Journalist David Schwartz, after building up and selling his National Health Information, launches Niche Builders Inc.

David Schwartz's entry into the newsletter business was fairly prosaic. Armed with his degree from the State University of New York at Binghamton and experience as editor of the school paper, he went south to Atlanta in search of warmer weather and a job. He answered a want ad for a "staff writer" that turned out to be with American Health Consultants.

Knowing nothing about newsletters when he began in March of 1983, David did "odd ball" jobs around the office until becoming involved in the launch of a newsletter called Clinical Laser Monthly. He also became its first editor.

Fast-track career at fast-track company

Typical of the business we're in, a year to the day after he took over as editor (his "first real job"), David found himself as an "expert" on a panel at an industry conference speculating on the future for the specialty. (Remember the bromide, it's usually easier to take a journalist and let him or her learn a specialty than to teach a specialist how to write effective journalism.)

Over the next 11 years, AHC grew from the 6 or 7 newsletters published when Schwartz came aboard to "a lot, probably over 50."

Then founder Leslie Norins sold the company to Medical Economics. Robert Williford took over as president and David began going through "every job in the book" at AHC, eventually as vice president.

Launches own company

By 1994 David said he "wasn't looking for a job, but wasn't happy" at AHC ("a long story"). And then, at an association publisher's conference in Newport, R.I., he met Ken Kahn of LRP Publications, who was looking for new ventures and offered to be a financial backer if David gave him a business plan he liked.

"I pitched him an idea for a newsletter venture, publishing in healthcare, the area I knew about. He liked it and National Health Information LLC was born.

"My first product was a newsletter called Captitation Management Report. The timing was right; the healthcare industry was under assault from managed care and it just took off. We were profitable right from the beginning. After the initial increment invested by Ken Kahn, we never needed any additional outside source of funding.

"The first few years were very successful. We launched other titles. We crossed the $1 million mark in revenue by 1997. Remember, Fred, it was the '90s when you could pretty much print money with newsletters. It really wasn't that difficult to do," David said.

"Then, in the later '90s, we seemed to hit a wall. There was upheaval in the regulatory areas we covered, changes in Medicare legislation in 1999. The healthcare industry seemed to be in the tank during the dotcom boom and people thought. I suppose, that they were going to be 'able to get all the information they needed free on the Internet,'" David said.

"And then came September 11th"

"And then came September 11th. All in all it was a tough few years. It just was increasingly hard to sell another subscription. There was a lot of consolidation in the industry, big guys gobbling up the little ones. Actually, I think we did a pretty good job remaining on our feet and surviving.

"A major effort we made was to move heavily into ancillaries, an area we hadn't really been in before 1998 or so. We launched a website. We learned e-mail marketing. We entered partnerships with other firms. Ancillaries really became the engine that was driving the company," David said.

"NHI was never a large firm. I always used exclusively contract editors. With marketers, finance and production in-house we were about 7-8 employees. The contract editors probably brought us to about 15 full-time equivalents."

Struggle continued

"But life continued to be a struggle. We attempted launches in energy newsletters, nanobiotech and electronics, but it was a frustration to me that we never grew to more than middling size.

"Life still revolved around going to the post office and looking for the mail. I wondered if I was ever going to be running a business that reached the point where I didn't have to worry about what was in today's mail.

"For a long time we had a bell in the office and when we got a paid order or a credit card over the phone, we rang it."

Sells NHI

"So in August of 2006 I sold the company to HCPro and began a new venture as Niche Builders Inc. At this point it is purely a consulting company. We hope to show publishers how to become more ancillary-driven, how to sell more things and get more for the things they sell, how to slice and dice editorial and how to enter partnerships with others.

"Right now for one client I'm working on a launch, for another on developing audio conferences, and for a third on a business plan.

"I'm happy and as busy as I can be but also strongly suspect I'll be launching a newsletter myself again in the not-too-distant future," David said.

Earlier he had told NL/ NL that The Niche Builder would be ready "in time to spread it around the SIPA conference next June."

Niche Builders Inc., 1992 Westminster Way, Atlanta, GA 30307, 404-626-8191. [e-mail]