at-Home Employees During COVID-19
taxes

Tax Wrinkles for Work-at-Home Employees During COVID-19

Are your home office expenses deductible? How does going out of state to work for a while affect your tax picture? There are some interesting wrinkles…
November 9, 2020
Retirement: It All Starts with a Budget
personal finance

Retirement: It All Starts with a Budget

When you’re meeting with your financial planner, do you talk about your budget? If not, you should.
November 10, 2020
Will Joe Biden Raise YOUR Taxes?
taxes

Will Joe Biden Raise YOUR Taxes?

During the campaign, Joe Biden promised that he would raise taxes for some people. Will you be one of them?
November 10, 2020

Recommended

Financial Benefits for Military Families
Personal Finance for Military Families

Financial Benefits for Military Families

For Veterans Day, we run through benefits and programs meant to offset some of the financial risks service members take on. Also, hosts David Muhlbaum…
November 10, 2020
17 People You Should Tip for the Holidays
spending

17 People You Should Tip for the Holidays

The holiday season is prime time to give back. So who gets a holiday tip this year – and how much?
November 6, 2020
9 Places That Will Pay You to Live There
real estate

9 Places That Will Pay You to Live There

Working remotely? You may want to check out these places who'll pay you to move there.
October 30, 2020
COVID Clipped This Pilot's Wings
Coronavirus and Your Money

COVID Clipped This Pilot's Wings

American Airlines furloughed him on November 1. Now his career track is cloudy.
October 29, 2020