Red Herring founder shares success story

Working around the clock, forgoing a salary and sharing a single phone line, Chris Alden and his partners started from scratch and wound up building a virtual empire in the process. That empire is Red Herring Communications, Inc., a publisher of technology business news in various media, including a magazine, a Web site and a television operation. Alden, the corporation's chief executive officer, spoke to a packed crowd of mostly Wharton graduate students yesterday afternoon about his entrepreneurial experiences. Wharton's eCommerce Club sponsored the lecture. "I want to encourage people to be entrepreneurs," he said following his talk. "It's fun, you don't have to know all the answers before you try -- but to be successful you have to have the right motivations, the right will." Red Herring was not Alden's first try at entrepreneurial success. In 1990, he constructed a company to teach people how to use a Macintosh computer. The theory of the company was this: A client would call up asking for a tutorial on, for example, Microsoft PowerPoint. Alden would then read a PowerPoint instruction book and teach the client the material for $75 an hour. Sounds good, right? But Alden soon figured out that making $75 an hour doesn't make one a millionaire in this world. So, in 1992, Alden -- a Dartmouth College alumnus -- hooked up with an old friend and an experienced magazine executive and started Red Herring, a San Francisco-based business magazine. The name refers to the preliminary prospectus with red binding that budding companies create to market their ideas. It is fitting for the magazine because the product shows a "glimpse of a company before it's gone public," Alden said. But as well-known as the magazine is today, starting it was just as difficult. "We didn't have any money to pay anybody anything," Alden explained. So the trio developed creative ways to advertise their product. Alden joked that the best ad came when the group showed a list of people subscribing to the magazine. However, the magazine had limited subscribers at best, so the list was comprised of "silly names," including characters from popular TV shows. The idea worked; soon people were calling to find out how they could get their names on the list. Red Herring, Alden boasted, offers its readers something new -- a different type of business article because the businesses featured in the magazine are barely off the ground. "We were willing, prepared and excited to cover ideas at their inception," Alden said, adding, "We were covering an area that no one else was covering." Alden offered some words of advice to those prospective entrepreneurs in the audience. "Being an entrepreneur is very, very hard," he warned. "You won't succeed unless you're prepared to stomach the down cycles." A question-and-answer session followed the talk. "I thought it was outstanding," said Rich Chism, a first-year MBA student. "It was very interesting to hear [Alden's] story, to see how he made his company. It's inspiring."

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