Bob Young shares insights on future of publishing business model

30 04 2010

Bob Young admits that he could be playing golf for the rest of his life, but he won’t. And it’s not just because he’s a bad golfer.

Instead, he’ll be using his management insight from his management experience at RedHat to help authors publish and distribute their work, helping them overcome the Internet’s “terrible signal to noise ratio.”

According to this RedHat founder and CEO, as human communications and media change, all the rules on how to be successful change. He said everyone has deep expertise in very narrow field, and Lulu is dedicated to finding a way for the Internet to deliver this expertise.

The idea, he said, came from his time at RedHat. He compared the company and its competitors to David and Goliath, but not in the way one would expect.

“We are, in fact, Goliath because we have a bigger engineering team than Google or Microsoft can afford to employ,” he said, referring to the hundreds of programmers contributing to the open source code. “One-third of the contributions came from dedicated and enthusiastic amateurs. No way of compensating them because their no way of evaluating their contributions.”

Their compensation, he said, could come from recording their expertise on a platform like Lulu. He told one of his favorite stories of a retiring scientist publishing a text on timing differentials in subatomic particles, a topic the author said had an audience of 214 people, 170 of which the author knew personally.

“His work would have retired with him if he didn’t publish it,” Young said. “The future of publishing on internet – if this is going to work, you have to rethink the way it works.”

The company has done just that, eliminating the “author to agent to publisher to reader” separation. The site also employs a social mechanism to bring readers to the content they desire.

“We read books because someone told us to!” he said. “It is a social mechanism, how we choose the books we read.”

Social networks allow the readers to communicate their favorite books so their friends can find the most relevant content. He explained that his teenage daughter reads Harry Potter instead of a better, less popular fantasy story because she wants to read the same book as her friends, enhancing her social interactions.

In terms of electronic readers, which make up 10 percent of Lulu’s sales, Young sees it as just a matter of time before “dead tree readers” fall out of popularity. He does not see Lulu’s books as good candidates for an advertising-based electronic business model because they do not have big enough readership, but it could be a good business model for more popular titles.

He explained that Lulu’s economic model works because they print 2.5 million books a year, making the printing cost low, and they don’t print books until customers have ordered them.

He said he believes that libraries and newspapers have outdated business models and that they will have to adapt rapidly in order to survive.

“We could paint a model of the future, and there’s not a chance one thing will come true!” he said.

“Lulu is likely to be my last project,” Young said, noting that he will likely move on to share his management insight in one of the area’s universities.

-by Rachel Cieri

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