ETEC 522 – May 2012

David Vogt 7:47 am on May 6, 2012

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  vawells 7:28 am on May 21, 2012 Permalink | Log in to Reply

  Yes I would invest in this venture at this time. Sue Heilbroner, the CEO, is likable and confident. The proposition has the potential to be successful and I believe the risk for failure is very low. The pitch is credible, concept is feasible and the potential market is there for this venture to be successful.
  Credibility:
  The pitch given by Sue Heilbronner for WeBook, a digital publishing platform for user generated books, is delivered confidently and with conviction. In the pitch she compares WeBook to well known, successful ventures such as Wikipedia, eBay and Linux and in so doing portrays the sense that this is a venture capable of success. During the 56 second pitch Heilbronner presents much factual information and clearly exudes the confidence and capability necessary to achieve success.
  Management Team:
  Other than the frequent use of the word “we” and a quick reference to a project leader there is little actual evidence of a team. However Heilbronner clearly references the digital publishing platform necessary to access WeBook and references their current book projects base.
  Concept:
  The idea is feasible and probably original in 2008. Heilbronner appears to have done the research necessary to be knowledgeable about market share and WeBook’s growth potential. The story is credible and her pitch compelling.
  Opportunity:
  According to Heilbronner, WeBooks is tapping into millions of aspiring writers who do not have access to the closed publishing market. I believe that there is a realistic market for this service, (although I’m not sure millions of aspiring writers is realistic) and that it has the potential to corner a piece of the 50 billion dollar publishing market.
  Competition:
  Heilbronner does not identify any competitors in the pitch. However the idea of user generated books, opportunity for collaboration, immediate feedback, participation by the community writers and the 50 / 50 profit share of book sales for writers/contributors and WeBook of published WeBooks gives this company a competitive edge.
  Market Readiness:
  I think the proposition is realistic and has the potential to be successful over time.
  Exit Strategy:
  Heilbronner clearly defines the destination and what the success of WeBook looks like. As an EVA I am ready to invest in this proposition.

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  Meggan Crawford 10:03 pm on May 23, 2012 Permalink | Log in to Reply

  No, as an EVA I am not willing to invest in this proposition without further information.

  CEO & Team: Although the woman giving the presentation, Sue Heilbronner, appears confident, knowledgeable and likable, she is also giving irrelevant information that makes it seem as though her company has accomplished more than it has. By saying that WeBooks wants to do for publishing what ebay did for commerce, etc. she is planting the idea that her company is at the same level as those, which it is not yet. This information suggests her company has done more than it has in reality, which can be misleading. As well, apart from using “we” in the presentation she does not identify a leadership team that will be supporting the venture.

  Venture Concept:The idea of online publishing in general is not new – there are some people who believe that everything shared online is a form of publication. Perhaps WeBooks is formalizing this idea, but the general concept is not new. As well, the phrasing of Sue’s pitch could be misleading as it suggests publication as “webooks”, which are, presumably, like ebooks. Some people may be confused by this unexplained term – does it mean publication in a ‘real’ book or a virtual one? If it is a virtual book, what makes this site different from other peer edited sites?

  Marketability: A lot of people believe themselves to be writers worthy of publication. This does not mean, however, that their writing is automatically of high enough quality. Sue explains that the works will be voted on by the community – does this mean that anyone can vote or are their requirements for who may vote/edit? As well, where does the revenue come from – she says that Authors and Major Contributors will get a 50/50 share of the profits – what is the base cost of this publication – is that where WeBooks will make its money?

  Venture Plan: My largest concern with Sue’s venture plan was her end goal. The idea of overthrowing the entire publishing industry with one site is extremely ambitious and is not likely to be achievable anytime in the near future, particularly when there is competition from larger established companies like amazon and Barnes and Noble.

  Overall, I like the idea of an online publication company that is more accessible to your ‘average’ writer, but I am left with too many questions after viewing the pitch to feel comfortable joining the venture.

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  Kenton Hemsing 12:24 pm on May 25, 2012 Permalink | Log in to Reply

  No, I would not invest in WeBook. I feel that there are too many questions left unanswered about how I, as an investor, would make money on this investment.

  Although there is a niche in the market for an alternative publishing source, I feel that there are too many underlying costs to the user of the product that will in fact deter many from using the system to publish their work.
  • Pain Point: It is true that it is very difficult for people to work their way into the publishing market and this organization will aim at helping the average writer to make the jump into the published author realm.
  • Solution: The organization allows writer to create, edit and review works in order to help them increase their chances of being published.
  • Differentiation: Hobbyist writers might want to use this service to help publish their own material.
  • Marketing: Users will need to seek out the company and no mention of advertising was mentioned.
  • The Return: it seems that investors will not be making money until the books become sellers, even then, there is no mention of what this projected amount per published book will be. Also, there is no mention of what the overhead that will be for the company.

  1. CEO & Team:
  • CEO Credibility: The CEO is passionate, but provides little information about how the company was started and what her role will be onward, and why this venture is important to her.
  • Management Team: No mention of any other management systems that are in place to help ensure success in the company.

  2. Venture Concept:
  • Venture Concept: The concept is good, but a little research shows that the service is not free for authors, as the initial elevator pitch made me think. This causes some issues for me as authors are charged nearly $10 to submit their initial first page of the manuscript. Many people will do this and never get their books written or published. This may lead to limited use of the service and therefore limited returns for myself as an investor.

  3. Marketability:
  • Opportunity Space: The possible market share is quite possibly large, however, worry can be though up that the company will become another large publishing company, or in the reverse, become a novelty and never really gain industry respect for the work that they do.
  • Competitive Edge: Searching the internet you are able to find several websites that are dedicated to helping would be authors to create and submit their work to publishers or journals. WeBook may have had an advantage when it was founded in 2008, but since has began charging clients to use AgentInBox, which was a free service, to receive feedback about their writing. Again, this is another deterrent to would be customers and could have a negative effect on profitability.

  4. Venture Plan:
  • Market Readiness: To compete with large publishing companies will be difficult and the task set out by the company is no small feat. Many companies have tried for a very long time to carve themselves a market share and WeBook will need not only a long term plan, but also a little luck to make it happen.
  • Exit Strategy: Their destination is not really clear. From the pitch, they want to offer their service and have the large publishing companies topple as their company prospers. In reality, many have tried and many have failed to compete with the large publishing companies. I feel that WeBooks would be better off if their goal was to gain market credibility and increase their market share rather than think of themselves as revolutionary.
  • Investor Affinity: For me, this investment will be too risky. I don’t feel that there is a sure fire way that the company will make millions of dollars and I will be able to make money on this investment.

  • Looking at a breakdown of profits and costs for books in the traditional publishing market an author makes about 3 dollars profit. That means for me as an investor I too would receive about 3 dollars a book. Printing, storage and shipping works out to another 3 to 4 dollars per book, while advertising and marketing will run about 1 – 2 dollars per book, editing and typesetting will run about 1 dollar per book, and the publishing company will make about 4 dollars for each book. (Source: http://p.printingchoice.com/e-books-vs-real-books/)

  • This will give a grand total of: $17 before the book sellers add on any markup to make their profit. Assuming a mild 50% markup, the total for each book would have to be about $25.50. Not underselling the major publishing companies prices for books.

  • It seems that WeBook.com passes these extra costs onto the authors by charging for their services, which means the authors are paying more to get themselves published. Perhaps, WeBook would be better off to attempt to break into eBook publishing to cut the cost of production and the amount that its users are charged and minimizing overhead cost for production.

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    karonw 12:26 pm on May 26, 2012 Permalink | Log in to Reply

    Hi Kenton,

    Wow, good job on the analysis! It is really well laid out and detailed! Your profit breakdown really helped me in visualizing this venture even better.I agree with you and I won’t be interested in investing in this venture as well. I do like the venture concept itself however like you said it seems like they lacked in presenting the exit strategy. You stated ” I feel that WeBooks would be better off if their goal was to gain market credibility and increase their market share rather than think of themselves as revolutionary”, and I couldn’t agree more on this I think when new products come out they should always test their marketability and try to gain credibility before anything else otherwise they might just lead themselves to a big deficit at the end.

    Keep up the good work.

    Karon

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  Jody McKinnon 5:51 pm on May 27, 2012 Permalink | Log in to Reply

  Upon viewing this pitch, no I would not invest in this venture. While she appeared very confident about her product, and she established the goals of the company (we want to what…did…for…) seemed very lofty, I fear that the publishing industry is one that is undergoing rapid change to the point where I’d be weary about buying into anything at this time (tough words from someone who is working on a new text and e-text!).

  She makes it seem like there is a giant group of people out there dying to be writers and that somehow her site will make them more successful if they work together. She claims the publishing industry is worth $50 billion. This seems quite high. She makes it sound like a guarantee that by using her site, that you will someone get a piece of that pie. It seems like a pipe dream to me. Like I said earlier, I would weary about using a site like this. The publishing industry is undergoing drastic changes, and when this came out, the iPad or other tablets and e-readers were barely cracking the market place. Also, I’m not sure that if I were a writer, that I would trust my work in the hands of thousands of people that I do not know. Who are these people and what makes them experts? If the people were actually from major publishing companies, then maybe I would want to participate as a writer, but without the credentials, how do I know that this isn’t an operation running off one computer in someone’s basement?

  In the end, while the pitch seemed credible, the woman likable, and the concept somewhat believable, i wouldn’t invest in this one at a time when publishing is so complicated and unstable.