Scribd | Interview with its Co-Founder & CEO – Trip Adler
In San Francisco, we meet co-founder and CEO of Scribd, Trip Adler. He shares his story how Scribd was founded and how the current business model works, as well as what the current plans for near future, and some advice for young entrepreneurs.
The transcript of the interview is included below.
Martin: Hi, today we are in San Francisco in the Scribd office. Trip, who are you and what do you do?
Trip: My name is Trip Adler and I am the co-founder and CEO of Scribd.
Martin: What did you do before you started this company?
Trip: Well, I started right after college, so I guess going back to very beginning I was raised here in the Bay Area, in Palo Alto, and then I went to school on the east coast, to Harvard. I studied biophysics and then I right around my senior year I decided I want to start a company. So, started, kind of come up with my ideas, found a co-founder, went to YCombinator, and then it just went from there.
Martin: Why didn’t you start some company related to biophysics?
Trip: It’s a good question. That was actually my original plan, and I realized that I just didn’t, I would need a lot more time and school to get a biophysics company started, and meanwhile had a lot of ideas for internet companies, I knew I’d get started really quickly. So that was, I was too excited to start internet company that I couldn’t wait that long. So, I just decided to get started. Maybe in longer term I could go back to a biophysics company, but I think right now I’m enjoying working in the internet space.
Martin: And how did you decide which of those hundreds of ideas you wanted to pursue?
Trip: We went through a period of time for maybe a year, year and a half, where we were just tried a bunch of different ideas. That was, I think for us a really important learning experience, because we would come up with an idea, maybe build it, test it, think about it. And that experience of trial and error really taught us a lot about just how to approach starting a company and how to approach different ideas. So, we went through several ideas, one of them was basically a lot like what Uber and Lyft are today, it was like a ride sharing service, coordinated over your phones. Turns out we was just way ahead of the time it was nearly make sense to pursue it. We also did a college classified site, we launched that at Harvard, we got it going, but we realized that wasn’t really scalable so we moved on past that. Then we tried a bunch of other ideas, and then eventually Scribd came along. And that one just got a lot of things going right for it, so that was, ended up being the one that we stuck with.
Martin: So you tested different business models and you stick with one with the most traction?
Trip: It was a combination of what got early traction, what we thought was going to scale, what was a big opportunity, what would have a good business model, good user need, it’s a lot of those things combined. But traction is definitely an important one, if you can’t get some traction early on, that’s a sign that something is not working.
Martin: Let’s talk about the business model, Trip. So, how’s the current business model of Scribd working and how it might have been evolved over time?
Trip: Currently, we’re mostly a subscription service. So, what we do is we let you read unlimited books and other kinds of written content for $8.99 per month. So you pay one flat monthly fee and then you can read any kind of content on whatever device you like, and we have the really nice experience for discovering things to read and having the social experience around reading. So, it’s kind of the Netflix or Spotify model, but for books. And our model is that we, consumers pay us for $8.99 and we make revenue that way and then we pay out publishers and authors based on the reading activity. So that way we have really entire ecosystem where the publishers and authors get paid and consumers can have really direct, terrific reading experience.
Martin: When you’re looking at publisher side, are you also working with bigger brand names or publishing houses, or is it more for the individuals only?
Trip: Yeah, we’re working with… We have over the thousand publishers using the platform and we work with some of the biggest publishers in the world, so we have both HarperCollins and Simon & Schuster, selling their full backlist of books through our subscription, and we have some of the other big publishers selling books through the retail model at our site. But, we’re mostly focused on the subscription.
Martin: Can you tell us a bit what kind of verticals in terms of the publishing books are working well and which are not working well, meaning that most people are not reading the specific kind of subsegment or vertical?
Trip: Publishing is very broad, there’s many different types of books that appeal to many different types of people. So we have many verticals that are working really well, we have a partnership with Lonely Planet to do travel books, and people read travel books, that’s doing well, we have the Dummies series, so you can look for information within books, learn things in those books, we have all sorts of non-fiction, we have fiction, mysteries, thrillers, romance. Probably the verticals that are doing the best so far are the fiction and the romance, just because those readers are very various and they fit the subscription model really well, but we’re really growing across all the different verticals, and I think longer term we could have a lot of new, interesting use cases developed.
Martin: And is the ground business model only digital, meaning that you don’t deliver physical kind of publishing goods?
Trip: Yeah, it’s all digital. We’re completely digital company and we work with publishers and authors that publish their digital files and then we help provide an audience digitally and distribute the content digitally.
Martin: Most users maybe know Scribd from the early days, so having some kind of platform where we can share PowerPoint presentations with each other. Can you tell us a little bit more about the beginnings of your startup? How did you grow and scale your company and user base?
Trip: The way we got started was, I was having a conversation with my dad, who’s a doctor at Stanford, and he had a medical paper that he wanted to get published, and he was talking about how in medical publishing it takes 18 months to get your paper published. So that gave us the idea that we can make a website that would let him really easily publish his paper on the web. And we could quickly broaden that to all kinds of written content so, medical papers, books, power point presentations, school papers, creative writing, any kind of written content, and any kind of content in document format, upload it to the web and then find an audience for it. So, we built that site, got a bit of a community going, just kind of through group force and just finding anyone we could find who would use it to upload their own content, and launch the site. And we had a very lucky launch where within three days we were one of the top 2000 websites on the internet. It was just very explosive launch. You see a lot of these companies doing it nowadays, because they’ll get promotion in the App Store, or they’ll get viral and put it on Facebook or something like that, but we were kind of one of the first companies that I’ve seen really explode very quickly like that. And once we had that launched, we had a lot of readers come and then a small fraction of those readers would then upload their own content and that would bring more readers, and then some of those would upload and that created nice viral loop. So, that viral loop continued to grow, it’s still growing today, we’ve now reached about 95 million monthly users, we have about 60 million pieces of content in our library, and it continues to keep growing. And then over time what we’ve realized is that the main things our authors and publishers wanted was more revenue. And we tried then to sell books, but it didn’t really work very well, but we’ve realized subscription was a very good way to help them make money, because that way we can make more money for them and we can get, give readers a really terrific experience that subscription offers. So that was what leads to us launching the subscription model, on top of the free service we previously had. So, now it’s a bit of a freemium model.
Martin: What do you think, what are the reasons for you fast explosion in terms of when you launched this kind of product? Because I’m pretty sure a lot of sellers think by themselves, I want to start the next marketplace, or a social network, whatever. What measures have you taken to grow that fast?
Trip: I think there was a real user need for what we’re doing. I mean, there wasn’t an easy way to put something, put a PDF online, and we filled that need and just given the viral nature the internet works, spreads really quickly nowadays. People, back then, we were on like the front page of sites like Digg and Reddit. Nowadays it’s more like word of mouth, I mean, Reddit is still kind of big, Reddit’s actually really big now, but it’s a little harder to launch a site on Reddit than it was, but now you can, there’s Hacker News, there are people sharing things on Twitter or on Facebook, so just taking advantage of all those viral channels to basically get the word out there.
Martin: Trip, let’s talk about the corporate strategy. What do you think is the competitive advantage of Scribd nowadays?
Trip: I think we’re really focused on two things. The first one is just having the world’s largest library of subscription content. So, for, we want to have a service that for one flat monthly price of 8.99 lets you read almost any kind of content you want to read. So, we’re, we have over 500.000 books right now, over 60 million user-generated documents, and we’re adding more all the time. So, we want to have the biggest, broadest and deepest library on the web and in the world, available via subscription. So, the first one is the size of the library, and the second one is just the user experience we’re building. We’re building such a terrific experience for reading and reimagining the way reading should work and serving the needs of readers in ways that other competitors are not doing as well as we are. We’re building a terrific experience for discovering new books and things to read. The subscription model really decreases the friction of starting a new book, but we are working by now with a really good recommendation engine, with really good editorial process that helps you discover books you want to read and also a really nice social layer around reading. So you can discover things to read trough your friends. So, we’re combining all of this together just to provide a really good experience for discovering things to read and it really just pleasant user experience overall. So, it’s really those two things, having the world’s largest library subscription content and a really good user experience for reading it, that differentiate the company.
Martin: Trip, can you tell us a little bit more about the product strategy and what you think are some areas of development for your business?
Trip: Under product specifically there’s just a lot we can do around book discovery. So, I’m sure you’ve seen there are companies like Netflix that has really organized videos really well, where they actually tag all the videos by hand, so they can recommend very specific kinds of videos, or Pandora has a music genome project, where you can organize songs by the type of song they are, and we’re basically in the same thing for books. We’re taking every single book and by hand generating tags for that book so we can really organize the books really well and make it really easy to discover books you want, based on your particular interests. So, there’s a lot that we’re doing on that front, to make books much more discoverable, we’re also doing a lot on the social side of things, so we think social reading is, can be a really big thing. We’ve already seen that happen with sites like Goodreads, but what we can do is we can actually combine the social experience with the actual reading experience of the content. And since we’re subscription, everyone’s reading the same books and the same products, you can make that experience really good. So, when you’re reading something you can highlight it, comment on it and then your friends can see that activity. So, there’s a lot we do to build a really differentiated social experience through our reading.
Martin: Are you also analyzing, like for example, the reader behavior, so what types of books are they reading, or documents in general, and until what time they are reading as well what paragraph, and based on this giving some kind of recommendations what your peer group is reading?
Trip: We collect a lot of data on how people are reading, we can see what parts of the book people are reading, which parts they’re reading faster and slower, we have to collect all of those because we use this data to pay to the publishers, based on the reading activity. So, we collect a lot of data on reading and we use that to make recommendations, to pay the publishers and to continue to improve the product.
Martin: Imagine I’m an author and I want to publish my book, my PDF, whatever, via Scribd. Is there some kind of mechanism like with SEO, so how I can optimize and reach more people via your platform? I mean there is some kind of playing with algorithms, I guess.
Trip: First of all, you’d had to get your book published on platform. So, currently, you’d have to work with one of the publishers we work with. There’s over 1000 of those, the probably the least friction ones with the self publishing platforms, like Smashwords, you can go there and get your book published to our platform very quickly. Eventually, we plan to open subscription to authors directly, but right now we’re working with publishers specifically. So, first you get the books up there and then, we do a really good job with the distribution at that point. We’re very good at finding an audience for your books, by making it really searchable, making it SEOable, making it the paid sharable. But the more authors can promote the books on their own, the better that will help with the promotion overall. So, if the books, if they can promote them on social networks like Facebook and Twitter, if they can embed the book on their blog, if they can just generally share the link, that just gets the content out there, it gets more links to it, increases the amount of traffic Google sends it, so the more authors can promote their books, the more that will increase the readership overall.
Martin: What do you think of the idea of having this books not only as a read-only, but as an audio book? Because it’s, the thing is how you want to consume those content. Have you thought about having something like this, because I mean adding this as a plugin at the books that is also quite easy with the player?
Trip: It’s a really good idea, audio books are definitely in the rise, people are listening to them more and more, and there are, it’s a huge market, most people don’t even realize what a big market it is. So, it’s definitely something we’re thinking about. And I think that by combining audio books with the book experience in subscription is just a really, it could be a really terrific experience for both reading and consuming audio books in the same product.
Martin: Trip, let’s talk about the market development, in terms of publishing. There are several distributional platforms out there like Amazon, or Scribd, and there are also different kind of products. What is your take on the overall market development in those publishing industry?
Trip: I think that there’s, it’s a really interesting time, the shift to digital is so happening very quickly, because a lot of people are still reading on print and they are going to be switching to digital. So, the digital publishing market is growing very quickly and I think it will continue to grow. And I think that this entire shift from the ownership model to the access model that we’re pursuing is really exciting change, because previously the way it worked was, even in digital, it was still basically an ownership model, where you pay the publisher or the distributer and they give you a file in return for that. We’re now, we’re shifting it at the access model where you pay for access to the library and then the publisher or the author gets paid when the books are actually read. So that creates huge changes in just the overall ecosystem. So, we’ve already seen very different data and how we borrow our reading through subscription. So, one thing we’ve seen is that with the subscription model people are reading a lot more than they were before, unless people are discovering differently, they’re rather than just searching for the book they want and read that, they’re browsing books and reading books they wouldn’t have read otherwise. And the result of these changes is that the ecosystem we’re building is much more long tail. We drive much more distribution to books that were published 10 years ago than to books published really recently. So, it’s a much more long tail distribution than it’s typically seen in publishing. So, overall just bringing subscription to the industry is just a, it caused a lot of changes both for reading experience and for authors and I think you’ll see just a lot more general reading and a lot more authors and writers and books being published as a result of this.
Martin: If you compare this what you call owned book market and then the kind of subscription based book market, do you think that by entering the subscription based book market that you grow the overall publishing market? Because, on the one end side, it’s definitely the quantity of reading books will increase, but the question should really like, whether the multiplication of quantity times €/$ per book will increase overall. What do you think?
Trip: I definitely think so, because the way to get the market to grow is to get consumers to ultimately consume more, you want them to consume more and pay more and that expands the market. So, in the way we get consumers to read more is to by giving them better products. It’s kind of amazing to me that the subscription model is coming to books last, it came to video and music before it came to books, so I think that this kind of model coming to books is just, as it gets larger, I think people will read more and it will just grow the market overall.
Martin: Did you think of going after the education market? Because I can imagine having this kind of content and imagine some kind of pupils sitting in the lecture room and currently have all the physical books, which cost a lot of money, to just having on an iPad all the kind of digital books provided by Scribd, for example?
Trip: You sort of where we are, we have a lot of students sharing their school papers, a lot of teachers putting up their course notes out there, and I mean there are a lot of users who are already students. And there are students that are reading the books they need to for class, if you’re taking an English class, you’re going to have most of the books that you’re going to need to read for class, so turns out we already are in that market. In terms of going into the professional textbook market, it’s definitely a market that we’re looking at, I think there’s definitely a big opportunity there.
ADVICE TO ENTREPRENEURS
Martin: Trip, most of our readers are first time entrepreneurs and people who think about starting their own company. What advice could you give them, especially what would you have done differently if you had to start all over again?
Trip: This is a big question! It’s.., and I think I change my answer to this about every 3 months, because I’m always learning and I think right when I feel like I’ve figured everything there is out about entrepreneurship, I realize that I actually was completely wrong and that feeling that there’s something else I have to learn, and that seems to keep happening and I imagine it will probably keep happening for your whole career. So, I guess that would be my first piece of advice, which is to just keep learning and to just, you just realize how much there is to know and just like how long it takes to get at building companies. I mean it’s not, building company is not, the media often makes it out to be this kind of thing where you start your app, and then Facebook buys it for a million dollars a year later. And that does happen occasionally, but that’s really kind of the exception, anyone can build a really big company, it’s just that if you get lucky it takes time and learning. So, if you try the first time and you don’t get it right, even if it takes you a year of trying something or a couple of years, eventually you’ll get there if you just keep trying, if you’re just constantly learning and constantly trying, you’ll eventually figure out something that will, users will like and will scale and get the rest attention, and become a big business.
Martin: And what when your little brother asks you Trip, what should I do and what shouldn’t I do when I start a company? What would you answer him?
Trip: The first thing would be just to get started. That’s actually probably the hardest step, which is just doing anything at all, because most people are just afraid to get started. So, you need just sort of like take that take that first step and sort of have some confidence at what you’re doing. So you need to be very confident and aggressive when you do things, but at the same time just be humble and learn as you go along, because probably that first step that you take you’ll make a mistake and do something wrong, so you need to just learn from that, and then change course and get to the next step. So, it would just be basically get started and be really determined and learn as you go along.
Martin: What advice can you give young entrepreneurs when they think about financing their company?
Trip: First of all, I think people often think of financing their company as the big challenge, but it’s, or the think that they do to be successful, but that’s not really true. You often need a lot less money than you think you do. And you can make a lot of progress without much financing, and you should only raise money if you really have a use for the money, because… Especially nowadays, there’s so many companies in Silicon Valley that raise a lot of money and they just spend it all and then they didn’t really do anything with that money. That’s a really wrong way to go down. So, my general advice, which is a little bit kind of what most people say, which is raise, delay raising money and raise less than you need, because that will kind of force you to really build a good company. If you do want to raise money, the best thing you could do is just build a good business. If you have a really good business with real user need and real traction, a real business model, investors will come and it’s pretty easy. And if you’re having problem tracking investors, it probably means you should just focus on building your business, not necessarily spend more time trying to attract the investors.
Martin: What advice would you give on how to manage your time focusing on business and focusing on raising money? Because I mean some of the startups just focus six months on raising money, while neglecting the business and the other guys are only building the business, and not fueling the company with cash, for example.
Trip: You definitely want to spend more time building the business. If you do want to raise money, it does take time, usually, you do need to get investors comfortable with giving your company money, you need to spend some time going through the whole process, but the best thing you want to do is to either, if you do fundraise, to just go 100% into fundraising boat and then get it done quickly. So, you want to be building the business, then you decide to raise money, go raise money and as soon as you’re done go back to building the business. You don’t want to be spending six months on fundraising, especially early on, maybe if it’s an IPO or something, you could spend some more time on it, but on the early on it should really be a much shorter period of time than six months.
Martin: Trip, thank you very much for your time.
Trip: Well, thank you.
Martin: And next time you are thinking about starting a company, you can read on our website the practical guidance and in addition some kind of presentations on Scribd. Thank you very much.
There is a major technological revolution going on. It has started only in recent years, and it …