Company: Cedar Books/BookWitty
Founder: Cyril Hadji-Thomas and Sany Naufal
Capital raised: $1 million investment from Bader
The Internet, it is widely believed, is killing the local bookstore. Across the world independent retailers are going bust as customers turn to Amazon to save a few dollars per purchase. In the United Kingdom alone the number of bookstores has fallen by over half in the last seven years.
Much of the problem is efficiency. Bookstores, particularly independent ones with their high rental costs and low turnovers, cannot compete with the infinite number of sellers online. So while they may be run by people with real expertise and specialist knowledge, they lack infrastructure to enable them to utilize that knowledge.
Hadji-Thomas (L) and Naufal formed Cedar Books in 2007
Cyril Hadji-Thomas and his co-founder Sany Naufal want to help them with that infrastructure. They have already established Cedar Books — a book distribution company focusing on less common books with annual revenues of over $12 million last year. Now the two men have set about helping make niche services profitable with the launch of their new venture BookWitty.
The idea — whose name was chosen as it suggests both intelligence and ubiquity — is, as Hadji-Thomas says, simply “a network of people that are interested in books.” The aim is to allow people, including bloggers, booksellers and experts, to use the Internet to debate, discuss and sell books.
Say, for example, you run a philosophy blog. If you are discussing good philosophical books online within a community, it would make sense to be able to sell the product directly. BookWitty enables you to install basic features to your site so you can do so, with the product being sourced and delivered by Cedar Books. The blogger then gets 10 to 12 percent of the cost — around triple that of Amazon affiliates.
How does that save small bookstores? Well it doesn’t directly. But it enables independent booksellers to utilize their wealth of knowledge on the topic to reach out to customers globally, without having to worry about the logistics. “Books are the heart of knowledge and wherever we have people that are exploring their hobbies we bring the whole logistic part — which no one knows how to do perfectly — and they can concentrate on what they want,” Hadji-Thomas says.
The company, though run by two French-Lebanese men, is actually registered in numerous companies and BookWitty’s testing phase is largely occurring in the United States. Among the first groups they are working with is Green Street Books (http://greenstreetbooks.org/) — a San Francisco-based charity that sell books online. “They use books from the local communities and sell them online and give back some of the money to local charities — it can be helping people to read or planting new trees,” Hadji-Thomas explains.
They will work with the group to create a network of people willing to donate books, both far away and locally. “E-commerce is very useful for something that is very far away but it is also very useful for something that is close to your home that you have no idea about,” he adds.
The company has already been well backed. After discussions with the Middle Eastern Venture Partners, they invested $500,000 from their own fund and another $500,000 from their sister fund Building Block Fund. The $1million total was exchanged for an undisclosed amount of equity, but the money will be used to launch BookWitty. “Most of [the capital] will be invested in servicing booksellers and bloggers on the BookWitty network with software, and e-book, and audio books and proper marketing,” Hadji-Thomas says. The other major shareholders are Levant Distributors and Cyril-Hadji's own company Keeward.
Another major market that BookWitty — and Cedar Books more generally — serve is diaspora communities around the world. They deal with books in numerous languages, arranging shipment at a cheap cost at the expense of Amazon, he explains.
“We are getting the market share of, say, Amazon France selling in the US. If you go on Amazon France you will probably pay a lot of money to have a book delivered to the US.”
“Usually when you want a book and you don’t live in the country you ring your uncle and say: ‘when you come next month please bring this and that,’” Hadji-Thomas explains. “We bypass that by working with local players – so we ship directly to them through the proper channels, but everything is stored where the product came from.”