I recently had the opportunity of interviewing Yrjö Ojasaar, one of the co-founders of the cloud-based ebooks platform, Publification.
He talks about how the idea for Publification came about, the growth of the eBook and self publishing market and how they are hoping to compete with the big players in the game (Amazon KDP, B&N PubIt, Apple iBooks, Kobo, Smashwords).
Hi Yrjö, Tell us about your business?
Publification is platform for self-publishers to create, promote, and sell cloud-based eBooks with built-in social reading and interaction for over 2 billion existing devices.
Is there anything really new or different about what you do or want to do compared to the existing solutions? What substitutes do people resort to because your product or service doesn't exist yet (or they do not know about it)?
Publification is the only open platform on the market where people can read and interact together live online (i.e. without having to buy special hardware or setup software).
Partial Substitutes: Amazon KDP, B&N PubIt, Smashwords, Readmill
What is the need that is satisfied by your technology? How big is the market potential for your company?
eBook market has now reached over €5 billion, and is projected to be grow to over €9.5 billion on just mobile devices (smartphones, tablets). Self-publishing sector is the fastest growing segment of eBook publishing, currently accounting for 25% of Amazon top 100 books.
We work with a community of international authors to verify their needs and stay responsive to their problems. The single biggest problem they indicate is – how to effectively discover, engage and grow their eBook audience.
How did you know this was the right idea to work on? Do you have domain expertise in this area?
Publification grew out of my iOS boutique Indilo Wireless, where over several years many authors came to get their custom eBook apps. We started thinking that there must be a better way to serve authors than to subject them to making multiple eBooks (separate ones for B&N, Apple, Amazon, Sony etc) and anonymous reading audiences (big platforms do not give authors any individualized data about their readers, as they regard readers to be their customers for TVs, music, movies, other books etc.). Moreover, authors could not have functional footnotes or bibliographies - as the major platforms disallow outbound links to other books. We sold Indilo Wireless off to Mobi (parent of Fortumo) and spun off Publification as a separate company.
What is your product status today and how long have you been working on it?
Publification is now 1 year old. We have a fully functional cloud based eBook editor and cloud based eBook reader. You can see the platform here: www.Publification.com
Here is an eBook created on our platform so that you can see the features in action: http://goo.gl/gKSsI
Could you describe current progress or traction including customers, user metrics, revenue, monthly growth rate or any other indicators of your progress?
We have seen viral rates for our beta authors in the range of 191% to 427% meaning that reader recommendations brought 2 to 4 extra readers to the platform – showing how effective the social referral and discovery mechanism is in creating viral loops. Alan Moore’s No Straight Lines got +6000 readers were captured without any advertising or marketing beyond the tools in the platform.
We are finalizing negotiations with a strategic partner from the US whereby over 8,200 authors from their platform would use Publification as their distribution and promotion platform
How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it will not be attractive to users unless or until it already has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?
The go-2-market strategy is to reach a critical mass of users through strategic partnerships with self-publishing technology platforms that lack the promotion and discovery tools.
This strategy is supplemented by direct recruitment of select authors with a strong reputation and name recognition. In addition over 1000 authors have started following our platform as word of our beta trial leaked out.
What is your business model? Did you already test some of your assumptions about revenues or pricing? How much could you make?
--15% revenue share on eBooks that are purchased through our in-book PayPal/MC/Visa payment (versus 30% to 65% charged by Amazon, 30% charged by Apple etc.),
--We make up to 11% from affiliates if the reader choose to buy through the in-book Amazon, Apple, etc. link (for example 8% affiliate fee from Amazon)
--We have also been approached by publishing companies to license our platform.
Can you provide information on (potential) competitors and/or those who might become competitors, including key differentiators? Who do you fear most? How will you succeed versus them? What gives you an unfair advantage and how will you sustain it? What do you understand about your business that other companies just do not get? How will you minimize risks if something goes wrong?
Amazon KDP, B&N PubIt, Apple iBooks, Kobo, Smashwords.
There is always the threat that the big platforms start serving the needs of self-publishers by proving them with data and tools for direct interaction with readers. At this time this is however unlikely, as the big platforms have an extremely difficult time in pivoting and changing their models. Moreover, the big platforms have built their business model on the premise that the readers are their customers (to whom they sell TV’s, Laptops, phones, tablets, music, movies, etc) and not the customers of the authors.
Therefore the unfair advantage is the focus on catering to the needs of the self-publishing authors, and the ability to make dynamic changes as the needs of the authors change with new technology and business models. The way to sustain the advantage is not to try to offer too many solutions to too many people – this results in feature creep and loss of focus.
Maintaining the ability to pivot at all times, another words to adapt and overcome the changing circumstances is the key to hedging against risk.
Tell me about your team? Why is this team the right one for this company? Did you work together before?
Most of the team has worked together for years on various tech projects – so we have seen both ups and downs – thus learning about each others’ strengths and weaknesses. It has been great to learn that individual skills of all the team members are complimentary, therefore making delegation of responsibility and tasks that much easier.
Have you raised any money so far?
We have received £15,000 from Springboard UK and £100,000 from Northstar Ventures
We are in the process of raising a round of financing to fund our operations for approximately 9 months, to prove that we have a repeatable and scalable business model. Based on the growth and engagement metrics of this round, we will raise a full A round to fully scale the platform.
What has been the biggest surprise thus far in working on your company?
How slow and difficult the technical and business model revolution is for traditional publishers. One publisher recently said at a publishing “innovation” conference – “we have to find a way to bring the youth back to reading paperbacks”
What have been your biggest achievements so far (e.g. former companies you have set up, work experience, projects, education etc)?
My ROTC experience (leading a platoon of US Army combat engineers and $40M in equipment approximately 8 km from the North Korean border).