Today I have great pleasure in bringing you an interview with Neelan Choksi, co-founder of Lexcycle, developers of Stanza, the most popular ebook reader for the iPhone and iPod touch. Stanza has been downloaded from the iTunes store over 500,000 1 million times in the last 6 months.
Mark: Stanza and Lexcycle seem to have appeared almost overnight. Can you tell me a little of the history of Lexcycle and the people behind it?
Neelan: Appearances can be deceiving. Marc Prud’hommeaux, our Principal Developer, has been thinking and experimenting with eBooks and eBook technologies for over 5 years. It was often personal side projects here and there but there is a lot of R&D and thought leadership that went around the technology of Stanza long before Lexcycle was even formed. As such, there are features in Stanza and in prototypes of Stanza that I often don’t even know about e.g. text to speech using the Mac text to speech conversion tools in the Mac Desktop version of Stanza or a prototype of horizontal auto-scrolling in one of our desktop versions of Stanza (apparently, you can read faster and retain more with horizontal auto-scrolling than a regular book / current ebook paradigm).
The company is about a year old and we view ourselves as a media application company. We’ve started with eBooks and have a relatively strong focus on the iPhone and iPod Touch but we truly view ourselves as much more than that.
The founding team of Lexcycle have been working together on and off for nearly a decade. We all met in Washington, DC in 1999 at a company called TechTrader. TechTrader was a startup trying to address the B2B net market business. Like many bubble companies, we raised a lot of venture capital and spent a lot of money and eventually filed bankruptcy. From the ashes of TechTrader, we started SolarMetric with a fourth co-founder. SolarMetric created a product called Kodo, which basically was an object / relational mapping tool (in non-geek speak, a product that made databases interact more efficiently with Java). In 2005, BEA Systems acquired SolarMetric. At BEA, we open sourced Kodo as the Apache project Open JPA. After the acquisition and the transition, I worked for SpringSource, an enterprise Java open source company. With Marc, leading the charge, we came back together to work on Lexcycle. I think the enterprise Java experience and the open source experience all plays a major role in the way we do things at Lexcycle.
Mark: How many people do you have working at Lexcycle?
Neelan: 4 employees and a few contractors on an as-needed basis.
Mark: Is Lexcycle a VC funded startup?
Neelan: No. We are self-funding Lexcycle at this time.
Mark: Your Stanza reader application is free. The desktop application is also free, although there has been some talk there may be a small charge for this in the future. What is Lexcycle’s business model?
Neelan: We also provide access to 50,000 free ebooks through a variety of sources. This is an example of where our open source experience play a role in what we do. Part of our business model is based on referral or affiliate fees around the sale of pay books. Part of it is making books into standalone apps like we did with the iPhone: The Missing Manual application for O’Reilly. We also envision licensing our reader technology as well as the Lexcycle Atom Distribution System (LADS) which is our catalog services to various hardware manufacturers over time.
Mark: You have a number of partnerships with established ebook stores such as Fictionwise and BooksOnBoard. How easy were these partnerships to set up and do you think they’ve play a big part in the popularity of Stanza?
Neelan: The biggest complaint about Stanza from July to November was the fact that users could only get free books (mostly classics like “The Curious Case of Benjamin Button”, “The Taming of the Shrew”, and “Huckleberry Finn”) and they wanted to be able to read more popular contemporary titles. The relationships we’ve established with Fictionwise, BooksOnBoard, All Romance eBooks, and Smashwords are part of the popularity of Stanza. Working with third parties is always fraught with challenges but in each case there were significant joint benefits to making things work and that always helps in getting over any hurdles. There are still things we can do to improve the user experience in each of these cases and that is one of our major thrusts for this quarter.
Mark: Some ebooks for the iPhone are being sold through the iTunes store as applications. The iPhone Missing Manual is perhaps the highest profile of these. I believe it’s actually the Stanza Reader that’s used to display this app-book. This approach seem wrong on a number of levels – the equivalent on the desktop would be to fuse Acrobat Reader into every PDF document. How can readers read these app-books on other devices, search across multiple books and how do they manage a large library of app-books? Is this a stop-gap solution or something we’re likely to see more of in the future?
Neelan: The user is always right so I have a hard time judging what clearly is a popular route to go in having a application for each title or in some cases an application than bundle a variety of titles. I currently have 64 books in my Stanza Library including the iPhone: The Missing Manual. Would I want 64 icons cluttering my iPhone? Probably not. But I am probably part of a different segment than the one that chooses to pay $0.99 or $1.99 for “The Curious Case of Benjamin Button” when you can get a standalone app for free or get it via Stanza through the Feedbooks catalog. I actually wrote a blog about paying for things that could be received for free because that never made any sense to me especially in this economy.
All of that said, the audience who wants a separate app actually comprises of a variety of segments that are valuable and there are reasons they may want to have an “app-book”. I can envision a photographer wanting her 3 most important reference guides available as icons on her home page. I can envision a writer wanting his grammar reference guide available to him with just 1 tap. I can envision someone new to the iPhone wanting Pogue’s guide right there. Also, I bet there is a segment of the population who once they read “The Curious Case of Benjamin Button” will just delete the application with no desire to ever read it again. There is a clearly a market for “app-books” and just because you and I don’t believe it makes sense for us, doesn’t mean that it doesn’t make sense for another segment of iPhone and iPod Touch users.
The Apple SDK agreement also plays a role in this in that every application has to be a standalone application. As such “app-books” are a very real part of the eco-system and I think we are going to see a lot more of this in the future.
Mark: What is your position on DRM protected ebooks? Do you believe it helps or harms the ebook industry?
Neelan: Personally, I think proprietary DRM systems (and proprietary formats) hurt eBook users dramatically. The bottom line is that when a user upgrades their phone or moves to one of the new dedicated readers, they shouldn’t have to lose their entire library of content and right now, proprietary DRM and proprietary formats often result in that exact problem. I believe vendors are using the non-portable nature of proprietary formats and proprietary DRM to create switching costs and I truly believe that is a bad thing for eBooks across the board. I know that publishers don’t like to here the argument that they should look at music but I do think that music is a valuable thing to look at regardless… yesterday’s announcement that iTunes tracks are going to be DRM free is very telling. We are trying to encourage publishers to go DRM free but don’t always have success.
I understand why publishers and authors and agents want DRM and given that is one of the constituencies we have to work with, we do support DRM as a necessary evil to do business currently. To be honest, we considered creating our own proprietary DRM system but have chosen to wait to see if a defacto standard emerges. That said, we hope publishers follow their brethren at O’Reilly and Samhain and Pan Macmillan into being more supportive of DRM-free and being more supportive of the ePub standard.
We are huge proponents of the ePub standard and want to see it be very successful so that our users know that there is a future for the books they purchase to read on Stanza today. A big reason I ran for the open board seat on the IDPF (the organization behind ePub) is because we believe in the ePub standard and think its success if very important to the overall success of eBooks. We are huge proponents of DRM-free because we believe that 99% of readers will pay for books if given the opportunity to do so.
If given our druthers (and ignoring a variety of limitations that would prevent us from doing so), Stanza iPhone would read every format and be able to decrypt every DRM system out there until a standard truly took hold and was supported by all elements of the industry (publishers, distributors, retailers, etc). We obviously read a lot of DRM-free formats via Stanza Desktop. At the end of the day, the simple fact that user is aware of format issues and DRM issues is a sad, sad statement. A user simply wants to read the book. The more vendors get in the way of that simple goal, the harder it will be for eBooks to be successful.
All of that said, my open source background is probably showing through this answer. As a business, we will make decisions to help our business like we did to support the eReader proprietary format and the eReader proprietary DRM system all the while working very had to help promote ePub. It seems schizophrenic but certain decisions are made as the right thing for the business as a stop-gap while hopefully the industry as whole comes to the eventual right conclusions.
Mark: Can you tell us a little about your vision for Stanza and what we’re likely to see in the near future?
Neelan: Our vision for Stanza is very simple. User experience. We believe our success is tied to 1 thing and that is making the user experience the most efficient and best user experience possible in every aspect of electronic reading (including finding the content the user wants, downloading the content, providing an immersive experience when reading the content, discovering new content, learning more about the content interacting with the community, etc). So, I think you will see us improving every one of these things. We provide a variety of mechanisms for users to interact with us and give us feedback including Twitter, Facebook, our forums, email, phone calls, etc. We always want to hear from users and love constructive criticism.
Mark: There’s been a lot of talk that Apple should release a dedicated iPhone-style ebook reader with a larger touch screen. Have you heard anything to substantiate this speculation? Perhaps Apple have slipped you a prototype or two?
Neelan: As far as we know, this is still speculation.
Mark: Oh, you’re good. I’m taking that as a yes;)
Thank you so much for your time today Neelan. I look forward to seeing where Lexcycle take Stanza in the future.