How We Started PC Magazine
in 1981 with $150,000
by Cheryl Woodard, Posted March 2000
is the first issue of PC Magazine. It was created during the winter
of 1981 and printed in January 1982, less than 5 months after the
first IBM PCs were distributed to consumers.
IBM announced its personal computer in August 1981. At the time, David
Bunnell and I were working at the Osborne division of McGraw Hill publishing
microcomputer books. David was editorial director and I was marketing and
sales director. It was David's idea to create a magazine for IBM PC users.
Our editorial mission: The new IBM computer was to be an "open" machine
- a box that would accept non-IBM parts and products. Not only the
software, but also the hardware itself could come from other companies.
This openness was a staggering opportunity for the computer industry.
IBM could use its name and reputation in the business world to exponentially
expand the total market for personal computers. And hundreds of smaller
companies could ride into those new markets literally on the backs
of IBM computers.
But the openness was likely to create confusion for computer users who
would have to assemble dozens of products from different vendors to make
a complete business computer system for themselves.So, our editorial mission
for PC Magazine was to provide users with unbiased advice about choosing
among all of the products available to them.
Wanting to appeal to people who were novice computer users but sophisticated
business people, we had to be specific about the products but not too technical
in our language. We had to be colorful and attractive - more like a smart
business magazine than a drab, technical one. And we had to discuss how
to use the products, not just iterating a long list of features.
Our advertising sales plan: We knew we'd have a strong base
of potential advertisers if we could provide IBM-compatible hardware
and software companies access to the new IBM PC users. Our advertising
pages would grow as new products reached the market. But here was the
challenge: we had to reach PC buyers while they were still actively
buying products. If we got to readers a year after they bought their
first PC, or even a few months, we'd miss that critical buying window
that was so important to the prospective advertisers. So our circulation
plan focused heavily on distributing single copies at computer stores
and retail computer shows.
The existing personal computer magazines were very strong, but IBM's goals
extended well beyond the universe of their readers. By making a machine
that was not compatible with any existing personal computers, IBM had created
a new playing field for publishers. No one could claim special advantages
with IBM PC users. In many ways, everyone in the industry was starting
from scratch ­ advertisers and publishers alike.
We found that advertisers needed lots of help understanding who their customers
were going to be. In many instances, we had to help advertisers develop
ads that were free of jargon, but still capable of communicating the technical
features of their products. For example, IBM was using Charlie Chaplan's "Little
Tramp" figure to advertise their computer in general interest magazines
like Business Week. We urged them to run something different in PC Magazine — something
that would explain the features of the PC but in a "user-friendly" style.
The suggestion almost backfired: while the agency was considering which
ad to run with us, our printing deadline came and went. We held up the
first issue, though, because of course it had to have an IBM ad in it.
We hadn't planned to spend so much time and trouble educating our advertisers.
As events unfolded, it became clear that our relationships with advertisers
would always take as much time and energy as every other task before us — combined.
Our startup strategy
David had a friend in New York who had an associate who wanted to
finance the new magazine. We first sat down to discuss the idea in
September of 1981. All of us wanted to be the first ones out the gate
with an IBM PC magazine. So David and I started working on it full
time in October 1981, and published our first issue in January 1982.
Our startup team included six people, counting the New York financier.
The rest of us were in San Francisco. I was in charge of marketing and
sales. There was also an editor, an art director, and a production director,
plus David as publisher. David was the only one of us with any previous
We never prepared the kind of formal business plan that is normally
used to raise money for new ventures. We already had our financial
backing, and besides there wasn't time. But we did prepare a budget
for the first year. We planned to publish bimonthly and to sell
about 300 ad pages in the first year with an audience of about
50,000 readers at year's end. There was no point doing direct mail
- since the computer was brand new, its users would not find their
way onto mailing lists for some time. Instead, we planned to put
issues of the magazine wherever the computer itself was on display.
So we planned to print tens of thousands of extra copies loaded
with subscription ads and we developed an aggressive single copy
We had two pieces of good luck right away. First, IBM agreed to
run an ad in our first issue. Other advertisers were eager to follow
IBM's lead. Second, Byte magazine agreed to run our subscription
ads. Both were leaders in their own venue. Nearly all of our first
subscribers came from those Byte ads.
We created an eight-page, four-color "preview issue" describing
our plans for PC Magazine. Editors and contributors were pictured and profiled.
The subscription offer was also a drawing for a computer.
We distributed the brochure at two trade shows, one that was a show for
computer dealers and one attended by individual computer enthusiasts. We
rented lists of computer retail outlets and did a mailing that brought
in several hundred outlets willing to carry the first issue. We also telephoned
computer dealers and got them to order issues, sight unseen.
We sent the brochure and a rate card to all of the advertisers in existing
computer magazines. It was a primitive promotion program, but it worked.
We had 36 ad pages in our first issue, which was 96 pages long plus the
Success nearly killed us
The IBM PC was an immediate hit, and we were instantly overwhelmed
by it's success. There were so many more products than we had anticipated!
The entire industry was running on overtime getting their products
to market. We sold more ad pages in our first three issues than we'd
budgeted for the entire year. What a disaster!
Our worst problem was cash. Subscriptions were pouring in, each
with a check enclosed. But the big money - from advertisers - was
trickling in 60 days or more after the issues hit the street. Printing
bills came due before the ad revenues reached us. Worse, we out
grew our original printer and had to switch to a new one with the
third issue. Neither of our printers was willing to give us any
special credit terms because we were an upstart company with no
track record whatsoever. Both demanded full payment of the printing
bill before they would release the issues. Ouch!
Our slow-growth budget also created a lot of stress and strain
with our New York investor. He was particularly upset at our growing
overhead. He was reluctant to advance extra cash despite the obvious
need for it. Too late, David and I realized that we might have
paired up with the wrong person. Perhaps he didn't have the resources
he'd claimed. We didn't know. And the distance between us made
it hard to clear up the confusion.
Getting people to help us
We were scrambling to keep up with the accelerating demand for editorial
material. Looking back on those times, we joke that if you could walk
and talk at the same time, we would have hired you to write product
reviews for PC Magazine. One fellow we profiled in the first issue
(Andrew Fluegelman) became a contributor with the third issue.
And we needed help in every other area, too: production, subscriber
services, ad sales, dealer sales, accounting. Looking for people
we could trust, we hired people we knew and assigned them tasks
many had never done before. David's wife, Jacqueline Poitier took
charge of the art and production process. My sister, Sarah Woodard
became our accounting manager. Her husband, Bill Cox, took charge
of retail dealer sales. David's cleaning lady joined the office
staff. My former secretary, Niki Stranz and the drummer of her
rock band, Mark Doss, worked in advertising sales. Most of these
odd matches proved successful. The staff was loyal and incredibly
hard-working. I worried constantly, though, that we would fail
and our families and friends would fail with us. The pressure on
me and David was scary.
All those people needed telephones and a place to work. We outgrew
David's house after the first issue. By the third issue, we had
rented four separate spaces on Irving Street in San Francisco:
two apartments, a basement office space and an off-season H&R
Block Tax office. There were no affordable fax machines, no voice
mail, and no e-mail in those days. Worse, none of our telephones
were linked together, so we hired a kid to run up and down the
street distributing phone messages and mail. One day she called
in sick and we discovered a cache of mail she had stuffed in the
bottom of a closet rather than sorting and distributing it!
Advertising orders flooded in and we decided to go monthly with the fourth
issue. We sold over 130 pages for that issue alone.
Every one of our original vendors and administrative systems was
overwhelmed right away. At 148 pages, our second issue was bigger
than our printer's binding equipment could handle. We outgrew our
fulfillment agent almost before we'd finished signing a contract.
We were billing our hundreds of retail dealers and advertisers
by hand. Staff were buying office supplies and equipment on their
own credit cards. Stationary, sales brochures, and rate cards were
being printed at a local quick print shop.
Looking for appropriate financial support
In March things came to a head with our investor, who finally told us
that he wanted out. He said he would not put any more of his own money
into the magazine. We agreed to start looking for someone to buy him
Normally, selling your successful magazine would be a happy occasion. We
certainly hoped that a bigger backer - one with publishing expertise and
systems - would solve all of our pressing problems. We were eager to find
a way out of our dilemma. But the selling process can be much harder than
From about May of 1982 until November, David and I spent nearly half
of our time meeting with potential buyers. There were about a dozen
of them, and each had a million questions. They wanted to see reports,
financial analysis, cash flow projections. We were short on documentation,
but we did our best to show them our situation.
David and I would spend the day (including dinner) with potential
buyers and go to the office at night to review stacks of messages
from the staff. I found consultants to help organize our subscriber
services. I met with the ad sales team every morning in a local delicatessen
and commuted to work with my sister so we could work out operations
problems together. All of those wonderful people really kept the
magazine together for us while we were so distracted with the financial
In the end, we could not avoid a bad break with our investor: he
chose one buyer and we chose another. A sale was made, but it was
a messy one, and both sides immediately launched multi-million dollar
law suits. I won't go into the legal details. But despite the lawsuits,
the final results were positive for everyone.
The happy endings
Ziff Davis bought PC Magazine, moved it to New York and went on
to make it into one of the biggest magazine success stories of
all time. As of this writing, PC has over a million readers, is
bi-weekly, and generates some $20 million in ad revenues with every
Pat McGovern hired David and me and about 45 of the original PC
Magazine employees. With the support of McGovern's International
Data Group (IDG), we founded a new company in San Francisco and
created PC World, Macworld, Publish! and the Macworld Expo. McGovern
took PC World and Macworld international, making more than 20 foreign
editions of each. The Macworld Expo is the leading trade show for
Macintosh computer users and his IDG Books division makes excellent
use of the magazines' franchise.
David left IDG after about 6 years. He founded his own publishing venture
and directs several others. He is a happy man.
I left IDG about a year later, and I'm happy, too. I wrote a
book, Starting and Running a Successful Newsletter or Magazine,
to help other people start good magazines without making some of
serious about publishing magazines, You can order it from Amazon
. Or check your local library
or retail bookstore.
Many of PC Magazine's original employees turned
that formative experience into successful publishing careers.
Some are still working
with PC World or Macworld. Some are successful writers or run
their own businesses. Others have moved far away from publishing
computers both. All of them can still tell great stories about
their time at PC Magazine.
Some of the biggest companies in the computer industry today
started out with quarter-page black and white ads in PC Magazine.
Like us, they started with minimal cash, a lot of luck, and
a good idea.
If you're thinking about starting your own magazine, maybe I can
help. Feel free to email Help@publishingbiz.com. I'm happy to help
other publishing entrepreneurs.