I had a fun conversation with John Pettigrew on his ‘Talking Through My Hat‘ publishing podcast recently. If you’re in book publishing, his series is worth subscribing to. He has regular conversations with wonderful publishing entrepreneurs, including Michael Bhaskar of Canelo, Kate Wilson of Nosy Crow, and Emma Barnes of Consonance.
Earlier this year, I closed my startup. So now I get to reflect on what I’d have done differently. Hindsight is unfair and inaccurate, but I still enjoy its lessons. This is one, a note to my future self: Don’t call your projects ‘startups’.It’s a semantic trick, but a really important one. Here’s why.
‘Startups’ have become a commodity in an industry of startup conferences, websites, courses and competitions. As founders of young organisations, we struggle to distinguish genuine guidance and support from the distracting pizzazz of the startup industry, where we’re just the product, not the customer. Lured by the lights, we spend valuable hours crafting slide decks, jumping on planes, giving presentations and filling out entry forms, almost always so that someone can sell tickets to the show. I worked it hard, and I didn’t see the return. I want that time back for my business.
Here are five new rules for myself.
1. No more startup events
I’ve been invited to four startup events just this week. Wait — checks email — that’s five. It’s a freakin’ craze. Startup seminars, breakfasts, retreats, showcases. Say no to all of them.
Startup events are supposedly ‘good for networking.’ I made an interesting connection at one or two, I think. For the most part they’ve sucked vast amounts of time I really should have put into working on my organisation.
Your next project may be in publishing, healthcare, engineering or another industry, but it’s probably not in the startup industry. At a startup-industry event, you’re only going to meet startup-industry people. They are not your customers. Only go to events packed full of potential customers in your industry.
Very occasionally, treat yourself to a dinner with a few entrepreneurs you like — it helps fight the loneliness. Otherwise, if you’re not out selling, get back to your office and work. Or go home and spend some down-time with your family.
2. No more startup competitions
Then there are the competitions. Innovation competitions, pitching competitions, business-plan competitions. Sometimes the prize is an investment in your company. (First prize, an investor! Second prize, two investors!)
Honestly, do you want an investor who comes shopping for startups at a cocktail function? Winning an investment is like your bank calling to say you’ve won an overdraft. Lucky you.
It can be worse. I got a call from a major international consulting firm to tell me we’d won a big innovation award. But I can’t tell you about it because I have to pay them a licence fee if I do. Seriously: they wanted 7500 euros just to let us tell people we’d won. Another time, I got interviewed on a startup-support radio show, only to be asked to sign a letter afterwards saying they’d given us R188000 in airtime. (I didn’t sign.)
You can also win ‘business support’, or well-meaning MBA students to ‘help you grow your business’ for their course project. I’ve spent days with teams who are new to my industry using my time to tell me things I already know. I want those days back.
If you’re certain that you have time to enter competitions, only enter the ones where they’re giving out loads of free money and you know you can win. Don’t be the product.
3. Beware the warm glow of startup media
The startup-industry press is so seductive. It’s pretty and says it loves you. Being a startup, especially based in Africa, is great for media coverage, more especially if you win a startup award.
At Paperight we kept a long list of posts and articles about us that came from startup-industry acclaim. We won startup and innovation awards in London, Frankfurt and New York, an Accenture Innovation Award, and public congratulations in South Africa’s national parliament. We were featured in several ‘startups to watch’ articles and were profiled on the websites of CNN, Forbes and others. We were even featured in a book about open-business innovation. We’re fairly certain that the awards made this coverage happen.
But in not one case did we see a corresponding spike in sales (or calls from investors), and for a young business running out of runway, sales are all that really matters. For a while, the acclaim is great for motivating staff, and to help inspire an investor’s confidence, but the effect wanes after a few awards. Don’t chase coverage in the startup industry. Find your own industry’s media outlets (they’re harder to find and less sexy than the startup press) and focus only on them.
4. Don’t tell customers you’re a startup
Every office-bound exec wants to love a startup. Like a pet. But no one wants to buy from a startup. Especially big companies. Big companies want to buy from big, stable businesses. They want to trust that you’ll still be around in a few years. And their people need to feel you’re a familiar name. At Paperight, we needed book publishers to trust us with their most valuable IP. It’s insane to think they’d give it to a ‘startup’. We could have put our whole business in a cupboard for ten years, then dusted it off and they’d be more likely to work with us, because we’d be too old to be called a startup.
5. Get real help
The startup industry appeals to a very real need for emotional, intellectual and financial support. But (except in very rare cases) it is going to distract you more than it delivers. It’s bad for focus. Instead, find experienced confidants from an industry like yours. If nothing else, their emotional support will mean more to you than a hundred hollow prizes.
I’ll be surprised if I stick to my new rules. So remind me, please, because I’ll probably forget: run a business, not a startup. You don’t have the time.
This article was originally published on Medium.
At a Mobile Literacy Network Meeting this week hosted by the Goethe-Institut Johannesburg, I talked about Paperight, why we had to close, and some of the lessons my team and I are taking to our next ventures – particularly Bettercare and Book Dash.
From the talk:
Our problems were of course, in part, the result our strategic decisions: out of an infinite number of possible alternatives, some would have been better than others. But aside from that, we knew we had three major external challenges:
- While many publishers joined us, almost none let us sell their most popular, high-value titles. They asked us to test with their scraps – I’ve spoken before on why that’s always a poor idea, and wastes everyone’s time and energy.
- Most copy shops were not active partners, which is not surprising when we had so few high-value titles for them to promote. Many also gave their customers poor service (we double-checked ourselves spending hours and days in stores).
- Our target market – potential readers and students with poor backgrounds – have grown up without books. They don’t attach much value to reading. Certainly not enough to buy books before food and clothing. As I’ve said before, South African publishing has done very little in the last twenty years to change that.
Despite our disappointment, buried in those revenue stats is a promising story: we made far more as a publisher than as a distributor. We had created a hundred simple, low-priced books of our own: collections of past grade-12 exam papers. That one small collection of high-value, low-priced titles made as much as all our other sales combined. And that’s after those past-papers were free for the first seven months.
For some years now, Amazon and major publishers have been arguing about how the book industry should work. Most recently, Amazon has been tussling with Hachette. Alistair Fairweather has a neat overview in the Mail & Guardian:
For more than six months Hachette, a large publisher, has been wrestling with Amazon – the largest online retailer of its books – over pricing. The dispute soon escalated from private negotiations to a public brawl with all the hallmarks of a schoolroom hair-pulling fight.
Amazon is becoming a vertically integrated book company, a single house that handles everything from commissioning to sales. That’s what many publishers were a hundred years ago. Think Virginia Woolf and the Hogarth Press. (In some countries, like Egypt, they still are, as Ramy Habeeb explains in this great talk.)
Over the years, businesses that specialised in certain parts of the publishing process became independent of the rest of the publishing chain, until they formed distinct industries of their own. Specialist printers took the work of the publisher’s printing department. Specialist agents and editors took on the role of curating authors’ work. Specialist booksellers took on the work of putting books in front of consumers. The days of the vertically integrated publisher were over, at least in the developed world where books are big business.
Some companies managed to keep two publishing functions in-house: rights and branding. Rights mostly means entering into contracts, and branding means deciding which stories to tell and how to package them. Pretty much anything else could be left to the specialists. But if you kept rights and branding in-house, you could call yourself a publisher, because you got to decide where and how your books would reach people. And so, in the world of books, we use the word ‘publisher’ really to mean specialists in rights and branding.
In this world, for fifty years or more, the specialists lived in relatively peaceful symbiosis. This was possible while the constraints of the book trade were constant: given available technology and good sense, you could change very little about the way books were made, moved and sold. Advances like computerized typesetting and print-on-demand shuffled things a little, but they did not fundamentally change the natural constraints of making, moving and selling books.
Most of us grew up in that world, so we think it’s normal. But it’s really just a phase in the evolution of the book business. A phase held in place by constraints on what was possible. And perhaps the biggest constraint – an effect of the physical nature of books and the way we sold them – was the book-selling specialists’ inability to sell books to exponentially more consumers.
Amazon changed that. Bezos and his team solved the constraint on sales, as Fairweather puts it, “by consistently pleasing millions of customers for nearly two decades”.
With a key constraint removed, the symbiosis was over. For a few years now, Amazon has been vertically integrating publishing under its very big roof. Today, Amazon is a publisher (rights and branding), a self-publishing service in ebooks and in print, and of course a marketing and sales powerhouse. It owns a large piece of the Internet’s infrastructure. And last year Bezos bought a major newspaper, which may help Amazon do and learn more about marketing.
Don’t think that this is normal, either. Or that Amazon will remain the only troll under the bridge. This new phase may last fifty years, as the last did. Or the rapid change that the Internet makes possible will shorten it dramatically.
In the meantime, if you’ve been working for a publisher, it may be useful to focus on this: if rights and branding are what you’re good at, get better at it. Most importantly, be creative about it. Ever since the Internet made copies almost free, the biggest barrier between you and new customers is a rights barrier. Don’t make rights your admin person’s side job. And don’t clog your rights department with lawyers: a lawyer’s job is to eliminate risk, and finding new customers always involves risk. While you may have to lose battles with Amazon, you don’t want to lose the battles over rights, such as battles over exclusivity, lowest pricing, and territory.
Of course rights are exactly where Amazon needs to win on its road to vertical integration. Amazon often asks for exclusivity in key areas (such as lowest pricing), for instance. And its direct approaches to authors are a move on original rights. Your best defense in rights discussions may be your own precedents: if you are already creatively exploiting rights you control, it’s that much harder for Amazon and others to claw them off you.
There is another reason to get creative with rights, too. In another part of this galaxy, but not so far away, open-licensing players are getting stronger every day. They are doing high-quality, game-changing work. The publishing industry’s us-vs-them attitude to open licensing (see this PDF press release and this PDF paper) is self-defeating: open licensing isn’t other than book publishing, it’s a creative tool of business.
I would love to see the publishers of today become the creative rights managers of tomorrow. Not only would it make my job at Paperight easier, but because publishing companies employ so many of my good friends and family. Ultimately, we all care most about the individual lives affected by all this fuss; the people who make the books and the people who need them. Wherever they’re coming out ahead, the book business is doing well.
Earlier this year I was lucky to attend a fascinating meeting in Washington DC, hosted by USAID and Worldvision (among others), to brainstorm around the idea of a global online repository for children’s reading materials. I’d been invited largely to contribute our experience building distributed print-on-demand at Paperight.
The final report from that meeting is now available – click here for the PDF. (Or visit the project’s site here.) Out of lively and long discussion, several areas of sensible consensus emerged. For me, the most important was that the world doesn’t need more repositories. Rather, we need to strengthen those that exist, and to develop standards that allow them to interact.
From the report summary:
In the first sessions, participants agreed that a) a number of digital “repositories” already exist which could be strengthened, expanded upon, and/or linked to to promote access to relevant early grade reading materials, b) a directory to consolidate access to these dispersed sources is needed to meet objectives of a repository, c) there is a need for more materials to be catalyzed, produced, identified, digitized, etc. for inclusion in any collection(s) and d) a more thorough landscape reviews of existing platforms should be taken. Both as a prerequisite for this, and as a desirable standalone initiative, a metadata standard for early grade reading materials should be developed. Beyond this, the participants emphasized the importance of developing appropriate user-interfaces, promoting good practices in developing and “storing” materials conducive for print and electronic dissemination, ensuring usability with assistive technologies, creating a repository that could host new collections of early grade reading materials (rather than simply linking to materials in existing repositories), and encouraging the translation of existing content into different languages.
The main points of divergence among participants in these early sessions focused on whether to include both commercial and freely available content (on balance – yes) and whether to screen the types of early grade reading materials made available, particularly materials which may be deemed culturally insensitive and controversial (on balance – no).
I’ve highlighted key concepts in bold there. If this is your field, take a moment to look through the report and let me know your thoughts. I’ll be sure to gather and feed them back to the team behind it. Given that this discussion may inform big funding decisions by USAID and others organisations in future, it’s important that all those working in this area put their minds to getting it right.