Being an indentured employee is how most people pay the bills. But about 12 years ago I started down a different path.
I’m the founding CEO of two companies: one publisher, one software house. It’s been a hell of a decade-and-a-bit, and I’ve learned plenty along the way. I’d never actively persuade someone away from the perceived comfort of receiving a steady paycheque at the end of the month (although you’re only ever a couple of months’ notice away from insecurity): people have to really want to strike out on their own. But if you’ve ever daydreamed about being the master of your own fortune, and are considering setting up a new company in the publishing sector, read on.
Make your mistakes on other people’s money and time
The best thing about working for other people is that you can use their resources to learn, to test and to explore your ideas. The first seven years of my career (at a global retailing group and then as a management consultant) was a boot camp in how organisations, customers and supply chains work. And even though your new venture will have fewer people than most companies (at least at first), the same lessons about human nature, politics and influence apply. At an established company, you learn which products and processes work, and which don’t. Reflecting on the reasons can help you with your own business planning. Most of the time, of course, the lesson will be in how not to do things, but that’s just as useful.
Know your domain, solve real problems
When I started Snowbooks, I knew nothing about publishing. I just figured that making books would be much nicer than making PowerPoint slides (I worked for Deloitte, and I was right). Snowbooks became known for its innovation, mainly because we didn’t know what the norms of the industry were. Things that we considered to be a fairly sensible approach to things turned out to be interesting and new. But I did know retailing and business process, and so I could talk to buyers at the large chains in a way they appreciated. Later, when we started our software venture General Products in 2011, it was because we knew only too well what sort of software a publisher needs, having run one for more than a decade, and having desperately needed a decent, affordable system which we ended up writing ourselves. Knowing the intricacies of your industry, from whatever your angle of specialty, means you’re more likely to achieve product-market fit from the start, without all of this “pivoting” that the kids talk about nowadays.
Interrogate your values and do something that matches
You may as well keep working for the man if you’re going to set up a company that doesn’t make you happy and proud. I reflected on what made me properly happy: it came down to craftsmanship and having a life with the minimum of arguments. So I set things up that way.
Stick with what you’re good at.
It’s true that I’ve spent the last five years learning a brand new skill: how to code. But that’s still entirely compatible with the sort of person I am: learning new things and practicing till I’m perfect plays to my innate strengths. Managing people and doing non-product-related, non-revenue-generating admin, on the other hand, I’m hopeless at — which is why our team is small and I choose alternative ways to grow the businesses, such as automating processes. For too long, previous employers tried to get me to become someone that I’m not. Life is a lot more enjoyable when you play to your god-given strengths.
Don’t be someone else’s product
I’ve been guilty of chasing things that make me feel better about myself which don’t necessarily contribute to the health of the businesses. Having a boss means you get a pat on the head when you do something well, but when you’re your own boss, that validation is missing. I seek to fill that gap from time to time by entering business awards. It feels nice to put on a frock and get a round of applause. But these things rarely bring any actual money in. In a small business, every waking hour has to be spent on either product development or revenue generating activities. Entering awards, going to peripheral conferences: it’s a way for someone else to make some money out of you. Arthur Attwell, founder of now-folded Paperight, wrote about this eloquently on Medium recently.
Be organised so you can focus on the creative
There are lots of things that you have to do for the first and only time when you’re setting up a company. You have to register with all sorts of organisations: HMRC, Nielsen, the Data Protection people, Companies House. And then, once you’re set up, there’s no end of stuff you have to do just to keep the show on the road. Royalty calculations, contract management, supplier invoices, bookkeeping, printer negotiations, metadata management, sales report aggregation: all this and more can fill your days entirely so that you don’t have time left for the actual creative challenge. Whilst it might seem odd for me to say it, considering that I hawk my publishing management software for a living, you don’t necessarily need to buy any software when you’re tiny. You just need to be super-methodical, and organised. (And use Google docs and other cloud-based software, because no-one backs up their hard drives enough.) Recently, the manager of a new start-up told me he likes to "keep all his data in his head". Why fill your head with ISBNs, pub dates, multi-currency retail prices with their tax statuses, and royalty rates when you could keep more interesting, creative, bookish things in it instead?
Be adequately capitalised and cut your costs to the bone
It is very, very hard to make money. Think about how willingly you’d relinquish a whole £600 — how amazing the product would have to be, how much time or effort it would save you, how much your life would have to be improved. Then think about how far £600 after tax and expenses goes towards your monthly bills: it’s a drop in the ocean. How many books do you have to sell to just cover your monthly costs?
Go to the warehouse and look at a pallet of 250 copies of a novel. It’s a pretty huge pile. Think how hard it would be to sell all of them, and then calculate how much money you’d make if you did somehow sell them all (Answer: about £200, all told.) That’s the gap I have to fill every day and, honestly, it’s energy-sapping. You have to really hate the idea of being an employee, and really love building your own world, which, thankfully, I do.
When you’re planning your new venture, divide your estimated sales by three and multiply your estimated costs by four. If your new venture still makes sense, you’re on to something. If it doesn’t, think creatively. Can you excise printing costs altogether and keep things digital? Can you use POD effectively? Can you invert the usual publishing cash flow curve and crowdfund? Can you remain salaried for 12 months until you have a revenue stream?
Eat your own dog food
This rather strange saying comes from an anecdote about a premium pet-food factory, which employed actual humans to taste-test their product. If it was good enough for the dogs we’re hoping to feed, they reasoned, it should be good enough for us. I use my own Bibliocloud software every day to run Snowbooks. With my coder hat on, I’ll write a new feature — tracking review copies, for instance — and be all pleased with myself. The next day, with my publisher hat on, I’ll start to use the new functionality. Who coded this rubbish, I’ll mutter, it’s difficult to use and doesn’t take into account the fact that I need to track 50 copies in one go, not just one book at a time. So I’ll rewrite the code. Rinse and repeat, back and forth. Add it up over four years and you end up with software that’s pretty cool, and useable, and relevant. Same with the books: I’ve got a copy of a book we published in 2007 in my bag today. I’m enjoying the cover design and the paper stock we chose and I’m loving rediscovering the story. If you expect other people to enjoy your products, you should enjoy them yourself.
It takes a long time to be an overnight success
The lens we see success through tends to collapse timescales. You’ll read a profile in The Bookseller of a company doing well after a prize win or similar, but it’s hard to fathom the years of effort that led to that moment. Running your own show is emotional hard graft. You’ll only know if you have the stamina to work for years on the knife edge of cost control if you try it. But worst case? You’ll end up having to get a similar job to the one you’ve got now.
I said I wouldn’t actively persuade anyone to branch out on their own. But life is short. What do you want to look back on with pride? What will your legacy be?