Javier Celaya, Dosdoce
How can we have publishers working with start-ups? How are publishers using new technologies. Asked 174 publishers and start-ups and asked what were the relationships with them?
Tech is changing the publishing world. First transformation has been content driven. Next stage is driven by devices, not devices, but services.
Moving to service driven industry – services mean different things. Tech companies help define those services, they think in a different way to publsihers.
What are the difference between publishers and tech companies? They have different legacy, different managerial structure, different way of doing business.
Hard to find publishers that are already working in this collaborative way.
When publishers meet with start-up, they have a different objective than the start-up. Publisher wants to know what’s going on, what are the trends. Start-ups want to close a deal. Few follow-ups because different goals.
Start-ups are desperate for feedback. Is their tech, their idea, validated? Any feedback, if it needs extra features, those comments are strongly appreciated by start-up community.
Appoint someone in the oragnisation who’s responsible for meeting regularly with these people, so they have someone they can have that conversation. And that person should be responsible for going to conferences and finding new trends. Internet has no frontiers, so have to look globally for technology.
Try to engage. Not about investing, but can do many things with these companies. All about data, engagement, direct sales. Whatever problem you want to solve, there’s probably a start-up out there doing it. Start-ups believe publishers can give them value.
Publishers – 83% said they were willing to invest but felt there wasn’t anything out there. But there is a lot out there. Start investigating.
Other sectors, big companies invest in start-ups because they are going to investigate opportunities.
Few publishers investing in the start-up community.
Have to jointly transform ideas into products and services.
Anna Lewis, ValoBox
Make web-friendly books. Take ebooks and deliver them through the browser. Interested in a particular question: How do you sell books to people who aren’t looking for them.
By making books a part of the web, have opportunities open. Each page on ValoBox has a unique URL and can be linked to from anywhere. Can preview any page. Can share and are rewarded for that.
Start-ups are good for doing something by what big companies can’t. Very hard for small company to deal with larger companies. How do you make the relationship work.
Advice for publishers who might want to work with start-ups:
Laying the groundwork – make sure that you as a business are ready to work with start-ups. Be in a place where you’re looking to work with start-ups.
Tell me how you want me to work with you. Job titles mean nothing. Tell them who to go to, who to pitch to. Give the start-up an idea of the kind of process that they can expect to experience. Have some indication of how the process might look like, what are the stages.
Have well-managed files and metadata. So much easier when the building blocks are solid. Stops so much back and forth between you and the start-up. O’Reilly are brilliant at this, and that’s one reason they do work with start-ups, it’s all very straightforward.
Ask stupid questions. If you don’t understand when a start-up is blathering on, then do ask them. If they can explain it to you, then they understand it. If they can’t then maybe you should be questioning whether you want to do business to them. And if you like the project and need to sell it to your boss, you need to do it well.
Getting the most out of the relationship:
Keep it lean. Once had a bit project but it just kept getting bigger and bigger, and then it just got out of control and was shut down. If had started small could have seen what was working and deveop that. Do a small, meaningful trial then expand.
Take advantage of a start-up’s skill and flexibility. Tell them what your problems are, what questions you have. Start-ups are flexible, can adapt. Is there a product tweak that will help solve your problem?
Innovate in small steps.
“If you want to make enemies, try to change something.” Woodrow Wilson.
Start-ups have to make the new sound boring and un-innovative. It’s much easier to meet in the middle.
When it’s not meant to be. Say no if you’re not ready. Would rather be told up front.
Don’t be afraid to try. Sometimes it won’t work out and that’s fine.
“Failure is simply the opportunity to being again, this time more intelligently” – Henry Ford.
Molly Barton, Penguin Books
Investors are reticent to invest in start-ups that involve publishing at all because they see publishers as too slow.
Typical hurdles for publishers.
Structural: Who should the start-up talk to. Is it distribution? Product? Business development? Depending on the answer to that is who gets to talk to that contact. Need to find the right people to consider the idea.
Sales people focused on making their numbers, but need to set targets through new channels, including unknown channels. Asserting that structural forecasting can be really helpful to encourage people to take these opportunities seriously.
Contractual: How does the idea affect existing contracts.
Cultural: There’s discomfort with how people use some language, so be careful.
Hurdles for start-ups.
Lack of industry knowledge: A few people in NY who act as a concierge, work with them for 3/4 months at a time, coach them in language, connect them with the right publishing houses. Can be a productive way of moving forward. They are almost literary agents for products.
Taking models from other media sectors, eg TV or movies or music, without thinking of what makes books different.
Competition: Been pitched ‘Netflix for books’ by more than 20 companies. Lots of people working on similar ideas. Productive way forward is for those companies to talk to each other, be aware of the value proposition others have. Either collaborate or be clear on what makes you different. Know your competitors.
Pivoting too fast or too slow. May start with one idea which takes you somewhere else. That’s normal, but be careful how you communicate that to partner companies.
Goals not aligned with the publisher: A lot of start-ups coming up with a particular idea and their goal is to be acquired. For a publisher, that’s anxiety-producing because who’s going to buy that platform? Amazon? Google? Be straightforward as possible.
Examples of Penguin’s efforts to collaborate with start0ups and funding innovation.
Penguin/Pearson team choosing ten business problems and inviting start-ups to embed themselves into the business to help look at solutions, and sending execs out to embed in start-ups.
Inkling is an start-up, exposing the guts of a book to search, very media rich ebook experience. Now partnering with Penguin.
Citia, addressing an interesting problem, bit ahead of the curve, most people know that fiction sells better than non-fiction. Why is that? Why aren’t they picking up ebooks? Lots of information available on the web. But also, we’re changing the way we consume information.
Kevin Kelly, ed of Wired, take a book that he wrote about ‘what tech wants’, Citia took that, stripped away most of the content, and present it. “Table of contents on steroids”. It’s cards. Faster way of reading non-fiction. How can we make reading non-fic faster but not stupider.
Small Demons, trying to enrich metadata around books, connect books more effectively with pop culture.
Those are all start-ups that came to Penguin.
Penguin-funded start-up: Ebooks by Sainsbury’s. Sell print and ebooks. Rnadom House, Harper Collins, Penguin, wanted to create new market place.
Bookish, independent company, sell ebooks, print books and audiobooks. Focused on discoverability. Recommendation engine. Have editorial team covering books.
Book Country, start-up within a corporation, within Pearson. Wanted to start a community where people could improve their books and go on to self-publish if they wanted. the goal in doing that was really to create a brand that wasn’t a penguin brand where could experiment, learn what it’s like to really create a community, that was a new experience for Penguin, and learn what’s it’s like to run a direct to consumer business.
Would recommend that you set aside money for R&D and experiments. Don’t put those experiments into business as usual analysis for 18-24 months. Allow things to be confidential if they need to, don’t make people defend their ideas every day.
Create targets for trying things you’ve not done before. Share what’s working and what’s not working. Come to conferences like this!