A big blow

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.

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