My earliest memory of going to the bookstore
I used to go to this bookstore in Macedonian region of Greece during summer vacations, not too far from Alexander's court and where Aristotle travelled to take on teaching the young Prince. Tons of history, and tons of family - great summer memories. To this day, I can remember everything about it - the people, the books, the papery-smell, and excitement I had to go and discover something new, and talk about it with my bookstore friends. Being there, let alone the hours that followed, form some of my earliest childhood memories.
Just last night, after a great dinner at my favourite Italian restaurant I walked into a local shop and bought a magazine about the new Formula 1 season. I love racing, and I remember when I first met Sebastian Vettel as a reserve driver on the BMW-Sauber team, so I picked it up based on seeing him on the cover. My visit triggered how much I used to love going into this bookstore in Greece (now closed) and in general, how much I loved the experience of reading books. It also triggered the need to write this post for any friends who care to read it, and to satisfy my guilty conscience for not blogging in over a year.
What's been happening since Jan 2010
We founded Kobo, a global ebook retailer, in Dec 09 with a vision of delivering any ebook to any device, anywhere in the world. Books are going digital, and I believed that there would be only a handful of global ebook brands and that we at Kobo would be one of them. With a $91 Billion global market for books, this transition to digital represents a huge opportunity for a new company and we have been moving at light speed going after our vision ever since.
I for one, have not worked this hard - ever. Having been a rocket scientist / NASA / international science fair geek at age 16, and at some amazing startups before this - Zip2 (Elon/Kimbal Musk's company, sold to Altavista/Compaq for $300M in cash), DocSpace (we sold it for $568M 6 days before the peak of the market in 2000), and Critical Path (running nearly half the world's email at one point) - I can make the statement with some credibility - this is not like any other startup.
Not like any other startup
Scale. $91 Billion (in books alone) is no small number, let alone adding in newspapers, magazines, and the 'upside' scenarios on content and of course eReaders/Tablets. Factoring all of those, this is easily a $500 Billion dollar worldwide opportunity.
Market Growth. Our first 15 months as a company have been phenomenal. I remember when we started, our business plan called for 10% of books going digital in 5 years. In the US, that happened in our first 90 days as a company. The number is surely now over 50% by 2014.
Doubt. I remember how annoying the topic of ebooks seemed to be to some publishers, bookstores, and booklovers. "Never gonna happen.....Not at all like music....Love the smell of a book.....Books are different....." While I was someone who loved to read, loved bookstores and reading - I was certainly an outsider in the book business, and no doubt the tech resume was equally annoying to some. Looking back, that doubt - at least from industry types - is surely in part due to the fact that there hadn't much change in a VERY LONG time. Disruptive change is always very GRADUAL until it's SUDDEN. We are now in the sudden part. There is certainly no doubt today.
Scale of Competition. A couple of "A" companies, one "G" company and pretty much every major tech titan you can think of cares about this space. Some care because they want to sell bits. Some care because they want to sell ads around the bits. Some care because they want to sell atoms...(ok, electronics) to enable us/humans to engage with the bits. And then there are the carriers who care because it is they that move around the bits. Retailers of course, care, because when atoms turn into bits, and the revenue/margin equation changes, you don't need the square footage like you used to. Publishers care for those same atom-bit conversion issues, but also because authors are starting to look at the value equation and bypass publishers entirely. I am definitely oversimplifying this, but when you think about the # of sectors involved: ECommerce, Internet, Consumer Electronics, Telecommunications, Retail, Publishing, and the balance sheets of the new entrants vs. the old....you can see how it might be extra challenging (in some ways) for any startup to participate yet alone emerge as a leader. This is David v. Goliath on Super-Solider-Steroids. While every great startup is focused on the dream, it also has to make payroll - it has to think about survival. When all of its competitors are also thinking about survival, things get tough.
Pace. The pace of change, or more importantly, the pace of MAJOR market force movements is about weekly and that has not let up since we started. This means, it's impossible to go on vacation without missing a ton. Interesting fact - watching Goliaths move or try to move at this pace is fascinating.
Human History. You've probably heard this change in books/publishing called the biggest change since Gutenberg....or about the biggest in 500 years. It probably is, but I think that is actually a bit shortsighted. This goes beyond the actual physical product and the business and touches our children, the education system, and the fabric of our society. In an age of digital entertainment and a multitude of options beyond reading, there's also some degree of risk that this transition doesn't go so well.
Company Growth. Our numbers are staggering. Everyone of my former colleagues I talk to are floored when I tell the story and share some of the data points. There are always ways to look at the numbers, their size and how quickly they were achieved, and discount them in one way shape or form - but they are very real. This *will* be the fastest billion dollar sales company I've been anywhere near. Managing this ramp, in and of itself is challenging.
People. I have worked with some tremendous talent in my life. I want to say that I've worked with some of the smartest and best. I've also seen some incredible "heart" in the startups I've founded or worked at. It takes incredible passion, devotion, belief that you can do incredible things - even as a kid out of school with zero experience. It's safe to say here, that this is a vision and a mission bigger than any I've experienced before and that draws out magnificent talent, and Gladiator (the movie) - style heart and fight. Kobo's got incredible fight, and that is a tribute to the team I spend every day with. You're beyond amazing.
Upheaval and Innovation
We are certainly still in the early innings of a massive transformation. I think you can get a sense for why this is not like other startups given the market size, scale, pace,...etc. You can also get a sense for just how much is at stake for the book publishing value chain, let alone tech titans that view ebooks as a critical part of their content strategy. Hundreds of billions of dollars are changing hands, and the flow of money is being redrawn. When that happens, things generally get *challenging.* While I predict the upheaval to continue and probably grow in magnitude this year, I also firmly believe that out the other end, this will drive innovation that will benefit all of us and our children. I would love to be 5 years old again, and get my first eReader loaded with access to all the world's stories and ideas.
Disruption and Blogging
Disruption is fun, if you are in the disruptor's seat. But it's also a lot of work. This probably gives you a sense of why there hasn't been a blog post since last year...
I often get asked about "strategy." It's every investor's favourite question - "what's your strategy?" In David v. Goliath stories, strategy is vital but execution is also important. Moving faster, in concert, working harder, and from time to time doing irrational/innovative things is key to beating Goliath. In fact, it scares the pants off of Goliath.
That takes about 24 hours a day, which means not a lot of time to go to a bookstore...good thing I have Kobo...