Looking back, DailyCandy founder Dany Levy likens the sale of her company to Comcast as “running out of a burning building.” The wire transfer of a reported $125 million went through on September 12, 2008, just two days before Lehman Brothers collapsed and all other acquisitions were inevitably axed.
Talk about a sigh of relief. Levy had launched her company just eight years prior in her Manhattan apartment after quitting her job as a writer for Lucky magazine. Long interested in exciting New York City trends, new restaurants, gallery openings and the like, she launched DailyCandy as an email newsletter to share her findings.
Today, the site has 12 editions (11 U.S. cities and one national edition) and more than 3 million daily subscribers.
Why did you decide to use email to convey your message?
Back in 2000, there was no such thing as email newsletters, but even so, I was aware of the power of email. I would get tons of forwarded emails from friends of friends and realized that if I could harness email in an effective way, I could attract a very captive audience.
Did you have funding when you started out?
Nope. I was 28 years old and had saved enough money to self-fund the company for about nine months. I didn’t spend any money back then because it was just me. About five months in, I was able to get two angel investors.
What challenges did you face early on?
A lot of people didn’t understand the concept. No one was creating a business out of email, so it took a little while for people to get it. I launched in March and got my first call from an advertiser in August. I remember picking up the phone and the advertiser asking me how much it would cost for them to put a banner ad on my site. I was clueless, “Um, $10?” It was after that when I realized that I needed to hire someone to help with business development.
Did you ever worry about staying afloat?
We almost folded in December 2000. I was paying bills on a 60-day cycle. I really didn’t want to take money from venture capitalists, but I knew we were going to go under if we didn’t get something, so I brought in a few more angel investors.
It was really hard for me to accept the cash. I remember crying when I took the check to the bank. I never wanted it to get to that point.
You sold a majority share to former AOL exec Bob Pittman in 2003. How did you know it was the right time to sell?
DailyCandy was profitable by then and I really liked Bob and his vision for what the company could be. I had a lot of friends who told me that I was selling too early and my valuation was too low (Pittman reportedly bought in for $3 million), but I believe that there’s money and then there’s smart money. Pittman had faith in the brand and a great track record. He let me do what I wanted to do editorially and he provided the cushion to safely grow. I used to joke with him, “You are going to make a mint off of me.” And he did.
Any other secrets to success?
Back when I first started, I hired a COO from Boulder, Colorado, named Pete Sheinbaum. I didn’t know him, but he came highly recommended, so I decided to take a chance. I’m so glad I did. He ended up moving out to New York, becoming the CEO and was a fantastic partner with me. I really trusted him and it is also because of him that DailyCandy became such a success.
What was it like to work at DailyCandy back in the early days?
We had a culture of "get your stuff done." There wasn’t a lot of vacation time. That said, after working crazy hours in previous jobs, I didn’t want my staff to be putting in all-nighters. People got in around 9 or 10 a.m. and left by 6 p.m. on most days.
Did you stay on after the sale to Comcast in 2008?
I stayed on for three years, but was pretty removed. I worked as a consultant, technically the editorial director and chairman.
What are you up to now?
I am involved in various consulting projects and doing some writing, which is what I used to do. I’m applying to go back to school for social work. I’m not sure how much longer I want to stay in the media world; I’ve been in it since 1994.
Do you see yourself starting another company someday?
I’m not sure. I don’t really see myself as a serial entrepreneur. I will admit that, from a psychological point of view, starting another company is a little terrifying. Once you do something and do it well, you get scared to ruin your track record with something else.
What advice can you offer entrepreneurs just starting out?
Be practical, be humble and ask for help. I had wonderful people from different walks of life who were willing to talk with me. I asked a ton of questions.
Stay focused. Don’t be all things to all people. Think about your brand, and if a decision doesn’t contribute to your values and your bottom line, pass on it.
Read more great interviews with entrepreneurs in our Building an Empire series.
Katie Morell is an independent journalist based in San Francisco. She regularly contributes to Hemispheres, USA Today, Consumers Digest, Destination Weddings & Honeymoons, Crain’s Chicago Business and others.
Photo courtesy of dailycandy.com