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Episode #37

In just eight years, BookBeat grew from zero to 100+ million euros. We spoke with CEO Niclas Sandin about strategy, branding, customer acquisition, competing with big names like Spotify and Amazon, and whether AI will change the industry.

This post is based on our podcast episode with Niclas Sandin, the CEO of BookBeat. You can watch the entire conversation here.

1. Thinking long-term

Niclas emphasized the importance of focusing on sustainable, long-term growth rather than short-term profitability. BookBeat was designed as a startup independent of publishers, prioritizing customer needs and creating a demand for books over simply fulfilling publisher wishes. This approach allowed them to focus on building a great business that could stand the test of time, rather than getting caught up in short-term equity stories.

2. Distinctiveness over differentiation

BookBeat’s success in competitive markets like Sweden and Finland was largely due to its distinct and customer-centric marketing. Niclas highlighted the significance of becoming top-of-mind for new users rather than differentiating from competitors. The focus was on making audiobooks appealing to a broader audience, including light users, thus expanding the category and capturing market growth.

3. Innovating the business model

BookBeat’s decision to move from an unlimited listening model to a tiered subscription service was a strategic move based on data insights. They observed that a small percentage of users were responsible for a disproportionate amount of content costs. By introducing tiered subscriptions, they were able to cater to different user groups, improve margins, and expand their market to more price-sensitive customers. This move, initially specific to the German market, was eventually implemented across all markets, demonstrating BookBeat’s ability to adapt its business model based on market dynamics and user behavior.

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Watch episode: From 0 to 100 million euro with BookBeat CEO Niclas Sandin

Niclas Sandin: From 0 to 100 million euro – Youtube transcript

Today I’m joined by Nicholas sandid the C o of bookbeat bookbeat is a digital subscription service for audiobooks and ebooks uh since its launch in 2015 bookbeat has grown to over 900,000 pay customers across Europe and will pass over 100 million EUR in Revenue in uh 2023 welcome to the show nichas glad to be here I’m really honored that you invited me to come I actually listened to a couple of the episodes and I enjoy the thoughts you have had with different business leader and probably learned a couple of things from them too I’m really glad to hear that and and you this bookbeat story is definitely one of exactly the kind of growth story that that we want to talk How BookBeat got started about on this podcast so for people who do not know about the background can you briefly talk about how bookbeat came to be and how you became involved as the CEO yeah of course uh well to begin with I love working with dat and people and also Building Things by combining those two uh in 2012 I was recruited from a section of ey that work with growth companies like Spotify Etc back in the days uh to Bon books uh which is one of the leading book publishers in Europe I’m actually the biggest seller of digital books to different retailers my job initially was to analyze and create the business plan for their book clubs and after that I got the job to make the business plan happen uh by running them and uh just since not everyone will know what the book clubs are uh they were an amazing business but had a hard time growing anymore since the model was built on physical sales of books sending books home to people and the target audience was getting pretty old and in that position I spent a couple of years nagging the management of Bonnie books about how they also should do a Netflix like meaning uh moving beyond sending DVDs home to people’s mailboxes in a physical way and go all in on stream and in 2015 the timing was right uh and since I seem the most eager one in the organization about this Venture they gave me the mission to build a new service and the Business from scratch um but uh to make sure that we put all our focus on creating a demand from books uh for books from the end users rather than just fulfilling Publishers Wishes book bit was built as an uh totally organic startup uh independent from the Publishers but of course taking the good parts out of them and getting fueled with their longterm commitment uh of believing and investing in our core business so that’s how it got started back in 2015 and how I ended up there it’s actually now when I come to think about it almost H exactly eight years since we left the starting blocks and launched our beta version on November 30th on in 2015 and to say the least it’s been a crazy journey and love to be here to share some of it with you and your listeners that’s awesome I think it’s probably Having a 200-year-old family business as the owner quite unique that like you said this was a spin-off from a a a family own business that’s been around for like 200 years almost but they also had recognized that they need to do this as a completely Standalone service so you had kind of the backing all the good it sounds like you had the good and the The Best of Both Worlds you had the resources of a large company but also the autonomy of a completely you know Standalone startup uh yeah exactly one one of the found it core values is uh we plan for Generations not quarters uh and their end game have probably never been to do a total exit with book bit but rather extend one of their core businesses for the next 100 years uh this means that we have been able to build a great business rather than kind of constantly pushing Equity stores that line with the current passwords not that say that anyone else is doing that but we have been able to uh focus on what we believe is the best for the business and not what sounds good at the moment uh to raise capital and this has probably served us well and is the reason why we have had a pretty uh nice growth story uh so far that we have been able to focus on the long term but at the same time of course checking off the boxes and succeeding in the short term to show that we’re on the right path so the best Kindle of Both Worlds uh long-term commitment from them and not having getting to focus on really building a good business totally um what you mentioned it’s been almost eight years now and um what was the the BookBeat’s 4 strategic pillars strategy the idea when you launched because this was not a you were not the first to Market so how were you thinking about competitiveness and customer acquisition and the long-term strategy behind bookbeat when you first launched uh well actually be before moving into the exact way we set up the customer acquisition we have to come back to what was the overall strategy for bookbeat and we since I started with a blank piece of paper and pretty huge expectations from a really big company uh of what to fill that blank paper with uh back in 2015 I quickly had to formulate a strategic framework that would work both for the short and long-term business building and for me and the people joining our journey to hold on to when we Face Challen challenges but at the same time when we enjoyed successes um So based on my experiences of analyzing growth companies back at ey and adding some management book mumo jumbo that I’ve seen actually work in reality uh I scribbled down an overall strategy that this still is the foundation for bookbeat um to begin with the overall vision uh is to step by step create something that will lead the way for decades uh sounds pretty Grand but it’s more coming back to not just try to do something that works in the short term and do an exit uh so this means that we’re in a constant building mode uh we don’t rely on silver bullets but rather just long-term grit um and to achieve that Vision H it comes down to how well we execute on our four strategic pillars that I’ve been speaking about for eight years now to everyone in the team uh the first one is pretty simple it’s first who then what uh it means that to deliver the best service and adapt to new behaviors and context we need a team that can create it can innovate and it can grow uh we need we have almost no consultants in the organization and a mix between uh 50/50 between developers and analysts and the other trades like marketing and content uh this means that we have almost no experience ways when the team overcome challenges and we actually add that to our knowledge base uh and it means that the team will grows simultaneously with the business so so far we have 150 extremely talented specialists in our core areas that have joined our journey that’s one of the key things uh coming then later to the other part of the strategy uh the second pillar that we have built book bit on is don’t get stuck in the starting block that really sounds like management mamb when you say it but uh or for us it means that an ID has not been tested until it has reached a customer H it comes from my firm belief that if you try to find the perfect solution for something already at the drawing board you risk paralyzing your organization and so this should of course not give us the opportunity to just throw out a lot of shitty features and launch on random markets but rather doing stuff that makes sense without knowing exact impact beforehand and build on that what we learned from the initial try uh but to make sure that we always follow up on what we do and get real actionable insight the third pillar at bookbeat is the one that I get the people in a team to repeat most of the times when they talk about our strategy it’s data driven since day one uh this means that uh only our own data can make us better than the competition there are so many well I used the word shitty again well shitty marketing surveys out there that fail to give the real view of the market and they act as an alibi to show that you make the right decision but often I guess they Inspire companies to make pretty huge mistakes so we should not rely solely on surveys but rather more on what we learn by oursel along the way from our own data uh an example of that is that before we launch bookbeat we did a survey here in Sweden about the willingness to pay for this type of service and and what the market potential was and in that marketing survey it said that on the current price point the long-term potential of the market was 100,000 paying users and now 8 years later the total Market is 900,000 paying users at that price point I think it’s almost even a little bit higher so again uh we would have lost out of nine parts of that market so uh and uh same thing in Finland when we launched back in 2016 nobody was really interested in what we have built and now if we combined all of the services there I guess it’s over 500,000 people out of 5.5 million population that pay every month for our type of service so surveys will build by Design not tell you the truth about market and you have to find it through your own experiments and uh and this is what we want to do by being data driven since day one doesn’t mean that we should do endless AB testing of every small Innovation but actually follow up on we do to make sure that we are spending our time and resources on the right thing and on that note we get to uh pillar number four as small steps are better than big leaps and this means that Innovation and growth will be the sum of all the small data driven steps that we take it right direction and we build our momentum over time by building on what we do great and stop doing what doesn’t work uh it’s all about every day just getting that flywheel to spin a little bit faster so everyone in the organization is really tired about me talking about this but they should know these pillars as running Waters and when in doubt turn to them when they decide on how to handle different challenges um so the four pillars first who then what don’t get stuck in starting block data driven since day one and small steps are better than big leaps so that’s the foundation and then we can uh get to more of a how we use that in marketing uh yeah that that’s incredible I think it seems to me very uncommon that companies from day one or very early on identify kind of these principles or pillars and then they actually stay consistent to them as they’re building their business because I I think it’s quite remarkable that you know you’re now doing 100 million revenue and the principles are as relevant as they were when you were doing zero that’s that’s pretty incredible but but it was first of all to be pretty open I had to do some expectations management with our owners in the beginning so they understood that we were building it for the long term and not to focus too much on what was the results the first month or the first two months but actually looking more at the long-term signal are we building something that constantly are getting better so it was also a way for me to make sure that they kept um kept faith in our overall business plan but at the same time you shouldn’t create a strategy that Bec obsolete too soon just as you reach success it should be something that can last over time and don’t be it shouldn’t either be too specific either because then you would have to replace it as soon as you become a scaleup instead of a startup yeah that that makes so so much sense I think I’ve referred to Amazon way too much in this in the podcast previously but Jeff basos idea of like focusing on things that won’t change and Billy your strategy around that as opposed to things that will change and he said very simp simply like I can’t imagine a future where customers will want higher prices lower smaller selection and slower delivery so let’s just build on those three key key pillars yeah and for us our version of uh that is of course we cannot imagine future where we don’t want the best Specialists work in an organization where we don’t dare to try out new things we don’t dare to uh try to understand those Thing by being data driven and also make sure that we constantly are becoming a little bit better so they work really over time but when you start to think about them when you apply them to different areas of the company they also pretty much help us on what we should do um so yeah and especially in marketing which I guess will be the focus of this podcast on how we have used it to help us grow yeah so let’s get into that because you know you had the strategy it makes a lot of sense Competing without a unique selling proposition (why differentiation doesn’t matter) um the owners the stakeholders everyone’s on board so the First Market you launch in Sweden and this was not you were not the first on the market you were a competitor Storyteller had already been around for 10 years or something like that for a very long time yeah they held 100% of the market and you came in and correct me if I’m wrong but you did not really have any USP in terms of catalog like you didn’t come with you know we have you know this amount of books or these types of books that you don’t have so what was the strategy U and and kind of uh yeah what was the strategy for trying to grow in that kind of Market yeah at launch I was pretty open with uh especially our owners that we did not have anything that story tell didn’t have but at the same time it didn’t matter uh on a growing Market it’s so much important to become top of mind for new users entering the market rather than trying to differentiate yourself from competitors that the new users even though stel had 100% market share most people didn’t know anything about them so instead focus on uh becoming top of mind for uh for the new users entering the market so instead we talked about being more focused and distinctive in everything we were doing especially our marketing uh and this has meant that we step by step have now grown to almost 250,000 paying users in Sweden and currently are growing faster than all of our compe competitors and gaining market share every quarter uh so putting too much emphasis on USPS sometimes can make you rather stupid as a business and narrow down your message and the target group too much uh and now eight years later they are there are differences in the offerings that has primarily been built by US during the time we have been on the market but we continue to talk about books that people like and the values the users get rather than saying we have this but our competitor don’t have it um because most users still don’t care about about the differences they care about what value can you bring me so that has been our focus in our marketing and trying to enter a market where somebody actually had 100% market share not looking at how can we differentiate ourselves day one but actually go out there and get users in and shaves the stuff that seems to be threshold for getting them into our service rather than just talking about differences because most people don’t compare uh then we should focus instead on getting them in without them having to look at every other service doing so I think that’s a really good reminder for us marketers because we can feel that you know we are immediately our minds go to okay what’s the USP no no no you you need to have USP that we can communicate and you’re saying that was actually not the you didn’t care about that at all when you started but you me you mentioned that top of Mind awareness Building top-of-mind awareness that was kind of what you were going after so when you were approaching that were you thinking okay now it’s a matter of kind of like we need to buy a lot of media we need to just get you know frequency frequency frequency and reach or did you have any other tactics um when it came to building that top of line awareness and getting new users yeah at the same time I of course have to be pretty open if you do if you would do some tracking in Sweden our competitors probably have more awareness than us overall since they are uh bigger than us and been around for a longer time but I think building top of Mind awareness for the people that are in the minute that that they want to make a decision about this type of service so uh the overall tactic is pretty boring but it has been uh distinctiveness in what we do uh trying to get more overall users to us and the category rather than limiting oursel to only cater to the heavy users uh and this means that focusing of course also on the details of our messaging to make it as appealing to as many people as possible so we don’t just preach to acquire saying oh a the books for the people that love books no we’re instead talking about all the books it’s actually for everyone and here is some a book that I think you probably will love get the service become an AUD book listener uh so we don’t try to more communicate that this is something for the few it’s actually just like uh video streaming it’s something for everyone and trying to get everyone feeling that this could be for me too uh and the other tactic is of course be super clear about who is sending the message because since we’re building the category we of course have to be really clear that it’s book bit that putting in a lot of money in building that category uh so I and I guess I’m pretty biased here but you can really tell a bookbeat ad apart from the competition in both design and creativity even though for an untrained eye our offer pretty much the same uh Service as our peers so there I can can add more stuff to the strategy but not thinking about these are our power users how can we get more of them but instead talking about how do we lower the threshold for everyone that haven’t made this acquired taste part of their everyday life and that puts a lot of pressure on how you communicate because you cannot look too much inward at what the best users are saying you have to instead look outward at what value can you add to the people that haven’t found out about us yet yeah that’s really good I feel like again going back to as marketers there’s a Temptation when we look at uh we we let’s say we do a survey of customers and we identify oh these 5% of customers with these attributes are you know they’re the heavy users let’s just get more of these and we falsely assume that we are able to impact people’s behavior on Grand scale and what you’re saying is you recognize that actually there’s going to be a small percentage that going to be power users but let’s let’s try to grow the category and we’re going to get a lot of light users light buyers but that’s okay that’s okay that that we need that to break to kind create this huge business that we’re going after yeah but but actually one example of this because uh uh I know one of your home countries Finland uh that’s a market where we were one of the first entrance we launched there back in 2016 so the same time as our main competitor and uh there we implemented the exact same strategy as we have done in Sweden uh and so far Finland has become the land of milk and honey for book bit when we have done that and here we launched on a market where there were only a couple of hundred books available on the market and most Publishers did not see the need for them Beyond users that were blind and couldn’t read for those were were the potential audiobook listeners now in 2023 I said that the total Market in F probably over 500,000 out of 5.5 million that pay for a service but just in book beat we have passed 300,000 paying users so over 5% of the finnished population is now paying for us and this is just 7 years into our journey where we have built a completely new category as the market leader uh if we would have just focused on the heavy users which for publisher were people that couldn’t see that’s why they wanted the all the books and no Market survey said that anybody wanted any of this uh we would probably just say let’s just not go to Finland but instead we focus on more there should be an appeal we can create it even though it can cost a lot to build a category but at the same time we could Pig it back on us offering something that people already valued people already value books even though they don’t always buy them but in know we already had an offering that people could attach a value to so building a new category under those circumstances is probably a lot easier than trying to invent something totally new so knowing that we dared to actually go against what the common knowledge was so is there potential here in the market and that’s also something that we have used when we have made other decision regarding our offering and so on that don’t try to just go after the heavy users because you probably will miss out on a lot of the target audience and you wouldn’t get to a point where we were at right now in Finland where I often try to throw out the number that this year it will be I I think 84 million hours that will be listened to our service in just Finland and if you divide that with the Finnish population it’s 15 hours per fin that they will listen to book beat during 203 2023 so book beat per copy is that high but if we would have just focused on the heavy user and where there were apparent Potential from day one uh we wouldn’t have that number to throw out there so don’t limit your target audience too narrow because you will lose out on a lot of potential down yeah that’s that’s such good advice you mentioned that what the distinctiveness has been a key kind of pillar in in The tools, insights, and strategies behind BookBeat’s advertising creating that top L awareness and getting growing the category and then making sure that you capture some of that new category growth and mention that you’re you know the goal has been to be very distinct in in your advertising for instance um I think that’s true for me when I think back as you were talking about that one ad stands out for me that’s uh the guy who’s cleaning and he uh pushes of the pots um so it breaks so we can continue cleaning a listen to a book I don’t know if you yeah yeah yeah I remember yeah so so what was the yeah so so I agree with that I think that that just I mean before I um before I knew much about anything I I remember seeing that ad so can you talk a little bit about kind of the creative insights that led you to develop this um the messaging strategy that’s allowed you to be create that distinctiveness uh yeah I think it’s hard to narrow it down to few aspects the first thing is that we have of course a really really talented marketing team working with this every day and a lot of them has been on our journey since almost the start so they have of course built up an experience when did we go right with our message messaging and when we did we go wrong and uh some of them can come up with different answers on the same question so having a lot of talented people that over time try out a lot of things and kind of can calibrate their creativity of course helps but but other than that I think it’s all also I said earlier that uh most surveys are pretty shitty but some of them can actually give you some inspiration so what we have done is of course to some kind of driver survey on our different Market what could drive a user to get our type of OB service and then we look primarily at interesting groups for us uh and from that we can get some inspiration what can be the kind of tone of voice that we use in our communication uh what can be the things we should talk about which almost never is technical specifics of your product it’s actually more talk about the value that you provide them uh so we have gotten some inspiration from that and then done a lot of um trial and error uh and that also utiliz tools like I don’t remember the name of a product where we can send out to a specific um group of people U Pilots of our marketing and get initial feedback and we’re not really interested if they like it but all we want to hear what type of words popped into their head when they saw our marketing and that has also been uh something that we have the team have been able to utilize to just recognize how it actually perceived our different type of marketing messages um so a lot of creativity have been tested and we have a lot of talented people but uh otherwise overall it’s the trial and error that helps us uh along the way to find out where are we too creative and where are we just enough creative so uh yeah keeping that discussion going with and the team is probably really important totally and related to the Optimizing the media mix question of creativity as obviously the media and media placement in channels we talked a little bit offline you mentioned that you know you’ve been by constantly tweaking the media mix um you’ve been able to see pretty big changes in whether it’s signups or customer acquisition cost and even in in kind of mature markets like Finland Finland where you’re the clear market leader so can you talk a little bit about first of all how you’re thinking about the media mix and how you’re running those tests because you know obviously it sounds very simple like of course we’re going to test and we’ll see what what these channels that drive the best results we’re going to focus on those okay yes but how do you how do you make those tests and then is there any maybe generalized lessons about media choices that you’ve you’ve learned yeah sure uh well overall our growth strategy is constantly searching for the equilibrium between safe bets and spray and prey that’s what we do and I guess every growth marketer does that uh and one thing we do is that we buy all of our media ourselves and have our own in-house experts for different channels as well at the as a growth data science team that works really close with our marketers this means that we can quickly adapt uh if anything changes and one thing just to give you an example we saw last year was less effect in some of our bigger channels uh both in the short term but more importantly uh the long term term during the months when we did less pushes because then is where we can actually see what is the new Baseline uh the team then calibrate then rebalance the mix in different markets and put more effort into the messaging and so far this year we have seen pretty amazing results I think we have grown over the user base with over 30% at the same time the average customer acquisition cost has dropped with more than that uh also on our more mature Market as you say uh but again some example what got us there uh and the overall lesson I can give is to always keep your marketing Investments Dynamic by Design uh you have to be ready to Kill Your Darlings and thereare to experiment with different channels and throw more gasoline on already burning fires uh when you start to get some effect uh because even though everything cannot be tracked in the short term and a lot of marketing is for the long term the short-term impact for instance visit to your web page or short-term um growth of new users talking about you in Google Trends or signing up give you at least an indication if people at all is responding to your message and find it relevant so having a real Dynamic setup and try to see the short-term signals not viewing them as the absolute truth if you’re doing the right thing because everything isn’t Performance Marketing some of it is actually for the long term but the short term impact gives you a signal if you’re relevant because if people aren’t even visiting your web page when you do the biggest campaign ever I guess you probably won’t have that much long-term effect in two years so you have to have some signal and as soon as you start to see that you get more signal when you utilize one channel perhaps throw even more gasoline on that burning fire so have a really Dynamic design of how you do your marketing investment is probably uh the most important thing and when it comes to signals which which kind of metrics are you personally looking at most and how do you think about qualitative versus quantitative um signals the the million dooll question that I should tread lightly here otherwise I would get different parts of the marketing team responding to say but but but but it will always be hard to track long-term investment in marketing and since book bit I think we have been hovering between 25 and 50% of our marketing budget going into more broad channels like TV outdoor marketing radio so really big channels where you build a lot of trust over time uh but you can also have shortterm impact I remember when we started bookbeat every time we did a TV spot that was into Google analytics during the minutes afterward to see how much traffic did we get did we get the conversion uh and actually we could count home a lot of our TV investment by actually real signups in the beginning because it was such a good Channel but this was back in 2016 TV does not perform that way now and we shouldn’t expect that but that’s what’s one way of looking at it if we do a TV commercial we’ll talk about our uh bookbeat web page address and uh get telling people this is a really good thing it doesn’t cost you anything to try us out because we always have free trials if we even during those circumstances cannot get them interested enough it it tells us a little bit about the messaging uh um probably more than doing this long-term tracking every month of seeing what our what’s happening with our awareness since we’re so small as I mentioned in Finland even though we have 5% of the population H probably a double that have tried book bit since day one but still just perhaps 10% of the population they’ve heard about us so if you do this broad tracking it will be really hard to actually get any signal from it because we’re much smaller than the big uh well Brands like Coca-Cola or Nike or uh car manufacturer so we have to really focus on getting the signals other ways so one way is actually looking at the shortterm effect uh and one example also when we did a lot of broad Marketing in Germany we decided to uh do it pretty focused because just doing marketing in the for instance Berlin area covers pretty much the same amount of people like all of Finland so then we did a really big marketing push with outdoor marketing local Radiance on in the Berlin area and then we could track what was the difference in traffic in that area compared to the other ones and then we can extrapolate if we did it in more areas what the overall effect would be it’s not uh really clear there what the exact result is but it gives you an indication so for the long term I think you should look after signals that give you an indication if you’re relevant and have some impact it doesn’t have to be signups but are people looking at your web page are do you see an increased traffic they perhaps don’t sign up but at least you got them interested uh so that’s important and then you have the more uh safe bets part which is the Performance Marketing and tactical marketing where we utilize a lot of influencer pod costs and so on and there we of course often have a promo code and we can see how many people do they send to our web page so most of our influencer collaborations we have been able to uh look at through the lens of what was the customer acquisition cost for this campaign and most of them are actually really profitable so we have utilized it a lot um so different ways of looking at it the long term I think you should be out there trying to identify signals when you do stuff uh instead of trying to wait one year to see if it gives you any move of the needle in a tracking you should actually start to see do you get any short-term signals and then you put more gasoline on those fires but if you for instance do a really big TV campaign and you don’t see any increase in traffic to your web page you should stop doing that TV campaign and it perhaps do more outdoor marketing or more radio marketing and see if you get any more traction from it so not just do stuff and saying this will show us something in one year especially if you’re a Growth Company you cannot wait that long H just to know if you’re putting your money at least on something that gives somewhat of an effect yeah it sounds like a very kind of pragmatic uh growth marketing approach which I I’ve seen be really effective and obviously it looks very different for different companies but you’re trying to find the best signals that you can and make the best informed decisions and and just keep going another thing that’s been really Innovating the business model important for you is we’ talked a lot about the marketing but you’ve also you know used the business model as a way to to drive growth presumably um you’ve changed or been been kind of at the uh the Forefront of making changes there for it say moving from previously used to be unlimited and and now um you guys offer I think maybe the wantes do as well tiered subscriptions so can you talk about the Insight that led you to make that change um and and what the results were yeah of course uh well when we started off as I mentioned earlier every service but pretty similar so everyone had the same offer unlimited listening for pretty much the same price all over the nordics but when we entered Germany uh we had to face off with another paer which was Amazon service Audible and they had a little bit different offer and a lower price point than us uh and we cannot just go in there it should work the way that it does in in the nordics so we instead have to of course go back to drawing board a little bit and to handle that we innovated our offer based on all of the data we had collected so far and what we could see was that only 5% of the users listen more than A1 hours per month uh but they stood for over 25% of our content cost uh so they basically held up the prices for the other 95% and uh in a way limited the extension of the market uh to for the more price sensitive groups uh and what we did then based on that data was to invent the tier system we weren’t the First with tiers but the first one in our field at least uh with book beat basic at 20 hours per priced at $9.99 and then we added some other TI which for instance book be premium up to $100 and pric them at appealing levels for different Target groups because we uh going back to again we are in acquired taste people build their behavior over time a new user coming in will think that 20 hours sounds a lot but once you’re getting used to it uh perhaps you want to add even more and then you will be a good position to upgrade and the experiment was so successful generating roow but also helping our margins in a way uh so we have now implemented it on all our markets and completely removed unlimited and this is really our strategic pillars in action uh by being on a market understanding the data and step by step building something that’s better than the competition and but as you mentioned actually now most of our competitors have with somewhat Pride started to copy our model so I guess we have to init some more to keep them behind us but but it’s an example going into a market not just using the same tool set but actually seeing the signals and looking through our data what can we do based on what we know and then we found out that this is probably a good way to go to extend the market to more user groups instead of just catering to the 5% that really want unlimited and listen a whole lot yeah I guess it’s the same theme of like what you mentioned in the beginning that the the estimated total addressable Market was the 100,000 users now it turns out it’s nine times that large and I guess the kind of one of the carrying principles in bookbeat has been this Defiance of conventional wisd wisdom is that you don’t just accept it at face value but you want to kind of see the data for yourself and and and try to figure it out and improve yeah yeah this can also be a way of running out of cliffs so not looking at the danger side and just oh no we believe in it no but but overall I think coming back to I said data D from day one only our own data can make us better than the competitor so if everybody’s looking at the same uh Boston Consulting Group presentation about what you should do as a company at this growth stage uh we won’t be set apart from the other ones not through differentiation but we won’t be set apart through strategy and we won’t be able to uh impact the market either over time so we have to find our own way and find our own data but at the same time this of course shouldn’t make us immune to everything happening around us because then we probably will fall off the cliff but start with what do we know by ourselves so we don’t have to trust all of the signals everyone else is telling us because none of our competitors will try to tell us something that we actually could use they will just frame it the way they want to so we have to find our own way and I think this is a different compared to other services that perhaps build their differentiation by adding oh oh you do books you do AUD books Let’s do magazines too and that’s let’s bundle with something else instead we were more no the real potential is in digital all the books Let’s just double down into that and become even better can we find new ways of extending that market instead of trying to appeal to a totally different market and I think that’s also connected to the long term strategy that we’re building something to work for the long term in our field instead of just trying to find ways of proving the business for the short term totally let’s talk a little bit about the future you’ve made a good case for kind of the the competitive strategy that you’ve had at Competing with Spotify and Amazon bookbeat so far has been incredibly successful um recently what another Swedish company Spotify um announced a test a pilot I guess where they’d make under 50,000 audiobooks available at no extra cost to premium users in the UK and Australia if this is successful they’re probably going to roll it out uh worldwide so how do you think about you know the competitive landscape changing are you are you going to stick to the four pillars or or when companies like Spotify which have massive Global brand awareness are able to add this to their existing as a free add-on to existing users paying users um is that change does that change how you think about competitive strategy or or no uh well I think to begin with it’s really exciting that Spotify Ventures into our core it validates it in a way H but I think it’s worth mentioning every time this question come up because it comes up a lot uh uh is that they also enter into another ball game than they are used to uh digital Audi books is an extremely local Affair uh over 90% of our listening in our different markets is in the local language uh and this compared to Spotify where I think 80% of of the listening to an artist is outside of their home country without any alterations to the music it’s actually travels everywhere but in books often there’s local translation of global phenomenons uh so Spotify will have to play the local game and agree with local Publishers on every Market that they enter just like we have uh so being a global PL platform will not help them there uh in just spreading everywhere I think it has been easier in a way with music because there are a couple of Global Music labels that own a lot of music that has gotten them started here they have to go uh really local um and uh as a matter of fact we already compete with Spotify also in Germany where they offer a lot of AUD books and we have still been able to be one of the leading platforms together with them in Amazon’s audible service um so until proven differently uh I guess we will be continue to doing what we are doing with with our forer play uh pillars and playing the local game but until I guess we get punched in the face and have to reevaluate like with every strategy so I think it’s really interesting that they’re entering the field but it won’t be that they automatically can just go in and swoop every market and I think it’s similar to Amazon when they launched here in Scandinavia and some people said that most Ecommerce stores will go out of business when Amazon enters but they Al entered a market that that already was pretty mature and already had a lot of strong local players so they are playing a role but it doesn’t mean that they will become the leader uh overnight and perhaps it will be a little bit similar when Spotify Ventures into our markets here but I think they will have a big impact on the English speaking markets primarily in the US Audible has almost no competition so finally they now will have a match with Spotify that view the US market as one of the most important ones um so we’ll see everybody has a strategy until they’re punched in the face but uh so we we remain with the Strategic pillars but also we know the context in this market isn’t similar to the music industry so perhaps that will give us some more thresholds that will prevent a global player to have too much benefit of being a global player yeah that’s really interesting I immediately what comes to mind is is one of the big finish success stories Vault because they obviously they built a huge business by going to these um smaller markets mean for instance Eastern Europe and and throughout Europe mainly avoiding obviously the big English speaking markets where door Dash and Uber Eats and all those those big players uh are dominating it it would have been incredibly expensive and probably um not very successful to go into those markets so that that’s a good point that uh Global a global platform is not necessarily going to transfer over into dominance of multiple smaller local markets yeah but at the same time we should be really humble before the fact that we don’t really know what impact they can have on this type of Market but uh it’s not automatically that they will be as successful in this as they have been in music because it’s another ball game totally um another future Trend Will AI revolutionize audiobooks? that’s obviously probably a question you get also almost or probably more frequently is about AI so how are you seeing that impact already and and especially for the future the the the the the the industry that you’re in I’m thinking of obviously AI generated books which will change could change the entire value chain right who owns the content um and and but also things like because you mentioned how important is it’s local so just like AI power translation of of of books which could maybe make uh create expand the catalog um in in a completely different way so how you how are you thinking about AI right now this is of course a busboard where we should have a really good uh opinion and talk about how we’re in the Forefront of everything some a power service that you’re about to launch yeah yeah and and it will be it will take over the world no of course I’m humbled before the fact that there will be a lot of impact in many areas from generative AI but at the same time in the industry where we’re at it does not solve that many problems for us in terms of published books at this point uh we actually already in our type of service see a supply of books that is higher than the actual demand a lot of books that nobody actually want to listen to are being published to our type of platform because a lot of players believe it’s a quantity game but over time we have seen that the players that have succeed the most is the ones that understand it’s not the quantity game it’s actually building over time great series from uh big authors uh that is relevant for people uh because the algorithm will never give the everyone the same chance in our type of service it will focus on what do people actually listen all the way through and and what do they enjoy when they become a paying user uh so more books in the service does not solve anything if it’s not a higher quality and the good thing is that we’re probably the perfect experimentation platform for Publishers in at this age uh if they want to try out new books so hopefully we believe that we can play a role as this develops uh the AI hype but also uh perhaps in a couple of years Publishers will view book beats publisher inside platform as their own Google analytics because in our service we can see do people engage with what is being published do we listen all the way true what do they listen to afterwards how does it play with the algorithm uh and publisher will get real time data to see if people are actually enjoying the AI created content so hopefully can be an experimentation platform for Publishers when they start to venture into this field but it doesn’t solve a big shortterm problem because there are already so many books published on all all the markets where we operate and it’s not quantity that is needed it’s actually even more quality in what is being created so yeah a long answer but I think if we become the Google analytics for Publishers in the long term I think AI was perfect but I don’t think we need to be the one that start to create the lot of books in book bit we should be the helping hand and the enabler for Publishers there so very kind of a business centered Nuance approach which again going back to what you mentioned earlier I think probably helps that to have an owner who is focused on Generations not quarters and yeah you’re focus on building a really good business and a really good service for customers yeah if I were raising Capital right now I probably would have given you another answer but since we have just reached profitability I can give you the sincere answer I I love that um The changing media landscape and why books still matter how do you think about the future of audiobooks because when you think about the entire media landscape media consumption it it has to be one of the industries that has changed the most in in the last few decades I mean how content the type of content the amount of content where we consume the content has changed so radically over the years and keeps changing so how are you thinking about um how you think about your part in all of this because ultimately people have 24 hours in a day they have to sleep for eight they have to do their work etc etc and then they have a fixed amount of time and bandwidth and they want either inspiration or education or entertainment and they’re going to go to Netflix or Tik Tok or bookbeat so how do you think about this entire it’s a very broad question so you can answer it however you want but how do you think about the market evolving in the next say five years uh first of all the market has change a lot again going back to the land of milk and honey Finland now just seven years into our journey for I think most of the Publishers in Finland we are the biggest retail buyer of their books bigger than the biggest um book chain uh which has of course changed a lot of their uh view of what are we actually doing in this market since it’s a digital thing that is selling the most and is generating most loyal people uh to our books so a lot has already changed uh and I don’t know if we know what the long-term impact just from that change will be uh but I think it again going back to your question where you said there’s a certain amount of hours in a day that people have to spend uh on average in book be I think we between 20 and 25 hours on average people spend per month in bookbeat and it’s pretty stable exactly when they listen during the week and they build a behavior by being on this type of platform as Publishers and Publishing books that apparently people love otherwise they wouldn’t spend this much of their time and money on it will prettyy much ensure them that they will stay relevant at least for the coming decade because I don’t think streaming services are going away in the next 10 years and by being on this type of platform you can be part of forming the long-term Behavior also for a new generations of listeners and readers uh the biggest group of new users in book be signing up uh is between 25 and 35 year old people and they could have put put their time and money on Netflix they could have put their time and money on YouTube but now they actually see that they can put their time and money on both because we going back to surveys which I hate we have done some of them that show that all the people that pay for book bit 70% of them also pay for Netflix so we’re actually a a compliment to that not something that they replace Netflix it’s actually something that fits into their everyday life they have their music service they have their video streaming service and they have their book service and together they fill the hours of the day with that so but by being this being a service that so many people pay for and spend their time with probably will make sure that books stay relevant at least for the foreseeable uh future I certainly hope so I mean it’s a it’s a fantastic format format that I think is is like you said it’s very different than than what’s out there um I do just because we are doing this on a podcast I have to ask will we see book bookbeat going into podcasts you know doing a reverse Spotify or are you focused on books right now yeah and here here I become really boring again uh I I think um mention a lot of times to the team but those are other ones we should focus on what we can be the best in the world at and that’s books it’s in our name uh we we should dig even deeper to explored that area where it’s still such a low Market penetration in the markets where we’re at even though we’re extremely proud of what’s happening in the nordics it’s still so much grow to be found there and if we want to compete with global players diversifying into our field I think we will probably have more success by them becoming even better at our core than trying to beat them at their own game by diversifying into music and podcast so uh from our view pod is one of our best marketing tools we have probably sponsored every podcast in the nordics and in Jan uh and we will continue to do so because it’s a g good Gateway for us to get listening people to start paying for our type of service but that doesn’t mean necessarily that we should be best at it it just to use a metaphor when Netflix want to grow they don’t become YouTube they Instead try to do even more longer series and try to even more invest in creating premium content and podcast for many people is still an ad based product that’s the focus in getting reach and selling ads so uh we we we’re going to focus on books I think that’s the long-term strategy until we get punched in the face and have to re reevaluate that sounds like a good strategy um last question for Nicholas you’ve been CEO now from for eight years Biggest lessons learned um from zero to 100 million which is uh is a pretty incredible journey um it surely contains a lot of ups and downs a lot of wins but also a lot of failures so when you look back at at at the last8 years is there anything that stands out as like kind of the major lessons that you’ve learned things that you would want to do differently or or just kind of key takeaways um uh from from your journey so far yeah well that nothing will ever be done uh during the first years I spent like seven days a week trying to get this to take off and just when you get ready to enjoy some smooth sailing on the growth journey by delegating operational parts to well the amazing be team of people that have joined us some huge obstacle comes up that needs to be dealt with and as a CEO building something new together with the team uh you need to be engaged in this to encourage them to take new steps but also making sure that the steps taken uh align with overall Vision uh when we first St off started off uh I remember I was recommended by some people to stay away from the operational part and focus on strategy but that is not really how you build a culture of growth and innovation in a new company both parts has to be aligned and you are uh and if you’re not putting in your time in understanding the elemental part of your business and its challenges uh you will not be able to impact the journey in a sufficient way uh and I guess you will hear the same thing from every there the trick is of course to back away quickly when you you’re not needed in an area so you give room for people to grow as you scale the company uh but you have to be there and uh the good thing though is that I’ve been lucky to recruit some extremely talented key people now in the team that together with me focus on getting done and impacting our journey and getting their hands started together with their teams not just trying to maneuvered the organization through strategy and remote control because you have to be out there and look at the challenges together with the team and then found the good solution moving forward so it never becomes smooth sailing in a Growth Company yeah I guess that’s a really really good takeaway and you have to have that perspective if you’re going to do it for eight years and um it seems that you are committed and as committed and excited as you were you know back eight years ago to to continue growing book be yeah but it’s fun building stuff and especially when you do it to to get a real lot of people and I think also if it’s a digital company you have endless supply of data which fits well with my interest it’s so interesting to you see what can we make out of all of this yeah that’s I yeah data driven you get to build stuff with people your people data and kind of building um I can totally see why that would be incredibly exciting to show up every day uh to work yeah Nicholas it’s been a true pleasure to have you on thank you so much for for sharing a little bit about uh the secret sauce and the journey that you guys have been on um for people who want to follow you is is is LinkedIn the best best way are you writing books on B Be Where what’s the No No again focus on what you can be the best in the world at and it will never be writing books and no if somebody want to get in touch reach out to me on LinkedIn I think that’s probably the easiest way uh I’m my focus is to uh preaching the Strategic pillars to the book be team not being out there pushing my own books uh and I think they would be really interesting for outside people in a way I think baby you know let’s say another eight years down the line where book Beek is doing billion in revenue and 100 million I think it could be really interesting to to kind of jot down some of the lessons in a book but that’s for that’s for the future you’re focused on that’s for future Generations it can also become one of these Apple series like we crashed or the drop out or something like that so being a cautionary tale instead of a success story no but but so far we we have had a pretty good journey and I’m glad that you had me so I can talk a little bit about all of the things that the team together has built so far uh but we’re still at the beginning of the journey so I guess there’s a lot of things to come absolutely I look forward to look forward to following that so for people listening go check out book beat if you’re not already user chances are that five or 10% of you will be so that’s that’s awesome but um for those who are not go check it out and I’ll put a link to your personal LinkedIn in the show notes as well Nicholas once again thank you so much um and good luck with uh with everything you have going on thank you it’s been a pleasure to be here thank you for listening you can find all episodes of the growth pod on Spotify YouTube and apple [Music] podcasts

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