#618 – Booktopia’s Tony Nash On Building A Sustainable Business Model/
- February 24, 2020
Tony Nash – Founder & CEO of Booktopia
Tony founded online book retailer Booktopia and Booktopia Publisher Services.
Booktopia was established in Australia in 2004. Now, turning over more than $130 million a year, Booktopia has been listed in the BRW’s Fast 100 eight times and has been a finalist 7 times in the Telstra Business Awards for the Medium-Sized Business Category, winning in 2014 and 2018.
Booktopia was ranked as the 15th e-Commerce website in Australia in the 2020 Power Retail All-Star Bash. Tony personally won the Industry Legend Award alongside Kate Morris from Adore Beauty.
On today’s episode of The Daily Talk Show, we discuss:
– Where Booktopia sits in the market
– Why people buy books
– Starting Booktopia
– Separating yourself from the business
– Reconciling the old with the new
– Knowing when customers are ready
– Investment & acquiring businesses
– Book charts and best sellers
Tony Nash: https://www.linkedin.com/in/nashtony/
Email us: firstname.lastname@example.org
Send us mail: PO BOX 400, Abbotsford VIC 3067
The Daily Talk Show is an Australian talk show and daily podcast by Tommy Jackett and Josh Janssen. Tommy and Josh chat about life, creativity, business, and relationships — big questions and banter. Regularly visited by guests and gronks! If you watch the show or listen to the podcast, you’re part of the Gronk Squad.
This podcast is produced by BIG MEDIA COMPANY. Find out more at https://bigmediacompany.com/
It's the daily Talk Show Episode 618
and a warm welcome to our guest Tony Nash.
Welcome. Welcome. Thank you, co founder of book topia and sci fi. Yes. So you're based in Sydney.
How often here in Melbourne?
Hmm, maybe half a dozen times a year.
Sydney Melbourne, we always go there. Yeah. What do you what do you think of the,
the great city love, much love the architecture? enjoy walking around? Because Sydney has the harbour. It's a little bit like, you don't have to put the effort in. Yeah, Melvin does. I love it.
Where do we put the effort in?
When you say it in the buildings, the architecture, the way that people think about the urban planning?
What about the coffee tiny?
Um, I'm not a big coffee drinker, but it's very good. Yeah, it is good here
at what about the bookstores?
Very good. Hey, yeah,
the avenues grades. There's some little boutique ones in the city. I actually haven't seen a great deal. Maybe there's one in Bondi, I used to live in Bondi for a period of time. The good old days.
Yeah. And so where does book topia fit in regards? So, you know, when people think about a calm, they think, okay, against the bricks and mortar or you've got the big beasts of things like Amazon, and then you've, you've got book topia, where do you see the whole ecosystem? I'll answer it this way. Oddly,
we've got into seeing everyone more hopefully most people will know us as a book, retailer, online book retailer. In the last three years, we got into book distribution. So we are now a distributor publishers are appointing us as their representative in Australia, which is great. Then, in the last six months, we've got into publishing, so actually publishing books and we're going out and winning the right to be the publisher printing them in Australia and the first deal that we did was with was for club edition by a woman by the name of Patricia como who's a very famous crime writer. And so the deal was done actually with Amazon, they had won the rights or pinched her from her traditional publisher and brought her into the fold. And we did a, we're doing a competition just come out in the last couple of weeks. So this is February 2020. And so when I was in Frankfurt for the, for the book fair there, I had a meeting with the lady that I had done the deal with all my head of publishing had done the deal with them. And so we sit down with her and we go, look, you know, you're in America, you're Amazon. Out of curiosity, have you ever heard of book topia? Oh, yeah, yeah, I heard about topia. Sure. I said she and then she goes on yet but before I do my deal with you, I did my research, you know, within Amazon, I spoke to people and they said yeah, book topia, the Amazon of Australia. And I must have had a bit of a you know, look on my face. Right when she said that she goes, I don't mean that in a bad way.
So is it a compliment? I mean,
that you very much.
Yeah, I think it's a couple of years ago, what was your face looking like?
It was more like it was more like
I guess with much in the global space when you asked the question now where do we fit in, in the global space in books, we are very much known. And that what we do and how it becomes so big in the rest of the world where Amazon is completely dominated. Most countries just scratch their head and how come we don't have one of those. So in book retailing, we're going to do around 170 mil in in revenue this year, which puts us on par with the number one book retailer in Australia. Do you know who that is? No. No idea. It's not borders. W Yeah,
well, they seem to do a small selection but then they just slam the prices are like the bare foot will be like I
give you they give you five bucks. That's amazing. Yeah.
That's it, that's a really important thing to understand. So what what big w came out and target do is they use books as bait to get people into the store. So it's a commodity that people want. They actually used to have them at the front of the store heavily discounted almost at the cost price just a little over. And then what what happened as the rats were trained in the maze, they moved into the back of the store. So people will come in where your books are there at the back and so when they were leaving, of course, they picked up the you know, pyjamas and the T shirt so
I some chocolates from that joint like they've got all the novelty sighs Yeah. In perspective, the hundred and 70 million equates to a book every six seconds is the first that lower now
it's getting lower. Wow, it's getting lower.
Well, I sorted eight seconds and so that may so that's meaning that you're sending or someone who's purchasing through the store a book. It's good that there's a lot of people buying books now. smarter people. Hopefully
it is we have a lot of picture books as
a child. So
yeah, make sense. I love I love books. I don't necessarily read that many every year. But I'm someone who buys books and then puts them on the shelf. You keep Tony in business,
I guess like yeah, I wonder like, where do you say like, have you seen any sort of interesting trends in regards to how, why people are buying books and is that even like something that book topia would look at is like qualitative research. We have to there's a lot of ways I could answer that. So but I have to, feels like about eight years ago, for one of Australia's richest people needed to fulfil a book order was around 40 grand of books that needed to be coffee table was going to go into a certain room, and the designer that was kind of building the house or helping design the house came with me Through the warehouse, and we just had to be certain spines or certain colours, and didn't matter. You know, what was the comment, but needed to be so many more peach Aquila, this one. And so, so that's one reason one of the guys that worked for me for many years used to be a secondhand book retailer. And guys would come into his bookshop and say, Look, I need some books on my shelf. I've just moved into apartment and, you know, I want to get laid. So what books Could I have on my shelves to impress women? So they would think he's quite cultured?
What was their thinking Grow Rich, I mean, so he's got his finance sorted and then cookbooks because he knows how to you know, what, what did you go with what was the
for the riches,
titles for the person that wanted to get light
I never was in danger. So that was that was that was So the guy joined me after a secondhand store. Yes. I'm sure it happens. We don't have any like, you know, quick, quick reference searches.
Like could be a category that could be like getting light and it could be sort of the, the ones to look smart. So you could be your icon Yes, actually, I'm a bit socially conscious the
I think today Yeah, women can see right through that. And you're gonna be completely Good. Good luck. So, look, there's a lot of people think about books and they don't realise the range. So they might think of the fiction they might think of bestsellers, biographies, but we are selling books on so many interesting categories that just are under the radar. So if you want to become an Australian police officer, there's books around that if you will, if you're into fishing, crocheting, if you're into motor sports, your favourite footy team, like it's just so many ways that people Kind of by the content which is, you know, a hardcover or softcover, and the outside pages in the middle, but there's just, there's so many different ways that people will engage with that kind of device.
What excites me is and knowing that something like an online book retailer has a lot more access to data. So bookstore is selling stuff and the same sales go through but I could imagine you're able to see trends through your analytics about what people are buying what things are in vogue at the moment. What have you seen, what are the trends been over the years that has excited you and seeing the data on our start with one of the very first ones that gave me a huge insight to the opportunity and why book topia grew for so long.
We, we were selling a lot of romance titles that was kind of before ebooks were really taking off and they handle like covers with, you know, a bare chested guy in a kilt in the Scottish Highlands which Most bookstore owners would be embarrassed at the end. They never read that in a million years. So hand on heart, they just couldn't go to someone and say, Look, this is a really good book. But we're descending selling so many of them every single year, that it was just natural for us to stock them, not order them and have someone wanted one have more of them. And then that that took off. And that that really catapulted us into what else are people looking for? Is there someone looking for veterinary books? Are they into aviation, and we ran reports about what people were buying and add them to stock. So we went from, you know, 1000 or 2000 titles in stock. We've got 130,000 titles in stock now. And if you walk down the shows you go, my God, that so there's 27 million active books in the world. We have 6 million on our database, and 130 odd thousand in stock, and that's at the top. So there's a lot that are not but if you think about what's then you walk through you go really buying that and for it to hit the algorithm for it to be there, they're buying them often monthly. So So it's, it's, that's what's great about books. That's what I loved about it. In the beginning, it was, I could see it was very big, very complicated. And therefore the barrier to entry is much higher than people think that to get an online store to that size takes a lot of components to know what to do, how to build websites that can handle that kind of volume and have that speed of response to have the internet marketing skills, which is what our background, so we come from a software background and internet marketing background. And so to know all those aspects of what it was going to take was really appealing to me because I could see that the barrier to entry was going to be high it was real monumental pitch of a thing to address. The publishers was so archaic, I mean, in the beginning you got to understand like we We get back from Penguin, which is one of the world's brightest and biggest publishers. We get like a file that we needed to ingest to them put on the website, and we'll have like, Cat in the Hat, comma that. And I said, nice little shit. Like that. Why? Why do you send this title of the book? Why that may go? Oh, that's what the librarians want. Is the fly
in the fucking jury system anymore, right? Yeah. Is it still a thing?
in libraries? Okay.
Yes, I saw that. We were filming. We have a video production company tiny will film at a hospital and there was a selection of books and they crossed out the Dewey Decimal System really like books and I was like, there you go. It doesn't get us anymore.
I'm enjoying the book banter. But I want to eventually get your thoughts on hardcover versus paperback books. But let's keep the juicy stuff to the end. In 2004 when you started you had 10 bucks a day that you We're spending within the business coffees. I think it was time doesn't like, yeah. I guess it was the Google Ad money or like, Where was that? 10 bucks going?
Yeah. So what happened was, they were quite fortuitous. We've done a job to get Angus and Robertson to the top of Google. And that project gave us an insight to the company that Angus and Robertson were using in Sydney that manage their site, fulfil their orders, and did everything for them. And at the end of every month, they would write a check and go, this is what we saw. This is your portion. Thank you very much.
Was that organic? Or was that paid?
From an angle perspective, that was from what we did for Angus Robertson was both. We were doing organic, getting them to the top of Google for searches, like buy books online, but we also ran some Google ads for them as well. The The company that did that, for them managed at bookstores websites. And my brother who had actually won that project and completed the project, organised the meeting at the end of 2003, to say, Hey, we did a good job with a&r, getting them to the top of Google driving more traffic, it's making more sales. Why don't you introduce us to all the other at bookstores that you're managing? And we'll get them all to the top of Google and you make more money. And the owner of the company said, not on interested, I said, you're not interested in making more money said, Look, it's not our business. We manage bookstore websites, we fulfil those orders. That's what we do. I said, Well, how does it all work? And they told me, we've got a system you give us the name of your store within 10 minutes, there'll be a a bookstore website up and running with your name at the top and a million books on there. And if you sell anything, will pay you a commission doesn't like white label, right? Yeah, that was there. That that was the kind of nice offering and I had started in 98. And by the time I had met them was 2003. So I said to them, Well, that sounds interesting. And they said, Yeah, I know. But no online only has made businesses made anything out of it. Oh, come up, come off the back of a traditional bookstore that wanted a website. So I went away from that meeting, I said to my brother, you know what, I wouldn't mind giving that book thing a bit of a go, that that sounds quite appealing, we will be looking at other ways of generating revenue rather than just doing consulting work, but you are paid by the hour. And so I went away, I came up with the name book topia, and went back to them and said, we're going to start a bookstore. It's called book topia. And 10 minutes later, there was a website with book type Toby's name at the top and a million books on there.
And what was their reaction done? Oh,
yeah, just another online retailer.
So they obviously didn't see an opportunity or they're so focused on their model
where you're making them money as well.
But they had no idea we had no idea that my brother right the like, so he gave me some The $10 comes from because my brother is really cheap. He said, You can stop book topia. It's got to be outside of our Because we're doing all this consulting work, so we've done it from 9pm to 2am. In the nights, I began me Tim back. So I, I had my Google ads and I was a Google Ad expert back then. So I knew what to do. And yet I knew how to maximise the spend. So I didn't waste it on search terms like books, bookshop or bookstore, I went for author named someone who already use Google to do it an author search. So in the back of that ad, I had the link down to where all those books were from that author or the title that they were searching for. So it took three days to sell the first book and by the end of the month, and done a couple of thousand dollars. So my brother had written this projection of, Alright, we're going to do one order a day, right for the first three months and then we'll go to two orders a day. But we were already blasting through that because by the fourth month, I was doing $30,000 a month or 1000 a day. By the end of the year, I was up to 100,000 a month by the energy is 200,000 a month we spending more than 10 bucks at this point was that we were reinvesting obviously everything but by the time After three years of going out and doing this, we had gone to a booksellers conference, the annual booksellers conference in the middle of 2006. So been going for about just over two years and I came away from that realising these guys have no idea
what was the vibe like, what sort of what sort of people go to a booksellers, conference,
all your all your very dedicated book, retailers, not the not the chains or anyone nor the big discount stores. But demyx guys would go there and, and so I sat there for a few days listening, and I thought they have no idea what's going on. So I came back and I said to my brother and brother, no, we've got to, we've got to get on our own. We got to build our own site. But my brother in law's background was an IBM software engineer. I had been a programmer in the mid 80s. So we kind of knew that we could probably build our own site, and we'd be merely a lot of software for our businesses over the years. So we we kicked off a project we bought some shows on eBay had a 500 square metre warehouse in our time and next door brothel. And we, we just started going off on our own, we actually rang the publishers, and we said, look at book type, you're turning over 2 million a year, and they said, Never heard of you, because all our orders are going through this other company. We've been going for three years. And, and so by that point, we, we just had to kind of get runs on the board, start ordering, paying order more and just and just kind of build up a relationship. I got a letter from Pearson, which is the owner of penguin publishers, big academic publisher. And they said, as you're an online retailer, and have no overheads, your discount will be x was like 10%. I said, What do you mean? You know, I'm looking around I've got my that stage 10 or 12 people 500 square metres, you know, like books like this. What do you mean no overheads is overheads, and so they really didn't understand. So it took quite a while. For all of them to come around and realise, hey, this is this is really happening this is online this this company book topia is going somewhere. Interestingly enough, there were a lot of other online retailers that were there at that time. So they were move may have been turning over 5 million and they were doing two or three. The number two online retailer in Australia behind us so we're doing 170 odd is 22 million. Wow, the no one else really kind of came with us. It was just us there was just daylight between us and our and our competitive.
What was it exciting for you in that time? Was it looking at the lack of awareness these people had about a business? Did that put pressure on you to sort of go we need to go full steam ahead.
Um, there was no guarantee so we knew Amazon was around. It was just answering one question every single day. And that question was what our customers want. So when you ask that question, answers come, so we didn't hold any stock in that first year, the company that we used to start book topia. And the three years they didn't hold any stock. I felt that they should hold stock for the first year. We didn't hold any stock. And then there was this one book that was selling really well. The author of being on Oprah was Jerry Seinfeld's wife, Jessica Seinfeld written this cookbook, and America had sold out of it. 300,000 copies and, and Harper Collins had 200 copies left. And I said to my brother and brother, no, why don't we buy all the 200 units and then no one else will have it except us. And so we, they arrived and it's not in a common to walk into a bookshop and only see one title there, but our house look like that. It was just, I mean, maybe if you go into the Church of Scientology, l Ron Hubbard, but you know, having one button, that was what, that's what a bookshop look like, and so orders would come through the side and everything else for that first year. of going On our own to our fourth year of being in business we had to order in took three weeks, four weeks, six weeks, eight weeks. This book picked it packed and shipped it to the feedback that we were getting in that in at that time was wow what great service. Wow, you guys are really fast. And the other orders were like you guys are really shit I should have bought from Amazon his sack. And the feedback was so stark. I said to the others, you know, To Kill a Mockingbird is sold every single month for 50 years. Why are we ordering it in? What else is there? How to Win Friends and Influence People Power positive thinking. So we started to add all these titles to stock and our warehouse started to fill up and then after a couple of years of doing that 2009 we moved to 2000 square metres, took a five year lease. We thought that would be enough because it was four times bigger than where we were. We ran out of space had to get another 2000 square metres into thousand 11 and then 2014 we move to 10,000 knew the Olympic Stadium and we added an adjoining buildings so at 13,000 Now,
is it true that next to you taking the Olympic Stadium
have the book topia into the ANZ? book. topia stadium?
Yeah, that'd be not I mean, talking about buying one book in bulk sort of reminds me of the business that I tried to start, was it a business or never, never took off? But
the query actually given to Tony on the way that we could
look, I'm happy to do a deal. But yeah, about four years ago, Amazon did something with American Express was like free delivery. And the dollar was good at the time whenever it was 2012. Yeah, right. You know, I don't know if it's 20 would have been 2013 2013. And I, and so I was like, none of the book shops had my favourite books in stock. So Austin kleon steal like an artist Stephen King's on writing vagabonding By Rolf Potts, was there any other serves was I think that's it. And so anyway, I did an impulse purchase where I bought two and a half grands worth of these books. And it was on a Mac, so I didn't have to worry about like, you know, fronting the money. But I had the it was near Christmas, I thought what I was going to do is get a mate who had a bike and get him to ride around and be like, hey, we've got the best books, we buy them. But then once the books arrived, my girlfriend was pissed off obviously because have no interest like, never done this before. And so we ended up holding on to the books and we give them as gifts to people. They're currently in the garage. So if you don't have by Stephen King, I can
very, very if you hold on a bit longer, they'll move into like vintagey
pretty tiny. Yeah.
If you can go back to the authors and get them to sign them. Right, right. Golden King. I mean, just like well fake the signatures.
Well, I didn't notice I opened up Cuz I never actually read them by opened up a Stephen King one I would actually like your opinion on it but on every page there's like a weird sort of blotch and so I wonder if there's a
a fight that was a Luther I gotta go to Louis through book the other day that's got a fight I'm thinking of bringing up with the publishing done I should I should you definitely get your money but the yeah there's a blotching in all my Stephen King copies so I don't even feel confident selling them now because it feels like it's it's a
rare and collectible because no one else is being blockchain unique blockchain
today you hear about McDonald's being called not a burger business, their real estate business. It what's the definition of your business when you don't look at it as a as a book business or someone that you know, sells books.
It's I mean, it's a commodity, I think of it as a matchmaking business. So in recruitment, which was my background, I did that for 14 years. I was trained Solution selling which basically means you go to the client, you sit down with them understand what they're looking for. And then you go back to your database interview people and you say look, I mean, I've met a lot of people, you're going to hire this person because they have the right cultural fit as well as the the recipe of all this programming skills that you need. And when I thought of a good bookstore, and you mentioned Ave, bookshop readings and Melbourne, bedclothes, Harry hotdog, and Sydney, lots of them all over all over Australia. What's great about a good bookstore is they're very, very good at that matchmaking. They go in and they're adding value they're talking, they're understanding kind of what you want. You might like stick lessons in the go with the dragons, too. And you read the trilogy and you don't know what to do next you go into something someone like are you really into Scandinavian crime Are you on that you go watch Scandinavian crime, and they go Yeah, it's a sub sub genre. Janice Berg, Berg, there's a tonne of great Scandinavian crime writers and then you, you get introduced to someone that you never knew before, and they've got a whole series, and that kind of idea of matching people up to what they what they're looking for bit for their education. So they might be wanting to become a lawyer or a doctor or they're a professional already, and they're looking for some more postgraduate books that that will assist them in what they're doing could be kids could be someone who's can't read anymore, and they they need an audio CD, to listen to that book. And that that idea of of meeting the demand of the customer, and that books are and and people are constantly either wanting to be entertained or educated is how I saw what we did, what we did and what we do. And that's I think, where the interesting value proposition is
the Tinder for books. Well, I mean, you hear a lot of entrepreneurs That creating some version of you know, the the matchmaker, the connector for product and they use the term Tinder, Tinder, you know where the Tinder of X
or Netflix have done a great job. They used to put a bounty I think it was like a million bucks or whatever working on the algorithm. This is going back a bunch of years, I think when they were even doing sort of their DVD mail out. So it'll be interesting to see how much of that can be learned through. You guys are getting to see that at a mass scale.
I was talking to someone yesterday, Tony, that worked with at Harvey Norman. And there was a period of time where having Omen Mr. Harvey Jerry, Jerry Harvey hated the internet. Didn't want to borrow of it. I mean, it's that classic like, you know, missed opportunity. We use. I mean, you were in the Google, Google marketing Google ads, very early days. Did you think it would rate the reward it has for business like yours?
I did, because having come from sales and marketing and technology, I mean, I was reading something only on LinkedIn this morning. Someone had done a, like a three minute kind of video, and was on Jeff Bezos. And he got into books and the internet because way back whenever it was 1993 94 he read that the internet had grown 2,300% that year. And when you have that kind of groundswell, like the internet, people buying online is kind of growing 10% every year, when you have that many people every year kind of congregating around a certain way of, of transacting, and you could see that the value proposition was there. It wasn't like a, you know, a fad that was going to come and go, it's actually really helpful and, and so I had a lot of confidence in that. I felt that that was The way that everyone was going to naturally migrate, I guess, mobile phones, tablets, that things come and go some of fad seminars. And and that made it really, really easy. We're the only company ever to make the BMW now the AFR fast 108 times. And the main thing that we had to do was manage the growth do not grow too fast. Because you can you can get caught up in not being able to pay your bills or you've got too many orders then people complaining and cancelling, you then ordered all the stuff based on your orders, but then they will cancel because you didn't get them fast enough. And then you get caught holding the baby. And and so we had to make sure that we didn't overextend ourselves in terms of our ordering. So it was always very managed growth, aiming at 30% growth every year, which we did for over a decade.
What's it feel like trying to pull back on growth when the growth Is there?
It's good because you you've got control. You don't you say no to advertising opportunities. When the GFC came through and ads on radio and TV were just, you know, cheapest chips are no thanks where we're too we're too busy. And everyone was saying the opposite. What do you mean you're too busy? Are you ever got too much work? We don't know what to do during the GFC. And, and so it's making sure that you don't we have a very simple philosophy around our marketing. For every dollar that we spend, we must measure Billy be able to get $10 of revenue. And if you can't measure it, we don't do it.
So 1994 you went to I think was like a 16 day trip. 93 Yeah, 93 you went to a like a 16 day workshop type of thing school for entrepreneurs. So obviously this mindset self development has been something that you've been thinking about or I've been a part of for a while, where did that self development side of you come from?
My school buddy product, because you're not that kind of kid at school like what the hell happened? I travelled, I went to, I got 56% of my high school certificate. Not that great. I scraped into uni and to do accounting and finance, but I mastered in Space Invaders and snooker. So I dropped out after six months became the mail boy at the nrma. It's like the ICV down here, you know, the movies from the 80s where the guy would walk around with a little trolley handing out those envelopes that people had scribbled out the name. Yeah, right. That's like the old email system. I was the email system back in the 80s.
You would get email. Yeah, email.
Elmo lakia. And so so what happened was after going back to university as a mature age student 9586 and I was getting distinctions and credits and it was stupid, I would go to the lecturer, I'd say so about this assignment that you're talking, you know, we need to just what I would just ask really good questions about it, I would then go away and write whatever they wanted to hear it, give it back and I will get a distinction. There's no challenging me and it was just, I'm going to go travelling around the world. So I went travelling around the world for three and a half years. And I think during that period was when my curiosity meeting people, that personal voyage of discovery became more even more so than ever before. And I did my first personal development workshop in London, was called the forum. It's now called landmark and it was quite monumental. I then went on to do more things and then with Robert Kiyosaki, who wrote Rich Dad, Poor Dad. I did his money in new course back in 92, which was about six years before we write that book. And I had already done pretty Well from Business School for entrepreneurs in 93, many years before he wrote that, so. So that was that kind of personal development. He said, one thing in that workshop, which still resonates with me is that knowledge is indestructible. And the most, the biggest return on investment you can get is by investing in yourself. So the more that you invest in yourself, the greatest possible returns you can get in your life and your universe financially, then then trying to get it in chairs or, or or
a job, and how were you financially? Then were you did you have much cash?
That by then I did because I was a recruitment consultant. And as a as a 20 year old or mid 20s, late 20s. I was earning maybe 150,000 a year which was a lot so I could invest in myself. But what would happen is is that I've, I could get I had contractors working for me and I got to 15 contractors. And then I would drop back down to 10. And then I get back up to 15 and then drop it just really annoying me that I couldn't get past 15 and then I did a man I did money in new this workshop, and I learned some things about myself, I got some insight about myself, and then I went within three months went from 15 to 30 contractors, so I really doubled my, my, my personal income. And, and so then I got stuck at 30 I just dropped 24 back up to 30 and then I did another workshop. And then I got to 45
Can I ask what was the insight that sort of made the change to 30 to get to that first
most of them have been around what how we can we all limit ourselves or belief systems or certain ways that we create? I'm not good enough or I'll never be good is that all in my probably back then and I can't take good take a lot of time to think what I actually am have it, it would probably the way that I self sabotage at that time. So I would, I would get to a point and I got Okay, that's enough. And then I would stop doing what I needed to do. And then I come back down because I had probably had this one, I remember, one day, I'm going to be successful. Now, if you're successful, and you're saying to yourself as your mantra one day, I'm going to be successful, you have to self sabotage. So you can get back to continue to say, one day, I'm going to be successful. So you've got to be able to get some personal insight around your, your languaging what you're saying to yourself, so you can break through these levels of that that are going to stop you from get, like if you say one day, I'm going to find the love of my life, you know, one day, well, when you find that person, you're going to start thinking, Hmm, maybe I need to, she's not exactly perfect or he's not great or he does this or she does that and then you're going to start to sabotage the relationship because why I'm going to find that on my life if that's what you've always thought of, then you have to, you have to sabotage to reset.
What's the shift in language? What What is it for if you are thinking one day I'm going to be successful.
Everyone will be different. Let me explain to you with book topia the way that I've done it here, because it's, I can seriously see the way it's worked. There's, I use this kind of metaphor that imagine, imagine if you use them as herati. And, but speaking engagement for one of my mates, who's in the jewellery business, and it was an elite group of jewellers that were there, and they all had a
So I said this to the everyone, you know, like, imagine if you had a Maserati and it was about 35 guys in the room and women. Yeah, it
wasn't my number one.
If you had a big daddy viral, you had to go something real hot.
Yeah, I was like, yeah, that's me. Yeah, it was. So I was like, I haven't had that reaction before.
Anyway, so now we none of us own a Maserati.
Yeah, so no, yeah, right. Anyway,
yeah, that's right.
So, so we don't need another girlfriend.
I'm not a car guy. I'm safe in that way. I think I, I'm a very I'm interested in this because I'm, we're very much in that one day space where it's like, we visualise and think about this one day for me, it's a Tesla, just like nothing, just so I can have it on autopilot. And so I can go and reading your Stephen.
So yet what the book topia, yes, anyway, so what happened? You mentioned you got to measure it and, and as Maseratis, Italian sports cars are prone to do on this particular day, it needs to be in the workshop, which happens quite often. So you put it into the workshop and the mechanic gives you the liner and the loaner is this two door 15 year old fit. And you used to taking the car but on this particular day, you've got a very, very important first client meeting huge potential client and you having a breakfast meeting on track road and you think yourself No problem. I'll just park around the back they went see and then I'll just pop in and then have my meeting. You get the and for whatever reason there's something on no parking spaces. It's almost nine o'clock. Why? And you've got to get there. So you go.
All right. Is this you this morning? Were you driving around?
I was not. Not me. Not today. Anyway, so you there's only one spot available right in front of the cafe restaurant. We're supposed to have this meeting you go. I have to take it as you get out of this. Two door. 15 year old feared. You see your clients, they see you and you're getting out of this car game, but it's not in their life. I am a $300,000 Maserati, it's this. This is not my car, and they're looking at you and they're making judgments and you're making judgments on yourself. You got to get out of that car. Like, it's you. You are not your car. You are not your girlfriend. You're not your boyfriend, your wife. You are not your kids. You're not your sports team. I know. One of my very good mates Jeff. He thinks he's the Richmond tigers. But he is not via the Richmond tigers and he did not win the Premiership is Tyler
Is the south south the border. Paul he's got a he's got a sassani tattoo on his Yeah. And he's also a target support a family law. And and so this is the thing. You've got to have that separation you You are not there you are not your business. So with book topia, I am not book topia. So when booked book topia wins an award or Telstra Business Awards or when we talk about Got 170 million dollars of sales or 250 employees, but it's not me. It's the company and that's given me great freedom and perspective. So any kind of judgments of values that I might have around, or I don't know whether I can have 100 million dollar company or a $50 million company is completely separated. So if I, if I try and let layer on top, all of those things, you will sabotage your life. You will sabotage your business because you don't think you're worthy of that or you don't think you're and it's so important to understand what what that might be like other people doing Europe to 619 I've got my little mug here that says 618th episode, which
costs numbered mugs.
Yeah, I could pay for it, but you should get every guest to pay for your number. And that's a good idea.
I wonder because that really resonates with me and the fee that I have with what Tommy and I a building is with The Daily talk show our personalities are part of it. And I know you were you'd mentioned on a previous interview around businesses you should be able to you want to set it up. So you could sell it at some point. So, you want the box to be right and all that sort of thing. Looking at it from your critical eye, how does a business like this operate that is, so the founders, the the personalities are so ingrained in the actual product.
The first thing that comes to mind, so it's a system. So you've got your, you've got your studio here, you could interchange yourself with others. So there could be other segments happening every day. Different talk shows different events, different things. So you're so you're already getting leverage around what you've invested in. So in an hour's time, that could be a gardening show, that could be a craft show that could be educating your kids. Are some sort of it might even be like coaching for children, like lots of different things, then the main, the main thing that comes to mind is like, someone listens to this and they go, Oh my god, this is the best. This is the best format I have seen or heard in years. I'm going to put you guys on national television at nine o'clock at night. Now after you've checked yourself and you're thinking, oh my god, like, Can we do that? Is that possible? Because you're going to come up against some of the fears or it's easier to do it here because you got used to that, but then you're going to come up against your own judgement. So I don't know whether we can do it on TV, there's going to be a lot of pressure. It's really live. We can't just kind of get everyone relaxed, and will it transform. So for me, it's about creating something that someone else wants. And the toll on the systems
is when you say that what I think about like you In a TV analogy, because people will say to us, like, you know, is that empty and I'm radio or, or we're trying to do is build it's almost the equivalent if if someone came to you and said, Tony book Toby is going so well, we want to give you the best spot on a bullshit like on the straight, or a bookshop. Have you um, how do you reconcile the old way of doing things with what you think the new way of doing things, and also realising that your customers or the audience might not be ready with where you think things are headed?
So what you're saying is like if someone gives us a like a retail like,
Well, yeah, no. So I guess I'm just using that analogy as a as an example of old systems versus new systems. Do you feel like you guys have insights or where you think things are going that you're not doing yet because the customer isn't ready to do that?
Yeah, you're doing that all the time. So I said before, what are our customers want? So there's a lot of people that are coming up with ideas like this virtual reality, artificial intelligence, all these other things that you hear. I'm not interested in being at the bleeding edge of any of that. Like, I want to see it working like when I this is a good start. So I explained before that I went to the Australian booksellers Association Conference in 2006. And I got some insights that, you know, these guys really had no idea. I think there's an opportunity,
what were they talking about, by the way, what
what big books are coming up, how to organise a store,
how to sell merchandise,
yeah, and all those kind of things. And they'd really had no idea how big online retailing was getting. So in 2008, I convinced my brother and brother in law, it would be a very good idea for me to go to America to go to their book event, which is book Expo America. And, and so we had just gone out on our own in the last year, and I was I arrived there and there was a guy talking there by a guy interviewing another guy. And the guy that was interviewing was a guy called Chris Anderson, who wrote a book called the long tail of the internet. And he was interviewing a guy called Jeff Bezos. Now, here I was, as the owner of a company and one of the owners of a company that was turning over $5 million. And this guy in the same industry that I was in was worth at that time around 10 billion US. So I sure as hell was going to listen to what he had to say. And I went in there and for the whole hour, all he talked about was the Kindle. And as a technologist, I understood what he said I could see where things were going, and I could go and I knew that's going to be huge. And at that time, ebook sales were point three of a percent of all sales in America. It was tiny was at the very beginning and I walked out of there completely shattered, going, I was walking down the corner. corridors of the LA Convention Centre, which is not that much wider than this room, say four or five metres almost in a drunken stupor going, you know where fact, this is, this is like this is definitely going to happen. And I stopped myself for 10 minutes and stood there and thought through what he just said and what was going to go on. I thought, in all the Asian countries, they're going to copy that tech, which is what they always do. The publishers, they hate Amazon, they're going to make sure there's all those digital files, we're going to be available to everyone. Yeah, it's going to be okay. And so I walked down and I realised that was what was going to happen the next year went back, and ebook sales were up to 1%. So they'd tripled, still small, went back again. Actually, I sent my brother in law next time, and I said, mate, can you just go and see how this is going and whether we should get involved and within a year and a half, we had set up our first ebook platform, so it's that thing You're asking about knowing when to go when things are going to actually kick in and, and not thinking and knowing when someone's really going to hand over cash, how they're going to hand over, you know their money, and will they hand over their money to you for a transaction. So many entrepreneurs that I talked to they just don't understand the point of the point of the transaction. You've got to know where people will say they're willing like one of the best affiliate programmes that we have with book topia is better say it right because I'll get in trouble. It's chat 10 looks three with Lisa miles and Annabel Crabb. And like you guys, they've just kicked off this podcast is become hugely popular. It's completely outside of mainstream media. We have what they would normally do a massive following. And on their website and all their things that they do they just think about the book or book or the book or the authors book, to book topia, and they're constantly making money all the time because they're creating all this unique content that just others another person, another book, link to book topia, and we pay them a percentage. The model is kind of changing now, who would have known that that would have worked me as an alternative to the traditional model? I probably wouldn't have predicted as much but it is because you're adding value.
Yeah, there seems to be a lot of resistance with a lot of different industries. I guess the book the book industry isn't is no exception. When Tim Ferriss, he released a book called Four Hour Chef, which was one of the first books to be published through Amazon, and all the book shops refused to stock the book, with what you're doing with book topia and starting to get into the publishing distribution. The the book shops and the older industry. Have they recognised that then there needs to be changed? Are they more open to these things and yet some still resist but once you take the time to explain to them
what we're doing that we actually giving them getting access, giving them access to more title than they've ever had before, good pricing for them. And some of them have said no, like gimmicks have been somewhat reluctant because where the competition as well as now a distributor so it'll take a little while that people like to hold on to whatever they had. So as castles have been broken down and fiefdoms have been kind of disrupted and it's not what it used to be. And they they do they get desperate to try and retain whatever power and control they had
a you wary of that for your business and not trying to be in a position of protecting
So the you've probably heard of the expression, win, win or win lose. So that doesn't exist. Yeah, it's double Win win. And what I mean by that is is octopi needs to win, our customer needs to win, our supplier needs to win and our employees need to win. You can have everyone winning, then you've got a sustainable model. So without store customers, if they're winning, then and we can win at that, at that price and that service to then a sustained, sustainable model. If you take companies like Woollies and Kohl's where you hear they squeeze the the milk in the egg farmers and they're getting squeezed and squeezed. And if they can't continue to produce and manufacture whatever they're doing, then they don't have a sustainable model and so, so Amazon's the same he his stories of the customers are getting good deals. Amazon's okay. This I know because I talked to the suppliers, the public They're getting squeezed all hell and they've got there's penalties and all these things that happen. And the employees quite often you hear these stories of, especially in the UK, of where, like ambulances are waiting outside Amazon warehouses at Christmas because everyone's been working to the bone. I don't know whether that's true. But I like to promote it because just just in case and even if it's an urban myth, it really does. It doesn't. Yeah, I
guess that speaks to loss leaders that you know, the example of big w or businesses that are using books or creating a false dichotomy. Is it hard to weather those those storms? Like do you think that it's only ever short term?
I always think that if someone does massive discounting, knock yourself out, because it's not sustainable. If someone wants to bid on Google ads and overbeat us, go for it. It's even Amazon. You can do it. It'll any last first certain mile,
but just So using like Uber as an example, or what what they've sort of done in different cities, and being able to give a sense of Oh, well, I guess it's the win win lose. So they're losing short term to get rid of all competition and to create a monopoly. Yet, like, what what do you think it's going to look going for? Do you think consumers are going to start to understand more about the importance of having competition and not just, you know, even if it's easier to click the one button on Amazon, that there's actually other issues down the line that they need to consider
that there's so many aspects that it's the fundamentals of business that if you're not making a profit, or there's not more cash at the end of the month, and you're not running out, then you've got us, you can sustain yourself. So companies that you've talked about, I've done massive capital raises, so they're using other people's Money, you think they're going to go from a price of x two, three x or four x or 10 x. And so therefore, that better work because like, Amazon has made very little money over the years, they do make a little now, but in comparison to the revenue that comes through is, is not it's not a lot of return, they've all got their return because of the capital growth. And, and so if Amazon eventually runs out of money or their price gets reset, and their value is drops dramatically, then they'd again don't get access to the cash, a lot of their growth has come from buying other businesses, and using that money to then buy other businesses. So and also their tech like AWS and all that sort of thing is that it's like, it's propping up all these things. So you wonder how long it makes sense. Yeah, that's right. And so so any business that has used capital, the beauty for us is that the 16 years we had no money. We've just done a $20 million capital. In the last month, which is our series A,
what happened with the crowd fight? Did you go ahead with the crowdfunding stuff?
No. And it's been misreported in the media. And what what happened was, we, we, we tried to IPO in 2016. The week that we were going to get, hopefully get ready to list Amazon announced they were coming to Australia and all the fund managers said that you're going to be annihilated. So they'll pull it out. So they may look to other things. And then we had so many customers that were buying from us who are huge fans, we thought we'll just use them to raise money as we kicked off that process. And we could see that we were going to get to the $3 million minimum. And we started to get conversations going with people who had a lot more money who wanted to invest a lot more. So rather than it's called the bathtub of crowdfunding, so you tell everyone that you're going to do, you're doing a crowd fund, everyone gets in, then all then no one puts any money in and then as you're getting to the very end, everyone puts the money in It's always like the bathtub of, of, of the way the money comes through. And I could see that we were going to get there if we really pushed it, but we didn't push it at the end. So we just let it kind of expire. The money went back to all the people because it was held in trust. And, and we started to then pursue the, these conversations around, people had a fair amount of money that they wanted to invest, which happened within within nine months of us kind of allowing that to expire.
So for someone who has that value of the win, win, win win, crowdfunding, it feels like the opportunity for that. Looking at it from a critical lie or now that you've done it. Do you think that it is is a model for businesses like autopia
in it, I mean, listing on the exchange and having people buy your shares is crowdfunding like you giving them an opportunity to get in at an IPO to so the not the issue, the other problem is that we were of when we started doing that we were our revenue was already 120 hundred and 30 million. So their shareholding was going to be minute. And the money that we, we could have put that money to good use, but it was not, not everything. It it's probably better to use it when your business is a lot smaller. And the idea of what you're trying to create is clear. And therefore people can buy in at that early stage rather than at a mature stage that we were at.
If a businesses turn over 170 million what what's the thinking of getting investment.
So we we don't need investment. We didn't need it. But having the investment meant that instead of getting to 300 million in revenue, in say five years, we're probably going to get there in two and a half to three. And the fact that we've done all the hard work, it's it was a lot easier. For this consortium of investors to come in and go, yeah, we love what you've done. You've proven that you can continue to grow. We've doubled since Amazon announced they were coming to Australia. So they could see that that by investing in in us that there was still a lot of growth
left plus your bro was only giving you 10 bucks a day. Yeah.
What's it like being in business with your brother when it actually works? So my brother, my sister, my brother
in law, the family, I get asked that a lot. It's, it's good because for us, we have different skills. So I'm more of the sales and marketing, the ideas and the innovation from a business perspective. My brother in law was coming from the tech side, and my brother being so conservative and risk averse meant that anything that I did consider or do, I always had his voice in my mind going, let's make sure we don't, don't do anything. That's going to have this collapse on us. So that level of, of managing stretching ourselves to also considering the risk
was always there is that the most painful part of like, I guess, with the IPO, you spent 4 million bucks and you said in another interview you worried about it for three hours and then moved on? Is that a three hours thinking about what your brothers thinking?
It was just the grieving of something that doesn't happen and then allowing that to be complete so you can move on. He he was good about it still is, in terms of what his what we've accomplished, Simon wanted, he was happy when book topia got to like 40 to 50 mil. And he wanted to just kind of stay at that level and pay dividends and just be as profitable as it could be. That was within his comfort zone. But I have other ideas.
What's your your key driver now Tony, and What has and how much has it shifted from the early days of book topia?
My personal key driver book topia sky,
your personal within the context of building book topia,
it's still that same question what our customers want and meeting the demands of that. So every, it doesn't feel like we've hit any kind of capacity in terms of what Australians will demand of book book retailers in terms of an online offering. And so right now, it's us continuing to grow with the amount of people that are buying online. One of the things that we're about to do which, so we bought the co op in the last month, the university bookstore, businesses, yeah, we didn't buy strange geographic or curious pendant as they called it. We left with that with the administrator.
What is it like dealing with an administrator is it Lots of just buying a normal company or
is anyone listening? Can we just is it just between ourselves
and the other three people that listen. Right? It's, it's good and it's tough. They've got a job to do. And to be honest, they've got they've been given. They've been charged to try and give as many dollars back or many cents back in the dollar to the creditors. And there's so there's a there's a fair amount of legal framework our administrator needs to operate. So they're not really thinking okay, this is really good business how can I sell Oh, how can I kind of what can I do to make sure that it's got longevity it's not part of their agenda. You can't do the good like are this is a win win win set like this book topia, look at all the great stuff we're doing. They just want to see cashback they do but they look, I guess, I can only look at it from this perspective in terms of the cop and curious planet and they've got the They've got to wind it up as quickly as they can they've got employees that need to be have a sense of certainty. There's customers, there's leases in their case. So they would have had about a 90 different leases with all the stores, the universities as well as the as well as the shopping centres for curious planet. So they they have to quickly move through a lot of things that we were not considering what we're trying to do is work out if we bought that business, can we make it work? Is it any way that we can kind of take the remnants of what they had, because book topia was already the largest tertiary book retailer in Australia. So we've gone from like, probably three or 4 million where the car was doing 100 million in book, tissue book style sales went now but 40 in there, they were down at 20. And, and so what we've decided to do is hold on to as many of the store managers as we can have them territory managers, so they won't be stuck in the four walls of their shop, they'll actually be out on campus, they'll also be given more than the campus, they're going to have library schools, government departments in the area to own and to manage and to connect with and build relationships with. So that idea of just being an online retailer where people come to your site, they place orders, or they call us up and and, you know, can you help me out with our order, which a lot of government departments need to now having an army of people out in the field is a very different thing that we're testing. It's unproven. I believe in it a lot because I come from a solution selling background. So I think having a people in the field who are understanding the needs of our big clients and customers is going to add value so that that is really what we're trying to deal with and grapple with. Make sure they have the systems make sure we have A good formula that they can flourish in. It's not been done before.
It's exciting times
to end hard.
We can. Surely we've got more time to live. The gotta come back.
I know, we definitely want that. But we also need to work at hardcover versus paperback. What do you prefer first, as a reader,
as a collector, definitely the hardcover Okay, as a reader, the paperback large format though, so as it gets as you get older, 56 years old glasses, I prefer the C format or the trade paperback edition, the pages are bigger, the font is bigger, but as it goes down and format is not really.
I didn't know that. How would you recognise that on that? Like, what are the so you because I
BNC so I use those little kind of ones, the American ones which are tiny, then be is kind of made and see as the ones which are the new releases. Interestingly, in Australia, we've always gone with the paperback see format, you might see a hardcover on some authors. But in America and England, it's always going live with a hardcover first. And that's because
like, I believe New York Times and all that sort of thing, I only use the hardcover. That's That's true.
That's not true. It's true, but not true. The reason why it's true is that Americans always go with the hardcover first. And then I go with the paperback, and because of that, it's a new book. And so therefore, yes, it's only going with a hardcover because it's a new book. They don't do paperback first editions for the big authors, which is really who's gonna make a New York Times bestseller?
Yeah. What about the rankings because, say, for instance, this seems to be very common now, where authors will say, Hey, we're launching the book. If you buy five copies, you get a webinar. 10 copies. Please send you some stickers. What does that do to the industry? That's,
that's a really, really good question. Because what happened was, how much power we got a minute. Yeah.
Scott, yeah, you've got that one out. Yeah, exactly.
So what happened was in 2016, so just over three years ago, we got a call from Scott Pape. And he said, I've got a new book coming out ever written a book a number of years. It's called the Barefoot investor. And what I want to do is I've got 140,000 people on my following in my email database, I'm going to send an email to them to say that I've got a book coming out. And if you buy the book, as a pre order, from book topia, you're going to get a link to a one hour video session normally valued at $199. And you get it as part of purchasing the book. So we said yeah, yeah, sure, we'll get involved. But it was Christmas november of 2016. And it was a Saturday Sunday that the emails was going was going out. So I logged in on the Saturday evening nine o'clock It was Christmas how sales going? And I'm best ever day I think onClick frenzy was like five or 6000 orders and I log on at nine o'clock at night and we're at $10,000 for the day or bring up my it guys. Let's say guys were being hacked. And, and so they go hard It really and they get login. They log into the system. They go now it's a book called The barefoot investor. I yeah, that's right. We did that deal. Yeah. Okay, fair enough. We did 23,000 pre orders over that weekend. Wow. And so he knew what to do. He could have said to john Wiley, the publisher, you I will send the emails to you. I'll send everyone to you. You can fulfil them individually. But that meant he knew that it wouldn't go through a bookstore which men wouldn't make the New York And book scan results which would meet make it a best seller. So authors that think they can just, you know, get the kids together and pack them with themselves are doing themselves a disservice because it doesn't make the best selling list. It doesn't get counted. It hasn't gone through a store. So he and he knew how to game the system. So, two weeks later, when the books came in, we pack them ship them within 24 hours to the 23,000 people. We said nothing. Scott Pape said nothing. And john Wiley said nothing. And on Saturday night, the file gets loaded up to Nielsen book scan of all your sales for the week from all the different stores around Australia and, and, and so forth. And so I had during Nielsen books and say guys, you're going to get a file on Saturday night. It's true. The book is called barefoot investor by Scott Pape. He did this. We have sent them out. They are all individual orders. Okay, great. So the next week the results come out. Right and it's 23,000 we had 98.5% market share. Wow. And, and it was, of course a massive bestseller and everyone in the industry goes. Like no one had any idea that this book was coming out and the bookstores didn't really have an idea either. So we were helping him, propel him into being the number one. And he was number one because then john Wiley went out said, Guys, it's a massive bestseller. You didn't get enough. And then he kept promoting it and it just kept selling. So sort of a self fulfilling prophecy
tribesmen and everyone's got orange card buckets down in the garage, you know.
And so so what happened was, last year when I was going to the book fair, I had one of the publishers on the plane sitting next to me and he said, Tony, that day in 2016, change the landscape of publishing in Australia, because we saw for the very first time what pre orders can do. So this is what getting back to what you asked him before that obviously people offering things is that because, like for example, last year Book of the Year, Was boy swallows Universe by Trent Dalton. In in the top six books, three of them were debut authors and we hadn't made them based on our sales loading up on that Saturday night that that accumulation of orders over many, many months in Scotts case was just two weeks. But quite often we're promoting books for many months, this is a really great book, you should get it. It's amazing a debut author, it's incredible. Like, it all goes into the sales for the one week. So even though you're selling, selling, selling for a long period of time, it only gets added up on that week, which can make it a best seller. So if you've got incentives, I'm going to give you a like a, there's a special letter that was written by one of the characters to one of the other characters and if you buy the book here as a pre order one, you'll get access to that special PDF, whatever you can do, to give people an incentive to get more than the value of the book and it doesn't cost you much do it. Get your sales because then it becomes a best seller which becomes self wants a self fulfilling prophecy but it helps you launch it. And Scott paid really knew how to game that system. So the more that authors understand All right, that's how it works. Okay, I've got to do something I've got to create something of value that will maximise It is really, really important and
that's what I guess we're saying now with all the publishers are going to YouTubers and different content creators and saying, hey, like, let's let's do a deal because there's huge audiences that these people have that and I guess, therefore was a big, big part of pipey.
Yeah. Tony, thanks for coming on the show. Definitely would love to have you back on it was good fun to daily talk show. If you enjoyed the show. Feel free to give us a review on Apple podcasts. Otherwise, see tomorrow. See ya