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Bob Young on Lulu's revolutionary business and marketing strategies
Featuring...

  • Bob Young
    Founder of lulu.com, entrepreneur and record breaker on the NYSE...
Bob Young (Lulu.com, RedHat) shares business advice and insight on what makes Lulu so different to other publishers:

In traditional publishing, the publisher adds a great deal of value and his primary value is his ability to help you sell your book. And that is really important for someone like J K Rollings who is a very shy mother who is writing these books to try and earn a living to help support her kids. But she wasn’t a sales person and she needed Bloomsbury and Scholastic to take her book around the world for her. Bloomsbury and Scholastic did as far as I am concerned a brilliant job of it. But lets remember how their model works. They would love nothing better to have only ten authors each of whom is J K Rollings and sell a million books every year. Lulu is looking for just the reverse. We are looking for a million authors each of whom only sell a few hundred books a year. In order to get there we have reversed the royalty split with the authors. With the traditional royalty the author is lucky to get 10 percent of the sales of the book of his or her share. On Lulu the author or the creator or the business that publishes through Lulu keeps 80 percent of the profit on the book.

Lulu’s tools are completely neutral and our tolls work every bit as well if you are a small individual on the top of a mountain in Tibet or whether you are one of the great public Corporations on Wall Street. Any time that you have a title you don’t know how many you are going to sell. You want to work with print on demand suppliers, someone who will only print them when you have a customer for them because one of the problems in the publishing industry’s figures are over 50 percent, in other words more than half the books that are printed this year will never be sold. And when you think about it the economics are that if you sell five thousand books you print ten thousand because what if you sell six thousand, you need the extra books. The problem is that most books don’t actually achieve their sales goals. So instead of selling six thousand you actually only sell two or three thousand, what do you do with the other seven thousand books. You send them to the recycling centre. Working with Lulu we print the books one at a time. So if you only sell three thousand books, we only print three thousand books.

I have heard the comment many times but you are doing putting ink on paper and don’t you read most of your stuff on the internet. My response to that is that I am not denying the trend. Twenty years from now I wouldn’t want to be in the dead tree business chopping down trees and turning it into paper and putting ink on paper. But the reality is that we are not there yet, 95 percent of all content is consumed in a physical format. So whether you buy it as a book or whether you buy it as a DVD or CD-ROM, you are buying it in some way as physical content. The electronic content is a growing part of what people buy but it is still small. It was only invented a few years ago and it is well under 10 percent today. Interestingly enough Lulu sales because we don’t differentiate and one of the reasons that Lulu is very popular is our authors will both publish their paper book through Lulu and make their book available electronically through Lulu. But right now we see that 90 percent of the sales of the demand is for the printed versions of these books as opposed to the electronic versions of these books.
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