The birth of an institution

Esther Smith launched Washington Technology in 1986 with a simple concept in mind: Give a voice to a strong, vibrant business community that was woefully underserved."It was apparent to me that real estate and banking dominated the business community [in the Washington area], and they had no appreciation for the tech community," she said. "There was clearly a need to reach this group in terms of identification, news value and serving other people's marketing needs."Existence of the need came as no surprise to the area's technology industry, which included defense, telecommunications and IT companies. Tech World, a group formed to promote the industry, approached Smith about starting a newsletter for the tech community.She nixed that idea. "A newsletter is OK, but a newspaper is a better business model," she said.Smith, a Georgia native, knew what she was talking about. She started her career in journalism as a reporter for the Atlanta Journal-Constitution. In the 1970s, she was married to a career military officer and living in the Washington area. It was then that she founded what later became the Washington Business Journal.But when her husband was promoted and transferred out of the area, she sold the publication. "I saluted and moved," she said. But she kept in touch with many of the business leaders she knew from the 1970s.She and her husband returned to Washington in 1985, and after Tech World approached her, she began building her business plan for Washington Technology. She presented the idea to potential investors that summer and fall.Her goal wasn't to raise a lot of cash. "My theory was this was going to be a success or it wasn't," she said. "I didn't see the use of making it a big hyped start-up either way. You can't just throw money at something like this."Her many contacts at the companies she wanted to reach as readers gave the project a boost. "We did a viral marketing campaign to get subscribers, and the bigger companies were very cooperative," she said. They let her put subscriber cards in pay slips and office mail. An agreement with the Association of Image and Information Management let Washington Technology get the group's mailing list, and all attendees of the group's annual convention got subscriptions."We started out with about 10,000 subscribers, which is more than enough to achieve critical mass for this kind of thing," she said.Smith was editor and publisher for the first issue, published in April 3, 1986. Some early advertisers included BDM International Inc. and PRC Inc. By May, the newspaper, which carried the tagline, Champion of the Washington Technology Market, was on its growth trajectory.Enter investment banker John Sanders, a friend of Smith's. He had taken a pass on investing in Washington Technology. "I knew nothing about publications," he said.But after Washington Technology began publishing, Sanders was impressed by the reception it got from CEOs and other business leaders. "Even after just an issue or two, they saw it as something really good," he said. "They needed something like this."He then went to Smith and asked how things were going. Great, but Washington Technology needed more resources to keep growing, she told him.Sanders came onboard to help restructure the company, bringing in more equity and becoming chairman of the board.The biggest challenge was with advertisers, he said. "Esther was committed to this being the champion of the technology community and the voice of the community because it had no voice," Sanders said. "But no one cared, other than the tech community. The banks didn't really care; the brokerage firms didn't really care. So it was tough to build up the advertisers."As exasperating as Smith found that, she had to quit going on sales calls, she said. "I kept thinking the people were so stupid, which in retrospect, they certainly were," she said. "I'd tell them, 'One of these days the light is going to click on and when it does, you are going to want to talk to us.' I was not very nice."But a sense of community was starting to build. Smith and Sanders began organizing breakfast briefings that started with general business topics but took off when the focus shifted to technology and government, Smith said."We were starting from a pretty primitive base," she said. "I remember going to cocktail parties hosted by Earle Williams [chairman and CEO of BDM]. He would invite about 25 other CEOs, and other than John Toups [CEO of PRC], no one else knew who anyone else was."A watershed moment in Washington Technology 's early history came when the publication connected with the accounting firm Ernst and Young Inc. and the American Electronics Association to throw an awards dinner in 1987.Expecting 400 to be a home run event, the event drew more than 700. That was it, Sanders said. "Everyone realized that the tech community is real. It had arrived."Not that everything was smooth sailing after that. The transition from the Reagan administration to the first Bush administration created a surprising slowdown in government spending, and a real estate recession at the same time also hurt."We were certainly hit by economic forces," she said.Washington Technology had been conceived as a regional publication, but fully a third of the publication's readers resided outside Washington, Smith said.Because many early readers were primarily involved in the government market, the publication began concentrating its focus on the government IT market, she said.By the mid 1990s and particularly with the rise of the Internet, Smith and Sanders saw a coming boom in the technology market."The whole nature of the tech industry was going to transform and really surge," Smith said.They were faced with a choice: Cling to the status quo or grow, and to grow they needed more capital. The right choice was obvious, and they began positioning the company for a sale.The decision was made in September 1996 to sell to the Washington Post Co. It was the Post's first acquisition of a technology publishing business. A year and a half later, it acquired Government Computer News and the FOSE trade show to form the nucleus of PostNewsweek Tech Media."I wanted the organization and the publication to continue," Smith said. "My goal was to build a company and an institution, not just a publication. I loved every minute of it."Washington Technology Editor Nick Wakeman can be reached at nwakeman@postnewsweektech.com.