How Our Book Publishing Services Marketplace Hit $1M/Month In Gross Merchandise Value

$1M
revenue/mo
4
Founders
17
Employees
product
Reedsy
from London
started June 2014
$1,000,000
revenue/mo
4
Founders
17
Employees
8.71K
alexa rank
36.5K
followers
37.1K
followers
market size
$110B
avg revenue (monthly)
$1.08M
starting costs
$26.9K
gross margin
10%
time to build
9 months
average product price
$16
growth channels
Word of mouth
business model
Consulting
best tools
Ahrefs, Upwork, Airtable
time investment
Full time
pros & cons
23 Pros & Cons
tips
12 Tips
Discover what tools Ricardo reccommends to grow your business!
Discover what books Ricardo reccommends to grow your business!
Start A Publishing Business

Hello! Who are you and what business did you start?

Hello! I’m Ricardo Fayet, one of the four founders and the Chief Marketing Officer of Reedsy. First and foremost, Reedsy is a marketplace connecting authors (or anyone looking to publish a book) with all the people they’ll need to prepare, publish, and market that book successfully — think editors, proofreaders, cover designers, illustrators, ghostwriters, book marketers, and even literary translators.

Since starting in 2014, the marketplace has become home to over 1,500 vetted freelance professionals and close to a million authors, driving 1,000+ projects every month with a GMV of over $1m.

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value

What's your backstory and how did you come up with the idea?

I didn’t come up with the idea — my co-founder, a long-time friend, and Reedsy CEO Emmanuel did. He first mentioned it to me during university, and out of all the (many) startup ideas I’d heard by that point, it was the only one I found really promising.

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value
Emmanuel and me celebrating some of the early Reedsy success stories

This was in part because it tackled a specific industry: book publishing. But more importantly, it leveraged two exciting trends: on one hand, the exponential growth of self-publishing, and on the other, the growing freelance economy movement in traditional publishing — which at the time, was already driving many talented editors and literary professionals out of in-house jobs. Building an online marketplace to unite them made perfect sense.

However, we had next to no experience and little knowledge of the publishing industry. So our first move to validate the idea was to talk to as many authors, editors, agents, publishers, and “industry experts” as we could. Connecting with these people through a half-formed idea was actually easier than we thought: since we didn’t have anything to “sell” them, they were very open to discussing our idea and helping us shape it.

Several of them have since become good friends and even power users of the Reedsy Marketplace. Indeed, one of the key learning points from our early conversations was that for our Marketplace to be successful, we needed to rigorously curate it, i.e. only allow the cream of the crop in terms of freelancers.

Around the same time, we started building our core team and brought on two other co-founders: an amazing designer, Matt, and an equally amazing CTO, Vincent. We were lucky enough to find them simply by scouring the Internet and posting on forums. Most of us were still in university at the time, so we were pretty much broke — which is why our next step was to look for funding to build an MVP.

Take us through the process of designing, prototyping, and manufacturing your first product.

Since we didn’t really have the resources to do more on our own, we began by building a simple landing page explaining the idea, along with a signup form to record interest. This allowed us to build a small list of 2,000 people to leverage for fundraising.

Our biggest missed opportunity was not thinking about SEO on the Reedsy blog until a year or two after we’d started it. We were effectively wasting time and money producing blog posts that very few people would read.

Meanwhile, Emmanuel and Matt started working to create mockups of the MVP: the Marketplace, the freelancer profiles, the form for price quotes, the collaboration interface, etc. This allowed us to show our vision both to potential investors and to the industry experts we’d interviewed so far, to “keep them warm” as well as get their feedback on it.

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value
When you spend too many hours designing at night

Describe the process of launching the business.

A pivotal moment in our early days was when we managed to secure pre-seed funding through Seedcamp. This was probably the best decision/achievement ever for us in terms of funding, as their mentorship and network of investors paved the way for our future seed round.

This mini-round allowed Emmanuel, Matt, and I to move to a London flat and start working (and living) together. We were also able to release an MVP that would generate enough traction for us to raise a proper seed round. This period was obviously super intense, but equally exciting and ultimately invaluable to us building and releasing a beautiful, fully operative marketplace in just six months.

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value
When you’re going to spend 90% of your non-sleeping time working, you might as well do it with a nice view.

We didn’t know much about marketing back then, so there are now many things about our initial launch that I’d do differently in terms of lead acquisition. But from a product perspective, we launched in several solid stages:

  • First, we released a very simple version of the website, meant exclusively for freelancers to fill in their profiles. This was a way for us to grow the supply side of our marketplace before opening it to the demand (authors);
  • A month later, we released the marketplace itself, opening it to authors and allowing them to message the freelancers they were interested in — but without the in-built payment or collaboration tools, meaning we didn’t make any money yet;
  • Finally, a couple of months later, we released the quoting, collaboration, and payment interfaces, and started seeing our first projects on the platform.

This multi-stage launch somewhat diluted the PR and buzz we could have gotten with a single launch, but it allowed us to improve quickly and make sure everything we released was working properly.

Since launch, what has worked to attract and retain customers?

It took us a few years to really nail customer acquisition and growth on the author side. I think our biggest missed opportunity was not thinking about SEO on the Reedsy blog until a year or two after we’d started it. We were effectively wasting time and money producing blog posts that very few people would read, despite us (in retrospect, a bit spammily) sharing them in a bunch of Facebook, Goodreads, and LinkedIn groups.

At some point, we came across a great blog post about skyscraper SEO, and we decided to try it. Since we’d already had a bunch of quotes go through our system, we made our data public in a post on “how much does it cost to self-publish a book?”. We built a bunch of backlinks to it through sharing an infographic, manual outreach, and guest posting, and quickly saw it rise to the top 3 for most of its target keywords.

We repeated the operation with several other topics, observed great success, and eventually concluded that every single post on the Reedsy blog should be for SEO purposes. To organize our efforts, I built a mammoth keyword research spreadsheet listing every single topic we could cover, and ordered it by “traffic/competition” score — allowing us to immediately target “low-hanging fruit” keywords.

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value
Small excerpt from our keyword research spreadsheet

You can see the results of our efforts over the past few years in the graph below:

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value
Reedsy organic traffic - Source: Ahrefs

SEO is definitely the main channel responsible for our growth now, though affiliate marketing, paid SEM, and display retargeting also play important roles. Once you have the kind of traffic we get, running retargeting ads is both cheap and effective.

How are you doing today and what does the future look like?

Right now, the company is profitable. We’ve experienced huge growth during 2020 — the result of both our own efforts and the global pandemic and lockdowns, which have driven many people to start writing again and invest in their books.

In 2020, the number of quote requests (our North Star metric) on the Marketplace has grown over 65% from 2019, and signups have grown over 140%:

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value

Of course, with the growth in terms of demand, we’ve had to work equally hard on growing our supply — our network of vetted freelancers. We now have over 1,500 verified freelancers on Reedsy (handpicked out of over 50,000 applicants).

The great thing about a marketplace is that you can keep adding services and segments, as long as they’re relevant. Over the past two years, we’ve added author website designers and literary translators, and are now working on adding audiobook narrators and editors/masterers.

You don’t want to rely on third-party software. Our email open rate increased by over 30% since dropping MailChimp, and our blog is 2x faster since dropping WordPress.

Through starting the business, have you learned anything particularly helpful or advantageous?

We learn something new pretty much every week! But if I had to highlight a few key personal learning points from my experience at Reedsy:

You want a web designer among your founders. Many entrepreneurs think they don’t need a full-time designer, never mind as a co-founder. I couldn’t disagree more. Our designer Matt’s work is one of the main reasons for Reedsy’s success. I can’t emphasize enough the importance of a beautiful, clean UI and the great first impression it makes on prospective clients. But it goes beyond that: pitch decks, blog illustrations, exit popups, emails, ads, everything needs designing.

You want to meet people in person. One of the first marketing channels we tried was conferences: sponsoring, attending, and offering a coupon code to track conversions. I believe that getting in the conference game early was key to Reedsy’s reputation and future success. Face-to-face meetings (often at the bar) allow you to make much more meaningful and long-lasting connections than over email, and I’m now friends (or at least acquaintances) with most of the “influencers” in our industry.

Similarly, while the company is fully remote, with employees and contractors all over the world, we do our best (in nonpandemic times) to bring them all together once a year for “Reedski”.

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value
Vincent, Savannah, Felicia, and Tiago at Reedski 2019

You don’t want to rely on third-party software. Do you know what WordPress, Intercom, and MailChimp have in common? They’re all pieces of third-party software that we dropped. Instead, we built our own Reedsy CMS and our own email marketing service.

Establish some thought leadership in your niche before launching your first product. We struggled to get Reedsy recognized in the beginning because we had little experience and visibility in the industry.

Why follow in our stead? Because these services are not only expensive, they’re also not custom-built for you; they’ll always lack one or two important features that you need. Even more concerningly, they can change pricing or features at any point, leaving you in a world of debt/trouble. Of course, we still rely on other third-party services, but building our own platforms for these crucial functions was one of the best things we ever did: our email open rate increased by over 30% since dropping MailChimp, and our blog is 2x faster since dropping WordPress.

What platform/tools do you use for your business?

As mentioned above, we don’t like relying on third-party tools when we can build something better on our own. That said, we do rely on Gsuite, Basecamp, and Slack for organization and remote working collaboration, and on Stripe Connect for Marketplace payment processing.

For analytics, we recently implemented the Google Tag Manager which enables us to group and organize all our third-party tracking (Facebook, Google, Bing, LinkedIn, etc.), and we also find Google Data Studio particularly useful for visualizing data (both collected by Google and/or pushed from our own database)

Finally, we use MailShake for outreach, Hootsuite for social media scheduling, Crisp for customer support, GitHub for development, and Marvel for UX design.

What have been the most influential books, podcasts, or other resources?

Justin Mares’ and Gabriel Weinberg’s Traction: How Any Startup Can Achieve Explosive Customer Growth was one of the most useful marketing books I read. It’s a bit outdated now in terms of the channels explored in the book, but the main principle still holds true.

Other than that, I much prefer reading fiction to non-fiction, and find that you can gather just as much inspiration and learning points from it. For example, if you’re just starting out and feeling the stress, or if you’re close to burning out, Eliot Peper’s Uncommon Stock series provides both a great escape as well as relatable insight into the struggles of entrepreneurship.

Advice for other entrepreneurs who want to get started or are just starting?

This will echo my advice on adding a web designer to your founding team, but to extend it, I’d say the most important thing when starting out is to ensure all the skills that will be vital to the company’s eventual success are present in your founding team. I know it can be tempting to rely on freelancers or agencies, to be more cost-effective and remain the sole founder/owner, but certain skills are just too important to outsource. Identify those skills (e.g. engineering, design, and marketing/operations) and make sure they’re covered by your founding team.

Another tip would be to establish some thought leadership in your niche before launching your first product. We struggled to get Reedsy recognized in the beginning because we had little experience and visibility in the industry. Now, after speaking at dozens of conferences and starting a free weekly newsletter on book marketing, I’m preparing to release my first book. There’s nothing better for thought leadership than a book, so if you’re struggling to get the business started or raise funds, why not publish a book to raise your profile in the meantime?

Finally, don’t forget to celebrate your successes! It’s actually something we could be better at Reedsy, but one memorable thing we did is: when an Italian author sent us a nice bottle of Barolo to thank us for helping her publish, translate and market her book, we kept it until we hit the $500k GMV milestone, and opened it then!

how-our-book-publishing-services-marketplace-hit-1m-month-in-gross-merchandise-value

Are you looking to hire for certain positions right now?

We’re always looking to add new people to the team (“always be hiring!”), mostly for content marketing and website development positions. You can find all our available positions and apply to them on AngelList.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Ricardo Fayet,   Founder of Reedsy
Pat Walls,  Founder of Starter Story

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Tracy Stanley
6 months ago

Many thanks for publishing such a valuable startup success story. Appreciated the insights from Ricardo Fayet of Reedsy on using your own tools, making sure you have the right skills in the team and leveraging SEO.

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