All posts by Arthur Attwell

Arthur is Paperight’s founder and CEO. He oversees Paperight’s overall strategy and its implementation from day to day. He’s also our CTO, working closely with the development team at Realm Digital. (Visit his personal blog at arthurattwell.com.)

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.

Paperight and beyond: learning from disappointment

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.

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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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Thirty months of Paperight metrics

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.

Project 16 : Team operational costs 2014: closing report

This project was to establish our basic infrastructure for the six months from September 2013 to February 2014. The plan was to:

  • Extend contracts of certain team members (marketing team salaries are covered in project pitch 17)
  • Provide for another sales team member and another intern
  • Cover various operational costs including rent, hosting, and others detailed in the budget below.

General report-back

We are closing this project early because it is not achieving what we set out to achieve.

This project was the base on which we hoped to get Paperight further along the road to self-sustainability after a third year of funding.

We planned in detail how we’d work as a team to generate revenue, mainly by supporting our marketing efforts, and each taking an active role in sales. Based on progress and our experience with publishers, outlets and end customers to date, we decided that we were most likely to be successful in focusing on the university textbook market.

By the end of this project, and despite our best efforts and our concept being well received by students and the public, our original business model did not work out. The key reasons were:

  • Publishers not signing on or taking far too long in their ongoing discussions with us
  • Poor customer service in most copy shops, meaning we could not get enough return customers.

We were not able to reach our targets and realised that we needed to change our core model, while remaining true to our mission to use a rights marketplace to help put every book within walking distance of every home.

Objectives achieved and not achieved

Our main objective was to generate more sales, achieving our sales targets and becoming self sustainable by early 2015. We did not achieve this. (See project 17 closing report for more detail on sales.)

Notes

We shifted our focus to marketing as far as possible. To varying degrees all of the Paperight team were involved in marketing and trying to create sales opportunities during the course of this pitch. The core marketing and sales team now consisted of:

  • Marie, our marketing co-ordinator (paid from project 17), created a marketing plan and strategy for Paperight going forward. Her drive was endless and she really did generate volumes of media recognition and public support. Despite her best efforts to generate public interest in purchasing our Paperight products and getting involved, she was limited by the available product offering and the lack of decent content being received from publishers.
  • Nick, our creative head (also paid from project 17), created outstanding design work. He assisted with grant applications, create guides for schools and sponsors on how to work with us, generated all our fliers, newsletters, book covers. Anything design related had Nick’s stamp on it.
  • Yazeed, our business development manager, enabled two large bulk sales and focused on schools and outlets and trying to encourage relationships and potential sales. He walked outlets through the purchasing process, followed and tracked all our sales.
  • Philippa, our content manager, focused on public-domain content, face-to-face outlet support, and on-campus marketing.
  • Oscar, our reading-communities manager, focused on content curation and creating relationships with lecturers at UCT, trying to encourage them to participate and use Paperight products as far as possible.
  • Shaun, our video-production intern, created great footage and finished video for Paperight during the three months that he worked for Paperight.
  • Tarryn, our COO and head of content, continued to build relationships with publishers, most importantly bringing in a range of matric study guides form SA’s top publishers. She also travelled to the Frankfurt Book Fair and won us the CONTEC startup award, which generated PR and industry credibility.

We facilitated bulk sales for:

  • Pelican Park High School
  • Minuteman Press, who sponsored books for Silverstream Secondary School
  • Mduduzi Ngidi Kwamakutha High School

Both of the schools that we sold books to or enabled sponsorships, improved their matric results. They were highly appreciative of having had access to textbooks in their time of need.

Additional achievements:

  • We won the FNB Innovation Index Award
  • We won the Contec Startup Showcase at the Frankfurt Book Fair.
  • We achieved a wide range of media coverage, in print, online, over the radio and in magazines
  • We signed up some major publishers (although not always their best content)
  • We finally registered as a vendor with Unisa, which took over a year.
  • Paperight is now trademarked in South Africa. We are almost complete in our US trademarking process and only need to prove that the mark is in use to complete the final part of our trademarking application.

Measures of success

 

Aim Result
We are hitting our revenue targets (i.e. our existing revenue targets as of end Feb) Not achieved.
We’ve reached 5000 students in 50 schools with books worth R500 000 Not achieved. We did not manage to build sales on the relationships we started with the Young Writers Anthology. We delivered books to approximately 600 students worth about R150 000.
2000 copies downloaded outside of CBDs We barely managed a fraction of this: after we started charging for exam packs, our sales outside of cities plummeted and did not grow again. We’ve recently made these documents free again, but it’s too early to say whether that will have an impact.
R2m in turnover contributed to South African businesses (including licenses to publishers and turnover at copyshops) Not achieved. We created about R75000 in copy shop turnover (including licence fees; R42000 excluding licence fees), and about R31000 (USD3100) in licence fees.
10 outlets are a pleasure to by a book at (customers want to come back and would tell their friends about it) We can confidently say four outlets are great to buy from: Sagittarius Printworks in PMB, The Office Crew in Strand, Aloe X in Grahamstown, and 3@1 Cavendish. We are reasonably certain that another dozen are good. The common factor is always an owner manager who runs the front desk personally. At the most disappointing outlets, managers seem to be in a back office or not present every day.
We expect to see that we’re over a quarter of the way to these targets. Not achieved.
We would like to be halfway to these targets. Not achieved.
We would love to see that we’re well over halfway to these targets. Not achieved.

 

Budget

Original budget: R 1 000 000.00
Actual spend: R 723 797.13
Returned to pool: R 276 202.87

Item Budget Actual Return to pool Comments
Laptop Marie 6500 6500 0
Laptop Philippa 6500 6500 0
External hardrive 2000 900 1100
Laptop sales manager 7000 0 7000
Laptop intern 7000 0 7000
Travel Yazeed 9000 0 9000
Travel sales manager 6000 0 6000
Data bundles Yazeed 1800 0 1800
Data bundles sales manager 1800 0 1800
3g dongle sales manager 500 0 500
Telephone telkom expense 10200 8342.45 1857.55
Telephone skype expense 1200 0 1200
Afrihost expense 7800 4185 3615
Mobile phone expense 600 0 600
Rent expense 120000 128958.39 -8958.39 Spent three additional months, March, April and May
Insurance 14940 5117 9823
Groceries and cleaning material 7860 7224.41 635.59
Paper for printing 1500 0 1500
Toner and ink 3570 750.12 2819.88
Binding machine 1000 0 1000
Rexel rotary trimmer 3000 0 3000
Domain registrations 5400 2404 2996
Freeagent subscriptions 1200 1951.46 -751.46 Spent three additional months, March, April and May
Dropbox subscription 2880 4120.77 -1240.77 Spent three additional months, March, April and May
Google apps subscription 4500 0 4500
PASA membership 6500 5931 569
SABA membership 3500 3300 200
Trovebox subscription 600 0 600
BEE annual certificate fees 3400 0 3400
COIDA 17825 13824.98 4000.02
Google email subscription 9000 0 9000
General accounting fees 36000 6919 29081
VAT returns 5400 0 5400
Year end accounting fees 20000 9633 10367
Provision for legal expense 7000 0 7000
Provision for trademarking expense 16000 0 16000
Fnb bank charges 6000 3599.04 2400.96
Paperight banners 1500 0 1500
Extra chairs for the office 3000 0 3000
Extra table for the office 5000 3800 1200
Bookshelf for accounts filing 500 3790 -3290 There was a desperate need for shelving for filing.
Router for the office 2200 2199 1
Staff workshops 3500 930 2570
Entertainment and meals 2000 3659.88 -1659.88 Spent three additional months, March, April and May
Docraptor monthly subscription 4800 1210.70 3589.30
Paperight monthly winner 4000 0 4000
Tarryn’s screen 1500 1500 0
Nick’s screen 700 700 0
Arthur’s screen 1500 1500 0
Philippa’s screen 700 700 0
Software hosting Paperight 51300 25650 25650
Business cards for employees 2250 0 2250
Dezre – Financial Manager 102000 143567.29 -41567.29 Spent three additional months, March, April and May. See note below.
Tarryn – Content manager 102000 153000 -51000 Spent three additional months, March, April and May. See note below.
Philippa – Content manager 60000 75238.10 -15328.10 Spent one month extra, see note below.
Intern 12000 0 12000
Intern audiovisual 15000 0 15000
Payroll expense 67590 9144.14 58445.86
Recruitment ads 1000 0 1000
Travel local 60000 0 60000
Travel international 25000 0 25000
Bank charges 4485 0 4485
Paperight.com bug fixes 16000 570 15430
Software development 75600 69027 6573
Courier expenses 900 488.22 411.78
Monthly meetings 3000 4500 -1500 Spent three additional months, March, April and May
TOTAL 1000000 723797.13 276202.87

 

Note: We overspent on some salaries and on some subscription items in this project by up to three months. Towards the end of the project period, I knew we’d be letting most of our team go and restructuring others. Rather than creating a new, separate project to cover their notice periods, we used our underspending in other areas to offset the overspending here.

 

Outputs and deliverables

 

IP Author Owner
New content (mostly reformatted public domain content) Paperight team Paperight
Market data (including textbook prescriptions database) Paperight team Paperight
Internal process documents (e.g. wiki and documents) Paperight team Paperight
Improvements to and new features on paperight.com Paperight team Paperight

 

Learnings

We and our many champions all firmly believe that distributed print-on-demand is a crucial part of putting every book within walking distance of every home.

We believe that there were three key challenges we didn’t overcome in the time we had. In no particular order:

  • We made some decisions about strategy and focus that didn’t work out.
  • Copy shop service wasn’t good enough, in general, to draw customers and keep them coming back.
  • Where publishers joined, they almost never gave us the books that mattered.

And the result was that we didn’t sell enough books to hit our targets. Here is more detail.

1. Strategy and focus

Our strategy and focus changed during the course this project.

Our initial focus for September, October and November:

Our main metric was turnover from sales in dollars. We maintained our growing targets till October last year, but slipped dramatically since November. At the end of January, for the first time, we slipped below our cumulative ‘Mort’ figure, the minimum target for staying on track to self-sustainability.

Focus for December, January and February:

Our sales were very low over this period. We decided to shift our focus to our February/March 2014 university-centred promotional campaign, headlined #textbookrevolution. All available resources and staff were now focused on this campaign. The shift in focus was also part of our planning for the year ahead and to encourage social change in the publishing industry.

The focus of the #textbookrevolution campaign was to (a) highlight the fact that 70% of the cost of a textbook is the supply chain (printing, shipping, warehousing, wastage and retail), and that (b) print-on-demand on university campuses could save students and South Africa as much as a billion rand a year.

Our campaign involved creating detailed messaging and plans: one liners, elevator pitches, detailed back stories, a manifesto, a petition, outlet advertising posters and marketing briefs, novelty coasters, and videos; campaign website; doing lots of PR work; and organising a Twitter debate on the high price of textbooks. This is all outlined in more detail in the marketing closing report 17A and 17B.

The campaign itself was a great success. The response from students at Stellenbosch and UCT was great. We collected over 1000 signatures on our #textbookrevolution petition. In addition to the paper petition, students have left great comments on our online petition.

We established that students are highly sensitised to the issue of high textbook prices. We reached more students in the 20 hours we spent on campuses than we would have in months online. The lesson that we learnt here was that we’ve long underestimated the importance of putting people on the ground talking to potential customers (even if we don’t have the books they need yet).

Focus for March, April and May:

We 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 tried hard to train outlets, but managers consistently gatekeep or just did not 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.

As a result, I decided to cut my team, and drastically cut costs. We decided to see whether there are new licencing opportunities for Paperight to explore during the last months of my fellowship.

Before the team went their separate ways, they each contributed to the Paperight story at http://story.paperight.com. This has greatly helped us to find a clearer understanding of why Paperight did not succeed in the way that we wanted to and when we wanted it to.

We realise that we need to accept that the industry is not ready for our model just yet and that it is going to take time to initiate change.  Even establishing a relationship with Unisa took a full year before we could even become a supplier on their database. We still believe that there is a need for Paperight, and it would be ideal if we could keep Paperight alive while this gradual change is taking place.

Adding our stories to story.paperight.com allowed us to also reflect on not only our difficulties that we experienced, but all our achievements, the obstacles that we did overcome in the industry, the contributions that we made to schools in the form of sponsorships and our small contribution towards literacy and inspirtng young writers in our Anthology project.

The team was reduced by the end of March 2014 to three core team members: our COO Tarryn, Financial Manager Dezre and myself. Between the three of us we plan to guide Paperight through its next phase of publishing our Paperight story.

  1. Copy shop service levels

We focused on outlets in Stellenbosch and near UCT and many hours were spent training them both in person and over the phone. Despite this, we still found that we needed to assist them with their purchases. Despite much introspection, know that the difficulties were not related to bad UX on our site, because many other outlets had used the service flawlessly without training.

We also found out that many customers had cancelled their orders due to the length of time that the copy shops took to get back to them. (We ourselves waited almost two weeks on two occasions for books we ordered from Top Copy, a leading copy shop near our office.) We also had a number of phone calls where customers were upset because they had gone to a copy shop only to be turned away because the copy shop didn’t sell books. There were misunderstandings and lack of communication between staff. Strangely, copy shops often behaved as though Paperight was an inconvenience to their business model. They did not like to make changes, and were not always enthusiastic about being able to offer a new service.

We also sent some mystery shoppers to outlets in Stellenbosch and from their experience we don’t think that they would become return customers.

Types of problems that we have experienced with outlets include

  • Needing extensive training before being able to use Paperight
  • Needing repeated training due to inexperience, staff changes, long intervals between initial training and real time sales, and a lack of tech savvy staff.
  • Outlets not being motivated to advertise or actively sell Paperight books.
  • Some outlets were not motivated to even assist Paperight customers which was strange considering that they signed up as outlets.
  • Outlets were confused as to how to identify a Paperight customer.
  • Outlets battled to find the products that they wanted on our website when choosing among a range of similarly-named titles like exam packs. (We are aware that this is a problem we could probably do more to solve.)
  • If a customer ordered more than one book or even a series of exam papers, outlets often panicked and it became a struggle to assist them with the order.
  • They often battled with the book downloading process. For any of a number of reasons not limited but including:
    • viruses on their computer,
    • not knowing where their downloaded documents save to,
    • not understanding whether to select A4 or A5 one-up or two-up layouts (something we have been actively simplifying),
    • changing their internet security settings
    • slow internet speeds
    • mistakenly downloading the sample version and not the full book
    • not scrolling down the screen to click on the download now button and waiting for something to happen
    • using download-accelerator plugins that break when attempting secure downloads like ours.
  • Some outlets wanted full catalogues in order to know what books were on offer for their customers, others said that the catalogue was dense and not user friendly. (We have since produced a better catalogue.)
  • Some outlets allowed customers to view the books online and other outlets expected the customers to know beforehand what they wanted.
  • Many outlet owners and managers are nervous to hand over the use of the Paperight site to their employees. Some have said they are worried about staff abusing the site by using the same .pdf more than once. Others feel that staff can’t be trusted with the store’s Paperight credit balance. We have tried to find ways of reassuring them, but this is ultimately an issue of trust in their businesses that we can’t address.
  • Some outlets were reluctant to top-up until they had a sale. They then needed to top-up while making their sale and this added extra time pressure. We also assume some customers were not prepared to wait.
  • Some outlets after months of training and explanations still make a top up by simply depositing cash into our bank account and assuming that this will turn into credits. They do not phone, or even send an email that they have made a deposit. We can usually identify the outlet from the payment reference.
  • Some of our larger outlets who are more experienced printers, and we think are more likely to offer a great Paperight service, have incredibly fast staff turnover among shopfloor managers.
  • There is a general problem with staff not being aware that their outlet is signed up with Paperight.
  • Not reading our newsletter that we send out showing off new and valuable content.
  • Some managers tend to be disappointed in the lack of customers who just walk in and ask for Paperight. There is a sense of entitlement that Paperight should ensure they have the customers and that they should not have to do promotional work in store.
  • A few outlets have complained that they have been unable to contact us when they need us. They claim that our phone is mostly engaged. We addressed this by installing two extra lines (which since gone back to one line to save costs).
  • Copy shops are not consistent in the printing delivery time, even from the same copy shop. We know of orders that have taken from a 20 minutes to 2 weeks to complete from start to finish.
  • There were one or two copy shops who were not sure whether the download licence purchase was once off or for every book printed. This came up in training with Wizardz, where we discovered that they had reprinted the same PDF (we know because these were orders we placed with them ourselves).

These were common problems, but there were bright spots, outlets who are really engaged and love working with us. Our favourite is Sagittarius Print Works in Pietermaritzburg, where the owner Shahana Maharaj works hard to promote her Paperight-related services at local schools and in her area (e.g. putting flyers in all the post boxes at her post office, and taking order forms to schools).

Exit/Sustainability/Viability

The core business model that this project supported is not sustainable. It might be sustainable if we can keep all the costs and the team as low as possible, until revenue picks up, content is increased and the public becomes more aware of our products. Until then we are also looking to new business models, particularly around copy licensing, which is a much closer fit to existing publisher and institutional activities.

Conclusion

We did not achieve our big audacious goals, but we have made a noticeable impact on the publishing industry, and opened minds around greater access to books. We have inspired businesses to become more openness-minded, too. For instance, we’re a featured company in a new book published by Palgrave Macmillan. We have positively affected the lives of at least 300 children, many of whose matric exam results we know were improved over those in the prior year. We encouraged literacy and discussions about literacy in South Africa.

Paperight will continue in a new fashion, certainly much leaner. This is only the end of a chapter, not the book.

Next steps

As a step to reducing running costs, Paperight will be managed by Electric Book Works as one of its flagships projects and our focus over the next couple of months will be on photocopy licensing and testing reception to an open prescribed-textbooks database, starting with a full catalogue of prescribed texts at UCT.

Project 17 A and B: Marketing operations: Closing report

We planned two marketing campaigns to increase sales of our top products. These campaigns were planned in detail on the principle of seven-touches: a person needs to hear about us, on average, seven times before they will act on our message. We wanted to drive customers to our outlets, in the hope they’d become return customers.

General report-back

This marketing campaign was thoroughly planned and executed, led by our marketing manager Louise. We were helped a lot by pro bono workshop with Zoom Advertising (see Marie’s post here about it). In addition to ongoing day-to-day support of outlets, it included:

We couldn’t have worked harder on it, and I’m extremely proud of what Marie and the team produced. So our poor results in terms of sales (see objectives below) were very disappointing.

Objectives achieved and not achieved

 

Original objectives Result
Increase sales of specific titles through targeted campaigns We did not increase sales of the products we promoted most.
Increase sales overall Transactions dropped, but profitability increased due to a more profitable product mix. So we made marginally more gross profit in the period during the marketing project. More details below.
Improve sales experience in outlets for Paperight customers While we are happy with improvement in some bright-spot outlets, at some copy shops that we targeted (such as Top Copy and Jetline Stellenbosch) the managers gate-kept fiercely and we could not make an impact.
Increase awareness of Paperight (availability/price/convenience) We certainly increased awareness of Paperight.

 

Measures of success

 

Have we increased sales of target products? Achieved at a very low rate. Sales have increased, but very modestly. We were targeting university prescribed books, and have made a few sales in single digits monthly. We have seen greater growth in sales of matric study guides, which we were not promoting as much. This shows that people are finding us for their needs, rather than us reaching them with our favourite offering. This has a lot to do with the fact that our catalogue is still very weak in university texts.
Have we improved the experience of purchasing Paperight titles in outlets? (Measured qualitatively from conversation with outlets and customer feedback where available.) Achieved with modest success. Where outlet managers have been very receptive to us, we have been able to work with them to improve service with fast support and promotional items. The shining example is Saggitarius Print Works in Paietermaritzburg, where owner Shahana Maharaj does a lot of promotional work at local schools. At several other key outlets that we wanted to help grow (such as Top Copy in Claremont and Jetline Stellenbosch), owners/managers have passively or actively blocked our attempts to help or train staff.
Do 1 in 3 students at UCT and Stellenbosch know about Paperight, when surveyed around the departments we’re focusing on (e.g. English/Arts)? We will run these surveys when the universities reopen in late July. We suspect that we did not reach this target.
We expect to see:

  • an increase in sales (in proportion to our existing revenue goals)
  • a growing return customer base (measured as repeats of end-user customer names as captured by outlets)
Not achieved, at least not in this timeframe. Comparing the previous six months with this project timeframe:

  • the number of sales transactions actually dropped from 525 to 222.
  • Sales quantity (number of copies) dropped slightly from 1656 to 1595.
  • Sales value in USD increased from $2156.45 to $2486.74.

So we sold fewer of more valuable products, a sales-mix issue.

Return customers: We have not been able to create return customers. Returners actually dropped slightly.

Mar–Aug 2013 = 24 return customers

Sep 2013–Feb 2014 = 19 return customers

Mar–Jun 2014 = 6 return customers.

We would like to see:

  • outlets in addition to our strategic partners in target areas (around UCT and Stellenbosch) taking part in marketing activities (e.g. distributing flyers, displaying posters, sharing on Facebook)
Other outlets did join in, but not in our focus geographical areas around UCT and Stellenbosch. For instance outlets at UJ,  Wits, Free State and NMMU requested #textbookrevolution marketing packs. This was very encouraging. It did not lead to many sales, though, since we have very few university textbooks, and the #textbookrevolution campaign was more about awareness than sales.
We would love to see:

  • our sales revenue exceed target
  • sales at outlets other than our strategic partners showing higher sales than strategic outlets (it would show that we aren’t needed and that outlets can get it done on their own!)
We did not meet our sales targets.

We did see sales growing at outlets we hadn’t selected. In fact, there is no meaningful difference between sales at our selected strategic outlets and at other outlets. This does suggest that our marketing has very little impact on buyer behaviour, and that the outlets’ marketing work (e.g. flyers at local schools, posters in store) is the most important factor by far.

 

Budget

Note: This project was divided into parts A and B for funding-pool reasons: part A was funded from my first fellowship year and part B from my second. Operationally, they are the same project.

Part A:

Original budget: R395683
Actual spend: R395683
Returned to pool: R0 (see notes in table)

Item Budget Actual Return to pool Comments
Contract extension: Nick Mulgrew 90000 72991.91 17008.09 Nick worked part-time for this period, so we saved.
Contract extension: Yazeed Peters 90000 120000 -30000 See note below on overspending during notice periods.
Contract extension: Oscar Masinyane 84000 107545.45 -23545.45 See note below on overspending during notice periods.
New sales manager position: probation contract 30000 25417.50 4582.5 We did not hire a new sales manager . We took on two interns Andi Donald and Shawn Swingler. We also used this money to pay Philippa and Marie on a freelance basis in May and June for #textbookrevolution textbook database research..
New sales manager position: salary increase 42000 42000 We did not hire a sales manager. We did interview several people but could not find a suitable person.
Monthly marketing expenses 30000 47358.86 -17358.86 Over Parts A and B were ultimately over budget by R3837.34. We underestimated how much marketing material we’d need for this project.
Marketing travel and sales expenses 29683 22369.28 7313.72 All local travel expenses
TOTAL R395683 395683 0 For Part A of the project budget, we have balanced overspending with underspending. Further costs move into Part B.

 

Part B:

Original budget: R191010
Actual spend: R116094.05
Returned to pool: R74915.95

 

Item Budget Actual Return to pool Comments
Contract extension: Marie-Louise Rouget 60000 80000 -20000 See note below on overspending during notice periods.
Monthly marketing expenses 30000 16478.48 13521.52 Over Parts A and B were ultimately over budget by R3837.34. We underestimated how much marketing material we’d need for this project.
Marketing travel and sales expenses 101010 19615.57 81394.43 International travel was less than expected (only London Book Fair).
TOTAL 191010 116094.05 74915.95

 

Contract extensions during notice periods

We overspent on salaries in this project by up to two months (case by case). Towards the end of the project period, I knew we’d be letting most of our team go, even though their contracts were in place for several months to come. Rather than creating a new, separate project to cover their notice periods, we used our underspending in other areas to offset the overspending here.

Outputs and deliverables

 

IP Author Owner
Marketing materials including catalogue, posters, flyers, coasters, social media conversations Various paperight team members Paperight
Video Shaun Swingler for Paperight Paperight
Website at http://textbookrevolution.co.za Arthur Attwell Paperight

 

Learnings

It’s impossible to know for sure what we could have done differently, and we realise that we had to try all this to find out that this kind of marketing doesn’t work for a startup still trying to get its product working on a local scale: a good copy shop with the right books with the right customers.

We suspect that we tried to run before we could walk, and that local, hand-held, in-person sales might have been more effective. However, had we done that instead, we would have felt that we were not aiming high enough and were missing opportunities.

Concretely, we learned a lot about creating and executing marketing plans. In short: there cannot be too much detail or forethought.

Exit/Sustainability/Viability

This project did not have the impact on our sales and sustainability that we hoped for. As a result, we let go most team members and are revisiting our core business model.

Conclusion

The outcomes of this project were disappointing, considering that we executed it pretty much exactly as we hoped we could. The silver linings are that we learned a lot about how to run a marketing campaign, and that for a startup like ours, a more humble, less sexy approach to telling people about your service may be more effective. We’ll try that in future.

Next steps

We’re revisiting our business model, focusing on photocopy licensing. Our marketing approach there will be very different: much more focused on local, in-person interactions with institutional partners.

 

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.

The #textbookrevolution and hints of a pivot ahead

In our shift to focus on universities, we created and launched our #textbookrevolution campaign. This meant creating detailed messaging and plans: one liners, elevator pitches, detailed back stories, a manifesto, a petition, outlet advertising posters and marketing briefs, novelty coasters, and videos; campaign website (http://textbookrevolution.co.za); doing lots of PR work (emailing journalists and stakeholders personally); and organising a Twitter debate on the high price of textbooks. This was the main focus of Nov, Dec and Feb.

Much of this was written up elsewhere:

On the technical side, we finalised much better automation of book preparation prep (mainly tools to use online PDF layout tool DocRaptor to create better-looking books). And in finances, completed our audit with a clean bill of health.

Travelling

I went to Johannesburg for pitching meetings with publishers (Pearson, Van Schaik, UNISA Press), UNISA, and PostNet, and our outlets manager Yazeed attended the ActivateSA event in Joburg, a conference of young leaders, to talk about Paperight and the #textbookrevolution.

Speaking out

I’ve had a bit to say, too:

  • 22 Jan 2014: A post by me on Medium, “Not Yet for Profit”, arguing that well-funded, as-yet-unprofitable startups represent an whole new industry, much of it in social impact, and that’s a good thing.
  • 24 Jan 2014: Interview on Paperight’s story with AFKInsider, a US website on African business.

Mainly I’ve been telling the #textbookrevolution story over and over again in meetings (with publishers, university administrators and journalists). E.g. interviews during Jan and Feb on SAFM, Rhodes Music Radio, UJfm (University of Joburg) and Jozi Today.

The focus of the #textbookrevolution campaign is to (a) highlight the fact that 70% of the cost of a textbook is the supply chain (printing, shipping, warehousing, wastage and retail), and that (b) print-on-demand on university campuses could save students and South Africa as much as a billion rand a year. See our blog post for the detail, and the #textbookrevolution site for the manifesto, video, petition and supporters.

Joining our thinking

SHAWCO (UCT’s acclaimed social-welfare organisation) and Boundless (open textbooks) are official supporters of the #textbookrevolution. See all the supporters here.

We’ve also had ongoing discussions about closer collaboration with RISO (copier manufacturer), Mega Digital (SA’s biggest short-run book printer) and Loot (online retailer).

We’ve counted 21 media mentions that we know about, of which the highlights are:

Big wins

We had a great response from students at Stellenbosch and UCT where we collected over 1000 signatures on our #textbookrevolution petition. In addition to the paper petition, students have left great comments on our online petition.

we’ve long underestimated the importance of putting people on the ground talking to potential customers

Students are highly sensitised to the issue of high textbook prices. Also, we probably reached more students in the 20 hours we spent on campuses than we would have in months online. A big lesson was that we’ve long underestimated the importance of putting people on the ground talking to potential customers (even if we don’t have the books they need yet).

We’ve also had big losses. More about that in this separate post.

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.

Launching the anthology, mapping outlets, and a big win

We’re super proud of three new videos:

22 Oct 2013: This 8-min documentary on how and why Pelican Park High bought study materials through us is so affirming for us. It helps answer the doubts that can haunt you when you’re wondering whether you’re moving forward at all.

1 Nov 2013: Similarly, this 8-min documentary on how and why Minuteman Press sponsored books for Silverstream Secondary.

18 Nov 2013: We created a short 1-minute promo from the Pelikan park video on why schools should buy study materials through us.

But the real hjighlight event of the last few months has to be the launch event of the Paperight Young Writers Anthology on 7 September 2013. (See the blog post here and photos on Facebook.)

20140429_frankenstein-mapBack at the ranch, at the end of October we finally integrated our outlets map onto our product pages, to offer the ability to find outlets and compare prices of books at them per product.

This new product-page map explains the concept behind Paperight much better, too, which frees up other messaging space.

At the same time, we also created a range of new screencast videos for our help site (released 21 Oct 2013), produced on 4 Nov 2013 a new printable product catalogue, including improved CSV-based workflow to make future updates quick and easy, and made (on 13 Nov) some useful guides for schools and sponsors on how to work with us.

Marie and Nick have also been producing loads of Facebook posts about our books and outlets.

Out and about

  • On 10 Oct 2013 I pitched at the Accenture Innovation Awards in Joburg, and won! More on that below.
  • 9 to 13 October 2013: Tarryn, our COO, visited the Frankfurt Book Fair, and also won an award. More below.
  • 24 Oct 2013: I spoke at the launch of market research company Yellowwood’s white paper on transformative innovation. Here’s text and video.

  • 6 Nov 2013: “Tough Truths about Selling to Publishers”. I spoke at the inaugural Footnote Summit, a South African digital-publishing conference. I was worried I might offend some people, but my worries were unfounded: people really appreciated my honest, and my talk led directly to one important publisher signing up, and another giving us much better books.
  • 11 Oct 2013: Nice PR opportunities off back of Accenture win, including this breakfast TV show (skip to 3:10 for me).

New supporters

20130903_122743_window-dressedWe noticed on 4 Sep 2013 that local copy shop Top Copy had devoted their entire front facade to Paperight books. It’s great to see one of our champion copy shops devoting their prime ad space to our books.

We identified 46 separate media pieces about us, including these highlights:

Big wins

Five great wins in the last three months:

Our roadmap for the next 3 months

October and November sales were very low, so for the next three months we’re shifting focus to our Feb/Mar 2014 universities promotional campaign, headlined #textbookrevolution, and emphasising the need for universities and publishers to move away from their traditional, bloated supply chain (where 70% of the retail price of a textbook goes to the supply chain alone), and towards Paperight.

Project 12: Sales course for Outlet Development Manager: closing report

A ten-week course on selling for our Outlet Development Manager Yazeed Peters, intended primarily to boost sales from outlets to bulk-printing customers, resulting in revenue for Paperight in rights and service fees.

General report-back

The course has helped Yazeed define his role in Paperight more clearly. Yazeed was averse to being branded as a salesperson due to the stigma attached to salespeople. Through the course he has improved his goal-setting and confidence in fulfilling a sales role.

Objectives achieved/not achieved

Planned: “We hope that the course will enable Yazeed to find and close valuable deals between outlets and their customers that will boost Paperight’s revenue and create the success stories we need in order to encourage other outlets to register and do similar deals … revenue will increase, and outlets will be able to see the impact that Paperight can have on a business that embraces and promotes print-on-demand.”

We believe this has been achieved. The clearest evidence is that Yazeed’s sales work has kept us on track with our revenue targets.

Measures of success

Planned: “Yazeed must complete the course and all knowledge review and feedback sheets. This will help determine whether he feels he is internalising the training material.”

Yazeed: “The course materials are aligned with my own values and therefore easy to internalise.”

Planned: “Yazeed will report back to the team, and write up his reports, on what he’s learning and how it’s impacting his work with outlets and their customers.”

This is being done on an ongoing basis as Yazeed briefs and trains colleagues on aspects of pitching and sales, and briefs us on the status of pending deals.

Before: “We expect:  To see more deals like the Pelikan Park deal being created and closed.”

After: Achieved: We have been successfully involved in four similar deals since then.

Before: “To see a deal a month as early as one month into his course. ”

After: On average we have seen a deal per month with us reaching our overall targets successfully, considering that targets increase by 50% per month.

Before: “We’ve love to see more than that.”

After: We have not yet seen more, but this work has led to us formalising our efforts to seek sponsorships as a core part of our business, and to trying to recruit a dedicated sales manager to grow this side of the business.

Budget

Original budget: R19380.00

Actual spend: R13369.62

Returned to pool: R6010.38

Outputs and deliverables

Planned: “Direct tangible outputs will include the goal-setting and other plans that Yazeed creates for his position. Indirect outputs, we hope, will include sales that come as a result of his doing the course.”

Actual outputs: Yazeed’s goals have become more sales-orientated, and the course has helped him to focus on reaching sales targets and improved his ability to set priorities effectively.

Learnings

The course was a valuable investment for Paperight as it allowed us to boost our abilities in sales. The important nature of sales for our start-up makes the amount spent on the course worthwhile. In future we would continue to weigh up the potential benefits versus the cost of such training courses. It is important that we do not send staff for training courses which do not add direct benefit to Paperight.

Exit/Sustainability/Viability

This course was a one-off investment in team capabilities that will contribute to our ability to become self-sustaining.

Conclusion

We’re very happy that we sent Yazeed on the course, the benefits are clear and the organisation is certainly better off as a result.

Next steps

We will consider sending team members on similar courses in future, though none are planned at this stage.