Lulu Founder Bob Young talks to ABCtales
Posted by tcook on Wed, 14 Mar 2007
Bob Young is a collaborator. As the fourth ranked entrepreneur on Silicon.com’s 2006 list that’s a bit of a surprise. Most hotshot entrepreneurs are not collaborators.
But Bob is different. He made his money as the co-founder of Red Hat, the world’s leading open source software company and now he’s lighting up the publishing world with Lulu.com who are about to publish their millionth book. He’s done it all by collaborating. Red Hat used the resources of the internet to take on the might of Microsoft and Oracle and won. Lulu puts together the creativity of people and the massive changes in print technology to allow anyone to publish a book.
Lulu doesn’t charge you a penny until you sell a copy. Then they take the cost of the publication, which varies from book to book but is surprisingly low, plus a 20% cut of what’s left. It’s a brilliant strategy. It’s totally transparent. It lets anyone get into print. Technical books that will only interest a few are now available. Family histories, tomes of poetry, religious tracts, novels and diaries are all in the mix. The writer can purchase an ISBN number and become ‘available’ on Amazon and, in theory, any bookshop in the world. The vanity publishing world is out on its ear – now anyone can be a ‘published writer’ with Lulu - so long as they don’t write smut.
So how did a former typewriter salesman turned techie get into the world of books? Bob says that at Red Hat he always considered himself to be a publisher. Red Hat was only responsible for 10% of its prolific output; the rest was contributed by late-night nerds across the globe. Red Hat, says Bob, “empowered the users”. So when Red Hat was sold and Bob had his millions in the bank he thought: What other industry could benefit from a businessman trying to make the world a better place and still make him rich?
“It was at that time, in 2002,” says Bob, “that the recording industry of America did me a big favour and started to sue its customers. I’m an old typewriter salesman and I believe in looking after my customers. By failing to adapt to new technology and not providing what their customers wanted the recording business got itself into all sorts of trouble”. He discovered that his teenage daughters were downloading songs and sharing them with friends. He was also fascinated with the success of ebay. Ebay sells stuff but “we at Lulu want to do for content what they had done for things.”
So in terms of publishing and of empowering users Lulu seemed to be the obvious answer. It turns the premises of the publishing world on their head. “Books are only dead trees. They are only as valuable as their readers.” Bob knows that at some point a technology will come along that will overtake dead trees – but it must be a more pleasant and effective experience. So far there’s nothing around that even begins to threaten the book trade. Printers were being developed that could print whole books including the cover, binding and glueing on an individual basis. These printers need to pump out 30,000 books a month to cover their costs – but, and this is the crucial bit, they could be 30,000 different books. Not that Lulu has ever bought a printer – they use Xerox for that and allow them to deal with any problems. Another piece of collaboration.
Bob is still proud of his old typewriter salesman role. He says it taught him to listen to his customers, understand what they really need (not what they think they need) and deliver it. “Price,” he says “is seldom the primary factor.” He also understands the necessity for sufficient capital “because it allows you to go through the iterations of your customers”.
So Lulu publishes unedited books. They’re relatively cheap, they don’t require large capital outlay from the writer, they look good and they are widely available. But without an editor, without a screening process, are they all rubbish? Bob accepts that some of his output is, but he says it’s up to the marketplace to decide what will sell and what won’t.
He doesn’t believe he’s taking on the existing publishing world. “Ebay doesn’t hurt Sothebys or Christie’s. It’s not our job to sell 100 million copies of the latest Harry Potter. A publishing house dreams of having 10 authors selling a million books each. Lulu wants a million authors selling 100 books each.”
The average author on Lulu sells less than 1,000 books a year. Their top seller –‘Putting the Can in Cancer’ has now sold 40,000 copies. Their average print run is less than 2. As a novelist Lulu is great for getting you started – “we’re no better than a vanity press, but we don’t take your money.” The only thing they won’t publish is erotica as they feel that, for the moment, they have to protect their brand.
He admits that there are problems with getting Lulu publications listed on Neilson and other book data suppliers. Lulu is working with Bowkers in the States to try and overcome it and Neilsons in the UK are waiting to see if Lulu is here to stay but in the meantime are working with them. In the mad world of the internet Lulu state their value is in the long tail – it’s in the depth and diversity of people.
So how many Lulu books does Bob have on his bookshelf? “The good looking ones!” He’s a disarmingly honest man. He knows that sales are down to effective marketing – and it’s up to the individual authors to market their own books. He loves ‘The Replica Watch Report’ by Richard Brown. It tells you how to discern the difference between a fake and the real thing. It’s stacked with prints and charts to help the watch collector and therefore costs $15 a copy to print. But Richard sells it for £49.95. He works at it. He goes to watch collectors fairs all over the USA and he sells over 1,000 copies annually. That makes him $30,000 a year and he’s happy as larry.
Lulu allows everyone to get published. “Anyone can play. That’s our upside and our downside.” In Bob Young, the community movement has found one its greatest advocates amongst the shark-beds of American capitalism and it’s that very dichotomy, with its built in drive and energy, that will continue to drive it forwards.
Tony Cook 2007