Martin Bjergegaard, Founder, Pine Tribe:
Massive PR, loads of traffic, but conversions 90% too low. Solution?
January 29, 2015
Hi. This is going to be a very humbling experience, because I was one of the guys who were sitting in a in the one that was presented back in 2007. I’m probably one of those who are a bit reluctant to believe in the project and now a bit later, here I am. My case would be a case of failure because the last startup I did failed, so it’s not useless. I’m thinking why would they want a story that’s not great, but this is a story of failure. I offer that.
So I’ll give you a bit of context on it. I’m not a growth hacker; I’m the founder of it. I tried to bring my growth hacker here so you could throw apples or bananas or something at him or it, but he didn’t really want to. He has a new job now and he’s very busy, so that’s fine, but I do have some numbers. I’m even willing to hand them out so you’ll have them forever and if you want to.
But to go back, I started a company because I wrote a book myself. It’s called Winning Without Losing, and I published it in 12 different languages, working directly with 12 different publishers because I didn’t want to give the world rights to any one publisher. If you’re a writer, don’t do that. Don’t give the rights to any one publisher because they’re just stealing the rights. I heard about that and therefore I want to work directly with publishers in the different languages.
I’ve been working with 12 so far and any more on the go, and the thing was that that was a terrible experience. I’m very happy that my book has been a bestseller in quite a few countries – and that’s all nice, but the way the publishing industry works nowadays is so out of whack with the reality, right?
Even for many of them, they don’t do an e-book, and you need to push them again and again to do an e-book, and an audiobook – it’s not happened so far, even though my book won Management Book of the Year in the UK and it’s been number two on Amazon just after Sheryl Sandberg’s – with her Lean In book that’s a huge phenomenon in the States.
So the book has been doing great but the publishers haven’t. And what I figured was, why don’t they make a new kind of publisher, a modern kind of publisher, focusing on your, so focusing on e-books. Also the print books have it, but you would have it as print-on-demands; we don’t need to have a big warehouse and print a lot of books like do and then throw it out later if you don’t sell it. You just do print-on-demand.
It’s a little more expensive – or quite a lot more expensive – per unit, but it’s a very cheap way to get started and to get we need to have a stock, a big warehouse and all that distribution. Just outsource it to Amazon and focus on the e-books and do decent marketing and work with big influencers and promote your books – all the things that I didn’t really see the publishing industry do.
So that felt like a great idea and I wasted money on the back of that idea. We put in a million of our own money from a that I’m a part of, and then we raised two million from business Angels, some of the usual suspects that we’ve been working with on other projects, so that was quite easy. Then we had three million and we set a goal of selling 100,000 books the first year.
We wanted to start with Scandinavian authors, and particularly, actually Copenhagen-based authors, because we’ve worked with them. We would have them in our opportunity and we would sit down with them and make a plan; we wanted to really engage the authors also because that was part of what I felt that the publishing industry didn’t do right.
So we chose some brilliant authors; one of them is just sitting down her. Matias, awesome book called Don’t Despair. I read it and I was blown away; it’s an amazing book, and we thought he has a unique opportunity to actually take that book and translate it to English and market it internationally.
We chose some other books as well, also a few less profound books. One book called Ten Years Younger In Ten Weeks by Thorbjörg, about how – for women in their prime time who wanted to look, yeah, young. We found five books, and then we started the project.
There was a lot of hard work around getting the project ready and then we put it up on our own webshop. We, of course, we weren’t so naïve that we thought we can just go around Amazon; we knew Amazon was a big gorilla and we wanted to be there, so instead we started a relationship with them as much as a startup can establish a relationship with Amazon, and the same with Apple for the iBooks store. And those two – Amazon is 85% – 87% actually or something like that, at least of our sales it was. And iBooks store was like 7% percent of them, then the last 5% is all across the long-tail hundred-dollar outlets, and a little bit on our own site.
We were a bit naïve; we hoped we could drive more traffic to our own site, because what we learned was that when we sold via Amazon, they officially say that they take 30% – that’s not true. They take 58%, and then the way they get around with – yeah, so almost double, and that’s a bit disappointing to find out. You only find out – at least we only found out when we were actually dealing with them, and the thing is they had two different plans. They have the normal plan and then if you want business intelligence, if you want to be in the promotions, if you want to bring all the people who have also bought a circle there – if you want all good stuff, you need to pay 58% instead on a different plan.
And we needed that, right? So that was very expensive.
Another thing is that the prices of e-books are actually very low nowadays. We got an average of 20 Danish kroner per book we sold across all formats, across all outlets – 20 kroner. So we sold 12,000 books during those. We were alive for ten months and we sold 12,000 books. We were supposed to sell 100,000 – that was the number we put in the spreadsheet, and it was based a little on if my book alone could kind of sell that, then we could also sell that based on –. We actually thought we had time to release ten books; we only managed to release five. But still those five books out in all English-speaking geographies couldn’t sell 100,000. We dared to believe that, but the reality after looking at was that the new titles, we had them underway at the time when we ran out of funding – we had them there, but we didn’t have half a year that it would take to also promote them and get the sales on them going.
Another very disappointing fact was that we could Kickstart – we could get a book, at least some of the books, especially the ones for prime time women, it sold quite well for a period of time, but we couldn’t keep it up there unless we kept the effort up there. And then it’s very difficult to build a portfolio of a lot of books because they just fall out again every time you look at the next thing, right? So that what’s very frightening about the business. If we only, at any given time, can really push five books with this size of a team, then we would need to be one to push a hundred books, we need to be like 20-something more people. It’s not going to do any good to the numbers.
So therefore, after spending those three million, we looked at each other in the board or whatever – myself and my investors – and we agreed that we shouldn’t put in another three million and go another year. It would probably be too risky.
So since you are a group of growth hackers, I do have some numbers for you. We sold those 12,000 books; we planted 10,000 trees – we had an idea of plant a tree every time. Kind of like Toms shoes, right? You buy a pair of shoes, and you give someone a pair of shoes. We planted a tree every time. We collected 25,000 email addresses in seven months we were online; we had an average opening rate of 22%. We built our domain authority to 46 and Gavin, my growth hacker, was extremely happy about that. That, in itself, was I think good. Got a lot of backlinks going from Forbes and all kinds of very high authority domains. We got 30,000 Facebook likes without spending any money on ads; we got great reviews from our books on Amazon and a lot of reviews. And we’ve had a million visitors from nothing; when we lost in February 2014, we had a million visits in 14.
We were featured in more than 50 articles – high-quality, like Forbes and, Time, all kinds of cool, international outlets. In a way, you could say that our has succeeded in many ways. We did get ourselves on the big influencers’ blogs and communities; we did get the PR, we did get the product to the market, we did get high use of reuse for the books, so it was high-quality books. But all of that put together still only generated a book sale of 12,000 books at a very low average margin or income, and therefore it seemed very difficult to get the dynamics to work without being three guys in a garage working only on pizza for five years. This time, in my career, I couldn’t offer that.
And then the newest development is this: instead of us closing it down, we sold it to – because we thought about what to do. We don’t want to put any more money in it; it’s still an asset, it’s a shame just to forget about it, so I found three guys in a garage in the UK who actually –. They do have an, but you can get the metaphor. They do have something going for them; they market books already now for UK publishers and self-published authors in the UK market, but they would like to go a bit downwards the value chain, so they like to publish books themselves, and we have an infrastructure for that now. We also have a brand and 25,000 new subscribers and social media channels and all that, which are things that they probably would have a hard time financing out of their startup budget, so we allowed to take it over for – it was supposed to be one pound, but now I opted to a hundred pounds because there needs to be an actual payment for this yet to raise become a house of companies – or company house – in the UK.
They paid for basically nothing – they bought it for basically nothing, 60%, and then myself and my investors kept 40%, and then hoped that we can recover the three million or however much, maybe even more, if it should go crazy. Then again, I don’t think we will, but he’s very happy about it. The team is very happy about it, because for them it’s extra revenue into a model where they already found some other revenue streams as well.
Yeah, I think that’s about it. I don’t know, was that 15 minutes? a bit short, so I tried to keep it.