Student Entrepreneurs Speak Out: #6 in a series
Redefining book publishing
by Carnegie Mellon Computer Science senior, Aayush Kumar
I remember – I was in 7th grade – around that time in my life when I was beginning to think independently and try out different things to see what it was that I would be extremely passionate about! It was also that time in my life that I had read my first 700+ page novel – the fourth edition of Harry Potter. And, like most of my friends, I began speculating of what would happen in the subsequent books and decided to write my own version of Harry Potter V. Albeit nowhere close to 700 pages, I sent out my version to my close friends and received overwhelmingly positive feedback! I wanted more people to read this but I had no clue how to! Should I print out 20 pages of a MS Word document and distribute it to my classroom, to my school?
Opportunity: In comes Hyperink, a start-up based in the tech-hub, San Francisco, to solve exactly this problem! They want to unlock and sell this untapped information by giving every citizen the ability to publish a book. And, the best part is that they will not only publish but also help any aspiring author write, design market and sell a book without any fees or upfront costs (which would have been awesome for the seventh grader me!).
The book industry has been going through a massive transformation the past couple of years. Earlier this February, Borders bookstore filed for bankruptcy and they are now in the process of shutting down around 400 of their 659 bookstores all over the country. Barnes & Noble in the first quarter of this year also reported that their profits were down by 25% and they too are in the process of slowly closing non-profitable stores. It’s not that people have stopped reading books though – the e-book industry is rapidly growing and reported nearly $1B in sales in 2010 and that number is expected to go up to $5B in 2015! Barnes & Noble saw this opportunity and decided to stop paying dividends to their stockholders, and are now heavily investing in the e-book market. They released their version of the e-book reader, Nook, and report that their online sales are up by 52%!
Product: Amidst this turmoil, Hyperink is trying to “democraticize publishing” and “disrupt how the entire book publishing industry works”. They find and select topics that are trending and that people want to read by analyzing things like Google search trends, and then, seek out authors and experts in the relevant areas. They are also targeting experts that don’t have the time to write a book, or feel that they are not good writers. Hyperink employs freelance journalists as ghostwriters who write down the thoughts and ideas of these experts after a Skype interview.
Unlike traditional books, Hyperink’s books are extremely targeted, cater to a specific or niche topic and are generally 30-50 pages long. Their main advantage in comparison to the traditional publishers is that they focus on fast publishing and can publish a book in one month at one-tenth the cost! That is, while typical publishers spend 12-18 months of time and around $18k in costs to try and publish a mega-hit, Hyperink is going in the completely opposite direction by churning out books in less than a month and at about $1k of cost price. The authors of their books will not make multi-million dollars from selling the books, but so far Hyperink has a great track record of having all its books being profitable so far!
The Company: Hyperink is run by co-founders Kevin Guo and Matt Lee, and is currently home to 8 full-time employees. They graduated from the YCombinator batch of December 2010 and have raised $1.2 million in seed funding from a myriad of other investors such as Andreessen Horowitz. Hyperink has currently published more than 100 titles this year, all of which have been profitable, and is looking to publish 500 books by the end of this year. Their books mostly target college students and cater around topics of getting into specific colleges or jobs.
Challenges: As with most start-ups in the beginning, Hyperink is starting off by trying to create and expand its customer base – both of experts and readers. But, Hyperink’s success lies in their low-cost, high-speed publishing model and it’ll be interesting to see if they can keep up with that as they scale. Traditional publishing is slow – it takes time to write a high quality book and then there are a series of steps involving fact-checking, editing, peer reviews and so on before the book can actually be designed, printed, marketed and distributed. Hyperink currently claims that their e-books are of extremely high quality, but it’ll be interesting to see if they are able to maintain the same quality control when they are publishing 100-200 books a month!
There is also the challenge of time. Publishing powerhouses and even distributors such as Amazon and Barnes & Noble are soon realizing the change in people’s preferences to reading books online. Amazon has recently taken multiple steps towards launching a host of self-publishing options through Createspace. These companies already have the customers and access to authors, and are big-enough to invest their stronghold of resources into this new field. The question is if Hyperink will be able to beat them to the flag and dominate the online e-book market, or would they be crushed by these powerhouses?
There are also other start-ups such as Vook and WeBook, that are providing similar e-book publishing options to common people based on crowd-sourced topics with a few minor differences and tweaks when compared to Hyperink. While, co-founder Kevin Guo doesn’t see them as a major competitor, no one really knows where the e-book publishing company is going and who has the right magic sauce ingredients to take over this market? Will it be a race of getting as many titles out in the market to mark their presence, or will it be a more sophisticated battle where the better publishing platform and model that caters to the needs of the people that succeeds?
A part of me wishes I could go back in time, back to seventh grade and get my book published. Perhaps, then, even J.K. Rowling herself might have been able to have a look at my little masterpiece!
Aayush Kumar is a senior at Carnegie Mellon studying Computer Science. While not hacking in front of his beloved laptop, he spends his time playing Quidditch, cricket and pretty much any other sport he can get his hands on!