On transformative innovation with Yellowwood

I was honored to speak at the recent launch of Yellowwood’s white paper on transformative innovation in Johannesburg and Cape Town. Here’s my talk.

[youtube http://www.youtube.com/watch?v=iSSR4j8nL7w]

 

Introduction

I used to be a textbook publisher for two multinational companies. And when you’re a book publisher you realise pretty quickly that you either make books for rich people, or you sell cookie-cutter textbooks to government. Most people in the world – perhaps six or seven billion – could never buy the books you make. Most South Africans, we can be fairly sure, live their entire lives without owning a book.

Take all the knowledge and experience in your brain that you got from books, and imagine you’re holding it here like a little package. Now, imagine you just threw it away. Gone. What’s left is a life without books. Maybe six billion people live like that, and that is a frightening waste of human potential.

So why is the world like this?

Traditional publishing

Well, all traditional publishing works like this:

  • The publisher develops a finished product, based on their best guess of market needs.
  • Then manufactures it.
  • Stores it.
  • Ships it.
  • Then a retailer displays it.
  • Sells a few copies.
  • And returns or destroys the copies not sold.

This is very expensive: not only are there multiple links in the supply chain adding costs and very little value, but the risk of getting the initial product design wrong is high. Many publishers will tell you that only one in ten books makes money. So, as a result, the industry’s customers must be wealthy to pay for all this, and its retailers must be located close to those wealthy consumers. This is as true online as it is in bricks.

The industry can’t expand beyond these little clusters of wealthy consumers. It’s stuck. And in this form it can’t even live up to its name, ‘publishing’: to make public, and so to spread stories and education and professional knowledge. It’s a problem that, in South Africa, we might call the trap of very exclusive books.

Only a disruptive innovation could solve this problem. And in big publishing companies that would be hard to achieve, because of what Clayton Christensen famously described as the innovator’s dilemma: big companies must meet current customers’ needs, and this prevents them from investing in disruptive innovations, especially in low-margin markets.

And since most of Africa is made of low-margin markets, we need disruptive innovations more than anything.

In 2006 I had left big publishing to start Electric Book Works, a small consultancy that would set examples for innovative publishing, with a focus on technology.

Over the next few years, we failed again and again at creating good examples of inclusive books. It took several years to realise that the innovation we needed would not come from a new, first-world technology. New technologies require disposable income and new behaviours, and human beings are stingy and don’t change quickly. For example, even in the US, fourteen years since ebooks became widely available, and after seven years of massive investment and ebook cost-cutting by Amazon, still fewer than 30% of books purchased there are ebooks.

And given the ecosystem of devices, data, support and credit cards that they require, ebooks are just as exclusive as traditional books.

So I realised we wouldn’t solve the problem in South Africa by throwing ereaders at schoolchildren, or asking everyone to read their textbooks on tiny feature phone screens. We needed something simpler. Something that required no new infrastructure or technology. Something that built on the energy of entrepreneurs and small businesses. It had to work for established publishers, but not rely on them to change much at all about their businesses.

The answer: copy shops

When the answer finally arrived during a research project, it seemed blindingly obvious: there are thousands of photocopy shops around South Africa, printing CVs and flyers and booklets, and photocopying books every day. These shops are in city streets, townships, and rural villages. They’re in schools and churches, at the backs of hair salons and in converted shipping containers. We only needed to harness their power, and make it legal and easy for them to print and sell books.

The key is ‘legal’: copy shops have long had a reputation for copying and selling books illegally. Where that is true, it’s because they are meeting the needs of their communities in ways the formal book industry can’t. So you might say we wanted to turn pirates into partners: to bring an informal market into the formal distribution chain, for everyone’s benefit.

So in 2011, with the Shuttleworth Foundation as our investors, I gathered a team and began building Paperight: a network of independent copy shops that print books out for customers quickly and legally.

Our B2B site, paperight.com, enables any business with a printer and an Internet connection to print out and sell books, paying only a small licence fee per book from a prepaid account. Amazingly, publishers can make the same margins that they do from their fancy editions, and still the total cost to the customer is usually less than a traditional book.

More importantly, the customer just walks to their local copy shop for it: no long trips to the bookstore to discover they’re out of stock, or waiting weeks for a delivery. No need for a credit card.

The copy-printer as intermediate technology

Our innovation is built on what EF Schumacher, over fifty years ago, called an ‘intermediate technology’: a technology that’s more advanced than the poor are used to, but cheaper to set up than the first world’s cutting-edge stuff. Base of pyramid initiatives will always rely on intermediate technologies to be sustainable.

But it takes humility to innovate with intermediate technologies. In this way, ours is a humble innovation. It is not sexy to sell printouts from copy shops. But the power of Paperight is in that simplicity.

Africa as a whole needs more humble innovations using intermediate technologies, or we will continue to limp forward through the rubble of a thousand failed attempts to roll out fancy technology that existing economies can’t support.

Intermediate technologies work today. Our member copy shops across the country have delivered thousands of books, many in places where no bookstores exist, like Peddie in the rural Eastern Cape, and the CBDs of Khayelitsha.

While we’re still small, the potential impact is immense. We’ve just signed an MOU with copier manufacturer Riso, whose low-power, high-volume machines are perfect for schools. Any school that leases a Riso machine will be able to print books from as needed, and Riso will contribute to the licence fees. This could change the face of schoolbook distribution forever, completely sidestepping the problems of textbook shortfalls in classrooms.

And it can all be done with good old photocopiers.

How we innovate

We believe that when innovation is humble, it becomes very straightforward: you simply focus on finding the real problem and solving it today. You can waste a lot of time innovating around the wrong problems, or on tomorrow’s problems, sticking glamorous technology where it isn’t appropriate.

We also believe wholeheartedly in the value of openness: transparency and sharing is built into our team’s DNA. The company is fully transparent internally, right down to knowing each others’ salaries. We’re open-sourcing our code. We love sharing stories of failure as much as success.

This openness many benefits: we waste no resources trying to keep secrets; we are forced to confront our failures bravely; and others share with us and trust us.

Openness helped us overcome our first big challenge: getting traditional publishers on board and willing to work with copy shops that they’d always mistrusted.

Challenges and bright spots

We’ve won a bunch of awards and accolades around the world over the last year. But quite frankly, what really matters is whether our model is delivering books. Which it is, of course, but we’re impatient, and we want to deliver far more books much faster.

So we’re continually looking for partners, specifically organisations ready to invest CSR or enterprise-development money in getting books to needy schools and early-childhood-development programmes, and in supporting small printing businesses.

It’s still early days for us and for truly accessible books, but as more and more partners join us on the journey, the better the chances are that we’ll look back in ten years and say that together we fixed a dent in the universe, and put books within walking distance of every home.

Thank you.

Let’s bust this “reading is dying” myth

In a wonderful piece for Time, Annie Murphy Paul argues that reading literature makes us smarter and nicer people. That’s something most book lovers would agree is a no-brainer. Apparently a professor at the University of Nottingham wasn’t convinced, so Paul did a great job stacking up the evidence.

In doing so, however, she worries that deep reading is dying, and that young people increasingly read only superficially:

“Deep reading” — as opposed to the often superficial reading we do on the Web — is an endangered practice, one we ought to take steps to preserve as we would a historic building or a significant work of art. Its disappearance would imperil the intellectual and emotional development of generations growing up online, as well as the perpetuation of a critical part of our culture: the novels, poems and other kinds of literature that can be appreciated only by readers whose brains, quite literally, have been trained to apprehend them.

She quotes a study by Britain’s National Literacy Trust full of ‘more-likely-less-likely’ stats about young readers that seem designed to leave us more confused than terrified. For me, surveys like this are far less useful or trustworthy than empirical evidence. It seems to me that deep reading is far from endangered among young readers. In recent years, young adult reading has boomed. The Mail Online wrote a year ago:

From Twilight to The Hunger Games teen fiction is booming, with sales jumping almost 150 per cent in just six years. In the first five months of this year more than 2.4 million books in the category were sold compared to 981,000 in 2006, according to figures compiled by Neilsen BookScan.

Here in South Africa, Yoza, FunDza and Bozza have enabled hundreds of thousands of teens to read long-form fiction and non-fiction on their phones – and engaging deeply with material that just wasn’t accessible to them before. Some have even become successful writers themselves.

Paperight Young Writers Anthology 2013At Paperight, we’re about to release the first Paperight Young Writers Anthology, a collection of the best poetry, essays, short stories and illustration from South African high school students. I was involved in the poetry selection, and I guarantee that these astonishing writers are voracious readers: it’s clear from their craft that they read deeply and often.

Young people love reading deeply. Let’s celebrate that, and build our literature around it, instead of worrying needlessly that the world we think we remember is going to pieces.

Why I put ebooks on paper for South Africans

On Publishing Perspectives today, I explain why – in an age of digitisation – it’s more important than ever to keep books on paper.

The irony of the digital revolution is this: as it democratizes publishing, it widens the gap between those with Internet access and those without. For instance, take Wikipedia: this is perhaps the most useful collection of human knowledge ever created. And it’s wonderfully democratic. But where a few years ago you could read a relatively up-to-date paper encyclopedia in your local library, today you can’t — because of Wikipedia. Up-to-date encyclopedic knowledge now exists only online, and if you don’t have Internet access, too bad. The gap between the Internet-haves and the Internet-have-nots is getting wider.

That gap in turn will translate into an education gap, an economic gap, and a healthcare gap.

Wikipedia is a microcosm of the book industry. Hundreds of thousands of books are produced every year, by more and more people, at lower and lower costs, and increasingly unavailable to anyone without Internet access to buy or read them.

I founded Paperight specifically to address that problem …

I hope you’ll head over there and read the rest of the post.

‘Woman gives birth to child’

On Thought Leader last week I wrote about Aidan’s birth, and what it taught me about the astonishing feat that is childbirth. From the piece:

When my wife Michelle gave birth to our first child, Aidan, last year, I learned some things about the world. I learned that nature doesn’t take prisoners. That labour wards are only pragmatic places, designed to extract one human being from another. And that every news headline, every day, should read ”Woman gives birth to child”.

A hundred years ago, Michelle would not have survived Aidan’s birth. She had a post-partum haemorrhage (PPH), the condition that still kills more new mothers than anything else.

The simplest drug treatment for PPH is Misoprostol. But in many hospitals, especially in the developing world, nurses and midwives aren’t allowed to give Misoprostol (apparently because it can also be used to induce abortion). Only doctors are allowed to prescribe it, even though there are often no doctors around to do so. And many, many women die as a result. It is the most terrifying evidence of our world’s callous misogyny.

Read the full post on Thought Leader.

Open licensing vs sales: tricky decisions and the Pratham Books data

Few questions in publishing are more clearly polarised by personal opinion than whether open-licensing is compatible with increased revenue. In general, fans of open-licensing don’t work for commercial publishers, and claim that open-licensing boosts sales. And those whose salaries depend on selling copies of books won’t even risk trying open licences. There has been precious little data to prove either’s case.

I have feet in both camps. As someone who genuinely believes widespread literacy could solve deep-rooted problems, open licensing seems to be a necessary leap of faith for any publisher who gives a damn. That’s why at Bettercare we put Creative Commons licences on our books. Still, as someone who needs Bettercare to stay afloat, this gives me the shivers.

At Paperight, too, we struggle with this. We recently spent tens of thousands of rand developing a CC-licensed book that Paperight outlets would sell. When a partner organisation started giving the PDF version away for free, we felt disappointed: those should have been our sales! We need that cash!

Of course, those giveaways were probably never going to be our sales, anyway. The book’s market is huge, so we’ll find our own customers. Still, it stung emotionally. We wondered whether the CC-license was a good idea. And in the absence of real data, emotion rules.

So it’s very encouraging to see that for Pratham Books, sales data clearly shows that open-licensing correlates with increased sales. Not only the licensing, though, but easy, free access to that content, too. In their case, on Scribd:

… when we looked at the cumulative sales data for CC books that were available on Scribd vs. CC books that were not available on Scribd, we were astounded to see that the former outsold the latter in such dramatic fashion in almost a 3:1 ratio. While we would be hesitant to say, given the specifics of our market and our model, that making books openly licensed and available online increased sales, we are a lot more confident in claiming that, at worst, it does not seem to depress sales of those books. And that, in itself, is an important learning for us and as it should be for the rest of the publishing industry.

I highly recommend reading the entire post, which explains how they gathered the data. It wasn’t an easy journey for them either. Just as it isn’t for us.

Luckily, I work with people who are willing to take the leaps of faith we need to overcome our worries and do the right thing. If all goes well, Pratham Books’ experience will be ours, too, and the gods will keep us in lunch.