THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, March 4, 1996 TAG: 9603020167
SECTION: BUSINESS WEEKLY PAGE: 11 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY DAVE MAYFIELD
BUSINESS WEEKLY
DATELINE: MANTEO, N.C. LENGTH: Long : 189 lines
Sometime in the life of nearly every small business, the owner mumbles painfully one sleepless night: ``Why am I doing this?''
Husband-and-wife entrepreneurs Michael McOwen and Beth Storie said as much several times during their first decade of guidebook publishing. They'd had moderate success and a couple of dismal failures. In 1990 they were wondering if their ambitious dream of a nationwide publishing company would ever come true.
``We felt like we had this huge, tasty ball of cheese,'' Storie says, ``and one way or another we needed to find a way to eat through it.''
So she and McOwen came up with a motto: ``rat-like cunning.''
As a title, it wouldn't fit neatly on the same bookshelf with such loftily worded motivationals as Out of the Crisis and In Search of Excellence. McOwen and Storie are a little embarrassed to have ever even used it.
At their low moment, however, the phrase was just right to help them sum up the energy they needed to finally overcome a series of setbacks that would have defeated lesser entrepreneurial spirits.
He and she are president and publisher, respectively, of The Insiders' Guides Inc.
Based in the little waterfront town of Manteo just off North Carolina's Outer Banks, Insiders' is quickly becoming just what McOwen and Storie always dreamed it would be.
It's one of the nation's fastest-growing specialty book publishers, with about three dozen guides to mostly small and mid-sized metro areas in the Southeast and Midwest.
If things go as planned, Insiders' will sell roughly 300,000 copies of these combination travel/newcomer/business guides in 1996 and post $3 million in revenues. Not bad, considering McOwen and Storie were barely hitting $100,000 a year in sales five years ago.
But this late-thirtysomething couple say they've only just begun. They aim to triple the number of titles Insiders' publishes over the next few years. And they've embarked on a daring voyage into the unchartered waters of cyberspace.
Insiders' is ramping up a site on the global Internet computer network's World Wide Web that will offer a full electronic companion version of each of its titles - from Boulder to Boca Raton. McOwen and Storie are banking on ad sales to make their on-line version work.
These days, their once-cottage business has a whiff of corporate air about it. In a bright new office along Dough's Creek, 25 Insiders' employees are making preparations for this year's editions and wondering when and if a giant newspaper chain called Knight-Ridder Inc. will exercise an option to buy their home-grown enterprise.
The Miami-based Knight-Ridder discovered Insiders' three years ago and has opened doors to Insiders' partnerships with several of its papers around the country. McOwen and Storie aren't saying how much Knight-Ridder would pay for their little company. They use words like ``generous'' to describe the would-be payoff. If it happens, it happens.
In the meantime, they're confident that they've found the formula to succeed regardless of who's holding the corporate umbrella.
It's all quite a contrast to six years ago, when McOwen and Storie had just about hit rock bottom on the motivational scale.
Through lots of sweat and long hours, they'd managed a decade of modest success publishing guides to places in North Carolina and Virginia.
They felt good about what they'd accomplished. They were barely out of college - he from St. Andrews Presbyterian, she from UNC-Chapel Hill - when two guys from Norfolk walked into McOwen's just-opened ad agency in Manteo back in 1981 and said something akin to, ``How'd you like to buy our travel guide?''
That would have been the Insiders' Guide to the Outer Banks, fourth edition. The Norfolk duo and one other partner had sold $4,189 worth of ads for the book. That's what McOwen agreed to pay for the already-completed manuscript and the publishing rights. He and Storie, whom he'd met on the beach during summer break on the Outer Banks a few years before, went out and sold more ads. Then they sold 10,000 copies of the book.
Before long they were publishing guides in Raleigh, Charlotte and Hampton Roads too.
Then came 1988 and the launch of a new guide in Orlando. ``That's when we hit our brick wall,'' McOwen recalls. ``We were a long way away and we just weren't able to keep on top of it . . . We lost money all over the place.''
The partners they'd recruited into the business started clamoring to get out, so over the next few years the couple dissolved their publishing company, paid off debts and formed a new venture.
By 1990, they'd rounded up a new slate of partners and $350,000 in fresh capital - and come up with a new expansion plan. They'd sell franchises in new metro areas in which they published guides.
Unfortunately, their new franchisees flopped and stuck Insiders' with the bills.
``We emerged out of the ashes back into the ashes,'' McOwen says, ``and had to hold onto dear life.''
Just as their spirits were ebbing, he and Storie summed up all their cunning and energy they could muster to make one final push for success. This time, things clicked.
Through some contacts they'd made in their search for new capital, the two were led to Fred Crisp, general manager of the Raleigh News & Observer newspaper. For a while, the newspaper considered buying Insiders'. That didn't pan out, but Crisp used his wide contacts in the newspaper industry to open doors for McOwen and Storie.
Crisp says he admired their determination. ``They had a dream and worked really hard to go after it . . . They were doing this thing from the shoestring for years and I just tried to help them out a little.''
His ``help'' led to an Insiders' partnership with the Richmond Times-Dispatch in 1991 to co-publish a guide for Williamsburg and, later, five other titles, including one for Hampton Roads.
The die was cast. From then on, Insiders' expanded into new metro areas by taking on a newspaper partner. There have been dozens of such deals so far, including several with Knight-Ridder papers.
In most cases, the papers put their name on the cover of the books for their areas, which Storie says helps boost sales. The papers also pay the books' freelance writers and ante up a management fee to help cover Insiders' cost for editing and designing the publications.
The papers sell ads for the books and keep all ad revenues. Insiders' handles distribution and keeps all revenues from sales of the guides to book stores and gift shops.
The newspapers' backing was important in more ways than one. It also gave McOwen and Storie the courage to pursue a strategy that they had been dying to try on a wide scale. That was to go boldly where other guidebook publishers don't - into metro areas not typically thought of as tourist destinations.
``Our niche is not Miami or New York City or San Francisco,'' McOwen says. ``Our niche is the Twin Cities or Cincinnati.''
For most of the new metro areas it spotlights as it expands, Insiders' is the first to have published a book-length guide. Appreciative locals gobble up the books, turning titles that would have been money-losers into profit-makers instead.
But the books are useful to travelers as well, says Rochelle Jaffe, owner of Travel Books & Language Center of Rockville, Md. Jaffe's store carries all of Insiders' guides, which retail for $14.95 each. ``I like them a lot and we sell lots of them,'' she says. ``The information is very current. I like the fact that they do areas that are not really covered extensively by other guidebooks.''
Insiders' books have a chatty, friendly tone that helps put readers at ease. And they're decidedly upbeat - more so than any other guidebook series. You won't find any unfavorable restaurant reviews or get any taste of an area's underbelly in reading one. Unlike other major guides like Fodor's and Frommer's, Insiders' books are also dotted with ads.
McOwen concedes that Insiders' has been criticized by some book reviewers' for its ad-acceptance policy. He calls the critics ``purists,'' and says the ads are necessary to make Insiders' ``micro-sell'' formula work. Without them, the company wouldn't be able to profitably publish books for many areas, he says.
As Insiders' growth continues, McOwen and Storie occasionally long for simpler times. Around their increasingly demanding work schedule, they also lead busy family and community lives. They have two young children and are active in civic affairs. Both are board members of the Dare County crisis center and shelter, which she founded. He helped lead a fight to stop oil drilling off the Outer Banks several years ago.
They've managed to keep it all together at work partly by divvying up responsibilities.
He has become the chief administrator and deal-maker. She is the editor-in-chief. They still sit down together to develop the company's strategy. As many as 125 guides are planned by 1998.
``I feel compelled to go everywhere at once before somebody else gets this idea,'' Storie explains.
Insiders' move into on-line publishing is the latest wrinkle. ILLUSTRATION: [Cover, Color photo]
INSIDE EDITION
DREW C. WILSON
The Virginian-Pilot
COMPANY PROFILE
Headquarters: Manteo, N.C.
Majority Owners: Michael McOwen, Beth Storie
Employees: 25
Products: travel/newcomer/business guides
Estimated 1996 Sales: $3 million
Internet Address: http://www.insiders.com/outerbanks
DREW C. WILSON [color] photos
The Virginian-Pilot
As online services director for The Insiders' Guides Inc., David
Haynes is in charge of putting the company's guidebooks on the
Internet.
The Outer Banks home page is logging more than 14,000 "hits" a week
by people browsing the Internet.
Michael McOwen and Beth Storie are president and publisher,
respectively, of The Insiders' Guides Inc., one of the nation's
fastest-growing speciality book publishers. And this
late-thirtysomething couple say they've only just begun. If things
go as planned, Insiders' will sell roughly 300,000 copies of these
combination travel/newcomer/business guides in 1996 and post $3
million in revenues. Not bad, considering they were barely hitting
$100,000 a year in sales five years ago.
by CNB