Impact Hustlers - Entrepreneurs With Social Impact

65 - Democratizing the Publishing Industry - Ali Albazaz of Inkitt

January 19, 2021 Maiko Schaffrath Episode 65
Impact Hustlers - Entrepreneurs With Social Impact
65 - Democratizing the Publishing Industry - Ali Albazaz of Inkitt
Chapters
Impact Hustlers - Entrepreneurs With Social Impact
65 - Democratizing the Publishing Industry - Ali Albazaz of Inkitt
Jan 19, 2021 Episode 65
Maiko Schaffrath

Ali Albazaz is the Founder & CEO of Inkitt, a platform that is on a mission to democratize the publishing industry.

Learn more about Inkitt:
https://www.inkitt.com/

Support the show (https://www.buymeacoffee.com/impacthustlers)

Show Notes Transcript

Ali Albazaz is the Founder & CEO of Inkitt, a platform that is on a mission to democratize the publishing industry.

Learn more about Inkitt:
https://www.inkitt.com/

Support the show (https://www.buymeacoffee.com/impacthustlers)

Maiko Schaffrath:

You are listening to Impact Hustlers and I am your host, Maiko Schaffrath. I have made it my mission to inspire the next generation of entrepreneurs to solve some of the world's biggest social and environmental problems, and for this reason, I am speaking to some of the best entrepreneurs out there who are solving problems, such as food waste, climate change, poverty and homelessness. My goal is that Impact Hustlers will inspire you, either by starting an impact business yourself, by joining the team of one or by taking a small step, whatever that may be towards being part of the solution to the world's biggest problems.

Today's guest is Ollie. Up as us, a serial entrepreneur, born in Baghdad, in Iraq who moved to Germany as a child and has been an entrepreneur for many years. What makes Ali really stand out in my mind is his passion and focus on solving problems naturally. He's actually a developer by background, which is very typical for his type of mindset. But he actually quickly moved into starting his own companies. And 2013, he came across the statistic that. Harry Potter. The book had been rejected by 13 publishers and realized how a few big publishing houses are acting as gatekeepers and can easily prevent up and coming authors from accessing a wide audience. This is why Ali founded Inkit uh, platform that allows anyone to publish novels and get a chance to secure a book deal. The platform shows early book scripts to the audience and then signs the authors of the most successful scripts, too bright to full book, which is then published on the company's Galatia platform. Ali talks about the publishing industry. What's wrong with it. And also drops a lot of good nuggets for entrepreneurs, especially on how to get comfortable with the fact that entrepreneurs are never 100% in control and we'll have to radically focus on what's important, even if that means not putting out certain fires in the company that seemed very important, but have to be deprioritized. I really enjoyed to speak to ali i hope you enjoy this episode two and let's go best episode, I speak to Allie out as us, the founder and CEO of and get us on a mission to democratize the way the publishing industry works by allowing authors to publish their manuscripts. To the platform. Think it then puts those manuscripts in front of readers all over the world that can read them for free and analyze the reading data to then publish the most promising manuscripts and offer actually publishing deals to the most successful authors on the platform.

Maiko:

With all that, they make the publishing process, much more data driven and democratize really the access. To a book publishing for lots of authors in the world. It's really great to have you on the show Allie today. Thank you, Michael. Thanks for having me. Thanks, Michael. I appreciate that. Perfect. I'd like to focus on your personal story a little bit first to get to know you as a person and for the listeners. Think when I. When I did the research for the episode I read a couple of profiles and interviews you already given. And it seems like you've been an entrepreneur pretty much forever since being a child. I'd love to understand your personal journey a little bit your work. Born in Baghdad in Iraq, you moved to Germany as a child and then ended up studying there and working there and starting companies all kinds of companies in the past. And Yeah, you have quite a lot of entrepreneurial experience under your belt. Now tell us about your journey from think selling and refurbishing smartphones as a kid to now being the founder and CEO of inking. Yeah. Thank you very much. Yes that's correct. Like somehow for some reason, like already very early on, I was always into Solving problems. Reality I never really saw myself as an entrepreneur. And this is something where people are starting to call me in the recent years and saying Hey, you're an entrepreneur. And so on. But like for me, always like for myself, started as a coder. I'm a programmer. I like solving problems with code. I was, I love solving problems with different skills. I'm really, I really liked to solve problems and I really solve other people's problems. And th that might be sometimes, from I remember I was selling beer pumps when I was 16 to like now selling stories and inspiring people with stories. Yeah, this is. I don't really know why, but this is what's like really well. This is really fun for me. And and then it turned out that I am now an entrepreneur, like by, by solving problems and actually having a team and having a product and creating a business. And that's what made me be a, be an entrepreneur, but what really matters for me in reality is this, problem solving like figuring out what. Problems people have and seeing like how we can solve that. And especially with in too, right? This was the biggest problems that ever came to, that I ever. That I ever faced that I ever saw in it was, I can, I think in 2013, when I came across these statistics that showed that's Harry Potter was rejected by 13 publishers and that Twilight was rejected by 14 publishers, Stephen King's first book it was called Kerry. Kerry was rejected by 30 publishers. And there, there is there, there was like a huge list of very successful authors being rejected over and over again. And when I saw that and I was like, ha how can that be? How is this even possible? And I started like researching deeper and I found like this entire thing being very inefficient on the one hand. But also what's, I think where I connected the most was with the authors, because they've been treated very unfair. And what I asked myself was like, how many. Talented authors are right now at this moment out there who have written an amazing story, something, that's millions and millions of readers would enjoy to read and would be inspired by, but then that author was rejected by a few publishers, a few agents or whatever. And then they gave up with their dreams and I found that, very sad and I was like, Hey, the world doesn't have to be like this. And for me as a software engineer, I was like, Hey, I think there is a way where we could use data, where we could use the power of the crowd and where we could solve this problem and give every author in the world. I'm an equal chance. So that was what really motivated me, giving an equal chance, giving a fair chance to, to every author in the world. And that's really what drives me. It's very, it's not really the entrepreneurship for the entrepreneurship sake or it's not the money. It's not about, reading entrepreneurship for me. It's really about solving this. Unfairness solving this solving this equality issue giving every author an equal chance to succeed. That's what really drives me. And that's what makes me wake up in the morning? I say, Hey let's, let's find and discover more talented authors around the world and give them a very good chance to shine. Yeah that's what drives me. Amazing. That's I think that's probably the best driver for any entrepreneur. I think obviously now that entrepreneurship becomes very sexy. There's a lot of people now coming out of business school also saying I want to be an entrepreneur. Rather than let's say having a focus on what problem do I enjoy solving problems and what problems do I want to solve? So I think part of this show, obviously it's awesome looking at more social and environmental problems to solve and getting people excited about solving them. And I want to take a bit deeper on the problem you're solving and what the angle on that is. First of all you just talked about Some of his office, like JK Rowling and Stephen King that got rejected. And it seems really from the outside, I haven't really been looking at the publishing industry, but it seems like it hasn't really changed that much. Probably hasn't really evolved fundamentally since the. Book printing was invented. That's how I look at it, but maybe I'm wrong. I don't know. But tell us about how the process actually works. Do I have to back some. Some anonymous guys in a boardroom to publish me or how does it work when I want to publish my book was one of the big publishers now. Yeah. So they're like maybe if we start like at the first step, so first of all, as a writer, you write a story. And then you have two options. Yes. You say you can either go to a publishing house or the other path is self publishing. We can talk about both of them and the problems and pros and cons on each of them have. So with the regular publishers, if you. Go to to a publishing house. The way it works is first of all, they will not talk to you. If you want to actually submit to a publishing house, you have to have an agent. If you want to have an agent, there are like a lot of websites where you can find agents. The agent takes 15% cuts from all your revenues that you will ever make. And The agent usually has good connections to publishing houses or the editors at publishing houses. And it is, first of all, that quite difficult to, first of all, get an agent like for, it's extremely difficult. That's like where quite significant amount of people, first of all, fail. Let's say you're still successful with that. And by the way, like the Tri-Tech they ask you, the agent asks you is Oh how many followers do you have on social media? And you're like, wait, I'm a writer. I have written an amazing story. Why do you care about my social media? They're like yeah, because then you can sell it to them and then you're like, but yeah, I have written an amazing stories. Isn't it? Your job or the publisher's job to actually do the marketing. They're like yeah, but you still need to have social media followers because we want to do as little marketing as possible. So th that's like where it starts and That's like a big thing, usually in the beginning. And then even if that's a successful and you move forward and the agent starts pitching publishers it's still super, super difficult. Don't have exact statistics, but like I would say like probably 95% of the books that publishers publish are not from w authors. So 95% are from authors who have been already there who have already had, a lot of sales who have track record. And if you are an author with no track record and very little experience, even if you have written an amazing story, if you have, even if you have written or Harry Potter unfortunately you have very little chance to enter that that's, Big publishing houses game. And so that's like the, yeah, the, the first couple of barriers, but then even if you get published as a w author even if you get through that then the marketing dollars that the publishing house allocates towards your book is pretty much limited. So the F you know, in reality, the thing is if you want to be published by a publishing house and you want to be successful, the odds are quite against you. Unfortunately. And if you have, if you're, if you are Obama and you want to publish a book, that, that works great. This system is perfect, for Obama or if a J K Rowling wants to publish another book, the system perfectly works. But if you are a w author it is really difficult. That's why a lot of authors then since 2007 or so since Kindle exists they, they are going towards self publishing self publishing sounds initially quite attractive because Amazon pays you 70% of the revenues, it's wow, that's so high person to, it sounds so cool. But then what then people realize, after this initial excitement is. They put their story on kinder, and then they realized that there are six, seven, 8 million other books on Kindle. And and they're just like, basically like a drop of water in a big ocean. And then it's all about, okay. I thought I'm a writer I wanted to actually write and I wanted to reach my audience. Now I have to start figuring out how online marketing works and then they have to do quite a lot learn online marketing. And and then for some people that works, some people are become really good at online marketing and they make it work. But the thing is, again, the majority don't and this is where inkjet comes in and this is where we say, Hey, I think it, it's not about your followership. It's not about whether you are an online marketer. It's not about whether you are Obama. What really matters at it is whether you have written an amazing story. If you have written an amazing story, it's our job as the publisher to promote your story, to sell it, to do all the marketing. And this is like how, what differentiates us towards this other two options? Got it. And how does the process actually works? So let's say I've written a Melville. I got the draft here. What do I do next with it? So you can either upload your entire manuscript or actually what like something I have seen nowadays the most successful authors now do is that they actually start writing and they post already when they have only one chapter. So they can like gauze and see okay. What's are the readers actually liking? And I can get very quick market feedback and they write with the feedback of the market and they this way, they make sure that they're writing something that actually people want. So you basically post your story is a B one chapter, two chapters. Beats an entire manuscript. You just upload it to it. You get market feedback and what's happens in the background. Is that on inkjet? We analyze the reading behavior of the readers. So do they stay up all night to finish reading your story? Do they shared with their friends, how many friends do they bring? We look at the behavior of their readers on your story, and if your story is truly great that's when we come in contact the author and say, Hey, your story's amazing. We would like to become your publisher and offer them a publishing deal. And then at the moment, the majority of the sales is happening through our Galatia app, which we recently launched since. I think about two years now. And on Galatia, we sell your stories and yeah. And then we even help you continuously optimize the story continuously, improve the cliffhanger as the storylines, based on the feedback we get from the. Data points on Galatia. So the net, the story kind of never stops optimizing and we continuously improve it. And through this process will give you a bunch of examples. So we discovered, for example, an author, her name is and seam run lives in Odisha in India. That's a state where only. 70% of the women can read and write. And we discovered her, because she uploaded her story to ink. Yet we saw the numbers that were amazing. And we put it on Galatia. We ran a bunch of iterations, improve the storyline, and she just crossed $1.5 million in sales. And she is a globally successful author. And, before that she was a debut author. She had no connection to any other publishing house. And this is something that, that makes me proud that we can discover talent wherever they are in the world and give them a chance. Or we have, we discovered another author. She is she was living in the suburbs of Tel Aviv in Israel. And she uploaded her manuscript to encase. We saw based on the numbers, that the story is great. Put it on Galatia. She, I think three weeks ago she crossed $5 million in sales. She is she's 23. She was 23 year old at that time. When she uploaded, she then moved to Boston is now going to to a private music school in Boston and is a globally successful author now. And this is. Yeah, this is what I said in the beginning, right? This is our, the things that, that make me really happy. This is why run this company? This is why I love this company because we can give an equal chance to every author in the world. That's, what's what makes us fun. Got it. And these offers that you're discovering, do they have similarly frustrating journey as JK Rowling or Stephen King, where. They've tried the traditional way, or do you see a lot of people now just go straight with something like incurred or self-publishing or anything like that? So we have had multiple authors like I've heard from one of, one of our authors who had like a similar story with trying to get published where it didn't work. We, we, we have had a couple of authors who tried, self-publishing where it didn't work for them and then came to us and now they're earning significantly more and have more readers. So that's, it's been already with a few cases. But I think a lot of people don't even go that direction anymore because it's just they're like, they're like, Hey, I'm a writer. I'm not an online marketer. I'm not a salesperson. I'm just a writer I want to write. I love writing and they just directly come to in kits. And they immediately reached their audience get feedback. And then, suddenly we give them a call and say, Hey, this is a great story with your writing there. Should we make this bigger together? And that's definitely also quite the majority of the cases I would say. Got it. And if you look at traditional publishers I don't know how much you interact with them, but do you feel like they're slowly getting it, that they need to change or are they still quite like on a different planet with the way they work? Do you face any opposition from them, anything where they're trying to block you or anything like that? The thing is if you look back right, like 20 years ago the, what the publishers were doing was the best thing that could do with information they had. So 20 years ago, their there, they way of working was. Perfect. And was so it is obviously quite difficult for them to now at the opposite, like to the new information age and to, to the internet age and how things are done differently. So when I speak, like with the CEOs of the top five publishers that there are in the world, they are like super interested, they're like, Oh, wow, this absolutely makes sense. The, the corporate development departments of all these publishers are constantly constantly contacting us. So they're like on the business side, they're very much interested in what we do. The big problem they have is if you look at publishing houses, the way they were like position positioning themselves for the past couple of hundred years, is that they have the best editors in the world that they have the best. Nose, to smell, if there was a great story, that's like something that they pride themselves with and it is quite difficult to then go to their big editorial department and say Hey, there is this company in kids, which has absolutely no editors. And the decision maker is a data scientist. So it is quite like a punch in the face. And that's yeah, that's something that they will probably have to figure out the next couple of years. Cause honestly, fast-forward in 10 years from now or 20 years from now. I can absolutely not imagine anybody running. That's, old old fashioned process of having a person manually read a book and make a gut feeling decision and where the majority of the times it's wrong. So in, in 20 years, I'm a hundred percent confident, people are gonna adapt to the new technology age and use more information than just one person's subjective opinion. But yeah, how they're going to get there. I don't know. I don't know. I know that the business departments, their CEOs and their corporate development people are very much interested into this. But yeah, for the editors, it's going to be, it's going to be tough. It's going to be tough. Got it. Got it. Let's talk a bit about the entrepreneurial journey we've got early stage entrepreneurs listening to this. Maybe people that. About the stuff at first company or they're just exploring problems to solve. And I think the, it's interesting to talk about the space you're in and what you actually doing. First of all, you're breaking, or when you first start started incurred, you're breaking into an industry that's quite old fashioned and the ways they do things. And then also you're building like a two-sided platform, right? Where. Or multi-sided platform where obviously it's not enough to just build the product. Like you had to build an audience as well. So if I'm an author testing out stuff, like you don't have an audience for me, it doesn't work. So how did he go about strategically in the early days of kind of building this platform where. You had an audience in place and were all offers that you talk to, could directly tap into those audiences. Right, so let me give you maybe a bit of a broader perspective too. The difficulty of the business before we dive in specifically on the chicken and egg problem and the marketplace problem on the inkjet platform. So we have basically five different products. And there's the in kits website, or is the in kits app? There is the in kids writing app, and then there is and then there has got that studio, which we use to. Create the experiences on Galatia, which includes also like sound effects and music that you can hear while you're reading on Galatia. And basically navigating all these five different products. With being resource constraint on having a kid, X amount of developers is always very difficult and and you have to constantly figure out like what's the smartest way to solve the problems that you have. So I think in terms of the way of solving the problems with multiple products, or the chicken and egg problem that we had in the beginning for the marketplace, it is quite similar mindset that you need in order to solve that. So th this now gets very tactical but yeah the you need to really understand when you have a marketplace, you really need to deeply understand your users and what they like and why they would be using your platform. I think you need to have deep understanding, first of all. And then once you have that, then you need to start with first of all, like with the easier one, and in our case, it was the supply side was the writers. And we were lucky that actually writers are also readers, when you get writers on the platform, they also read. So when the, in the early very early days, when, now we have I think over 300,000 writers on the platform, but like, when I'm thinking about the first thousand writers or so it was like really quite hardcore about acquiring writers, one by one, going to other forums or wherever they were on Facebook groups and telling them about ink. It. And then if you have a good platform, hopefully they will tell their friends about it and they will share that's is, this is like the early days, how it gets started. And at that point, actually it was more of a hobby project for me. And then once, once we had a few hundred writers, they started sharing and it started growing and they brought readers and they shared on Facebook. And so started to snowball. That's also what, the moment when I decided to turn it into a business. But yeah, if you're specifically asking you about the, the marketplace problem that we had in the early days, the way we solved it was to focus on the writer side, on the supply side. And luckily our writers are also readers. So that was the, that was the solution. And I think one, one additional thing that really helped was quite a focus on on the genre. In fact, I think for the first. Six months or so I focused quite a lot on fan fiction because I knew that a fan fiction is not going to monetize. You cannot sound fanfiction is not allowed but it would help get writers on board. And the engagement of those writers is much higher than engagement of original work writers because the fan fiction writers they. Day. They are already used to online forums and they interact a lot with their readers and with other writers. So it was a strategically the right move to get fan fiction. It started with fan fiction, even if we know that it was not going to monetize, but then once we have fan fiction going then it was easier to then get those maybe same writer as a subset of them to write original work, which could, we could then monetize. Got it. And tell us how big is the team actually managing all these different products? Right now? We are now 70 people. Too little, unfortunately. Yeah. So we are heavily working on hiring. So we are looking for suffer engineers. We're looking for product managers for performance marketing managers. Yeah we're looking for writers, staff writers who help us optimize the stories AB tests and improve drift cliffhangers and storylines. We're looking for sound designers who add sound effects on on our stories. So we are heavily hiring read them all. Amazing. That's a good note to anybody that's looking for jobs and you're hiring until then mainly is that right in Berlin? That's correct. Yeah. See what do you think, looking back at your journey from like really running does side project building this company with 70 people plenty of products, four or five products, something like that. What's been the biggest challenge that you had to overcome in that journey, or like a big learning that you had to learn on the way to what y'all right now. That's a very deep question. What's the biggest learning of how challenges every day, right? Yeah. There is, there are so many, like when you're running a startup, there are so many fires every single day that you're trying to put off. So actually maybe that's a good Good direction to to give you an answer something. Absolutely. Obviously I was not used to when you start out in the beginning and you have a small team. Quite everything is under control and you know what your problems are and it's a list of problems and you're just solving problem and ticking them off and going to the next one. But then there is a time where the list of problems grows faster than you have time, or like your team has time. This is definitely a been very challenging for me to say okay, there are these couple of fires that we are going to now let burn because we don't have the resources or capacity to actually work on them. And knowing actually that's some of those fires might resolve badly. So that's something that probably I'm still fighting with at this moment. Like basically knowing that there are some fires that we are not, we don't have the resources or we don't have the time to, to think about and just say, Hey, we need to clearly prioritize and say Hey, these are the top challenges we need to definitely nail this. We need to definitely solve this. But then there is like a bunch of stuff that. You will have to let burn. So if you're a perfectionist and you're starting a company, do you think that will be an issue? You're trying to probably you have to, yeah, you will not have everything on there under control, unfortunately. Yeah. You need to become stubble with letting some things burn right. And focus on the most important things, right? Yeah. How do you prioritize that? How do you prioritize the right fires to stop difficult? Because the thing is when you're talking about there are some small fires right there. You're like, ah, it's fine. If it burns, it's not going to be a big thing. But then sometimes you have an entire forest. That is on fire. And, but then you are like, This is a big fire. That damage is going to be big. But if I asked the team to now focus on that, they were, there will not be able to put this other fire off, or they will try to put both fires off and both of them will fail. And that's the real one. And That's really, it really difficult. I've been reading a lot of books recently about decision-making. Right now I'm reading this book called thinking in bets written by a a famous poker player who thinks in bets and explains like how you should statistically think about the decisions you are, you're making. And sometimes you make the right decision, but with the wrong outcome. So you have to like continuously make the right decision, the best. The one with the highest probability and just hope that in the long run you will win. There was also this book from Ray Daleo principles where he describes very like systematic, very clear thinking thinking about pros and cons about consequences, first level consequences, second leg level of consequences, third level consequences. And then yeah, that, that's something, you need to do if you have the time, like as deep as possible. And if you don't have the time try to like shortcuts as you can, because it's not easy. It's definitely not easy, but there are like these there, there is quite some literature out there about like good thinking models or decision making models that I try to follow. Yeah. Does that answer your question to go from there? No, absolutely. That's really interesting. And in terms of building up your product I feel like you're a founder, that's very mission driven, right? Like you discovered a problem in the industry and you wanted to solve this. You're not like a optimist opportunistic founder. That's saw a way to make a quick buck or anything like that and have to exit in mind all the time. And that's it. Don't worry about a problem. It seems like you're quite mission driven and I'm keen to understand how do you maintain the culture in your team or maintain the focus on that mission? And especially obviously you're growing now, you have like more office on, on the platform. If you look at some of the criticism that other platforms have faced, if you look at YouTube, for example, That has enabled so many people to get an audience and publish and get the content out loads of video makers all over the world and gotten an audience through them. But obviously there's been now some developments where they're trying to obviously milk the cow and whether it had some backlash, whether that's justified or not. But how do you think you can maintain this focus on your mission? And not at some point, try to squeeze the office more and more at some point, once you have to scale, yeah, I don't have the answer for you. What's going to be in the future of what would happen if you're like a public company and about things that I might not know at this point, right? It's I've never run a public company and I don't know like how Google is making those decisions, et cetera. But I can tell you like how I think about it right now, the way I think about it right now is, first of all, the reason I'm running this company is because, I want the world to be a better place at the time when I die. Very simple. I want to create for value for this world. And I feel like discovering these hidden talents and turning them into globally successful authors. This is like a quieten advancements for where publishing is at today and that we can give so many towns of the authors a chance to shine. That's I think that's huge value generation. And I would love us to continue to see focus on this because if we continuously focus on these long-term value generation even if we would go public and, on the, on, beyond the stock market, I think long-term value generation will also then increase like longterm value of the company. And then shareholders and everybody would also be happy. But I think it's all really about the long-term. Long-term thinking long-term value generation and not getting into this thinking of short-term thinking and seeing how can we squeeze one buck more today from this people and optimized for short term? Because then you're gonna, w you're gonna lose long-term. If you make people unhappy today, you're gonna lose long-term. So I would, I think this is definitely the case at this point, but with 70 people in the team where we were thinking really longterm thinking, very idealistic about the future, about what we can do here. And I would love us to continue keeping this mindset and definitely not get into the mindset of like short-term thinking or, that kind of stuff that you just mentioned about YouTube. Fingers crossed. Yeah. Fingers crossed on that. I got one more question for you and that is also about the future. Again it's difficult to predict the future in these times, but what I'd love to hear from you how do you imagine the world to be in 10 years, if it continues to succeed and continue to go down the routes that you're imagining? Look, I, I. I really like the power of literature the power of stories. There's been a lot of people in the world. Who have read books like Harry Potter or for me, the book was the Alchemist from Paulo Coelho which really influenced me and put me on there path. And I think there are so many people who read such books and they're now Doctors there are now teachers, there are now astronauts they're like they started really believing in themselves after reading these books and are helping humanity move forward because they started believing in themselves because they read that story because they were inspired by that story. And. I would love us to build that platform for the future. I would love to next Elon Musk who will then bring us on Jupiter. Find it to find his inspiration reading on ink it this is what I would like to create for society. The it platform, for. For people to get inspired and push humanity forward. That will be like my longterm, very longterm thinking about kid. Amazing. I wish you all the best on that journey. It's been really great to come across in kit and yourself as an entrepreneurial, really mission driven entrepreneur. And I wish you all the best for joining him. Thanks for joining us today. Thank you very much, Michael. I appreciate that. Thanks