Tips For Success From A Man With A Golden Touch
W. Randall Jones, C.E.O. Capital Publishing
by Carole E. Scott
|W. Randall (Randy) Jones is the founder and
C.E.O. of Capital Publishing Inc. Capital publishes three special interest
magazines: Worth, Civilization, and Equity. Jones is the
sixth Executive-in-Residence at the Richards College of Business, University of West
Georgia. This article is largely based on an interview with Mr. Jones and
presentations he made to University of West Georgia students.
Carole E. Scott is the Editor-in-Chief of B>Quest and a Professor of Economics, Richards College of Business.
To be a successful entrepreneur, says Randy Jones, you must be a maniac with a mission and have lots of cash and tolerance of risk. Because launching a new business is a risky venture, it is essential that the potential entrepreneur determine what their tolerance for risk is. Don't start a business, he warns, unless you are "willing to bet the ranch." In all industries many new businesses fail within a few years. In some, such as the magazine publishing business he is in, the risk is extraordinary. Ninety-five percent of all new magazines started do not reach their third birthday. It is because the number one reason for business failure is undercapitalization that you have to have "loads of cash." Your greatest currency in raising the money you need from other people, says Jones, is having a good reputation.
Crucial to success, he says, is having a good idea, one that a major group of consumers will find appealing, and using as much of other people's money as is possible. Getting noticed and convincing influential people to back you is also very important. Once, to get attention, Jones, dressed as a circus ringmaster, jumped on a trampoline in Times Square to promote an article in which P. T. Barnum, circus impresario and creator of "The Greatest Show on Earth" was mentioned. He launched his magazine, Worth, by sending models dressed as Revolutionary War soldiers to New York's financial district at quitting time to hand out copies of the first issue and a "100 Grand" candy bar.
Jones' background in magazine publishing determined the field in which he would become an entrepreneur. Because mass circulation magazines are in decline, his interest was in niche magazines, which is "where all the action is today." Necessary to obtain enough advertising to make the venture profitable was a circulation of 100,000. This is a dramatically smaller figure than was necessary in the comparatively recent past.
|Worth, Capital's flagship publication, provides very high income individuals with all the financial intelligence they need to manage, increase, and enjoy their wealth. Each issue includes expert advice on stocks, mutual funds, the economy, taxes, real estate, and retirement, plus Peter Lynch's regular column. Its current circulation is about 550,000. Its first issue was published in 1992.|
The idea for Worth, the first magazine he launched, came from his own personal experience. Looking for investment advice, he found existing financial magazines to be boring and intimidating. This led him to consider bringing "sex to money and Hollywood to Wall Street" by founding a new kind of financial magazine for the wealthy investor. His first step was go out and do a "sanity check" on the idea. He first talked to people he thought would know what "leading edge," baby boomer investors are interested in. Money, they told him, is what they are most interested in. It is, they said, the chief cause of Baby Boomer divorces and family discord. This caused him to decide that he might be on the right track in considering publishing a "financial lifestyle" magazine.
Jones, a Baby Boomer himself, chose to focus on the huge Baby Boom generation for three reasons: (1) it is currently at the peak of its earning power; (2) the current, longest sustained bull market in history is inflating the value of Boomers' stock portfolios; and (3) the passing on of the wealth of the World War II generation to their Baby Boom children has begun. These have have made the Baby Boomers the richest demographic group the world has ever known.
His next step was to hire a company to quiz focus groups composed of the target audience of the proposed magazine: college educated people making at least $100,000 a year who had engaged in at least three stock transactions in the past year. The members of the focus groups, who were paid for their participation, were not told why they had been assembled. They were asked three questions. How many of you feel you are in control of your personal financial lives? How many of you feel that you need to be in control of your financial lives? How many of you enjoy reading personal finance magazines? They responded that they did not feel in control, but wanted to be, and that they did not enjoy reading these magazines.
The subscription lists of financial newsletters and magazines were purchased, and these people were mailed material about Worth and invited to subscribe. Other lists were also purchased, such as lists of people who had engaged in stock transactions in the last year or had purchased over $1,000 in luxury goods. The purchase of these mailing lists substantially increased the magazine's up front costs, but he believes it was worth it because a scatter shot technique that reached the same number of people would entail more waste--money spent to reach people unlikely to be interested in the magazine--and it would have missed more people likely to be interested in the magazine. From idea to turning a profit took four years.
Facilitating raising the money he needed from other people to finance Worth was the reputation he had acquired earlier when he was the publisher of Esquire and his acquaintance with potential investors and those who could suggest others. His share of the proceeds from the sale of Esquire provided funds he could invest in Worth. His contacts in and knowledge of the magazine industry enabled him to readily identify the key players he wanted for his staff. Both staff members and free lancers provide the articles that appear in Worth.
The establishment of Worth was Jones' first step towards achieving his ultimate goal, which is to "own the apex" of the money pyramid by establishing a publishing company that does what no other one does, and that is to provide the wealthiest five percent of the population with a family of magazines and books that cater to their needs. What this first step did for financial journalism is analogous to the change that has taken place in textbooks since the 1960s. Today the writing style in textbooks is sometimes more journalistic than scholarly, even at the collegiate level, and the typical textbook uses color profusely and contains numerous illustrations and photographs. Worth's writing style is laid back. In appearance, it has nothing in common with The Wall Street Journal, and it looks more like Life than Business Week. The fact that Marilyn Monore memorobilia is a collectable provided an excuse to feature this legendary Hollywood star on the cover of one issue. Sex has been utilized in such ways as picturing a couple kissing with a piece money between their lips.
You can't know too much about your customers and their views, and through surveys feedback from Worth's readers is constantly being obtained by the formation of advisory panels of readers who critique four monthly issues. Other market research has revealed such things about Worth's readers as that most of them do not feel rich unless they earn at least $500,000 million a year. Most do not feel guilty about their wealth. This is because they believe that they deserve it because they earned it. Most are leveraged to the hilt. Many believe that they are admired. They most often attributed their wealth to hard work and self discipline. They say that they would be happier if they had more money. By and large, they claim to be satisfied with their lives. What others would view as extravagances, they view as necessities. They are not interested in going to the White House, and the values of the men differ somewhat from those of the women. Significant differences were also found between those at different levels of wealth.
Because economies of scale are significant in publishing, after launching Worth, Jones began publishing other magazines. Although the demographics of the readers his two other magazines, Civilization, the publication of the Library of Congress, and Equity, a magazine that is aimed at women, are not identical to those of Worth, they overlap enough so that they can be offered advertisers as a package. Both Worth and Civilization have exceeded what he admits were high expectations, and he is encouraged by Equity's progress.
The son of a clothing manufacturer and cattleman, Jones is a native of Carroll County, Georgia. Those who knew him when he was a student at Central High School in Carrollton, Georgia remember him as a high achiever. He had big dreams, the achievement of which made it necessary for him to leave this small-town. As a boy he thought that he would probably end up doing something interesting and exciting. What that would be was foretold by the fact that as a child was a magazine junkie. He "devoured" these "windows" on a more exciting and more culturally fertile world than the one that then existed in Carrollton. His favorite magazine was Esquire, which he subscribed to when he was only 14 years old. Today Jones, whose magazines are frequently in contention for national awards, and his wife, the former Connie Cole, daughter of a Carrollton insurance and real estate agent, live in New York with their three sons. Even though he loves New York, where among its rich and mighty he is in the milieu he dreamed of as a boy, he says he has not become a Yankee and sometimes misses the lazy and thoughtful days of his boyhood in Carrollton.
After graduating with a degree in journalism from the University of Georgia, Jones (far left) worked in advertising and sales for the Silver Bear Paper Company in Atlanta. Clearly a highly gifted salesman, he attracted the attention of the owners of the Thirteen/Thirty Publishing Company, a company headquartered in Nashville, Tennessee. In 1980 he was offered and accepted a job in sales with this company. When Thirteen/Thirty purchased the then struggling Esquire magazine, Jones was sent to Detroit, Michigan to sell ads. Subsequently he was made its publisher. At the time, he was the youngest ever publisher of an American magazine. He held this position for five years. In 1987, Jones was recognized by Folio magazine as one of 20 under-35 "fast trackers" in magazine publishing.
After returning Esquire to its former glory, in 1987 Thirteen/Thirty sold it, netting Jones' a seven-figure share of the proceeds. By then he realized that he was a builder, an entrepreneur; not a preserver of an existing franchise. It was then, he says, that he became aware of the fact that there existed no magazine targeted at wealthy, culturally sophisticated, but somewhat financially naive, people like himself that was also sexy and interesting. Because other magazines pretty well covered the interests the "masses," but not those of the "classes," he thought that he had found a niche he could fill.
In an article in Mediaweek Magazine Report he explained that he saw "a need for a magazine about money for people who are good at their craft and perhaps not as good at managing the rewards that they receive." So he launched Worth to serve the top five percent of the income pyramid. The top five percent of income pyramid, he says, controls more than 60 percent of the country's wealth. The top one percent controls 40 percent. Contrary to popular opinion, he says, most of those in the top one percent did not inherit their wealth. The principle way they acquired their wealth was through entrepreneurship. Having two incomes in the family, too, plays a significant role.
In April 1991, Jones was named the chief executive of Capital Publishing Inc., the parent company of Worth magazine and Worth OnLine. His goal in establishing this company, he says, was to "revolutionize personal-finance journalism with a publication that is intelligent, entertaining, and dynamic. Worth reflects his view that money is "a means to an end, in that it makes for a richer, more fuller, more fascinating life." This sexy, smart, and provocative magazine with eye-catching covers reinvented financial journalism, bringing Hollywood to Wall Street and Main Street. Today Worth is profitable. In 1998, its revenues rose to $37,317,558, a 19.2 percent increase over the previous year. It has won more national magazine awards than has any other business or finance magazine, and it has won the critical acclaim of The New York Times and The Detroit Free Press.
"I should admit that I've never fully understood why business and financial magazines often put up such a boring, intimidating, and inaccessible front. I grasp the notion that prim and solemn layouts serve the same function as pinstripes on a banker or marble columns in a bank lobby: They convey prudence, solidity, trustworthiness. And I understand that those are desirable qualities in a financial magazine. We are, after all, writing about things that affect our readers' pocketbooks, and that's a responsibility we'll never take lightly. All the same, isn't it possible to be serious without being solemn? Financial magazines, if not their readers, are in danger of forgetting that their subject can be fun."
John Koten, Editor, Worth magazine, October 1997
It is Jones' belief that no matter how brilliant your editorials are or how great is the financial advice your magazine contains, if you do not first "seduce the reader, you are spitting in the wind." In a column in Worth, Jones explained his objectives in the following manner.
Think for a moment about the untold billions wasted because so many people don't understand what personal finance is all about. Even many sophisticated men and women don't understand the language or grasp the concepts.
The effect on our economy is devastating. It accounts for so many bankruptcies and mountains of personal debt as well as millions of divorces. It's why smart people make stupid investments, why there's always a market for scams, why we don't make the right decisions about funding college or retirement, or buying a Warhol....And wouldn't the S&L swindle that our children and grandchildren will pay for have been harder to put over on us if every American knew how to read a financial statement as well as we know how to read a box score?
We all agree that no one should be deprived of adequate health care. But we also must have access to adequate financial health care. I see a national Financial Health Care program that makes sure every family understands the basics of personal finance, has regular fiscal check-ups, including second opinions when required, and has objective help to turn to. (How about FMOs, Financial Maintenance Organizations, alongside HMOs?)
Like preventative medicine, investments in financial health will pay in the long run. We'd learn to invest smarter and save more. There would be fewer business failures; too many good ideas flounder because of financial failures. I also believe there would be far fewer divorces on every socioeconomic level: It isn't just the Kramdens [fictional couple on Jackie Gleason's TV show] who battle about budgets.
In its own way, Worth has sought to address the situation. Our objective is a new mastery of personal finance, helping readers rebalance their lives by controlling their financial destiny, instead of letting their destiny control them. We accomplish this by exploiting fresh territory with our own unique compass.
|Civilization is the magazine of the Library of Congress. It covers such intellectual subjects as literature, history, culture, and society. It uses the past to increase the reader's understanding of the present. Elegantly designed, it prides itself on in-depth coverage of books, and each issue features a literary essay and book reviews. Jones expects that this year its circulation will rise to 300,000. When Capital Publications began publishing it its circulation was under 200,000.|
The greatest headline that could be written about him, he says, is that he was the savior of Civilization. This publication of the Library of Congress was struggling when Jones purchased it because he believes that knowledge is the greatest status symbol. Its problem, he decided, was not its content, but its poor packaging; so this is what his "re-engineering" of Civilization focused on. While his own ideas have earned him much of his success, he has been wise enough to be receptive to others' ideas, and they have added to it. An important one of these was the suggestion by a colleague that Civilization have guest editors. Guest editors have included the Secretary General of the United Nations, a well known film director, the President of the Czech Republic, the inventor of virtual reality, and a famous fashion designer. His objective for Civilization is for it to provide its readers a "cultural search engine" that provides them with the best of the literary, historical, visual, and performing arts.
|Equity is a women's financial publication that features female "takes" on making money, investing it, spending it, and thinking about it. Currently it has about 400,000 readers.|
Jones' third magazine, Equity, was the brain child two women members of Worth's staff, who badgered him about the need for a magazine aimed at women who, they pointed out, control sixty percent of the nation's wealth; start new businesses at twice the rate of men; and whose businesses employ more people than do the Fortune 500. Convinced, he launched Equity, the nation's first "high-end" woman's magazine. Because he believes its editor and the women on her staff know more about this market than he ever will, he has delegated to them the responsibility for determining its content.
While it is true that if nothing is ventured, nothing is gained, when you venture, sometimes you lose. One of his greatest failures in business was Capital's fourth magazine, The American Benefactor. An idealistic venture designed to celebrate philanthrophy and encourage the wealthy to open their hearts and wallets wider, it was shut down after a two-and-a-half year run. A problem he did not anticipated that doomed this magazine. It was that many potential advertisers did not want to try to sell things to people in a magazine that encouraged its readers to give money away.
In the future Jones hopes to launch or re-engineer magazines targeting the readers of his current magazines whose focus is other of their interests, such as gardening and food. To promote his "brands"(magazines), Jones has published "how to" financial books and co-sponsored trips to sites of interest to the readers of Civilization. Other companies have published his books, but in the future he plans for his company to become a book publisher. Plans are in the works for a television show on PBS about women and money. Because magazine publishers as a whole have not been very successful in making such supporting ventures directly generate significant profits, he realizes that it will be a struggle to make these ventures profit centers.
Capital Publishing Limited Partnership
575 Lexington Avenue
New York, NY 10022
CREDITS: The picture of W. Randall Jones superimposed on the 20th-century, twenty-dollar gold piece was provided by the Times-Georgian newspaper of Carrollton, Georgia. Some of the personal information about him was provided by Erin Moriarty, a member of the Times-Georgian staff in features she wrote. Additional information about Jones and his magazines was obtained from a CNN production broadcast on July 3, 1999 (Movers by Jan Hopkins). The magazine covers and the picture of Jones at a party were obtained from Capital Publications' pages on the Web. The Marilyn Monroe graphic appeared in the October 1997 issue of Worth, page 17.