You don't always need an original idea for a start-up. Canadian residents Rahul Simha and Vishnu Chapalamadugu, along with California-based Mohit Aggarwal, spotted a wheel and concluded they didn't need to reinvent it; all they needed to do was modify it to fit their vehicle.
Last year, the three friends started iDreamBooks. The website, www.idreambooks.com, aggregates book reviews from major publications such as The New York Times, the Wall Street Journal and a number of other media platforms around the world, and assigns ratings to books based on the reviews.
The service is modelled on www.rottentomatoes.com, a well known website that provides a similar service to moviegoers, aggregating film reviews. The founders of iDreamBooks are open about their source of inspiration, even billing their website as a "Rotten Tomatoes for books". In fact, one of the founders of Rotten Tomatoes is an investor in iDreamBooks.
The idea
In an interview, Simha recalled the three founders were big fans of Rotten Tomatoes. Being avid readers, they sought a similar website for books. When they couldn't find one, they decided it was a good service to offer.
iDreamBooks, with its casually chatty slogan - "Never read a crappy book again!" - features between half a dozen and three dozen, sometimes more, critics' reviews for a book, along with readers' comments. The website also assigns a rating for each book. A rating of 70 per cent or more means the book is recommended, and the score is accompanied by a smiling face within a blue cloud, the website's logo. Lower scores are given a sulky-face-within-a-grey-cloud treatment.
Simha says the rating is derived through a combination of automated sentiment analysis and manual curation of professional critics' reviews. He adds the software used for sentiment analysis was partly developed by an in-house team; some of it was secured from available Open Source software and tweaked to the website's needs.
The project started with a couple of thousand titles; now, it covers about 100,000 titles. While critics' reviews are displayed for most books, ratings are available only for about 2,000. A search for Dan Brown's long-awaited thriller Inferno, for instance, reveals only one review and no critic rating, though it was widely reviewed and one of the biggest publications this year. "Scaling up data is our main challenge, ever since we launched. On the business side, we see it as a function of data. So, as we generate more data and it is cleaner and of better quality, everything on the business side becomes easier," Simha says.
Shot in the arm
The initial investment for the venture came from family and friends. Soon, they attracted funding from 500 Startups, a Silicon Valley incubator that invests in early-stage start-ups, providing up to $250,000. iDreamBooks is headquartered on its investor's campus in Mountain View, California. Simha declines to specify the funding his venture has secured so far. He says the company is in talks with other investors for more financing. Currently, the start-up has a staff of five, including the three founders.
In April, the company received a shot in the arm through a deal with Sony ReaderStore. Through an iDreamBooks icon on the Sony e-bookstore page, users can now access critics' reviews and the iDreamBooks rating for the book of their choice. "Sony approached us because they liked what we were doing. It's unique," says Simha.
He adds the partnership would provide the start-up with a revenue stream in the form of an annual fee. It also introduces iDreamBooks to a much larger audience - the universe of Sony e-bookstore users. While this would increase visibility for iDreamBooks, experts caution Sony Reader isn't as popular as the market leader Amazon's Kindle. "The device is quite good, but they keep a low profile and don't seem to innovate anymore. They seem to update long after everyone," says Calvin Reid, senior news editor at Publishers Weekly, a leading trade magazine for the US book publishing industry.
Simha admits Sony's market share is smaller than Amazon's. He, however, points out his company's partnership with Sony isn't an exclusive deal. He says iDreamBooks is also in talks with other book-related sites that could use its service, pointing to Amazon as a potential partner. The start-up sees licensing its data as a major part of its revenue stream, with publishers, retailers, libraries and others into book discovery or book selling as potential clients. "On the consumer side, once we get to scale and have a lot of traffic, we can monetise it through book sales and, maybe, through ads," Simha says.
For now, the founders want to focus on scaling up content and building traffic on their site. "Ten to fifteen thousand books are reviewed by major publications every year. Our goal is to be current with those. Right now, we're current with the best sellers from May 2011 and the Big Six publishing books," says Simha.
Challenges
Building up content is the biggest challenge, as the company can't rely solely on automation for sentiment analysis; the need for manual curation makes the process slow. For instance, the presence of a word such as 'disappointed' in a review may push the book towards a negative rating, which would be misleading if the critic had actually written the reader would not be disappointed. "We've done some work on it, come up with some algorithms to separate that and to come up with accurate sentiment. But we're not satisfied with what we have right now," admits Simha.
To aggregate reviews from various publications more efficiently, the company also wants to build its own crawler. "Right now, we have to query a site with a certain book and if it exists, it gives us a 'yes' or 'no'. But if we have a crawler, it informs us of all the books being talked about on that site. So, that would solve all our problems," he says.
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Expert Take It’s a good idea because they are following the trend of consumption of books in a digital format. Other types of media are well reviewed by different types of sources, whether it’s Netflix or Rotten Tomatoes for movies or iTunes for music downloads. For e-books, there really wasn’t a similar way to judge a book. |
Being part of 500 Startups, they have access to all the mentors. They also have the profile that comes from being part of that programme. They have a big market that doesn’t really have many competitors; there aren’t a lot of rating services for books that have received any sort of widespread adoption.
But they need to have partnerships with books, digital publishers or platforms. It’s a bit of a fragmented market. There are different types of e-book readers — there’s Kindle, there’s Kobo, there’s Nook from Barnes & Noble. So, it might be a good idea to work with one of the big e-book publishers or with traditional retailers still focusing on in-store experience. Another idea is they could start working with a very large platform for people to read the writings of unpublished authors. It’s called Wattpad, a Toronto-based company that has several million users around the world. This is where people can discover the writing of other people who aren’t published, mostly fiction. I recommend they try to work with a company such as Wattpad as a way to build awareness.
Their business model can be applied in many countries; the focus is to build the world’s leading review brand for published work. They’re not trying to dilute it by focusing on other areas. The model of books is a steadily growing and truly international business one.
Sunil Sharma
Managing Director, Extreme Startups, Toronto
Opportunities
The book market in the US, including educational and professional publications, is estimated at $27 billion; e-books account for a fifth of this. "There's a lot of shift and turmoil in publishing, but there's a big move to e-books from physical books. It's actually good for us, because everything is moving to digital and there are more e-books being downloaded," Simha says.
Amazon's recent acquisition of Goodreads, a site that allows book lovers to share opinions and ratings of various titles, has provided a boost to Simha's morale. Amazon was reported to have paid about $120 million for Goodreads.
Publishers Weekly's Reid believes demand could grow for sites such as iDreamBooks, which aid discoverability. "This is the holy grail of bookselling in the digital era. How, in this sea of content, do you come up with something you'd be interested in reading or, on the business side, how do you make your book stand out from somebody else's? These kinds of entities would be valuable to both consumers and the publishing side," he says.
iDreamBooks's traffic isn't anywhere close to that of Goodreads. But if it succeeds in making itself valuable to book readers, it may be equally valuable to booksellers, too.
RATING BOOKS WITH REVIEWS
Product: Aggregate book reviews from major publications; assign book ratings based on reviews; ready reference guide for readers and book buyers.
Investors: Dave McClure, Paul Singh - Partners at 500 Startups; Daniel Hoffer - Mentor at 500 Startups; Patrick Lee - Founder, Rotten Tomatoes; Joshua Greenough.
Revenue strategy: Annual fee from partnership deal with SonyReader e-bookstore; similar deals with other e-booksellers; licensing data to publishers, retailers, libraries, and others with book discovery or book selling functions; monetise user traffic through book sales and advertisements.
Challenges: Visibility and user traffic are still low; scaling up data proving slow because manual curation of reviews is needed alongside automated sentiment analysis; team still working on building a crawler to aggregate reviews more efficiently; need partnerships with services more popular than SonyReader; two founders have to travel frequently to Silicon Valley from Canada as they don't have suitable work visas for the US.
