FlatWorld: The Publishing Platform Looking To Rewrite The Rules Of Textbook Economics – Forbes
As the cost of college tuition continues increasing across the country, conversations surrounding reduced funding for education have only escalated exponentially. Due to lack of funding, more institutions are shutting down, cutting programs, or struggling to supply students with adequate resources.
Arguably the most important necessities required for any college student are textbooks. As each semester kicks off and schedules are confirmed, campus bookstores become flooded with students on a search to cross off every book on their mandatory reading list. For students who get a late start or are limited by budget restrictions, online platforms for book sharing and reselling see traffic spike drastically.
Beyond these two groups, there is a massive amount of students forced to be without textbooks, purchase outdated editions, or use throwaway copies. In fact, fewer than 20% of students in Higher Education purchase a new textbook. This number has dropped steadily, as a result of annual price increases pushed through by the big publishers.
With most textbooks priced between $300-400, a good portion of students buying new books are only doing so because major publishers intentionally update editions frequently to constrain the supply of used books. Consequently, 80% of college students have to search for alternatives. Consequently, an abundance of academically gifted students step into the classroom unprepared and unequipped to win. Noticing the need to make textbooks both affordable and accessible to students regardless of circumstance, one startup set out on a mission to redesign the industry.
Founded in 2007, FlatWorld provides real-world solutions for reducing the price of education by significantly cutting the cost of textbooks for students, while also providing a robust digital publishing platform for writers and subject experts to post their works at a fraction of the typical cost.
Although their model is digital-first, their platform still supports traditional colleges and universities that prefer print. With hopes of flattening out the publishing industry, the company isn’t aiming to tread against the existing system, but instead set on balancing the scales and introducing new ideas for the future.
I spoke with FlatWorld Co-CEO Alastair Adam about the vision behind his company, disrupting the publishing industry, and his plans to make new textbooks and teachings accessible to students everywhere.
What have been some of the biggest blindspots or pitfalls plaguing the space and how does your company aim to solve for them?
Alastair Adam: The education publishing industry was lulled into an uncompetitive stupor by over 20 years of price-driven growth and high margins. It was then seduced into believing technology provided the remedy to recapturing the dollars lost to the used and rental book markets. That’s inculcated it with a ‘digital is good, but print is bad’ mantra, blinkered to the real issue, which is the inflated price of the product. To us, focusing solely on digital solutions as the answer to the industry’s woes is like trying to fix high airfares by investing in flying cars. Technology does play a role, but as an enabler, not an end in of itself. We are a digital-first publisher, meaning that all our books are developed digitally, then rendered to the appropriate format – downloadable ePub or PDF, HTML for web-display – or sent to a third party printer to fulfill on-demand printing and shipping of a bound, color textbook to the student. But, we are media agnostic. Some students prefer the searchability and portability of digital, while some would also like to be able to study at home, armed with a highlighter and a printed book. We want to make it easy to do both, letting the student choose the format that is most convenient for them, not the format chosen by Wall Street’s appetite for digital conversion statistics.
What was your vision upon stepping in and taking over the leadership role and how have you seen the company evolve since implementing that vision?
Alastair Adam: Our vision was to use FlatWorld as a platform to accelerate our disruption of the Higher Education textbook market. We’ve spent the past year rebuilding the leadership team, working through the long list of deferred maintenance and returning the business to growth. We’ve grown from the handful of people who came across at the acquisition, to a team of over 30. We’re expanding our roster of authors and looking to grow our list of titles by 25% a year. We are in the process of hiring 12 new field sales reps.
What have been some of the challenges you’ve faced during the process of building your business?
Alastair Adam: Prior to our acquisition last year, FlatWorld had been through several years of under-investment and deferred maintenance, as the venture backers focused on pivoting to a competency-based learning platform. When we stepped in, there was no marketing team, no field sales force and one person valiantly juggling the entire IT system. But, just like a great house that needs renovation, the foundations and bones were terrific. The biggest challenge was persuading the talented leadership team that we’ve brought on board that this wasn’t a completely crazy career move. Imagine, as an example, the conversation when we approached our VP of Strategy and Marketing, Corey Lewis, with her background as part of the craft beer success story, to make the pitch that she should move into textbooks.
Describe your business model and how your company is reinventing the publishing space?
Alastair Adam: Our mantra is that education is expensive, but textbooks don’t have to be. We believe that professors are at the heart of the learning process. By making textbooks affordable again, we are seeking to leverage their time and knowledge, rather than looking to disintermediate them. The stratospheric price of textbooks is unique to the US market. It didn’t use to be that way, and it doesn’t need to be that way. Just as Southwest, JetBlue, and others disrupted the airline industry, we are disrupting the higher education textbook market. And just like Southwest, the difference is in the details – disrupting the industry by reinventing the business model and the details, not the fundamental concept. As one small example, all of our books are developed with the same layout and, for printed books, we use the same size and quality of paper. That might seem trivial – until you see all the cost and complexity associated with a legacy of developing and composing everything in different formats, which is hard to unwind. Likewise, we print books on demand and ship direct to the student. Which makes sense – unless your business model is already geared to filling warehouses with books, shipping to bookstores and then handling the huge, wasteful volume of returned books that come flooding back after the start of the semester. Again, back to the airlines – which found it very hard to compete with the low-cost model. Anyone remember Delta’s Song or British Airways’ Go?
What are the keys to your company being both successful and sustainable?
Alastair Adam: We need to keep focused and keep it simple. The value in textbooks is in leveraging the professor’s time and expertise, so we need to stay true to that. Focus on the basics, don’t get diverted by the extraneous bells and whistles that end up complicating things unnecessarily. Google’s home page, not Yahoo!’s. Toyota, not Lamborghini. But not Yugo either. Make it easy for authors, for professors, for students to do business with us.
How do you see your company evolving in the next 3-5 years and what impact do you hope to make on the industry?
Alastair Adam: The industry, which we know well from our consulting days, is in turmoil, completely inwardly focused. A never-ending stream of earnings misses from one, bankers running another, Private Equity trying to exit, but with a stalled IPO, for a third and drawn out CEO search underway for the fourth. So a perfect time for a disruptor. We are on a mission. We are aggressively investing in the basics: product, marketing, sales. Success for our competitors is about defending their existing revenues. Success for us is about putting professors back at the center of the learning process, making textbooks affordable for students and rewarding authors fairly. If we can do that, we will see continued rapid growth in adoptions of our books, new sales and in market share. And, above all, growth in the percentage of students who come to class with a new, high quality textbook.