By Jennifer Litz
Editor
April 13, 2008
San Angelo LIVE! publisher Joe Hyde has an office on Concho Avenue across from the YMCA. It’s got everything he and his team need to survive stretches of overtime: Hyde’s Copenhagen, a carpeted floor with props that can serve as makeshift pillows, a network of Apple Macintoshes, and a dry-erase board to write sales goals and figures for employees, and provide them an outlet for press-time work delirium. It’s the perfect incubator for the now year-old, general-interest publication.
The office isn’t the feng shui downtown digs you might expect from a cutting-edge publication. But the dirt around the spokes of the floor fan and close quarters of the magazine’s skeleton crew say more about the company’s bootstrapped work ethic and history than any Madison Avenue prototype.
In fact, the local edition of LIVE! officially turns 1 year old in a month. But its time in the womb, if you will, was long and tumultuous.
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In the Beginning ...
US Air Force Major Joe Hyde started in the magazine business the long way—through teaching himself how to provide Internet service to small-town Texas before Roadrunner and Verizon did.
“Here’s how it happened,” says Hyde, who is privy to a uniform of white t-shirts and a leather bomber jacket. “I was working on my MBA in Rio Grande College at Sul Ross in Del Rio. To get promoted to major, you had to have a master’s. And my professor, Randy Stitts, was making me write this paper on why Medicare and Medicaid screwed up the healthcare system. Because he was a Liberal and I was a Conservative. So I was traveling all the way to the University of Texas at Austin to go to the PCL library for research.”
During these jaunts, Hyde would stay with a fish buddy of his from Texas A&M University who was getting his doctorate in astrophysics from UT. “He said, ‘Hey Joe, maybe you’ve heard of the World Wide Web,’” Hyde says. “And he’d show me this thing called Gopher to retrieve things so I wouldn’t have to drive to Austin. So I got an AOL account and started logging on from Del Rio, and they charged you like $8 an hour. I ran up a $360 bill in one month.”
Hyde decided he needed to get someone to start up an Internet service provider in Del Rio, to make things cheaper. But nobody with any experience in the field thought it would catch on. So then he decided to try it himself.
“Me and my neighbor John Martin did research, downloaded this 5 million page document on how to do the ISP,” Hyde says. “We hired a guy named Jerry Kemp who was a network administrator in Laughlin Air Force Base, and he helped us set up all the Unix servers. Along the way, I learned how it worked, and how it all went together.”
They called the ISP DelRio.com.
In 1996, Martin and Hyde successfully started the ISP in Del Rio. But Hyde was transferred to Shreveport, Louisiana, in 1997, and decided to sell his share of the business to Martin.
Hyde kept the bulletin board system that was an offspring of the ISP. Called “Talk Live,” it was one of the first of its kind, a prototype for today’s message boards and more. When Del Rio had the big flood in 1998, it was one of the only ways people across the country were able to contact and keep tabs on loved ones.
“Then John sold DelRio.com, and I had this huge audience on this bulletin board system,” Hyde says. “I peeled it off from DelRio.com and called it Del Rio LIVE!
“By ‘99 we had stringer reporters, and they were writing about city council and county commissioners court, and we continued to build that audience for free. So in 2000, I sold a whole bunch of online ads to see if it worked. And it did. A lot of people stood up and bought banner ads.” Hyde left active duty and joined the part-time reserves at Laughlin as a T-38 instructor pilot so he could devote more time to his burgeoning Internet company.
But Hyde didn’t think the budding online community could survive off ad revenue alone, so he turned Del Rio LIVE! into a dial-up ISP. “It competed against DelRio.com directly,” Hyde says. “We were one of the first wireless ISPs in the nation at the time.
“But I made a strategic error: I spent 1 percent of my time on media, when that’s what I really wanted to do.”
And then 9/11 happened, and nobody wanted to buy ads anymore.
“So I was 100 percent ISP for a year,” Hyde says. “Because people still wanted the Internet, no matter how bad things were. “
The Rise and Fall of DelRio.com
In 2002, the people who had bought DelRio.com from John Martin and were now competing with Hyde threw in the towel: They wanted to be bailed out. Hyde turned to successful Toyota dealership owner Nick Khoury for possibilities. “I needed a businessman,” Hyde says. “I knew the technical stuff, not the business stuff.”
They partnered on a DelRio.com buyout, “and went to town building that thing into a huge operation,” Hyde says. “Primarily as a wireless ISP.”
At the height of that business’s success, the DelRio.com/LIVE! merger had radios on 10 towers in America and Mexico.
But Hyde knew the honeymoon couldn’t last forever. “Triple play” companies that provided bundled phone, Internet, and cable services were coming to town.
As Hyde’s anxiety climbed, Milagro Wireless Networks, a start-up wireless Internet provider that sought to provide service from Del Rio to Houston, Houston to Dallas, and Dallas to San Antonio, waltzed onto the scene. They wanted to make DelRio.com part of their model, and offered an overly generous buyout figure.
“I had no other plan,” Hyde says. “So I thought, ‘they’re offering me a job to stay on with the company.’ And they offered an insane amount of money. But most of it was on the back end, in stock.
“They bought us out, and within about five months working for them, it became apparent that they didn’t have a clue what to do. They didn’t really have a plan. And I was being berated daily on the phone. So I resigned.”
Hyde took a sales job with MCI in West Texas based in San Angelo.
Shortly thereafter, the DelRio.com initiative fell apart. “Because they didn’t know what they were doing,” Hyde says. “A lot of people in Del Rio didn’t understand—they thought I was a big crook, leaving it. But they didn’t know I lost a lot of money on this deal.”
In 2005, MCI was bought out by Verizon and started closing down offices. “It became apparent that if I wanted to stay with Verizon, I’d have to move to Houston or Dallas,” Hyde says. “I wasn’t into moving to a big city. So I started frantically applying for jobs again.”
Hyde’s knowledge of Web development and building an online community made him think he could get a job in the newspaper or publishing business. “Anyone in the newspaper business that would listen to me,” Hyde says. “But they weren’t investing in their online strategy, or me. Heck, it was the first time I ever had to apply for a job, and I couldn’t get one! “So I’m really feeling down at this point and thinking, ‘I’m just the biggest loser.’ Just like that Kevin Fowler song [“A Long Line of Losers”].”
People told him he should apply for an airline job. But Hyde had done all the flying he had wanted to in the Air Force. “I mean, what are they gonna put on your tombstone if you’re a pilot your whole life?” he asks. “‘He flew a whole bunch of people around the country. Fasten your seatbelts.’
“There I was. I had no options. My job was going away and my business deal was falling apart, and ‘CPS was going to take my kids’—When I heard Bleu Edmondson’s “Finger on the Trigger,” that was my theme song.”
Starting Up In San Angelo
In early 2005 there was a business plan contest in San Angelo, put on by the Concho Valley Center for Entrepreneurial Development. “Basically, if you created a business plan, they’d help you write it,” Hyde says. “Then they’d help you present it to the esteemed board—first prize was $15,000 seed money. So I wrote this business plan based on what I learned about Internet content development at DelRio.com, and added to it a direct mail component.”
When Hyde worked in sales at MCI, he had learned about the power of direct mail. Nothing made potential clients call him back like a letter with a straightforward pitch. “I could buy newspaper ads and radio time and no one would care, but if I sent letters, my phone would ring off the hook with responses,” he says.
He had taken advantage of the poorly tracked Pitney Bowes office postage machine at MCI. “I’d hire ASU kids on the weekend, and we’d direct mail every business in El Paso that had revenue of over $5 mill. The letters would say, ‘If you’re spending more than X amount on Internet or long distance, call me.’ We started with El Paso, then covered Brownwood and Brady.
“So when I was building the [online magazine business plan pitch], I added a direct mail magazine component to the Internet presence.” Hyde saw TV station KLST’s homelessness—it had been kicked off the Cox cable network, and it was unclear when or if it would get picked up—as a sign of local media fragmentation. “So direct mail seemed like the surest form of media,” Hyde says. “You couldn’t guarantee people would be able to watch KLST, but everyone checks their mail.”
Hyde made his presentation to the CVCED. The committee tore him apart. They said he couldn’t compete with the San Angelo Standard-Times. They took exception with him being “a carpetbagger outsider.”
In the end, the first place prize went to a guy with a scheme to sell refurbished laptop hard drives on eBay. Second prize went to someone who was going to turn soybeans into diesel fuel.
“But I was emboldened that since nobody liked my idea, it must be a good one,” Hyde says. “Like with the FedEx guy.” FedEx founder Fred Smith received a grade of a “C” on a business plan for FedEx he wrote in business school years before he started it.
Around this time, Hyde got a call from a bank in Del Rio. “They asked if I knew how to liquidate Internet Service Providers,” he says. “I had to help liquidate DelRio.com.”
Hyde’s former business partner Nick Khoury stepped back in the picture. “He said, ‘We can walk away from this, or we can try and make something from it,’” Hyde says. “And here’s a guy that stood up with me and believed in me. So I felt a moral obligation to do something.”
Hyde shared the business plan he had presented to the CVCED with Khoury. “We tweaked the plan a lot,” Hyde says, “and while we’re liquidating Del Rio.com, we’re making this plan.
“Meanwhile, the director for the CVCED, Joe Lizio, had heard about it and said, ‘Hey, this guy can run a business. I just want to get him in here to incubate it.’ He wanted me to move in and pay rent at the CVCED. So I made another presentation to get in there.”
Hyde and Khoury’s new Del Rio LIVE! launched in May 2006. But the name was tainted: the former investors had bad debts and possible liabilities. So Hyde changed the name to Southwest Texas LIVE!
San Angelo LIVE! launched a year later, in May 2007. The rest is history in the making.
“There are a lot of things I’ve learned along the way,” Hyde says. “Like, there’s no such thing as freedom of the press.” Not when you have to balance compelling editorial content with ad sales, the magazine’s main source of revenue online or in print. Hyde recalls a time when one of Southwest Texas LIVE!’s advertising clients used the publication’s online message board to avenge the bank that had been involved with its foreclosure. The bank happened to be an advertiser—but not after seeing the posts on LIVE! Other banks pulled their ad dollars in a move of solidarity. Eventually, Hyde and crew have gotten most of them back.
Into the Future
While valuable lessons have been learned from the older Del Rio publication, Hyde and his San Angelo editorial staff are still perfecting the magic formula for captivating the local audience. One thing Hyde has homed in on is San Angelo’s vibrant music and entertainment scene.
“I had gone to the Pat Green Concert at Graham’s,” Hyde says. “I knew nothing about Texas Music—and we didn’t get an interview with him ‘cause he’s kind of a jerk. But we got an interview with the Rio Grand Band [the opening act]. And they were the coolest, most down to earth people ever. They were cool.”
But while music and entertainment coverage keeps the fickle 18-to-35 audience captive, advertiser’s coupons don’t get used as much by that less-wealthy demographic—and advertisers expect to see coupons come in when they pay to place them in a magazine. “So we started sending the mags to home owners in affluent neighborhoods, and growing our circulation,” direct mail guru Hyde says. “We also diversified our content with enterprise articles like we were doing on Southwest Texas. And that increased the direct response coupons. For example, the Kwik Kar coupons on the back of San Angelo LIVE! Ray Harper [owner] gets more response off that than any other advertising he places—radio or TV. He thinks they could cancel everything else. Daily business doubles for about two weeks once our magazine hits the mailboxes.”
Hyde says Kent Beagle at Texstar Power was skeptical when Hyde pitched him to run an ad online in both markets. He did, and he now says he hasn’t seen anything as effective. He’s got new customers in Del Rio, Sonora, and even Ozona, as well as San Angelo.
Kim Graves bought Suntrax Tanning Salon last year and was skeptical too. She turned down Hyde’s original pitch to pay for all the expensive phone book advertising she bought. But this year, she put in all new tanning beds and needed to get the word out. She turned to LIVE! “I have never bought advertising that paid for itself until now,” she says.
Hyde is also trying to grow the online component of both the Southwest Texas and San Angelo LIVE! Markets. The first market’s online presence has grown from 600 unique visitors in November 2006 to 23,000 in January 2008; San Angelo has gone from 1,650 (May 2007) to its current audience at 23,000 uniques.
Online stats, like readership and ad sales, are a finicky, hard-to-maintain thing. But Hyde and his crew strive to jack up the numbers with each day. And Hyde is confident they’ll continue the upward trajectory.
“I’m not scared,” Hyde says. “I’ve been scared flying over Baghdad in a B-52 at 35,000 feet with bad guys trying to shoot me down. Compared to that, this is a cakewalk. At almost every corner along the way [starting this magazine], people have warned me that this or that company will not allow us to gain traction, to be successful. Well, we have traction now in two markets. We made it this far. And you know, it’s all about providing real meaning to peoples’ lives. That’s what we do. And that gives our company a purpose. Meaning and purpose.
“We have a very loyal following in what we do. We have the audience. We are the innovators. There are a hundred ways to market a business, most of them don’t work. I’ve been there and heard a thousand sales pitches from all kinds of media. I’ve lost a lot of money on advertising too,” Hyde says.
“This thing is designed by someone who relied on direct response to gain new customers and put food on the table,” Hyde says. The formula? Harness the reach of direct mail along with the frequency of the Internet to engage a mass appeal audience that spends money. “I guarantee your next customer is reading San Angelo LIVE! right now,” Hyde says.
I noticed a photo by Matt Wittie but no mention of him in the story. Wasn't he Joe Hyde's right hand in starting this magazine in Del Rio and in San Angelo?
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