From Kobo via Medium:
The Economist’s Canada Summit attracted a jam-packed lineup of business luminaries and big name politicians (including the Prime Minister of Canada Justin Trudeau) to discuss the future of the Canadian economy — and how disruption is a necessary exercise in the quest for global success.
As the leader of one of Canada’s startup success stories, Rakuten Kobo CEO Michael Tamblyn was invited to weigh in. He was billed as a “Big-bang disruptor”, a business leader with the potential to shape the future of Canadian business.
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They say when you’re starting a new business, you should look for the white space, be first to market, go where your competitors are not. Or there is another option. You can do the exact opposite. In 2009, starting here in Toronto with a handful of people, we picked a fight with the largest ecommerce company in the world, with the most successful hardware company ever, with the world’s largest book retail chain, and the most profitable search engine in history. Seven years later, 27 million users, 20 countries, millions of devices, tens of millions of ebooks and a $315M acquisition later, I get to tell you why that worked, why being Canadian mattered, and why sometimes the best revolutions don’t look like revolutions at all.
Kobo was born to disrupt. More than that, it was an exercise in intentional self-disruption. We were incubated inside Indigo, Canada’s largest book chain, in 2009 in answer to the strategic question: “What happens if many of the Canadians who are currently buying and reading print, start reading digitally?” Kindle had just launched in the US, Sony had ereaders in market, the iPhone was just released. Change was coming: The only question was: was someone was going to do it to us, or would we do it to ourselves.
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Today, about 1 in 5 books sold in Canada is an ebook, in some categories it’s 1 in 3 or higher and Kobo is, when last I checked, the largest retailer of ebooks in Canada and one of the largest in the world and the second-largest manufacturer of eReading devices globally.
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We could tell that building a great ereading service was going to be a big, capital-intensive project — and that not only was Canada not a big enough market to sustain it, almost no most national book market was big enough to sustain the level of investment that would be required to compete with Amazon or Apple or Google. Go big, because you can’t stay home. We were leaving the era where each country has a dominant book retailer or two and entering a new era where only a few global players would have the scale to compete. The good news was that it meant that the challenge that Indigo was facing — protecting their customers in the face of digital onslaught — was a challenge that every retailer who sold books anywhere in the world was going to face.
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The second thing we did right was to let go of the gravitational pull of the US. in our first couple of years, we could already see that the US, the richest market for ebooks in the world, was about to become a battleground. It was the home turf of Amazon, Apple, Google, and Barnes & Noble, and everyone wants to win at home. So while our competitors were all engaged in a very expensive fight for control of the US market, we quickly and quietly expanded into every other single country that looked like a candidate for digital growth, places where we could get in early, start building brand and market share. And we gained months, sometimes years of breathing room as competitors later struggled to internationalize systems that had been built to serve the US market alone. As those markets have grown, we have been able to grow with them. So now we find ourselves with the majority of our revenue coming from outside of Canada, with active retail presence in 20 countries, delivering ebooks to another 170.
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Publishers and retailers in France are particularly cautious about working with foreign retailers, especially related to ebooks, but our membership in La Francaphonie and sensitivity to France’s tradition of cultural protection helped to get us a partnership with France’s largest retailer FNAC and a very significant French business. Our history as a Commonwealth country who had forged our own distinct English literature helped our partnerships in Australia and New Zealand. In Belgium and Switzerland, we understood multilingual politics, with all of its richness and complexity. In Mexico, we shared with both publishers and retailers the struggle of fighting to keep a distinct national culture while living right next to a neighbour who casts a very long media shadow.
Link to the rest at Medium