Bay Area Spotlight 2015: Digital Winners In the Bay Area

No examination of the Bay Area publishing scene would be complete without highlighting the many digital publishing and distribution startups in the area. By rejecting the rules of the mainstream publishing industry, these companies embody the Silicon Valley spirit.

About 10 years ago, Mark Coker and his wife, Lesleyann Coker, were unable to sell a satirical novel about television soap operas that they had coauthored, despite being represented by a top New York literary agency. Mark Coker describes the experience as frustrating: “Publishers don’t always know what readers want to read. Most of their professionally curated books are commercial flops anyway.”

So Coker aimed to solve the problem. “What if I could say yes to every author?” he wondered. “What if I could let any writer publish for free and let the readers decide what’s worth reading?” With that goal in mind, in 2008 Coker founded Smashwords, a free e-book publishing and distribution platform for self-published authors, some of whom have gone on to become bestsellers, earning royalties of 60%–80%. Smashwords has more than 350,000 titles distributed via partnerships with Apple iBooks, Baker & Taylor, Barnes & Noble, Kobo, OverDrive, Oyster, and Scribd.

“Unlike some of our competitors, we only make a profit when our books sell,” Coker says. He adds that while many Smashwords authors have gone on to become bestsellers, providing authors the freedom to publish is what’s most important to him. “If you talk with self-published authors, you’ll learn that their measure of success isn’t limited to the financial metrics. There’s success and pleasure simply in being given a chance to publish on your own terms with total creative control.”

Coker calls Smashwords a “true-blood Silicon Valley startup.” He adds, “Like many SV entrepreneurs, I’ve always believed that technology holds the power to effect positive social change.” Coker notes that most people in the publishing industry “still don’t understand self-publishing, and they don’t understand how Smashwords has only scratched the surface of what’s possible in the future.” He says, “Someday, I expect we’ll surpass one million authors published.”

With all those e-books comes a need for a way to access them. The San Francisco–based e-book subscription service Scribd offers unlimited access to more than a million e-books for $8.99 a month. Scribd’s v-p of content acquisition, Andrew Weinstein, says that two years ago the e-book subscription market was “an entirely new concept and publishers in general were hesitant. Now, we’re working with the majority of the Big Five as well as more than 1,000 other publishers.” He says the focus is currently on continuing to build the Scribd library.

Weinstein says that one of Scribd’s advantages is the “sheer length of time we’ve been in the market” since launching as a document-sharing platform in 2007. “We’ve had years to build our relationship with our publishing partners and our readers, and it’s served us well,” Weinstein says. “One of the really exciting things about the subscription model is that it’s driving attention to content that might otherwise not be discovered,” he adds.

Being headquartered in S.F. “gives us access to some of the most sought after engineering talent around,” Weinstein says. “It’s also given us the ability to work closely with local publishers—Chronicle, McSweeney’s, Counterpoint Press, Soft Skull, and Outpost19 just to name a few—who are right here in our own backyard.”

Inscribe Digital

The San Francisco–based e-book distributor Inscribe Digital helps more than 300 publishers and a select set of independent authors get nearly 50,000 titles out to a web of distribution channels through its Athena distribution platform, an ONIX-based system that “turns chaos into order.” The company provides strategic planning, file conversion and management, marketing expertise, and analytics and consolidated reporting, in addition to an evolving set of subscription services.

Last year, Inscribe released a new tool called Instore, which lets publishers keep track of their content in the supply chain and leverage retailer-specific information to scale their marketing efforts efficiently. “We see publishers like parents sending their kids out into the world without always knowing if they arrived safely at their destination,” says executive v-p and general manager Anne Kubek, adding, “Instore helps publishers keep track of their titles once they’ve gone out the door.” She notes that Instore allows publishers to track titles with critical real-time information that aggregates data about e-book titles.

Kubek calls this a “time of shifting sands for authors and publishers. Authors have more flexibility to work outside a traditional publisher relationship than ever before, but also are finding that they still need an infrastructure to support their efforts if they want to sell books and also protect their writing time. There’s a reason why publishers have existed as long as they have.” She says Inscribe works with authors and publishers to map out strategic sales plans. Kubek cites the digital startup Ink Monster as an example and says Inscribe helped the publisher grow one of its series to 250,000 units sold in less than a year.

Aer.io

The Aer.io retail network lets anyone make a bookstore in minutes, curating inventory with one line of embed code. Founder and CEO Ron Martinez says Aer.io is for publishers selling direct to consumers and for bloggers, media properties, and organizations who would like to create new revenue by recommending and selling books. Martinez says Aer.io has “real interest from brick-and-mortar indie booksellers who’d like to add a contemporary, customizable e-commerce storefront to their website and social presence,” adding that it can be profitable for bookstores “right out of the box.” Martinez has also observed that offering a mix of nonbook products has helped independent bookstores continue to thrive. That has led Aer.io to bring new categories into the catalog. “If you’re publishing parenting books and marketing the vertical, you might want to add baby monitors to the product mix. We’re excited about extending our catalog to include products like these, shipped direct to your customer’s door.”

For book publishers, Aer.io handles inventory, payments, taxes, shipping for print, customer service, e-book sampling, and multiformat fulfillment, with optional social digital rights management and watermarking. Martinez says that, unlike other direct-to-consumer solutions, Aer.io comes with a built-in affiliate network, allowing publishers to offer complementary titles from other publishers.

Goodreads

With an overwhelming number titles to choose from, and myriad ways to access them, how does a reader know where to begin?

Otis Chandler, CEO of Goodreads, says he had an epiphany one day while checking out the bookshelves in a friend’s room. “I’d been a big reader growing up but had lost the habit at college. I’d made a commitment to read more and was looking for book recommendations,” Chandler says. He remembers grilling his friend and coming away with a long list of books to read. “It got me thinking about an opportunity here,” he says.

That epiphany spawned Goodreads. Chandler had previously worked an early social network called Tickle, which gave him a good understanding of “online social dynamics. I thought that if I could only get my all friends to put their bookshelves online and say what they thought of them, it would just be a really good way to find good books.”

Since launching in 2007, Goodreads has accumulated 35 million members and over 42 million reviews. The site lists more than 1.1 billion books. Chandler highlights two major milestones in the company’s history, the first being the launch of a recommendation engine in 2011: “We’ve learned that the way to get a person excited about a book is through a strong recommendation.”

The second milestone is Goodreads’ presence on Kindle. Chandler says the biggest change brought about by being acquired by Amazon is being able to combine Kindle, the world’s largest e-reading platform, with Goodreads, the world’s largest community of readers. He says that being part of Amazon gives his site the support and infrastructure of a large company, allowing Goodreads to achieve its vision faster.

And Goodreads doesn’t just help readers, but works with writers, as well. “We sell advertising campaigns to publishers and authors, and are in the business of amplifying a book around its launch,” Chandler says. Goodreads provides a platform for authors to directly connect with readers and build their fan base; the Ask the Author feature includes more than 144,000 authors. Recently Goodreads updated its iOS and Android apps. “Mobile is growing fast right now, so it’s important to our members to keep updating and improving our mobile apps,” Chandler says.

“One of my favorite things I’ve learned from Jeff Bezos is that the best way to invent the future is not to think about what will change, but rather to think about what won’t change,” Chandler says. “In 10 years’ time, I can’t imagine readers will be saying ‘I don’t want to find a great book to read’ or ‘I don’t want to talk about books I read with other readers.’ ”

Correction: An earlier version of this article misstated the number of e-books in Scribd's subscription catalog. It is over a million, not a half million.