Interview with Keith Waters of Abe Books

This week I had the pleasure to have lunch with Keith Waters, founder and creator of the massive online used bookstore, Abe Books. (www.abebooks.com). I was extremely interested to hear his story, and find out how he took an online business from zero to a million.

First off, a bit of history about Abe Books. Originally, Keith and his wife Cathy had a used bookstore in Victoria BC that they owned and operated. Cathy used a monthly magazine called "AB Bookman's Weekly" where she would post wanted ads for her bookshop customers to find rare/out of print books. Whenever she posted a want ad, they would get tonnes of mail from other booksellers letting them know they had the book. She would then send a cheque, they would send the book. Everything was done by mail. They had such an overwhelming response to the listings in the magazine that it gave Keith the idea to build an online version of it, and make it infinitely easier for sellers and buyers to communicate.

Keith had a background in IT and database development and a degree in computer science, so he was able to create the original platform that the website would run off. What Keith had suspected when he first had the idea for the online database was coming to fruition. Once the barriers of traditional mail were removed, the number of booksellers and buyers exploded.

From Wikipedia, a detailed timeline:

AbeBooks was founded in 1995 by Rick and Vivian Pura, and Keith and Cathy Waters. The site was launched in 1996, initially including listings for only four bookstores. AbeBooks acquired Germany's JustBooks GmbH online book marketplace in 2001, which helped the company expand into the German, French and British online bookselling markets. In 2004, AbeBooks expanded its model to include new books, and acquired the Spanish company IberLibro, to better serve Spanish language markets.
In 2002, the founding partners were bought out by German media company Hubert Burda Media.
From the late 1990s through 2005, AbeBooks had reseller agreements with eBay, Half.com, Barnes & Noble.com, BibliOZ.com and Amazon.com, allowing AbeBooks to market and sell booksellers' books through those channels; these agreements were dissolved in 2005. AbeBooks purchased IberLibro.com in October 2004 and its inventory was integrated into the AbeBooks' database in December 2006. In November 2005, AbeBooks acquired BookFinder.com, an American book price comparison "metasearch" shopping service site.[2] In February 2006, AbeBooks acquired book-inventory and order-management company FillZ.[3] In May 2006, AbeBooks purchased a 40 per cent stake in LibraryThing, a social networking and book cataloging website for bibliophiles.
Sellers pay a monthly subscription to list their books on the site, ranging from $25 to $300, depending on how many books they list. In addition, sellers pay a percentage fee for each book sold via the websites.
AbeBooks initially offered its services for a flat listings fee, based on the number of titles listed for sale. The model was changed in the early 2000 to include a commission on sales. In April 2006, AbeBooks started mandatory processing of Mastercard and Visa credit card transactions on behalf of its sellers and added a charge of between 3.5% and 5% for the provision of this service: previously this service had been optional. In 2008, AbeBooks started charging a commission of 8% on the cost of postage as well as the book price.

So, I had a number of questions that I wanted to ask Keith, as it is not very often that I get the chance to pick the brain of someone who has had huge success with an online business.
First off, I wanted to know who Keith pulled around him to get this all going. In the beginning, it was just himself, and his wife Cathy, and then he approached his friend Rick and his wife Vivian Pura, Rick also being an IT consultant, to join him in his business venture.

I was curious to know if the business was planned from the beginning, or if it just evolved over time. I was happy to hear that once the decision to create Abe Books had been made, there was a plan put in place to build a successful business.

A key point I was interested in exploring, was just how exactly did Keith get the booksellers on board to sell on his website. He explained that they approached the booksellers with the business proposal that showed them how they could make money on his site, with very little overhead or monthly investment. For the booksellers, it was a no-brainer to work with him, as it would greatly expand their customer reach by having the exposure of being on the internet. At his last count, they had some 13,000 booksellers on the site.

I had a number of other questions that we covered during our luch, but here are some of the bits that I found most incitefull.

· What was the hardest part of starting an online business?

Having an idea, and then actually taking that first step forward. Hundreds or thousands of people can have the same idea, but it is the ones who have the emotional and mental strength to take that first step forward that have the best chance of succeeding.

· If you were starting again today, what would you do, and where would you start from?

Have a bulletproof business plan, with extensive cost/profit charting, with as many x-factors eliminated as possible. The area Keith said he would start a business in, I think we’ll let him keep that to himself.

· Finally, my last few notes from our meeting:

- Test the market as much as possible first.
- Have a team of 3 or 5 people, never 2 or 4
- Follow your plan from beginning to end!
- Agree on the steps, from beginning to end, at the beginning!
- Fill a need, or make a problem/task infinitely easier to do
- The best business plan is the SIMPLEST business plan.

I had a great time getting the chance to interview Keith Waters, and hope that some day I can have the same level of success that he’s had.
Later this week, I will be writing about the last two books of the week, “The Four Hour Work Week”, and “Get Smarter”.

Thanks for reading,

Will