Category Archives: Building business

About Paperight, Building business, Marketing, Sales

An overview of the Paperight journey

This article by Arthur Attwell was originally published in Art&Thought magazine, published by the Goethe Institute.

Everyone knows that books are critical to development and education. Everyone knows that bookshops and libraries are vanishingly rare in Africa. Everyone knows that most families have fewer than ten books at home. So why do we still have this problem?

The book business is expensive. It costs a fortune to stock a bookstore. Even a small store needs to carry a few thousand books just to keep customers coming back. What’s more, bookstores need lots of floor space for shelves, and they are highly dependent on foot traffic, so the rent is expensive. So the margins are low, and the risks are high.

And if you want to try to start an online store instead, you need to be ready to lose a lot of money at first. And then, in most of Africa, most people don’t have credit cards, or can’t get online to use them.

A few years ago, the Centre for the Book in South Africa distributed free children’s books to 7000 rural homes. But there was no existing way to get them there. In some places, volunteers used wheelbarrows to carry the books from a post office to homes and schools. If you live any distance from a wealthy city suburb, books are simply not a part of your landscape.

The problem is particularly desperate when books can even save lives. In Tanzania, an NGO called CCBRT treats over 120 000 people with disabilities every year. To train nurses and midwives, they order their course books by post from Cape Town, 5000 kilometres away. A leading neonatologist there said recently that training with these books could save many of the 45000 newborn lives lost in Tanzania every year. But the cost of getting the books there is absurdly high.

By the time a book travels to a printer, and then to a warehouse, gets shipped across countries, stored again, displayed and finally purchased, its cost has risen four times over.

One way to tackle this problem is to put books on mobile phones. The website childhealthcare.co.za, the free online version of a textbook for nurses, had 27000 visits last year, about half of those from developing countries. That’s a hundred times the number of printed copies sold. A free novel by Sam Wilson called Kontax, which is read on feature phones, has been read over 63000 times by South African teens from every part of the country. And more and more schoolchildren are reading free Siyavula science and maths textbooks on their phones.

But there are still obstacles: no publisher has figured out how to make these mobile books pay for themselves yet. And to read a book on a phone you need electricity and airtime, and you have to read on a small screen that can’t handle complex images.

Worst of all, Internet access is not as widespread as we like to believe. If you look at a map of 3G internet coverage in South Africa, from a great distance it seems you can get online anywhere. But as you zoom in, and get closer to the ground, you find that coverage actually extends in hundreds of narrow spines from city centres, leaving big gaps in coverage only a short distance from significant towns. In reality, the Internet is not in everyone’s pocket.

Books on phones might be the way of the future, but they don’t work for everyone today. Of course, people are resourceful. Despite these obstacles, they do read. They find a way to get to school and study. Where do they get their books? More than anything, they photocopy.

There are print-and-copy shops in every town in the world, churning out pamphlets, flyers, adverts, CVs, and books. Unlike bookselling, you can get a copy-print shop profitable quickly. For a monthly lease of only a few hundred rand, and just a small space to work in, you can get a copier business selling thousands of sheets a month. As a result, the copier-printer may be the single most common distribution channel for publishing in the developing world.

Copy shops will laboriously scan and print the books their customers find and bring in. And since those customers often have no other way to find or afford a book, they’re performing an important social function. But they have to do it illegally.

By law in most countries, you can’t scan and print a copyrighted book, and you definitely can’t sell that print-out to someone else.

As you can imagine, copy shops terrify publishers. When I was publishing textbooks some years ago, we even tried printing in special inks that we thought wouldn’t photocopy well. (It didn’t work.) And the more our books were copied, the fewer we sold, and the higher we pushed our prices. And the more that happened, the more convinced we became that copy shops could never be trusted, that they didn’t understand our industry, and that they were our sworn enemy.

But copy shops are solving our customer’s problems, and putting books more books in the world, surely we should help them do it better and faster? Surely a partnership would be better for both sides? Imagine if we made their jobs easier, and legal.

What if we let copy shops print and sell from a whole library of books on a simple website? What if we made that website so fast and easy to use that it was more profitable for the copy shop – and more cost-effective for their customer – to pay for the service than to keep copying old books the hard way? Only a local corner store would have to be online for a whole village to have access to books.

And would publishers make money selling books through copy shops?

I decided to find out. I gathered a team and, with investment from the Shuttleworth Foundation, we built a website called Paperight.

On Paperight, anyone with a printer could download books and print them out for customers. Many books were free to download, and for others, the publisher charged a rights fee. Amazingly, publishers could make the same margins from these downloads that they do from their fancy editions, and still the total cost to the customer was usually less than that fancy edition sold in a mall.

Instantly, with only a basic Internet connection, every copy shop would be a bookstore. Even in the most remote village, every school could have access to new study guides. Every hospital with a laser printer could train new nurses and midwives with up-to-date information.

The idea was so promising, and for six years it consumed most of my waking hours. But by December 2014, the journey ended. We couldn’t make it work financially. And its story tells us a lot about publishing and innovation.

What happened to Paperight?

Our aims seemed simple: turn photocopiers into bookstores in every village in Africa, dramatically reduce the cost of tertiary (higher-ed, university college) textbooks, and prove that publishers could make money selling instant licenses (we’d sustain ourselves from commission).

In short, we wanted to offer a more effective way to get textbooks to students. And thanks to the Shuttleworth Foundation, we had time and money to make it happen.

From our site’s launch in May 2012 to Dec 2014 we put over 200 print-shop outlets on our map, signed up over 150 publishers, added over 2100 titles, and distributed 4049 copies of books.

But revenue didn’t climb. I began to realise that, starting from a small base, a trickle of sales can look like traction. A trickle can inspire confidence that is both valuable – to confidence, to our ability to sell – and terribly misleading. It’s a dangerous time for an ambitious team, because both trickle and traction make you think your model is working, and that it’s time to plan for scale. But a trickle that isn’t traction can hide fundamental problems with your model.

In 2.5 years we charged a total R57500 (about US$5750) in licence fees. Of this, R26000 went to publishers, we earned R20000 from books we published ourselves, and we earned R11500 in commission. It was tiny, not even enough to meet one month’s payroll. More importantly, after a year the rate of growth in sales had slowed to almost zero.

So what happened? Our problems were of course, in part, the result of our strategic decisions: out of an infinite number of possible alternatives, some decisions would have been better than others. We probably didn’t have enough sales people on the ground, and perhaps we scaled too fast, and didn’t bed down the model locally before going nationwide. We’ll never know if that would have changed things. But aside from that, we knew we had three major external challenges, ones we would have faced to matter what our strategy had been.

Firstly, and most importantly, while many publishers joined us, almost none let us sell their most popular, high-value titles. They asked us to test with their least popular titles, thinking they were mitigating risk. In reality, they were inadvertently setting us up to fail: we could not sell books that no one wanted. (See the section at the end of this article, ‘Tough truths about selling to publishers’.)

Secondly, 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 by spending hours and days in stores). This meant we weren’t attracting new or returning customers.

And thirdly, 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. And South African publishing has done very little in the last twenty years to change that.

Despite our disappointment, though, buried in our revenue stats is a promising story: one small collection of high-value, low-priced titles that we created ourselves sold well: a hundred low-priced 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.

These sales showed that if we’d had the right content, we might have done well. But it’s almost impossible to build a working experiment relying on commercial publishers’ content when those publishers are too risk averse to let us use popular books. Experimental projects like ours need high-value content to work with.

I had been determined to push for change in publishing by enabling a better way to sell. But I now believe that you cannot create industrial change by enabling its participants. It’s like saying ‘Here’s a tool that will completely change the way you work!’ No one wants a tool that will change the way they work. Work is complicated enough as it is without having to learn about new tools.

Nonetheless, change must be possible. People just need different motivators. I now believe that to change an industry you shouldn’t try to enable organisations to change for the better. You should take those new tools and compete with them. Challenge traditional methods head-on by challenging for market share. If you fail, you can always try something else. And if you succeed, you will either replace the incumbents or force them to change. Both outcomes are good.

South African publishing today

South Africa has been democratic for twenty-one years. It’s a good time to reflect on how far the local book industry has come. Book production values have soared. We have more black authors, more major women writers, and they’re selling well internationally in more popular genres. It’s a very good time to be a wealthy book lover in South Africa.

It’s not a good time to be anyone else. The number of bookstores outside suburban malls has hardly changed. Working from the Publisher’s Association’s most recent industry survey, the number of trade book buyers is probably less than two million, or 4% of the population, if they are spending about R700 ($70) per person, per year at retail value. That’s roughly four paperbacks each. New books are almost all in English and Afrikaans, the home languages of wealthy, white South Africans. Of R312 million ($30 million) in local trade publishing revenue, only R1.7 million, or 0.5%, comes from books in the country’s nine official African languages. In adult fiction, the proportion of African-language revenue is only 0.2%. (In 2008, this figure was 0.6%, so it’s got worse.) Essentially, zero with isolated experiments.

The conventional view is that, outside a narrow cohort, most South Africans don’t like reading. In casual conversation, this view sometimes correlates dangerously with racial stereotypes. For instance, two senior book industry figures have told me that black South African children wouldn’t read Harry Potter in Zulu because it’s “culturally irrelevant.” If this mindset is common among editors, it’s a key reason we’ve made so little progress.

Outside traditional publishing companies, there are bold attempts to sell books to new readers. Projects like FunDza, Bookly and EverEgg focus on mobile phones as a way to grow reading, though none have found a business model that would satisfy traditional publishers. Others, like Megabooks, focus on print-on-demand – though like Paperight did, they struggle without committed buy-in from local publishers who control the most valuable educational content.

So market-based solutions seem unable to get off the ground. Where markets should grow from little pockets of early adopters, there may not be enough pockets to grow from. For most South Africans, books are a luxury they could never afford. New data from the University of Cape Town’s Unilever Institute shows that over 34 million South Africans (70%) survive on an average household income of R3000 ($300) per month. They regularly skip meals and turn off electrical appliances long before payday. In those homes, even the cheapest books would never be prioritized over food and clothing.

For those who’ve made it out of poverty, books remain invisible. When books have never been a part of your life, you are unlikely to seek out and invest in them. At Paperight, even when we solved for price and availability, books remained largely invisible without intense and expensive local marketing.

If as a publishing industry in 1994 we’d taken a twenty-year view, we might have seen that our biggest challenge lay in making books visible to South Africans. We’d have given away millions of free books to children – just as the UK does on National Book Day every year – and seen many of those children blossom into keen book buyers today. Seen this way, the market-based challenge lies not in finding right business model, but in taking a long-term view. Less like Jack’s beanstalk, more like bonsai.

A new non-profit called Book Dash, which I helped found last year, takes exactly that view. Book Dash focuses on creating and giving away free, high-quality books to needy children. The books are created by volunteers, all creative professionals, who participate in twelve-hour book-making marathons. Some are from book publishing, but most are from other industries: animators, artists, copywriters, journalists and designers. Almost everything is done by these volunteers – to date, my company and a few other donors have covered direct costs worth about R200 000 (US$20000), and Book Dash has crowdfunded R80000 for printing books for children.

Everything the volunteers create is open-licensed (Creative Commons Attribution), so that anyone can translate, print and distribute the books freely. And Book Dash is creating basic HTML versions for mobile-phone initiatives. Already, other organisations have come to the party: the African Storybook Project has funded Book Dash creation days, and they and the Nal’ibali reading campaign have translated Book Dash stories into several African languages. And Book Dash stories are appearing in Nal’ibali’s fold-your-own-book newspaper inserts, where commercial publishers’ stories were used before under proprietary licenses.

The aim is to slash the cost of high-quality children’s books for literacy organizations to the cost of printing alone. When printing as few as 5000 copies, unit costs dip under a dollar for bookshop-quality editions.

Book Dash is very different from Paperight, but it aims to solve essentially the same problems. And if it succeeds, perhaps in ten or twenty years time there will be far more readers, and bolder publishers, and Paperight’s distributed print-on-demand model might have another, better chance.

 

Sidebar: Tough truths about selling to publishers

This is adapted from a slightly longer version on Arthur Attwell’s blog here.

For every innovative startup in publishing, it’s hard to remain patient while pitching to publishers over and over again. Most of the time these companies seem impervious to change. Here are my five hard truths about pitching to publishers.

1. People love you. Their organisations don’t.

When people buy a product or buy into an idea, it’s emotion that makes them do it. They use logic to justify the emotional decision after they’ve made it. And emotionally, publishers get very excited about social impact. But convincing a person with emotions is very different from convincing an organisation. It takes an untiring champion to get a decision through an organisation’s decision-making process, and this is where innovation stalls.

2. The right person is rarely the right person.

When we pitched Paperight, we were bounced from the rights-and-licensing manager to the sales manager to the digital manager, and none of them were sure they could just sign up their company. In the end, it matters less that you figure out who is responsible and more that you find someone, somewhere who’ll just get on with it.

3. Most people don’t speak XML.

Most publishers don’t understand technical jargon. They have their own vocabulary to describe their needs. When pitching, you have to ask sensible questions till they describe the product they need in their terms. Only then can you explain why what you’re offering solves their problem. This sounds obvious, but it’s really hard to do and takes lots of practice.

4. Anchored numbers are sticky

Here’s a number: 55%. The gross margin that most publishers aim for on each book. In many companies, it’s a sacred number. The rule is: “Do not propose publishing a book that does not hit this number.” Sacred numbers are very useful if you want people to produce the same kind of product over and over again to sustain an established business. But when you want to innovate, sacred numbers are big obstacles. When the decisions a company’s staff can make are circumscribed by specific numbers, the numbers define how the company thinks. Sacred numbers define a company’s culture.

In psychology, these sacred numbers also cause what’s called anchoring. When a number is an anchor, we use it to evaluate any other number by comparison. In the case of a 55% margin, or a standard print run or a common price point, publishers compare any number you give them to these anchors. If you pitch a project that will make a million sales at a gross margin of 10%, they’re going to have trouble believing in it. Their anchors make it hard to fit new numbers into their company culture. Every innovative publishing service or startup is trying to offer publishers a new set of numbers. But company values are big rocks to move.

Moreover, the staff must actually know how their company’s numbers interrelate. Often, publishers I speak to don’t know the real costs and margins on their products, especially warehousing, wastage and other provisions that don’t appear on their standard costings spreadsheets. As a result, they simply aren’t empowered to make the kinds of decisions that innovations require.

5. Risk and regret loom large.

People fear losing much more than they desire a corresponding gain. When you’re pitching a service to a publisher, they fear regretting their decision much, much more than they want your product. Even if they want your product a lot.

As a result, publishers felt safer giving us low-value, low-selling content, thinking this would reduce their risk of failure. Ironically, this had the opposite effect: by putting low-selling content on our site, they actually increased their risk of failure, because this low-value content did not sell at all. To make an innovation work, you have to maximise your chances of success by using it for the best content you have.

About Paperight, Building business, Content, Sales

Paperight and beyond: learning from disappointment

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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. 

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In the next ten minutes I’m going to talk about three things: what was Paperight, why we had to close, and a few lessons (out of a great many) that I’m taking into my next ventures.

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But first, a quick note on learning lessons from disappointment.

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Hindsight is cruel, because it’s almost certainly wrong.

The disappointment you feel when you decide that your project didn’t work only indicates what particular set of circumstances, and series of events, didn’t work out the way you hoped. That disappointment makes us regret our decisions, and looking back we’re tempted to say ‘We should have done this instead.’ The problem is that your journey was one of an infinite number of possible alternatives, and you have no way of knowing what exactly you should have done differently.

So when we draw lessons, we can say ‘For us, this didn’t work and this did’. We can’t say ‘If we’d done this, everything would have turned out well.’

  • It’s okay to say ‘This didn’t work.’
  • It’s foolish to say ‘This would have worked better.’

Watch out for that trap of wishful alternatives. Once you start noticing it, you realise that we all fall into it all the time, wasting energy on we-should-haves.

It also means that our lessons might not apply to your project directly, but perhaps they are a rough guide to potential challenges.

So, let’s see what happened to Paperight.

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At Paperight we built a network of independent print shops that could print books out for their customers on demand.

We worked with publishers to provide an online library of books that print shops could legally download, print and sell to customers.

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We wanted to:

  • turn photocopiers into bookstores in every village in Africa
  • dramatically reduce the cost of tertiary (higher-ed, university college) textbooks
  • prove that publishers could make money selling instant licenses (we’d sustain ourselves from commission).

In short, we wanted to offer a more effective way to get textbooks to students. And thanks to the Shuttleworth Foundation, we had time and money to make it happen.

Paperight-lessons-learned-20150127_Page_07

So how did we do?

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From May 2012 to Dec 2014 we got to:

  • 200+ outlets on our map (there were about 200 more that we didn’t believe were active copy shops)
  • 150+ publishers
  • 2100+ titles (with 1000+ in our queue)
  • 4049 copies distributed.

We worked with copy shops to make sure their customers knew about the service.

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In some cases, we helped with signage, and in others…

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…copy shops did a great job of promoting on-demand books themselves. The early signs were promising – we told ourselves we had traction.

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But revenue just didn’t climb. I began to realise that, starting from a small base, a trickle can look like traction. A trickle can inspire confidence that is both valuable – to confidence, to our ability to sell – and misleading. It’s a dangerous time for an ambitious team, because both trickle and traction make you think your model is working, and that it’s time to plan for scale. A trickle can hide fundamental problems with your model.

A trickle can look like traction. It’s a dangerous time for an ambitious team, because both make you think your model is working, and that it’s time to plan for scale. A trickle can hide fundamental problems with your model.

In 2.5 years we charged R57500 in licence fees. Of this:

  • R26000 to publishers
  • R20000 as a publisher ourselves
  • R11500 in commission

That wasn’t enough to meet one month’s payroll. More importantly, after a year the rate of growth in sales had slowed to almost zero.

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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:

One small collection of high-value, low-price titles made as much as all our other sales combined.

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.

Even though we made so much of our revenue from past exam papers, we often regretted deciding to charge for them. When they were still free, we made really good headway growing customers for copy shops in poor areas, especially in Khayelitsha and in peri-urban Eastern Cape towns.

From the day we started charging for them – between $1 and $2 a copy – those sales declined massively. It was a great lesson in the infinite distance between free and paid.

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Free content is easy to sell. Paid content is infinitely more difficult.
You don’t just ‘add on’ paid to a free model. Payment changes a project fundamentally.

Still, we really wanted to prove a paid model. And we did have paying customers.

If I had to draw broad conclusions from this, I’d confidently say that if we’d had the right content, we could have done well.

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A few high-value titles will sell. But it’s almost impossible to build a working experiment relying on commercial publishers’ content. Experimental projects like ours need high-value content to work with. If it’s open-licensed, we all get much further much faster. It’s critical that impact-minded content projects and funders prioritise open licensing.

I was determined to push for change in publishing by enabling a better way to sell. But I now believe that you cannot create industrial change by enabling its participants.

Paperight-lessons-learned-20150127_Page_16

‘Here’s a tool that will change the way you work!’ No one wants a tool that will change the way they work. Work is complicated enough as it is.

Nonetheless, change must be possible. We just need different motivators. So I’ll try a different approach: competition. I’m actively implementing open-access models, easy licenses and print-on-demand at Bettercare.

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If we can take market share at Bettercare by doing things differently, perhaps we’ll tempt established players to do the same.

Meanwhile, in other work I’ll focus on building readership for the long term. If twenty years ago, South African publishers had made a concerted effort to invest in early-childhood reading, perhaps Paperight’s distributed print-on-demand might have worked out better.

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So at Book Dash, a volunteer-based non-profit, we’re creating new, high-quality, African books for little children that anyone can freely translate, print and distribute. Already our books are being reused by literacy projects like Nal’ibali and the African Storybook Project, who in turn create translations in many local languages. We’ll soon be distributing digital versions through FunDza, Worldreader and others. And we’ve recently crowd-funded over R80000 to print copies to give to children.

It was disappointing that Paperight didn’t work, but my excitement about our next steps far outweighs that. Those were good lessons.

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About Paperight, Building business

Thirty months of Paperight metrics

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Here’s a series of graphs about Paperight’s journey. They cover two and a half years, by month. We’ve picked our starting date for these as September 2011, when our investment and funding from the Shuttleworth Foundation kicked in. I’d already been working on my own, part-time, on the model and prototype tech for almost three years before that. We’re including:

  • our high-level projects and decisions
  • our team members and size
  • sales by quantity
  • sales revenue in US dollars (before deducting rightsholder earnings)
  • social media followers
  • unique visitors to paperight.com

What’s interesting here is how little correlation there is between any of these. Perhaps our small data set lets outliers hide any evidence of correlations or trends over time. Or perhaps disruptive startups are just messy and unpredictable. (One very recent stat these graphs don’t show is that in the first two weeks of June we had our highest ever site visits, and our lowest ever sales. Go figure.)

This first graph shows our high-level projects and decisions, the most significant being the realisation in February 2014 that our original business model doesn’t work, and we need a big pivot. (More about that in this post.)

Click on each graph to open it at full-size.

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High level projects and decisions

If you use the monthly-archive menu on this site, you’ll find posts by team members from the months concerned.

Then our team: we grew our team quickly from about five months in. This was critical in getting our outlet footprint established and creating our own content (reformatted classics and grade-12 past-exam packs).

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Team members showing team size

So how many books did we get out there? Here’s books distributed by quantity. That is, the number of books for which our outlets paid licenses and printed. There are three big spikes that are outliers: large bulk deals we initiated and closed working directly with schools and sponsors. These look lucrative, but the cost of making each sale was very high, so they were not necessarily profitable.

With hindsight, I would have liked to have measured the time our staff spent on each sale. It would range from zero for organic sales to dozens of hours for the large bulk sales. At about R100/hour for staff time (cost to company), even two full days on a bulk sale could wipe out our margin. Often they took more than that: finding beneficiary schools for a sponsor, analysing what students needed, meetings, handovers, and more.

So by late 2013 I did not push our team to seek out bulk sales and focused rather on strategies (like the #textbookrevolution campaign, see posts by Marie, Tarryn and me) to grow organic sales, which I believed would make for a healthier business in the long run.

Now compare revenue.

 

Let me take you through that:

  • For our first nine months (from May 2012 launch), most books on paperight.com were free. That is, we charged no licence fee for our grade-12 past-exam packs or our classics. And at this stage we had very few books from commercial publishers in our catalogue. Downloads are satisfying (we didn’t know then what ‘high’ or ‘low’ would look like), but revenue is almost nil. We’re getting customers but no money.
  • We decide from January 2013 to start charging a licence fee (usually 1 to 2 US dollars) for each copy. Revenue goes up a little, albeit in bumpy fashion. But downloads almost vanish. That is, most of our users disappear, but we do, technically, make more money from those that remain. With hindsight, I want to think we started charging too soon. But I also know that if we’d waited, we may only have postponed discovering the sad truth about our original business model.
  • Faced with these now disappointing sales, we decide to go find some big customers. We send Yazeed on a sales course and he throws his time into finding sponsors to buy for schools in bulk. We get a few bites and by the second quarter of 2013 we think we’re onto something. I’m not yet thinking about what each sale is costing us in time, only that bulk sales may be the way we bring in cash while we grow. But our first few deals come through existing relationships, and we don’t up our game building new relationships. So we run out of good leads. By the third quarter of 2013 I realise how much it’s costing us in time, and therefore payroll, to find bulk sales. And I see that beneath the tall trees that are the bulk sales, there’s no mulch. No organic sales.
  • By early 2014 our sales look a little better. Perhaps our smarter marketing work is paying off, and we’re also finally selling popular study guides from major South African publishers. But it’s too little, too late for our original business model.

On to some web metrics. I don’t believe Paperight has ever been an online business. We’re part of the offline paper-book industry, and we just use the Internet to scale our footprint. We only realised this about ourselves in late 2012.

Nonetheless, I expected to see some correlation month to month between site visits and sales. However, we’ve never noticed any real correlation we can count on or plan around.

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Unique visitors to paperight.com

No metrics are more vain than Facebook likes and Twitter followers:

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Facebook Likes and Twitter followers

We are hugely grateful for the moral support of thousands of people over the last two years, represented well in this graph of social-media supporters. And insofar as Paperight’s mission was to change the way people think about rights and book distribution, perhaps these followers represent success.

But as you can see, they have zero correlation with sales. I know that for our next phase, our big pivot, I won’t spend a heartbeat’s time trying to grow them.

That said, please keep supporting us anyway. It keeps our heads up when things are tough. We have a long way to go and much more to learn. We’ll keep sharing.

Building business

A big blow

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customer service in most copy shops is atrocious. This is a major blow to our business model

We have finally concluded, under the weight of years of anecdotal evidence and topped off with a full day in a top Stellenbosch copy shop, that customer service in most copy shops is atrocious. This is a major blow to our business model. I’d long worked on the assumption that 80% of stores would offer good service (or care about offering good service and aim for that actively), and 20% would be bad. I’ve now come to believe the opposite is true. As a result, under our current model we will never consistently create return customers. And without return customers, we could never hit the growth rates we need in order to sustain our current overheads.

We’ve tried hard to train outlets, but managers consistently gatekeep or just don’t work with us. We would only be able to tackle this problem in the long term by owning or franchising the outlets ourselves, which is beyond the scope of the project.

I have decided to cut my team, drastically cut costs, and see whether there are new opportunities for Paperight licensing to explore

As a result, I have decided to cut my team, drastically cut costs, and see whether there are new opportunities for Paperight licensing to explore during the last months of my fellowship. I’d prefer not to close the Paperight service, though it is an option. I’m also talking to potential acquirers, but an acquisition is unlikely.

For now, all discussion of Paperight’s model being flawed, reducing the team, and possible project closure is confidential and not for public consumption. We will certainly share our story in time, but right now we need to be able to craft the public story if we want to create a home for the Paperight service elsewhere and maintain the credibility of the concept of distributed print-on-demand.

Killer metrics

Our main metric is turnover from sales in dollars. We maintained our growing targets till October last year, but slipped dramatically since Nov. At the end of January, for the first time, we slipped below our cumulative ‘Mort’ figure, the minimum target for achieving self-sustainability. That’s a core reason I’m cutting the team and revisiting the core business model. I hope to find a way to keep the project going, though it may not be as an independent company (Paperight Pty Ltd) or as the service we know today.

We also track outlet and publisher registrations, top-ups (credit balances that outlets maintain in order to be able to buy books), and various PR metrics (newsletter opens/clicks, Facebook engagement, Twitter followers, website visits), but we only aim to increase these generally. Sales revenue is the key driver of decision-making.

What next for the team

Right now our team consists of:

  • Myself as CEO and CTO
  • 7 full-time employees (COO, content manager, designer, financial manager, curator/researcher, marketing manager, outlets manager)
  • Software development outsourced to Realm Digital.

During March and April we’ll reduce that by 6 people and keep only our COO, with financial management done on a part-time freelance basis by our current financial manager, Dezre, who will be employed by my other company Electric Book Works.

This is a big blow. But we’ll figure it out. I’m glad we’ve reached this point while we still have a funding runway to work with.

Building business

Another incremental lesson on dealing with universities

Good meeting today with Crain Soudien, Deputy VC at UCT, and while he’s supportive of what we’re doing, it’s clear we’re not going to get high-level backing at UCT in any concrete form. At that level, the university has to be too cautious and avoid dictating policy to lecturers on textbook adoptions. We’re going to have to win our way in through lecturers and specific textbook adoptions. More reason to make our textbook database valuable, and tie in mapping to OERs. But there may not be a business model that gets us any real revenue from providing access to OERs.

Building business, Sales

Report on Stellenbosch training

Marie and I had the opportunity to go through to Stellenbosch for most of the day to train up some of our existing outlets. Even though they had been trained in person by Yazeed and had been guided in depth over the phone by Nick and Marie, they were still battling to use our website and our services effectively.

We had received some complaints from customers that they had waited more than a week and had not received even a quote from the outlets. The outlets were defensive saying that they had not received sufficient training and did not have sufficient time to explore the services themselves.

The experience that we had with the outlets was not isolated to the ones in Stellenbosch. We have had many phone calls from frustrated customers who have complained that copy shops had either not replied, taken days to deliver their order or not provided the service that they wanted. This made things quite complicated for us as some outlets would give excellent service and were committed to serving their customers and others seemed to find the opportunity to work as a Paperight outlet a burdensome event.

Some outlets even admitted to turning customers away. One of the more frequent reasons for outlets turning customers away was the fact that new staff members had not been made aware of the Paperight service and therefore advised that they could not assist.

We have been saddened that some of our customers have walked away dissatisfied as we had little control over the level of customer service received.  The customers who have been to our top outlets and received great service have all walked away satisfied with the end product.

Each day we are striving to improve these gaps by communicating with our outlets and preserving the relationships which share our values and serviceability.

Building business, Marketing

Turning school sponsorships into great PR

As a social enterprise, one of Paperight’s main priorities has been to get essential educational materials to students who need it. The entire business model has been structured to cut out as many obstacles as possible to make this aim simple to implement.

paperight-sponsors-guide_20131113In this vein, we chose to actively search for under-resourced schools that we could arrange book sponsorships for. We also approached profitable businesses and copy shops themselves offering a means for them to fulfill their business CSR (corporate social responsibility) objectives.

We paired three schools with sponsors in 2013. The partnerships were:

  1. Silverstream Secondary School in Manenberg, sponsored by Minuteman Press Cape Town
  2. Imizamo Yethu High School in George, sponsored by Blitsdruk George
  3. Kwamakutha Comprehensive High School, sponsored by DES-ign (licenses), and ITEC and Transforming Minds & Futures (printing)

Yazeed did most of the leg work pulling these projects together and Nick initiated the Kwamakutha/DES-ign sponsorship.

All three sponsorships were arranged with the promise that Paperight would generate PR to match the value of the sponsor’s donation. In all three instances, we delivered on this promise.

Businesses were able to offer invaluable support to 2013’s matric classes that could give the students the confidence and means to achieve access to tertiary education. In the meantime, the sponsors would achieve their CSR objectives and receive great press for their input. All three sponsorships were arranged with the promise that Paperight would generate PR to match the value of the sponsor’s donation. In all three instances, we delivered on this promise. I put together press releases about the sponsorships and sent them off to carefully chosen media contacts, specifically community newspapers.

Community newspapers are particularly interested in stories like this, for obvious reasons, and are the best place for businesses to be seen helping the community around them. Of course, this PR has helped Paperight reach more potential customers too. So everybody wins!

In addition to the three school sponsorships, Yazeed also managed to build a strong relationship with Mr Cader Tregonning of Pelikan Park High School in Pelikan Park. Together, they arranged that Pelikan Park matric students could purchase a comprehensive pack of past matric exam papers from Minuteman Press in Cape Town. The pack would cover all of their essential subjects and they would simply have to order a copy to be printed and delivered in the first term of 2013. To see more about this story, head to the Paperight blog.

This official endorsement from a school has been an invaluable addition to our growing list of supporters and has helped us to show registered copy shops that it is possible to build a sustainable business relationship with local schools. Once a school starts using Paperight and sees the positive results in their pupils, the relationship will be set.

To preserve evidence of our work with the schools close to home, we sent Shaun (our awesome video intern) along with Yazeed to speak to the Silverstream Secondary School and Pelikan Park High School principals. Admittedly, the rest of the team didn’t know the remarkable nature of the relationships Yazeed had built and the following videos really brought home why an idea like Paperight needs to exist in the world. For all our flaws, we have definitely done something right.

The videos have been uploaded onto the Paperight YouTube channel, and linked to from the Paperight blog and Facebook page. They have also been released to media contacts as supporting evidence of what Paperight is about.

Pelikan Park High School

Silverstream Secondary School

In early 2014, we hoped to work with Pelikan Park again to initiate a Paperight Sponsored Brains programme. We aimed to sponsor two nominated matric students with all of their necessary materials for the year and name them as official Paperight ambassadors. They would keep us up to date on their studies and over 3 intervals (roughly May, September and a final update in January 2015) they would produce a piece of writing about how they are doing and what their concerns/interests are at that point. These updates would help us to generate content for news stories about what today’s matrics really need to thrive. In addition, we would also arrange 3 training sessions on subjects of the students’ choosing, for example, personal finances, applying to universities, writing a great CV, career choices etc.

However, this project was abandoned due to the large volume of work required to bring the #textbookrevolution to life.

About Paperight, Building business, Marketing

External Marketing Advice: Zoom and the Stellenbosch MBA Students

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On the 27th of June 2013, Yazeed, Nick, Arthur and I headed to Woodstock for an insightful marketing and communications workshop with members of the Zoom Advertising team. I should point out that I hadn’t been promoted at this point. That was still to come, after a week long holiday to the extraordinary Grahamstown Festival.

After seeing a Paperight-related tweet, Zoom had contacted Arthur to offer a free 3–4 hour session to discuss Paperight’s brand image, target markets, past marketing endeavours and to suggest future marketing strategies. This all based purely on their interest and delight in the Paperight project. The discussion was spearheaded by Rebecca Warne and attended by other senior staff, including Managing Director, Steve Massey.

As the biscuits were eaten and the tea/coffee making facilities kept well oiled, we shared our ideas about how to make the best of Paperight’s established reputation.

A lot of what was suggested was way beyond our meagre means for the foreseeable future, however they were useful points to bring up as long term aims. If we want to be able to reach a certain level of sophistication and complexity in marketing strategies, we have to preemptively build up provisions while also testing various strategies on micro levels.

After the workshop, we came back to Paperight HQ with lots of great ideas buzzing around and enormous enthusiasm. Rebecca then sent us a Powerpoint presentation with the distilled discussion points for us to refer to. This certainly informed my decisions when writing up the official Paperight 2013–2014 marketing plan. A lot of what became known as the #textbookrevolution was inspired by this great session.

Around the same time, Rachelle van der Merwe of the 2014 MBA program at Stellenbosch University contacted Arthur requesting to use Paperight as the sample company for the students’ end of year project. The team of students would have to produce a marketing plan for Paperight, based on interviews with Paperight team members, document analysis, sales analysis and independent market research.

Over the course of two to three months, we met with Rachelle numerous times and corresponded with the rest of the team by email to accommodate their requests for advice and further information about current systems in place. We were happy to oblige and for the most part did not feel that their investigation got in our way. We obviously had control over what we would share with them, but as a company with an open policy, they had access to everything they needed – all they had to do was ask for it.

The finished product, given to us in mid October 2013, ended up being far different to what I had been working on as the official marketing plan.

My plan was based on what actions, formed into sustained campaigns, would form the base of our efforts. These actions were swayed by marketing actions attempted before I joined the team, established target markets and available finances.

Their marketing plan … offered a very nuanced and brutally honest view of Paperight … the current textbook distribution channels and major players, as well as a razor sharp analysis of the Paperight business model

Their marketing plan had no such thing, but instead offered a very nuanced and brutally honest view of Paperight as it stands. A detailed analysis of the current textbook distribution channels and major players, as well as a razor sharp analysis of the Paperight business model, led into a projection of where our future sales need to come from in order to achieve sustainability. Their project brought together all that we thought we knew into one document and certainly bolstered our conviction that Paperight is the best solution to tackle educational resource shortages. At least, the best so far.

Both these influences were particularly well timed (thank you, universe) and helped us all to align our strategies around marketing. The base concern at this point became about turning exposure into sales. The Shuttleworth Foundation will not be funding the project forever, after all.

This shift continues to inform all of our decisions.

Building business, Content

Pricing revisions

We kicked January off by updating all the pricing on the Paperight site. One of our major pivots from the previous year was our decision to charge a license fee/service fee for all documents, and to have no free material available on the site (excepting, of course, those Creative Commons titles with a Non-commercial license).  This included charging a nominal amount for all Paperight editions and matric past papers.

Initially, we had imagined the free content as a draw card, that would result in people also purchasing paid content. We found that while the former was true,  the conversion was not happening. We speculated that consumers found the draw-card content valuable in itself, and that they would be willing to pay for it.

The balance between paid and free content on the site was skewed heavily in favour of free, and given that this content accounted for the majority of license purchases and downloads, we needed to ensure that we were making enough money to reach sustainability. Initially, we had imagined the free content as a draw card, that would result in people also purchasing paid content. We found that while the former was true,  the conversion was not happening. We speculated that consumers found the draw-card content valuable in itself, and that they would be willing to pay for it.

We met with HMPG about medical journals, and continued our follow ups with Jacana and other publishers with strong African Literature lists. One of the latter included PanMacmillan/Macmillan, who we’d only recently contacted.  We also began contract negotiations with Pearson, a process which would later lead to the revision of our standard contract for all rightsholders.

The month also included a lot of prep work, with continued work on Mampoer shorts, GetSmarter, and csv and document uploading — we had a bit of a backlog at this stage given all the prep work done by our freelancers (Caitlin and Craig).

Other work included my proofreading of the Paperight catalogue, organising with PASA for attending the London Book Fair, and overseeing authorship of Now What? By this stage its author Paul had drawn together a final draft and we’d sent it to nine Together We Pass affiliated students for feedback.

Publisher registrations

  • Thenosis Publishing (10/1/2013)
  • Mindset Publishing (15/1/2013)
  • College Campus (23/1/2013)
  • P-Ridge Press (29/1/2013)
  • Porcupine Press (30/1/2013)
  • PUO Educational Press (31/1/2013)

 

 

About Paperight, Building business, Marketing

Messaging is a hard, winding journey

Sometimes a strategy emerges without you choosing it, because when you set out you didn’t know you had options. That’s how Paperight’s approach to growth and marketing emerged over the last few years. With hindsight, I can summarise this strategy as:

  • create a web brand (cool domain, slick website, friendly blog and social media, tech coverage) that consumers recognise and seek out.
  • use that brand recognition to attract consumers to Paperight outlets.
  • use that consumer-attraction to sign up more outlets.

To do this, we called Paperight a ‘website that turns any printer into a bookstore’, an ‘online library that copy shops use to print books for customers’, and other phrases that described Paperight as a website with downloadable content.

We kept describing the tool, but not the product. To the consumer, the product is a print-out from a local copy shop. To a copy shop, Paperight is a movement, a network of forward-thinking copy shop owners.

The fatal flaw here was that this required us to build brand recognition among consumers for a product that didn’t exist in their world yet. In other words: how could we get consumers to love Paperight before their local copy shop, which they already recognise, is using it? And worse, how could we attract low-income consumers to a web brand, when they spend no time on the web? To a consumer, Paperight is not a website. Describing Paperight as a website is like describing car repair as a spanner. We kept describing the tool, but not the product. To the consumer, the product is a print-out from a local copy shop. To a copy shop, Paperight is a movement, a network of forward-thinking copy shop owners.

Our mistaken approach was holding us back, but we didn’t have enough distance from it to realise that we had other options. I was obsessed with focusing on Paperight as a website. But I knew something was wrong, so I was looking for alternatives. Three key moments were Nick’s appearance on Hectic Nine 9, a misleading article in the Daily Dispatch about us, and Ben Maxwell’s sage session at the Nov 2012 Shuttleworth Foundation Gathering.

While preparing for Hectic Nine 9, whose audience is mostly teens, we realised that sending teens to paperight.com wouldn’t work. We needed to send them to outlets. We did NOT want them arriving at paperight.com and treating it like an ebook store (the interface doesn’t work as an ebook store, and our print-optimised PDFs make for terrible ebooks). But we weren’t allowed to mention brand names on air, like our major copy shop chain Jetline. So we decided to send the audience to a mobile-optimised, consumer-focused site at m.paperight.com. The problem was that when Nick got to the recording, the presenter and producer had other ideas. They were only interested in asking Nick about entrepreneurship, insisted on referring to Nick as the founder of Paperight (which is not a big problem, except that it made Nick uncomfortable), and then showed paperight.com and not m.paperight.com on screen during the interview.

The experience highlighted a few things:

  1. We didn’t have a concise, clear enough message that could cut through what the presenter had in mind about Paperight. Our approach was too broad and fuzzy, so the presenter went with what she thought already.
  2. A mobile site at m.paperight.com cannot be different in look and functionality from paperight.com, because (a) consumers will go to paperight.com by default anyway, and (b) users expect mobile sites to be essentially the same in purpose to their desktop parents.
  3. The whole notion of appealing directly to consumers was flawed because we don’t want them coming to our site. We want them going to our outlets.

Somehow, we had got completely the wrong message to the journalist. We briefly blamed her for being sloppy, but realised soon that it was our fault.

Shortly afterwards, the Daily Dispatch published an article about Paperight that described us explicitly as a site that matrics could use to download exam papers. There was barely a reference to copy shops. To make it worse, the article lightly criticised Paperight for being useful only to matrics who were wealthy enough to have Internet access. Somehow, we had got completely the wrong message to the journalist. We briefly blamed her for being sloppy, but realised soon that it was our fault. We simply weren’t being clear or focused enough in our messaging.

I also realised we (every member of our team) didn’t *love* copy shops enough. If we didn’t truly love them, we wouldn’t be able to create a tribe

We had to put our outlets first in everything. Our messaging, our elevator pitches, our promotional material, and most importantly, our minds. It was after Ben Maxwell emphasised to me the importance of creating in our messaging and on our site a sense of belonging (to a movement) for copy shops that I also realised we (every member of our team) didn’t love copy shops enough. If we didn’t truly love them, we wouldn’t be able to create a tribe, a sense that we were joining them in a grand march of progress.

Importantly, this meant we had to remove all references to our website and to ourselves as an online business or service from our messaging, especially any messaging that consumers might see. What would we replace it with? A movement, a network, a revolution.

Right now, our new messaging is built around the phrase, ‘Paperight is a network of independent print-on-demand bookstores’. If someone asks how we deliver content, we say we do it with a website.

The Daily Dispatch agreed to run a follow-up story with the ‘correct’ information. That story ran a few weeks later (see below, 14 Nov 2012), and is an example of the kind of thing we believe will work much better going forward.