Booktopia's Tony Nash On Building A Sustainable Business Model

Tony: The Daily Talk Show.

Tommy: It's The Daily Talk Show, episode 618, and a warm welcome to our guest, Tony Nash. Welcome, mate.

Josh: Welcome.

Tony: Thank you.

Josh: Co-founder of Booktopia and CEO.

Tony: Yes.

Josh: So you're, um, based in Sydney. Um, how often are you in Melbourne?

Tony: Maybe half a dozen times a year.

Tommy: Sydney v Melbourne, we always go there.

Josh: Yeah.

Tommy: What do you, what do you think of the, uh, love Melbourne, the great city?

Tony: I love Melbourne, love the architecture, enjoy walking around. Because Sydney has the harbour, it's a little bit like you don't have to put the effort in.

Josh: Yeah.

Tony: And Melbourne does. I love it.

Josh: Where do we put the effort in, do you think? Where do you see it?

Tony: In the buildings, the architecture, the way that people think about the urban planning.

Tommy: What about the coffee, Tony?

Tony: I'm not a big coffee drinker, but It's very good.

Tommy: Yeah, it is good here. What about the bookstores?

Tony: Very good.

Tommy: They're good here, yeah.

Tony: Oh yeah.

Tommy: The Avenue's great. There's some little boutique ones in the city. I actually haven't seen a great deal. Maybe there's one in Bondi. I used to live in Bondi for a period of time. The good old days. Yeah.

Josh: And so where does Booktopia fit in regards to, you know, when people think about e-com, they think, okay, against the bricks and mortar, or you've got the big beasts of things like Amazon And then you've got Booktopia. Where do you see the whole ecosystem?

Tony: I'll answer it this way, oddly. We have got into— so everyone, well, hopefully most people will know us as a book retailer, online book retailer. In the last 3 years, we got into book distribution. So we're now a distributor. Publishers are appointing us as their representative in Australia, which is great. Then in the last 6 months, we've got into publishing. So actually publishing books, and we're going out and winning the rights to be the publisher printing them in Australia. And the first deal that we did was with, uh, was for a club edition by a woman by the name of Patricia Cornwall, who's a very famous crime writer. And so the deal was done actually with Amazon. They had won the rights or pinched her from her traditional publisher and brought her into The Fold. And we did a— we're doing a club edition, just come out in the last couple of weeks. So this is February 2020. And so when I was in Frankfurt for the, for the book fair there, I had a meeting with the lady that I had done the deal with, or my head of publishing had done the deal with. And so we sit down with her and we go, look, you know, you're in America, you're Amazon. Out of curiosity, had you ever heard of Booktopia? Oh yeah, yeah, I heard of Booktopia. Sure. I said, uh, she— and then she goes on, yeah, but before I did my deal with you, I did my research, you know, within Amazon. I spoke to people and they said, yeah, Booktopia, they're the Amazon of Australia. And I must have had a bit of a, you know, odd look on my face right when she said that. She goes, oh, I don't mean that in a bad way.

Tommy: So is it a compliment?

Tony: I mean, very much so.

Tommy: Yeah, I think it's a compliment. What was your face looking like?

Tony: Yeah, it was more like— it was more like I guess we're much in the global space. When you ask the question, you know, where do we fit in, in the global space in books, we are very much known. And that what we do and how we've become so big in the rest of the world where Amazon has completely dominated, most countries just scratch their head and go, how come we don't have one of those? So in book retailing, we're going to do around $170 mil in in revenue this year, which puts us on par with the number one book retailer in Australia. Do you know who that is?

Tommy: No, no idea. It's not Borders.

Tony: They're done.

Josh: Big W. Oh yeah. Well, they seem to do a small selection, but then they just slam the prices. So like the Barefoot will be like 5 bucks, I think at one point. They give you 5 bucks. It's amazing.

Tommy: Yeah. Splurge though, Josh.

Tony: That's a really important thing to understand. So what What Big W, Kmart, and Target do is they use books as bait to get people into the store. So it's a commodity that people want. They actually used to have them at the front of the store, heavily discounted, almost at the cost price, just a little over. And then what, what happened as the rats were trained in the maze, they moved them to the back of the store. So people would come in, where are your books? Are there at the back? And so when they were leaving, of course, they picked up the you know, pyjamas and the t-shirts.

Tommy: It's always some chocolates from that joint. Like they've got all the novelty size.

Tony: Yeah.

Tommy: In perspective, the 170 million equates to a book every 6 seconds. Is it, or is that lower now?

Tony: It's getting lower. Wow. Yeah, it's getting lower.

Tommy: Well, I saw it at 8 seconds. And so that means, so that's meaning that you're sending or someone is purchasing through the store a book. It's good that there's a lot of people buying books.

Tony: Yeah.

Tommy: Smarter people, hopefully.

Josh: Hopefully.

Tony: And they have a lot of picture books if you're interested.

Tommy: Oh, you do? Well, I've got a child, so. Yeah.

Josh: Makes sense. I love, I love books. I don't necessarily read that many every year, but I'm someone who buys books and then puts them on the shelf.

Tommy: You keep Tony in business, Josh.

Josh: I guess like, yeah, I wonder like, where do you see, like, have you seen any sort of interesting trends in regards to how, why people are buying books? And is that even like something that Booktopia would look at is like qualitative research?

Tony: We had to— there's a lot of ways I could answer that. So, but I had to, feels like about 8 years ago, for one of Australia's richest people, needed to fulfil a book order. It was around $40 grand of books that needed to be coffee table, was going to go into a certain room. And the designer that was kind of building the house or helping design the house came with me through the warehouse and we just had to pick certain spines of certain colours and didn't matter, you know, what was the content, but it needed to be something in more peach. Um, there's a little aqua that we— I mean, this one. And so, so that's one reason. One of the guys that worked for me for many years used to be a secondhand book retailer And guys would come into his bookshop and say, look, um, I, I need some books on my shelf. I've just moved into apartment and, you know, I want to get laid. So what books could I have on my shelves to impress women so they would think, hmm, he's quite cultured?

Tommy: What was that? Think and Grow Rich. I mean, so he's got his finance sorted. And then cookbooks because he knows how to, you know, What did you go with? What was the—

Tony: Oh, for the richest—

Tommy: Oh no, the title's for the person that wanted to get laid.

Tony: I never was in—

Tommy: Oh, you didn't?

Tony: So that was, that was a historic— That was historic. So the guy joined me after he got out of his secondhand bookstore.

Josh: Yes.

Tony: I'm sure it happens. We don't have any like, you know, quick, quick reference searches.

Josh: That could be a category that could be like getting laid and it could be sort of the, the ones to look smart. But you could be like, oh, you know, socially, I'm a bit socially conscious.

Tony: I think today, yeah, women can see right through that.

Tommy: Oh yeah.

Tony: And, uh, you're gonna be completely stuck. Like, good, good luck. Um, so look, there's a lot of— um, people think about books and they don't realise the range. Um, so they might think of the fiction, they might think of bestsellers, um, biographies, but we are selling books on so many interesting categories that just are under the radar. So if you want to become an Australian police officer, there's books around that. If you, if you're into fishing, crocheting, if you're into motorsports, your favourite footy team, like, there's just so many ways that people kind of buy the content, which is, you know, a, you know, a hardcover or a softcover around the outside, pages in the middle. But there's just, there's so many different ways that people will engage with that kind of device.

Tommy: What excites me is knowing that something like an online book retailer has a lot more access to data. So a bookstore is selling stuff and they're seeing sales go through, but I could imagine you were able to see trends through your analytics about what people are buying, what things are in vogue at the moment. What, what have you seen? What are the trends been over the years that have excited you in seeing the data on?

Tony: I'll start with one of the very first ones that gave me a huge insight to the opportunity and why Booktopia grew for so long. We, we were selling a lot of romance titles and it was kind of before ebooks were really taking off and they had like covers with, you know, a bare-chested guy in a kilt in the Scottish Highlands, which most bookstore owners would be embarrassed at. They'd never read that in a million years. So hand on heart, they just couldn't go to someone and say, look, this is a really good book. But we're just selling so many of them every single year that it was just natural for us to stock them, not order them in if someone wanted one, have more of them. And then that, that took off and that, that really catapulted us into, well, what else are people looking for? Is there someone looking for veterinary books? Are they into aviation? And we ran reports about what people were buying and add them to stock. So we went from, you know, 1,000 or 2,000 titles in stock. We've got 130,000 titles in stock now. And if you walk down the shelves, you go, my God, that— so there's 27 million active books in the world. We have 6 million on our database and 130-odd thousand in stock, and that's the top. So, um, there's a lot that are not. But if you think about what's there and you walk through and you go, my God, people are really buying that. And for it to hit the algorithm, for it to be there, They're buying them often monthly. So, so it's, it's— that's what's great about books. That's what I loved about it in the beginning. It was— I could see it was very big, very complicated, and therefore the barrier to entry is much higher than people think. That to get an online store to our size takes a lot of components to know what to do, how to build websites that can handle that kind of volume and have that speed of response, to have the internet marketing skills, which is what our background— so we come from a software background and an internet marketing background. And, and so to know all those aspects of what it was going to take, um, was really appealing to me because I could see that the barrier to entry was going to be high. It was a real monumental bitch of a thing to address. The publishers were so archaic. I mean, in the beginning, you've got to understand, like we would get like from Penguin, which is one of the world's greatest and biggest publishers. We get it like a file that we needed to ingest to then put on the website and we'd have like Cat in the Hat, comma, the. And I said, guys, it looks shit. Like, why, why do you send this title of the book like that? And they go, oh, that's what the librarians want. Who gives a flying fuck?

Josh: Who's using the fucking Dewey system anymore, right? Is it still a thing?

Tony: In libraries.

Josh: Okay.

Tommy: Yes, I saw it. We were filming. We have a video production company, Tony, and we're filming at a hospital and there was a selection of books and they crossed out the Dewey Decimal System on the books and I was like, there you go. It doesn't get used anymore.

Josh: I'm enjoying the book banter, but I want to eventually get your thoughts on hardcover versus paperback books. But let's keep the juicy stuff to the end. Uh, in 2004 when you started, you had $10 a day that you were spending within the business on coffees. I think it was— uh, Tony doesn't like— oh yeah, uh, I guess it was the, um, the Google ad money, or like, where was that $10 going?

Tony: Yeah, so what happened was it— we were quite fortuitous. We had done a job, uh, to get Angus Robertson to the top of Google, and that project, um, gave us an insight to the company that Angus Robertson were using in Sydney that managed their site, fulfilled their orders, and did everything for them. And at the end of every month, they would write a cheque and go, this is what we sold, this is your portion, thank you very much.

Josh: Was that organic or was that paid?

Tony: Um, from a Google perspective, that was from what we did for Angus and Robertson was both. We were doing organic, getting them to the top of Google for searches like buy books online, but we also ran some Google Ads for them as well. The, um, the company that did that for them managed 80 bookstores' websites, and my brother, who had actually won that project and completed the project, organised a meeting at the end of 2003 to say, hey, we did a good job with A&R, getting them to the top of Google, driving more traffic, it's making more sales. Why don't you introduce us to all the other 80 bookstores that you're managing, and we'll get them all to the top of Google and you'll make more money? And the owner of the company said, nah, I'm not interested. I said, you're not interested in making more money? Said, look, it's not our business. We manage bookstore websites, we fulfil those orders, That's what we do. I said, well, how does it all work? And they told me, we've got a system. You give us the name of your store, within 10 minutes there'll be a bookstore website up and running with your name up the top and a million books on there. And if you sell anything, we'll pay you a commission.

Josh: So is it like white label?

Tony: Correct. Yeah, that was their back— that was their kind of niche offering. And they had started in '98, and by the time I had met them, it was 2003. So I said to them, 'Well, that sounds interesting.' And they said, 'Yeah, I know, but no online-only business has made anything out of it. It's all come off the back of a traditional bookstore that wanted a website.' So I went away from that meeting. I said to my brother, 'You know what, I wouldn't mind giving that book thing a bit of a go. That sounds quite appealing.' We were looking at other ways of generating revenue rather than just doing consulting work, but you were paid by the hour. And so I went away, I came up with the name Booktopia and went back to them. And said, we're going to start a bookstore, it's called Booktopia. And 10 minutes later there was a website with Booktopia's name at the top and a million books on there.

Tommy: And what was their reaction, Tony?

Tony: Oh yeah, just another online retailer.

Tommy: So they obviously didn't see an opportunity, or they're so sort of focused on their model, or you're making them money as well.

Tony: Look, they had no idea. We had no idea that my brother wrote the— like, so he gave me some The $10 comes from— because my brother's really cheap, he said, you can start Booktopia. It's got to be outside of hours because we're doing all this consulting work. So I worked on it from 9 PM till 2 AM in the nights. I— he gave me 10 bucks. So I, I had my Google Ads and I was a Google Ad expert back then, so I knew what to do. I knew, I knew how to maximise the spend. So I, I didn't waste it on search terms like books, bookshop, or bookstore. I went for author name. Someone already used Google to do an author search. So in the back of that ad, I had the link down to where all those books were from that author or the title that they were searching for. So it took 3 days to sell the first book, and by the end of the month, I'd done a couple of thousand dollars. So my brother had written this projection of, all right, we're going to do 1 order a day, right, for the first 3 months, and then it'll go to 2 orders a day. But we were already blasting through that because by the 4th month, I was doing $30,000 a month or $1,000 a day. By the end of the year, I was up to $100,000 a month. By the end of 2 years, $200,000 a month.

Josh: We spending more than $10 at this point was actually—

Tony: so we were reinvesting obviously everything. But by the time after 3 years of going out and doing this, we— I'd gone to a booksellers conference, the annual booksellers conference in the middle of 2006. So I've been going for about just over 2 years. And I came away from that realising these guys have no idea.

Josh: What was the vibe like? What sort of, what sort of people go to a booksellers conference?

Tony: All your, all your very dedicated book retailers, not the, not the chains or anyone or the big discount stores, but Dimmock's guys would go there. And, and so I sat there for a few days listening and I thought, they have no idea what's going on. So I came back and I said to my brother and brother-in-law, we've got to, we've got to go out on our own. We've got to build our own site. But My brother-in-law's background was an IBM software engineer. I'd been a programmer in the mid-'80s, so we kind of knew that we could probably build our own site. And we'd been building a lot of software for our businesses over the years, so we, we kicked off a project. We bought some shelves on eBay, hired a 500 square metre warehouse in our town next to a brothel, and we, um, we just started going on our own. We actually rang the publishers. And we said, look, it's Booktopia, we're turning over $2 million a year. And they said, never heard of you, because all our orders were going through this other company. We've been going for 3 years. And, and so by that point, we, we just had to kind of get runs on the board, start ordering, paying, or order more and just, and just kind of build up a relationship. I got a letter from Pearson, which is the owner of Penguin Publishers. Big academic publisher. And they said, as you're an online retailer and have no overheads, your discount will be X. It was like 10%. I said, what do you mean? You know, I'm looking around, I've got like, or at that stage, 10 or 12 people, 500 square meters, you know, like books. I said, what do you mean no overheads? There's overheads. And so they really didn't understand. So it took quite a while for all of them to come around and realise Hey, this is, this is really happening. This is online. This, this company Booktopia is going somewhere. Interestingly enough, there were a lot of other online retailers that were there at that time. So they were— we may have been turning over $5 million and they were doing $2 or $3 million. The number 2 online retailer in Australia behind us. So we're doing $170-odd is $22 million.

Josh: Wow.

Tony: So no one else really kind of came with us. It was just us. There was just daylight between us and our competitors.

Tommy: What was exciting for you in that time? Was it looking at the lack of awareness these people had about a business? Did that put pressure on you to sort of go, we need to go full steam ahead?

Tony: Um, there was no guarantee. So we knew Amazon was around. It was just answering one question every single day. And that question was, what do our customers want? So when you ask that question, answers come. So we didn't hold any stock in that first year. The company that we used to start Booktopia, uh, the 3 years, they didn't hold any stock. I felt they should hold stock for the first year. We didn't hold any stock. And then there was this one book that was selling really well. Uh, the author had been on Oprah. It was Jerry Seinfeld's wife, Jessica Seinfeld, written this cookbook. And America had sold out of its 300,000 copies, and HarperCollins had 200 copies left. And I said to my brother and brother-in-law, why don't we buy all the 200 units and then no one else will have it except us? And so we— they arrived. And it's not, you know, common to walk into a bookshop and only see one title there. But our warehouse looked like that, you know, was just— I mean, maybe if you go into the Church of Scientology, there could be L. Ron Hubbard. But, you know, having one book. That was what— that's what our bookshop looked like. And so orders would come through the site and everything else for that first year of going out on our own. So our fourth year of being in business, we had to order in, took 3 weeks, 4 weeks, 6 weeks, 8 weeks. This book, picked it, packed it, shipped it. So the feedback that we were getting in that at that time was, wow, what great service. Wow, you guys are really fast. And the other orders were like, you guys are really shit. I should have bought from Amazon. You suck. Um, and the feedback was so stark. I said to the others, you know, To Kill a Mockingbird has sold every single month for 50 years. Why are we ordering it in? What else is there? How to Win Friends and Influence People, Power of Positive Thinking. So we started to add all these titles to stock, and our warehouse started to fill up. And then after a couple of years of doing that, 2009, we moved to 2,000 square meters, took a 5-year lease we thought that would be enough because it was 4 times bigger than where we were. We ran out of space, had to get another 2,000 square metres in 2011, and then 2014 we moved to 10,000 near the Olympic Stadium, and we added an adjoining building, so 13,000 now.

Tommy: Is it true that next year you're taking the Olympic Stadium for your warehouse?

Tony: But to have the Booktopia instead of the ANZ Stadium, the Booktopia Stadium, yeah, that'd be nice.

Josh: I mean, talking about Buying one book in bulk sort of reminds me of the business that I tried to start. Was it a business or was it— Never took off, but the—

Tommy: Can we actually give them to Tony on the way out?

Josh: We could. Look, I'm happy to do a deal. But yeah, about 4 years ago, Amazon did something with American Express. It was like free delivery and the dollar was good at the time, whenever it was.

Tommy: 2012.

Josh: Yeah.

Tommy: Great year.

Josh: Now I don't know if it was 20— It would have been 2013. 2013. And I, um, and so I was like, none of the bookshops had my favourite books in stock. So Austin Kleon's Steel Like an Artist, uh, Stephen King's On Writing, um, Vagabonding, uh, by Rolf Potts. Was there any other— Sevs, was that it?

Tony: I think that's it.

Josh: And so anyway, I did an impulse purchase where I bought 2.5 grand's worth of these books, and it was on the Amex, so I didn't have to worry about like you know, fronting the money. But I had the— it was near Christmas, so I thought what I was going to do is get a, a mate who had a bike and get him to ride around and be like, hey, we've got the best books, we, we buy them. But then once the books arrived, my girlfriend was pissed off, obviously, because I have no interest, like, never done this before. And so we ended up holding on to the books and we give them as gifts to people.

Tommy: They're currently in the garage, Tony. So if you don't have—

Josh: if you want On Writing by Stephen King, I can very, very—

Tony: if you hold on a bit longer, they'll move into like vintage and collectibles.

Josh: I've got a bit of dust.

Tommy: They're pretty much there, Tony.

Tony: Yeah. Um, if you can go back to the authors and get them to sign them, right?

Josh: True.

Tony: Stephen King. I mean, just like, or fake the signatures.

Josh: Well, I did notice I opened up, um, because I never actually read them, but I opened up a Stephen King one. I would actually like your opinion on it. But on every page there's like a weird sort of blotch. And so I wonder if there's a fade in some of the pages. That was a Louis Theroux. I got a Louis Theroux book the other day that's got a fade. I'm thinking of bringing up with the publisher. I don't know. Should I?

Tony: Should. Yeah, definitely get your money back.

Josh: But the— Yeah, there's a blotching in all my Stephen King copies, so I don't even feel confident selling them now because it feels like it's—

Tony: It's a rare and collectible because no one else has been blotched. It's a unique blotching.

Tommy: Tony, you hear about McDonald's being called not a burger business, they're a real estate business. What's the definition of your business when you don't look at it as a, as a book business or someone that, you know, sells books?

Tony: Um, it's— I mean, it's a commodity. I, I think of it as a matchmaking business. So in recruitment, uh, which was my background, I did that for 14 years. I was trained in solution selling, which basically means you go out to the client, you sit down with them, understand what they're looking for, um, and then you go back to your database, you interview people, and you say, look, I've met a lot of people. You're going to hire this person because they have the right cultural fit as well as the, the recipe of all the programming skills that you need. And when I thought of a good bookstore, and you mentioned Avenue Bookshop, Readings in Melbourne, Um, Berkeley Lowe's, um, Harry Hartog in Sydney, lots of them all over, all over Australia. What's great about a good bookstore is they're very, very good at that matchmaking. They— you go in and they're adding value. They're, they're talking, they're understanding kind of what you want. Um, you might like Stieg Larsson's, you know, The Girl with the Dragon Tattoo, and you've read the trilogy and you don't know what to do next. You go into some— someone like, oh, you're really into Scandinavian crime, are you? And then you go What, Scandinavian crime? And they go, yeah, it's a sub-sub-genre. Jo Nesbø, Camilla Läckberg, there's a tonne of great Scandinavian crime writers. And then you, you get introduced to someone that you never knew before, and they've got a whole series. And that kind of idea of matching people up to what they, what they're looking for, be it for their education— so they might be wanting to become a lawyer or a doctor, or they're a professional already and they're looking for some more, you know, postgraduate books that, that will assist them in what they're doing. Could be kids, it could be someone who can't read anymore and they, they need an audio CD to listen to the book. And that, that idea of, of meeting the demand of the customer and that books are— and, and people are constantly either wanting to be entertained or educated is how I saw what we did, what we did and what we do. And that's, I think, where the interesting value proposition is.

Tommy: The Tinder for books.

Josh: Mm.

Tommy: Well, I mean, you hear a lot of entrepreneurs that are creating some version of, you know, the matchmaker, the connector for a product. And they use the term Tinder, Tinder, you know, where the Tinder of X—

Josh: well, Netflix have done a great job. They used to put a bounty, I think it was like $1 million or whatever, working on the algorithm. This is going back a bunch of years. I think when they were even doing sort of their DVD, uh, mail out. So it would be interesting to see how much of that can be learned through— you guys are getting to see that at a mass scale.

Tommy: Um, I was talking to someone yesterday, Tony, that worked with at Harvey Norman, and there was a period of time where Harvey Norman, Mr. Harvey, Jerry, Jerry Harvey, uh, hated the internet, didn't want to bar of it. I mean, it's that classic, like, you know, missed opportunity. Were you— I mean, you were in the, uh, Google, Google Marketing, Google Ads very early days. Did you think it would reap the reward it has for a business like yours?

Tony: I did, because having come from sales and marketing and technology, um, I mean, I was Reading something only on LinkedIn this morning, uh, someone had done it like a 3-minute kind of video, and it was on Jeff Bezos. And he got into books and the internet because way back whenever it was, 1993, '94, he read that the internet had grown 2,300% that year. And when you have that kind of groundswell, like The people buying online is kind of growing 10% every year. When you have that many people every year kind of congregating around a certain way of, of transacting, and you could see that the value proposition was there, it wasn't like a, um, you know, a fad that was going to come and go. It's actually really helpful. And, and so I had a lot of confidence in that. I felt that that was the way that everyone was going to naturally migrate. I guess, um, mobile phones, tablets— things come and go, some are fads, some are not. And, and that made it, um, really, really easy. We, we're the only company ever to make the BRW, now the AFR Fast 100, 8 times. And the main thing that we had to do was, um, manage the growth. Do not grow too fast because you can, um, you can get caught up in not being able to pay your bills, or you've got too many orders, then people are complaining and canceling. You've then ordered all the stuff based on your orders, but then they've all cancelled because you didn't get them fast enough. And then you get caught holding the baby. And, and so we had to make sure that we didn't overextend ourselves in terms of our ordering. So it was always very managed growth, aiming at 30% growth every year, which we did for over a decade.

Tommy: What's it feel like trying to pull back on growth when the growth is there?

Tony: It's good because you can— you've got control. Um, you don't— you say no to advertising opportunities. When the GFC came through and ads on radio and TV were just, you know, cheap as chips— oh no thanks, we're, we're too, we're too busy. And everyone was saying the opposite. What, what do you mean you're too busy? Oh yeah, we've got too much work, we don't know what to do. During the GFC and. And so it's making sure that you don't— we have a very simple philosophy around our marketing. For every dollar that we spend, we must measurably be able to get $10 of revenue. And if you can't measure it, we don't do it.

Josh: And so 1994, you went to a— I think it was like a 16-day—

Tony: through '93.

Josh: Yeah, '93. You went to like a 16-day workshop type of business school for entrepreneurs. Um, so obviously this mindset, self-development has been something that you've been thinking about or have been a part of for a while. Where did that self-development side of you come from?

Tony: My school buddy, um, Pratik, he goes, you are not that kind of kid at school. Like, what the hell happened? Um, I traveled, I went to— I got 56% of my high school certificate. Not that great. I scraped into uni and to do accounting and finance, but I mastered in Space Invaders and snooker. So I dropped out after 6 months, became the mailboy at the NRMA. It's like the RACV down here, you know, the movies from the '80s where the guy would walk around with a little trolley and handing out those envelopes that people had scribbled out the name. Yeah, right. That's like the old email system. I was the email system back in the '80s.

Josh: You're Gmail.

Tommy: Yeah, a T-mail.

Tony: Yes, L-mail, lucky, I think. And so, so what happened was, um, after going back to university as a mature age student in '85, '86, and I was getting distinctions and credits, and it was stupid, I would go to the lecturer, I'd say, so about this assignment that you're talking, you know, we need to just— what I would just ask really good questions about it. I would then go away and write whatever they wanted to hear, give it back, and I would get a distinction. There was no challenging me, and it was just, ah, I'm going to go travelling around the world. So I went travelling around the world for 3 and a half years, and I think during that period was when my curiosity, meeting people, uh, that personal voyage of discovery became more, even more so than ever before. And I did my first personal development workshop in London It was called The Forum, it's now called Landmark, and it was quite monumental. I then went on to do more things, and then with Robert Kiyosaki, who wrote Rich Dad Poor Dad, um, I did his Money and You course back in '92, which was about 6 years before he wrote that book. And I had already done Creating Wealth and Business School for Entrepreneurs in '93, many years before he wrote that. So So that was that kind of personal development. He said one thing in that workshop which still resonates with me is that knowledge is indestructible and the most— the biggest return on investment you can get is by investing in yourself. So the more that you invest in yourself, the greatest possible returns you can get in your life, in your universe financially, than, than trying to get it in shares or or, or, um, a job.

Josh: And how were you financially then? Were you— did you have much cash?

Tony: Um, that by then I did because I was a recruitment consultant. And as a, as a 20-year-old or mid-20s, late 20s, I was earning maybe $150,000 a year, which was a lot. Um, so I could invest in myself, but, um, I What would happen is, is that I, I've— I could get— I had contractors working for me and I got to 15 contractors, and then I would drop back down to 10, and then I'd get back up to 15, and then I'd drop— just really annoying me that I couldn't get past 15. And then I did a month— I did Money and You, this workshop, and I learned some things about myself. I got some insights about myself. And then I went— within 3 months I went from 15 to 30 contractors. So I really doubled my, my, um, my, um, personal income. And, and so then I got stuck at 30. I just dropped back down to 24, back up to 30, and then I did another workshop and then I got to 45.

Tommy: Can I ask what was the insight that sort of made the change to 30 to get to that first?

Tony: Most of them have been around what, um, how we can't— we all limit ourselves or belief systems or certain ways that we create, um, I'm not good enough, or I'll never be good at that. Or in my— probably back then, and I can't, you know, take— would take a lot of time to think what I actually uncovered. It would probably the way that I self-sabotaged at that time. So I would, I would get to a point and I go, okay, that's enough. And then I would stop doing what I needed to do, um, and then I'd come back down because I had probably had this one— I remember now 'One day I'm going to be successful.' Now, if you're successful and you're saying to yourself as your mantra, 'One day I'm going to be successful,' you have to self-sabotage so you can get back to continue to say, 'One day I'm going to be successful.' So you've got to be able to get some personal insight around your, your language and what you're saying to yourself so you can break through these levels of that that are going to stop you from get— like, if you say, 'Oh, one day I'm going to find the love of my life,' you know, one day. Well, when you find that person, you're going to start thinking, hmm, maybe I need to— she's not exactly perfect, or he's not great, or he does this or she does that. And then you're going to start to sabotage the relationship because one day I'm going to find the love of my life. If that's what you've always thought of, then you have to, you have to sabotage to reset.

Tommy: What's the shift in language? What, what is it for if you are thinking one day I'm going to be successful?

Tony: Um, everyone will be different. Let me explain to you with Booktopia the way that, um, I've done it here, because it's— I can seriously see the way it's worked. Um, there's— I use this kind of metaphor that, um, imagine, imagine if you, um, you own a Maserati, and I had to do a speaking engagement for one of my mates who's in the jewellery business, and it was an elite group of jewellers that were there.

Josh: And they all had a Maserati, right?

Tony: And I said, so I said this to everyone, you know, like, imagine if you had a Maserati. And it was about 35 guys in the room and women. Yeah, yeah. Maserati.

Tommy: Yeah.

Tony: Wasn't my normal one. Yeah.

Tommy: Would you have to go, imagine if you had a Bugatti Veyron?

Tony: Yeah.

Tommy: You had to go something real hot.

Tony: Yeah.

Tommy: I was like, yeah, that's me.

Josh: Yeah.

Tony: It was so— it's like, oh, I haven't had that reaction before.

Tommy: Anyway, so now we— none of us own a Maserati in here.

Tony: Tony? Yeah.

Josh: So not outright anyway.

Tony: Yeah, that's right. American Express. So, so we— you'll need another girlfriend.

Josh: No, I'm, I'm not a car guy. I'm safe in that way. I think I, I'm a very— I'm interested in this because I'm— we're very much in that one day space where it's like we visualise and think about this. And one day for me, it's a Tesla. Just like nothing's just, just I can have it on autopilot and so I can go and reading your Stephen King. Yeah, exactly. That'd be nice. So yeah, what the Booktopia. Yes.

Tony: Anyway, so what happened? You imagine you got a Maserati and, and as Maseratis, Italian sports cars are prone to do on this particular day, it needs to be in the workshop, which happens quite often. So you put it into the workshop and the mechanic gives you the loaner and the loaner is this two-door, 15-year-old Fiat. And you, you're used to taking the car out, but on this particular day, you've got a very, very important first client meeting, huge potential client, and you're having a breakfast meeting on Toorak Road. And you think to yourself, no problem, I'll just park around the back, they won't see, and then I'll just pop in and then I'll have my meeting. You get there and for whatever reason there's something on no parking spaces. It's almost 9 o'clock, like, and you've got to get there. So you go, all right, is this you this morning?

Josh: Were you driving around in the Fiat?

Tony: I was not. Not me, not today. Um, anyway, so you— there's only one spot available right in front of the cafe restaurant where you're supposed to have this meeting. You go, well, I have to take it. And as you get out of this two-door 15-year-old Fiat you see your clients, they see you, and you're getting out of this car going, but it's not, you know, like, I don't have $300,000 Maserati, it's this, this is not my car. And they're looking at you and they're making judgments, and you're making judgments on yourself. You got to get out of that car like it's you. You are not your car. You are not your girlfriend. You're not your boyfriend, your wife. You're not your kids. You are not your sports team. I know One of my very good mates, Jeff, he thinks he's the Richmond Tigers, right? But he is not. They are the Richmond Tigers. And he did not win the premiership.

Tommy: His tattoo says otherwise.

Tony: Yeah, yeah. Actually, I've got another mate who's a South supporter, Paul. He's got a— he's got his South Sydney tattoo on his.

Tommy: Yeah.

Tony: And he's also a Tigers supporter, funnily enough. And, and so this is the thing. You've got to have that separation. You, you are not them. You are not your business. So with Booktopia, I am not Booktopia. So when Booktopia wins an award or the Telstra Business Awards, or when we talk about it's got $170 million of sales or 250 employees, but it's not me, it's the company. And that's given me great freedom and perspective. So any kind of judgments or values that I might have around, oh, I don't know whether I can have a $100 million company or a $50 million company, are completely separated. So if I, if I try and layer on top all of those things, you will sabotage your life, you will sabotage your business because you don't think you're worthy of that or you don't think you're— and it's so important to understand what, what that might be like. Other people doing— and you're up to 618. I've got my little mug here that says 618th episode. I wish.

Josh: Yeah. Cut costs. Yeah, no numbered mugs.

Tony: Yeah, I could pay for it. Like, you should get every guest to pay for your number.

Josh: That's a good idea. I wonder, um, because that really resonates with me and the fear that I have with what Tommy and I are building is with the daily talk show, our personalities are part of it. And I know you were, uh, you'd mentioned on a previous interview around, uh, businesses you should be able to— you want to set it up so you could sell it at some point. So you want the books to be right and all that sort of thing. Looking at it from your critical eye, how does a business like this operate that is so— the founders, the personalities are so ingrained in the actual product?

Tony: The first thing that comes to mind, so it's a system. So you've got your studio here you could interchange yourself with others. So there could be other segments happening every day, different talk shows, different events, different things. So you're, so you're already getting leverage around what you've invested in. So in an hour's time, there could be a gardening show, there could be a craft show, there could be educating your kids or some sort of— it might even be like coaching for children, like lots of different things. Then the main, um, the main thing that comes to mind is like someone listens to this and they go, oh my God, this is the best, this is the best format I have seen or heard in years. I'm going to put you guys on national television at 9 o'clock at night. And now after you've shat yourself and you're thinking, oh my God, like, can we do that? Is that possible? Because you're going to come up against some of the fears, or, uh, it's easier to do it here because you got used to that, but then you're going to come up against your own judgments, or I don't know whether we can do it on TV, there's going to be a lot of pressure, it's really live, we can't just kind of get everyone relaxed, and will it transform? So for me, it's about creating something that someone else wants, and it's all in the systems.

Josh: Because when you say that, what I think about, like using the TV analogy, because people will say to us, it's like, oh, you know, is the aim to get on radio? Or what we're trying to do is build. It's almost the equivalent if someone came to you and said, Tony, Booktopia is going so well, we want to give you the best spot on a bookshop, like on the street for a bookshop. Have you— how do you reconcile the old way of doing things with what you think the new way of doing things, and also realising that your customers or the audience might not be ready with where you think things are headed.

Tony: So what you're saying is like if someone gives us like a retail—

Josh: like, well, yeah, no, so I guess, um, it was just using that analogy as a, um, as an example of old systems versus new systems. Do you feel like you guys have insights or where you think things are going that you're not doing yet because the customer isn't ready to do that?

Tony: Yeah, you're doing that all the time. So I said before, what do our customers want? So there's a lot of people that are coming up with ideas like this virtual reality, artificial intelligence, all these other things that you hear. I'm not interested in being at the bleeding edge of any of that. It's like I want to see it working. Like when, when this is a good story. So in 2000, I explained before that I went to the Australian Booksellers Association conference in 2006, and I want— I got some insights that, you know, these guys really had no idea. I think there's an opportunity.

Josh: What were they talking about, by the way?

Tony: What, what big books are coming up, how to organise a store, um, how to visual merchandise. Yeah, and all those kind of things. And they really had no idea how big online retailing was getting. So in 2008, I convinced my brother and brother-in-law it would be a very good idea for me to go to America to go to their book event, which is Book Expo America. And, and so we had just gone out on our own in the last year. And I was— I arrived there and there was a guy talking there, but a guy interviewing another guy. And the guy that was interviewing was a guy called Chris Anderson, who wrote a book called The Long Tail of the Internet. And he was interviewing a guy called Jeff Bezos. Now, here I was as the owner of a company, one of the owners of a company that was turning over $5 million. And this guy in the same industry that I was in was worth at that time around $10 billion US. So I sure as hell was going to listen to what he had to say. And I went in there and for the whole hour, all he talked about was the Kindle. And as a technologist, I understood what he said. I could see where things were going and I could go, and I knew that's going to be huge. And at that time, ebook sales were 0.3% of all sales in America. It was tiny. It was at the very beginning. And I walked out of there completely shattered going— I was walking down the corridors of the LA Convention Center, which is not that much wider than this room, say 4 or 5 meters, almost in a drunken stupor going, you know, we're fucked. This is, this is like, this is definitely going to happen. And I, I stopped myself for 10 minutes and stood there and thought through what he just said and what was going to go on. I thought, you know, all the Asian countries, they're going to copy that tech, which is what they always do. The publishers, they hate Amazon. They're going to make sure there's all those digital files are going to be available to everyone. Yeah, it's going to be okay. And so I walked on and I realised that was what was going to happen. The next year I went back, um, and ebook sales were up to 1%, so they had tripled. Still small. Went back again, actually I sent my brother-in-law next time and I said, mate, can you just go and see how this is going and whether we should get involved? And within a year and a half we had set up our first ebook platform. So it's that thing that you're asking about knowing when to go, when things are going to actually kick in, and, and not thinking— and knowing when someone's really going to hand over cash, um, how are they going to hand over, you know, their money, and will they hand over their money to you for a transaction. So many entrepreneurs that I talk to, they just don't understand the point of the point of the transaction. You've got to know where people will say they're willing. Like, one of the best affiliate programmes that we have with Booktopia is— and I better say it right because I'll get in trouble— it's Chat 10 Looks 3 with Lee Sales and Annabelle Crabbe. And like you guys, they've just kicked off this podcast, has become hugely popular. It's completely outside of mainstream media, you know, what they would normally do. Massive following. And on their website and all the things that they do, they just link about the book or a book or the book or the author's book to Booktopia. And they're constantly making money all the time because they're creating all this unique content that just— oh, there's another person, another book, um, linked to Booktopia, and, and we pay them a percentage. The model is kind of changing now. Who would have known that that would have worked, um, and be as an alternative to the traditional model. I probably wouldn't have predicted as much, but it is because you're adding value.

Josh: Yeah, there seems to be a lot of resistance with a lot of different industries. I guess the book— the book industry is no exception. When Tim Ferriss, he released a book called 4-Hour Chef, which was one of the first books to be published through Amazon. And all the bookshops refused to stock the book. With what you're doing with Booktopia and starting to get into the publishing distribution, are the bookshops and the older industry, have they recognised that there needs to be change? Are they more open to these things?

Tony: Mm. Yes, some still resist, but once you take the time to explain to them what we're doing, that we're actually giving them— getting access— giving them access to more titles than they've ever had before, good pricing for them. And some of them have said no, like Dimex, uh, have been somewhat reluctant because we're the competition as well as now a distributor. So it'll take a little while. That people like to hold on to whatever they had. So as castles have been broken down and fiefdoms have been kind of disrupted and it's not what it used to be. They do, they get desperate to try and retain whatever power and control they had.

Josh: Are you wary of that for your business and not trying to be in a position of protecting?

Tony: So you've probably heard of the expression win-win or win-lose. So that doesn't exist. Yeah, it's double win-win. And what I mean by that is, is Booktopia needs to win, our customer needs to win, our supplier needs to win, and our employees need to win. If you can have everyone winning, then you've got a sustainable model. So with our bookstore customers, if they're winning, then— and we can win at that, at that price and that service too— then it's a sustainable model. If you take companies like Woolies and Coles where you hear they squeeze the, the, um, the milk and the egg farmers and they're getting squeezed and squeezed. If they can't continue to produce and manufacture whatever they're doing, then they don't have a sustainable model. And so, so, um, Amazon's the same. You hear storeys of the customers are getting good deals, um, Amazon's okay. This I know because I talk to the suppliers, the publishers, they're getting squeezed to all hell and they've got— there's penalties and all these things that happen And the employees, you quite often you hear these storeys of, especially in the UK, of where like ambulances are waiting outside Amazon warehouses at Christmas because everyone's been worked to the bone. I don't know whether that's true, but I like to promote it because just, just in case it is true. And even if it's an urban myth, it really just doesn't paint a picture.

Josh: Yeah, it's a picture. I guess that speaks to loss leaders, you know, the example of Big W or businesses that are using books or creating a false dichotomy. Is it hard to weather those, those storms? Like, do you think that it's only ever short term?

Tony: I always think that if someone does massive discounting, knock yourself out because it's not sustainable. If someone wants to bid on Google Ads and overbid us, go for it. It's even Amazon. Then you can do it. It'll only last for a certain while.

Josh: But does it— so using like Uber as an example, or what, what they've sort of, uh, done in different cities, um, and being able to give a sense of a— well, I guess it's the win-win-lose. So they're losing short-term to get rid of all competition and to create a monopoly. Um, yeah, like, what do you think it's going to look going forward? Do you think consumers are going to start to understand more about the importance of having competition and not just, you know, even if it's easier to click the one button on Amazon, that there's actually other issues down the line that they need to consider?

Tony: Uh, that there's so many aspects. It's the fundamentals of business that if you're not making a profit or there's not more cash at the end of the month and you're not running out then you've got to— you can sustain yourself. So companies that you've talked about have done massive capital raises, so they're using other people's money. We think they're going to go from a price of X to 3X or 4X or 10X. And so therefore that better work because like Amazon has made very little money over the years. They do make a little now, but in comparison to the revenue that comes through, it's, it's not, it's not a lot of return. They've all got their return because of the capital growth. And, and so if Amazon eventually runs out of money or their price gets reset and their value drops dramatically, then they don't get access to the cash. A lot of their growth has come from buying other businesses and using that money to then buy other businesses.

Josh: So, and also their tech like AWS and all that sort of thing is it's like it's propping up all these things, but you wonder how long it makes sense.

Tony: Yeah, that's right. And so, so any business that has used capital— the beauty for us is that for 16 years we had no money. We've just done a $20 million capital raise in the last month, which is our Series A.

Josh: What happened with the crowdfunding? Did you go ahead with the crowdfunding stuff?

Tony: No. And it's been misreported in the media. What, what happened was we we, we tried to IPO in 2016. Uh, the week that we were going to get, hopefully get ready to list, Amazon announced they were coming to Australia and all the fund managers said, nah, you're going to be annihilated. So they all pulled out. So then we looked at other things and then we had so many customers that were buying from us who are huge fans. We thought, we'll just use them to raise money. As we kicked off that process and we could see that we were going to get to the $3 million minimum, we started to get conversations going with people who had a lot more money, who wanted to invest a lot more. So rather than— it's called the bathtub of crowdfunding. So you tell everyone that you're going to do it, you're doing a crowdfund, everyone gets in, then, or then no one puts any money in. And then as you're getting to the very end, everyone puts their money in. And so it's like the bathtub of, of, of the way the money comes through. And I could see that we were going to get there if we really pushed it. But we didn't push it at the end, so we just let it kind of expire. The money went back to all the people because it was held in trust, and, and we started to then pursue the, um, these conversations around people who had a fair amount of money that they wanted to invest, which happened within, within 9 months of us, um, kind of allowing that to expire.

Josh: So for someone who has that value of the win-win-win-win crowdfunding, it feels like the opportunity for that. Looking at it from a critical eye, or now that you've done it, do you think that it is, is a model for businesses like Booktopia?

Tony: It, it— I mean, listing on the exchange and having people buy your shares is crowdfunding. Like, you're giving them an opportunity to get in at an IPO. So, so The— not the issue or the problem is that we were— when we started doing that, we were— our revenue was already $120, $130 million. So their shareholding was going to be minute. Um, and the money that we— we could have put that money to good use, but, um, it was not— not everything. Uh, it— it's probably better to use it when your business is a lot smaller and the idea of what you're trying to create is clear and therefore people can buy in at that early stage rather than at a mature stage that we were at.

Tommy: If a business is at a turnover of $170 million, what's the thinking of getting investment?

Tony: So we don't need investment. We didn't need it. But having the investment meant that instead of getting to $300 million in revenue in, say, 5 years, we're probably going to get there in 2.5 to 3. And the fact that we've done all the hard work, it's— it was a lot easier for this consortium of investors to come in and go, yeah, we love what you've done. You've proven that you can continue to grow. We've doubled since Amazon announced they were coming to Australia. So they could see that, that by investing in, in us, that there was still a lot of growth left.

Josh: Plus, your bro was only giving you $10 a day.

Tony: Yeah, he's so cheap.

Tommy: What's it like being in business with your brother when it actually works?

Tony: So my brother, my sister, my brother-in-law, the family. I get asked that a lot. It's, it's good because, um, for us we have different skills. So I'm more the sales and marketing, um, the ideas and the innovation from a business perspective. Um, my brother-in-law was coming from the tech side, and my brother, being so conservative and risk-averse, meant that anything that I I did consider or do, I always had his voice in my mind going, let's make sure we don't do anything that's going to have this collapse on us. So that level of managing, stretching ourselves to also considering the risk was always there.

Josh: Is that the most painful part of, like, I guess with the IPO you spent $4 million and you said in another interview, you worried about it for 3 hours and then moved on. Is that 3 hours thinking about what your brother's thinking?

Tony: No, it was just the grieving of something that doesn't happen and then allowing that to be complete so you can move on. Um, he, he was good about it, still is, um, in terms of what he's— what we've accomplished. Simon wanted, um, he was happy when Booktopia got to like $40 to $50 mil And he wanted to just kind of stay at that level and pay dividends and just be as profitable as it could be. That was within his comfort zone, but I had other ideas.

Tommy: What's your, your key driver now, Tony, and what has— and how much has it shifted from the early days of Booktopia?

Tony: My personal key driver or Booktopia's?

Tommy: Oh, your personal within the context of building Booktopia.

Tony: It's still that same question: what do our customers want? And meeting the demands of that. So Um, every— it doesn't feel like we've hit any kind of capacity in terms of what Australians will demand of book retailers in terms of an online offering. And so right now it's us continuing to grow with the amount of people that are buying online. One of the things that we're about to do, which, so we bought the co-op in the last month. That's the university bookstore businesses. We didn't buy Australian Geographic or Curious Planet as they called it. We left that with the administrator.

Josh: What is it like dealing with an administrator? Is it similar to just buying a normal company or?

Tony: Is anyone listening? Can we just, is it just between ourselves?

Josh: Yeah.

Tommy: And 60 others.

Tony: And the other 3 people that listen. Yeah, yeah, exactly.

Josh: Yeah, right.

Tony: It's, it's good and it's tough. They've got a job to do, to be honest. They've got— they've been given— they've been charged to try and give as many dollars back or many cents back in the dollar to the creditors. And there's— so there's a, there's a fair amount of legal framework how an administrator needs to operate. So they're not really thinking, okay, this is a really good business. How can I sell? How can I kind of— what can I do to make sure that it's got longevity? It's not part of their agenda.

Josh: You can't do the good, like, oh, this is a win-win-win. So like this Booktopia, look at all the great stuff we're doing. They just want to see cash back.

Tony: They do. But they look— I guess I can only look at it from this perspective in terms of the co-op and Curious Planet. They've got— they've got to wind it up as quickly as they can. They've got employees that need to be have a sense of certainty. There's customers, there's leases in their case. So they would have had about 90 different leases with all the stores, the universities, as well as the, as well as the shopping centres for Curious Planet. So they, they have to quickly move through a lot of things that we, we're not considering. What we're trying to do is work out if we bought that business, can we make it work? Is there any way that we can kind of take, uh, the remnants of what they had because Booktopia was already the largest tertiary book retailer in Australia. So, um, um, we'd gone from like probably, I don't know, 3 or 4 million where the Co-op was doing 100 million in book tertiary book style sales. We're now up at 40 and there they were down at 20. Um, and, and so what we've decided to do is hold on to as, as many of the store managers as we can, but have them territory managers. So they won't be stuck in the four walls of their shop, they'll actually be out on campus. They'll also be given more than the campus, they're going to have libraries, schools, government departments in their area to own and to manage and to connect with and build relationships with. So that idea of just being an online retailer where people come to your site, they place orders, or they call us up and, and, you know, can you help me out with our order, which a lot of government departments need, to now having an army of people out in the field is a very different, um, thing that we're testing. It's unproven. I believe in it a lot because I come from a solution selling background. So I think having, um, uh, people in the field who are understanding the needs of our our big clients and customers is going to add value. So that, that is really what we're trying to deal with and grapple with. Make sure they have the systems, make sure we have a good formula that they can flourish in. It's not— that's not been done before.

Tommy: It's exciting times.

Josh: To end hard—

Tony: no, no, we can't end. Surely we've got more time.

Josh: That's 11. The—

Tony: got to come back.

Josh: I know we definitely want that, but we also need to work out hardcover versus paperback. What do you prefer first, um, as a reader?

Tony: As a collector, definitely the hardcover. Okay. As a reader, the paperback, large format though. So as it gets— as you get older, 56 years old, um, glasses, I prefer the C format or the trade paperback. Edition, the pages are bigger, the font is bigger. But as it goes down in format, it's not really—

Josh: I didn't know that. How would you recognise that on that? Like, uh, what are the— so you—

Tony: because I said A, B, and C. So A is those little kind of ones, the American ones, which are tiny. Um, then B is kind of mid, and C is the ones which are the new releases. Interestingly, in Australia, uh, we've always gone with the paperback C format. You might see a hardcover on some authors, but in America and England it's always going live with a hardcover first.

Josh: And that's because like, I believe New York Times and all that sort of thing only use the hardcover.

Tony: That's, that's true. That's not true. It's true, but not true. The reason why it's true is that Americans always go with a hardcover first. They don't go with a paperback. And because of that, it's a new book. And so therefore, yes, it's only going with a hardcover because it's a new book. They don't do paperback first editions. For the big authors, which is really who's going to make a New York Times bestseller.

Josh: Yeah. What about the rankings? Because say, for instance, this seems to be very common now where authors will say, hey, we're launching the book. If you buy 5 copies, you get a webinar, 10 copies, I send you some stickers. What does that do to the industry?

Tony: That's, that's a really, really good question because what happened was How much time have we got?

Josh: A minute? Yeah, yeah, we've got— yeah, as long as you've got the page. Yeah, you've got—

Tommy: we don't want—

Josh: yeah, exactly.

Tony: Um, so what happened was in 2016, so just over 3 years ago, we got a call from Scott Pape and he said, I've got a new book coming out. I haven't written a book a number of years. It's called The Barefoot Investor. And what I want to do is I've got 140,000 people on my following in my email database, I'm, I'm going to send an email to them to say that, um, I've got a book coming out, and if you buy the book as a pre-order from Booktopia, you're going to get a link to a 1-hour, um, video session normally valued at $199, and you'll get it as part of purchasing the book. So we said, yeah, yeah, sure, we'll get involved, and So it was Christmas, November of 2016, and it was a Saturday, Sunday that the emails was going, was going out. So I logged in on the Saturday evening, 9 o'clock, you know, it's Christmas, how are sales going? And our best ever day, I think, on ClickFrenzy was like 5,000 or 6,000 orders. And I log on at 9 o'clock at night and we're at 10,000 orders for the day. I ring up my IT guys, I say, guys, we're being hacked. And, and so They go, hold on, really? And they go log in. They log into the system. They go, no, it's a book called The Barefoot Investor. Oh yeah, that's right. We did that deal. The Barefoot Investor.

Josh: Yeah.

Tony: Okay, fair enough. We did 23,000 preorders over that weekend.

Josh: Wow.

Tony: And so he knew what to do. He could have said to John Wiley, the publisher, you— I will send the emails to you. I'll send everyone to you. You can fulfil them individually.. But that meant he knew that it wouldn't go through a bookstore, which meant it wouldn't make the Nielsen BookScan results, which would make it a bestseller. So authors that think they can just, you know, get the kids together and pack them themselves are doing themselves a disservice because it doesn't make the bestselling list. It doesn't get counted. It hasn't gone through a store. So he— and he knew how to game the system. So 2 weeks later, when the books came in, we pack them, ship them within 24 hours to the 23,000 people. We said nothing. Scott Pape said nothing, and John Wiley said nothing. And on Saturday night, the file gets loaded up to Nielsen BookScan of all your sales for the week from all the different stores around Australia and, and, and so forth. And so I had to ring Nielsen BookScan and say, guys, you're going to get a file on Saturday night. It's true. The book is called Barefoot Investor by Scott Pape. He did this. We've sent them out. They are all individual orders. Okay, great. So the next week the results come out, right? And it's 23,000. We had 98.5% market share. Wow. And, and it was, of course, a massive bestseller. And everyone in the industry goes, what the fuck is this? Like, no one had any idea that this book was coming out. And the bookstores didn't really have an idea either. So we were helping him propel him into being the number one, and he was number one because then John Wiley went out and said, guys, that's a massive bestseller, you didn't get enough. And then he kept promoting it and it just kept selling.

Josh: So it's a self-fulfilling prophecy.

Tommy: Next minute everyone's got orange cards and I've got buckets down in the garage, you know.

Tony: And so, so what happened was last year when I was going to the book fair, I had one of the publishers on the plane sitting next to me and he said, Tony, that day in 2016 changed the landscape of publishing in Australia because we saw for the very first time what preorders can do. So this is what— getting back to what you're asking before about all these things, people offering things, is that because, like, for example, last year Book of the Year was Boy Swallows Universe by Trent Dalton. In the, in the top 6 books, 3 of them were debut authors and we had made them based on our sales loading up on that Saturday night, that, that accumulation of orders over many, many months. In Scott's case, it was just 2 weeks, but quite often we're promoting books for many months. This is a really great book. You should get it. It's amazing. A debut author. It's incredible. Like, it all goes into the sales for the one week. So even though you're selling, selling, selling for a long period of time, it only gets added up on that week, which can make it a bestseller. So if you've got incentives, I'm going to give you like a there's a special letter that was written by one of the characters to one of the other characters, and if you buy the book here as a pre-order one, you'll get access to that special PDF. Whatever you can do, yeah, um, to give people, um, an incentive to get more than the value of the book, and it doesn't cost you much, do it to get your sales. Because then it becomes a bestseller, which becomes self— I won't say self-fulfilling prophecy, but it helps you launch it. And Scott Page really knew how to game that system. So the more that authors understand, all right, that's how it works. Okay, I've got to do something. I've got to create something of value that will maximise it is really, really important.

Josh: And that's what I guess we're seeing now with all the publishers are going to YouTubers and different content creators and saying, hey, like, let's, let's do a deal because there's huge audiences that these people have that And I guess, um, Barefoot was a big, big part of that.

Tommy: Shout out to Pipey.

Josh: Yeah. Uh, Tony, thanks for coming on the show. Definitely would love to have you back on. It was good fun. Uh, it's a daily talk show. If you enjoyed the show, feel free to give us a review on Apple Podcasts. Otherwise, see you tomorrow.

Tommy: See you guys.

Tony: See ya.