A New Course for Leanpub

Abstract

This is a long essay, as it explains why we are doing six things today:

1. Supporting the creation and sale of courses (MOOCs) as well as books
2. Introducing monthly plans to create books and courses, starting from $8/month
3. Giving anyone who has earned at least $1,000 in royalties a free lifetime grandfathered plan to create at least 10 new books or courses
4. Switching to 80% royalty rates for all new books, courses and bundles, and grandfathering all existing ones at their current rates
5. Providing an option for authors to opt in to the new 80% royalty rate, earning a free spot on The Shelf if their book has earned at least $100
6. Removing the option to write Leanpub books in Word

If you’re a Leanpub author, or considering writing a book or course on Leanpub, we’d love for you to read it. But if you just want the summary, this table should do nicely:

Background

Scott and I launched Leanpub back in April 2010, with the goal of creating the best way in the world to write, publish and sell in-progress and completed ebooks.

I wrote that sentence in October 2016, when I announced our pricing change [1]. Starting in October 2016, it would cost $99 to create a Leanpub book.

Since then, we’ve had an amazing 18 months. Our book sales have stayed strong, and we’ve now paid over $6.3 million USD in royalties to our authors. The pricing change has helped our revenue as well: 11 of our 12 best ever months of revenue have happened since October 2016. (We had an outlier month a few years ago.) It turns out that charging money for your product is indeed a secret to making money online [2].

Of course, another secret that more than a few internet companies have discovered is that charging money for subscriptions is more effective than one-time charges. This idea of software as a service is so catchy it even has an acronym, conferences, etc.

Now, at Leanpub, we’re opinionated to the point of being stubborn, so we resisted this—even though we knew the majority of internet services that we ourselves used and loved were subscription models with monthly plans. (Heck, we run Leanpub on AWS—which is ironic on multiple levels.)

Specifically, in 2016 I wrote the following: “This is a one-time charge, not a subscription. … We thought really hard about this pricing change, and considered many alternatives. One thing we really don’t want to do is charge a monthly or yearly subscription fee per book. Books take a long time to write, and when you’re starting a book it’s hard to predict when you’ll finish. We don’t want authors to feel that they’re on a clock, or that they can lose access to their book once they’ve started it. We also want to keep things simple. Authors shouldn’t feel that they need a doctorate in Leanpub to understand what it costs.”

This is still good reasoning for authors who (a) are already convinced that Leanpub is a good service, (b) expect to only write one book, and (c) expect it to take a long time. So, we’re going to keep the $99 one-time charge option to create a single book.

However, today we are also introducing monthly plans. We want to reach more authors than the previous list. If you think we should have done this in 2016, you’re right. But before I get to those, I want to talk about the other thing we’re also launching today:

Courses.

The reason why I want to talk about courses first is that the subscription plans will be for courses as well, so it makes sense to explain why we’re building them, and what it means for Leanpub to bring the Lean Publishing [3] process to the creation, publishing, and taking of courses.

Our work in bringing Lean Publishing to course creation starts with Markua.

Markua: Markdown for Books and Courses

If you’re a Leanpub author, you’ll know that there are currently two ways to write a book in plain text on Leanpub:

1. Leanpub Flavoured Markdown
2. Markua

Leanpub Flavoured Markdown is a dialect of Markdown, which evolved over the years since we launched Leanpub. Leanpub Flavoured Markdown was basically Markdown minus inline HTML plus a number of extensions needed to write books. This Markdown dialect has been used for years by Leanpub authors to create all kinds of books.

Markua (pronounced “mar-coo-ah”) is the evolution of how Markdown is used at Leanpub. After years of experience with Leanpub Flavoured Markdown, I set out to specify it properly. I originally thought that this is what Markua would be: just a formalization of Leanpub Flavoured Markdown. But as the specification work evolved, I realized that Markua was really a descendant of Markdown, not just a flavour of it.

Books have different abstractions than HTML. All abstractions leak [4], so HTML’s abstractions leak into Markdown and the abstractions of books leak into Markua.

So, I started over. I started with Markdown. I then removed or changed the few things which were either not needed for books, or which were overly complex. I then found new, more appropriate abstractions for books—most importantly resources, figures and attribute lists. I then reassembled the pieces around these abstractions into a hopefully coherent whole [5].

As I was creating Markua, however, a funny thing happened: we decided Leanpub should get into the courses business.

From Books to Courses

Leanpub getting into courses essentially got pulled out of us by customers. We hadn’t planned to do this when we launched Leanpub in 2010!

But over the past decade, there has been a steady growth of interest in courses delivered over the internet at massive scale. These Massive Open Online Courses, or MOOCs, consist of essentially four things:

1. Reading material
2. Video or audio lectures
3. Exercises, with answers provided to the student
4. Quizzes, with answers used to automatically mark the quiz

It turns out the four things in this list either already worked perfectly in a Markua document, or would with slight tweaks to Markua.

So, Markua can be used to easily create any book on Leanpub, including a textbook which embeds images, tables, video, audio, exercises and quizzes. Besides this, however, Markua is also an amazingly simple and flexible way of creating a MOOC.

Wouldn’t it be amazing if you could write one Markua source document, just like you would to write a book, but when you clicked the publish button an entire MOOC was created?

We built it. It’s Leanpub for Courses.

Leanpub for Courses

When you click the publish button on Leanpub to produce a MOOC from a Markua document, here’s what Leanpub makes:

• Courses have an attractive landing page and are for sale in the Leanpub storefront.
• Just like books, the price of a course is either Free or between $4.99 and $500, inclusive.
• The entire course is available to read, view and listen to on the web in a web viewer.
• The entire course is available to download and read offline as an ebook, in PDF, EPUB and/or MOBI.
• Exercises and quizzes are generated from the Markua source.
• Students can do the exercises and quizzes on Leanpub, and there is automated marking.
• The quizzes even include advanced features like random selection of question alternates, so students don’t all get the same quiz.
• Instructors can define various passing levels for the course, and students can earn attractive certificates which indicate their level of achievement.
• The course has a forum for students to join and collaborate in.

To be clear: as a course author, you get all this from one Markua source document. With one click.

In the future, we’re going to be adding features like course viewing and taking in the Leanpub mobile app, and in a native app for computers. These features will also work for all Leanpub courses which are created.

Our new, expanded goal is for Leanpub to be the best way in the world to write, publish and sell in-progress and completed ebooks and courses.

Given what we’ve already done with Markua, we’ve made a good first step. We have a lot of work to do in the weeks and months ahead, but this vision is really exciting for our company.

One reason this is especially true is that in many cases already on Leanpub, a book is a course.

A Book is (often) a Course

Many Leanpub authors write books to teach their readers something. This is especially true in the case of computer programming books.

A course just formalizes this, by adding exercises, questions and certificates.

So, if you’ve already written a Leanpub book, making a course out of it is often a natural next step.

I’m doing this myself: I’m turning my Programming for Kids [6] book into a course on Leanpub. As the author, the great thing for me is that the course is just a branch of the same git repository [7] as the book itself—that’s how much reuse of material there is. This will also help me keep the book and course in sync, and help any translators of the book who wish to make translated versions of the course, etc.

Teaching is intrinsically rewarding, and teaching a course on the internet is rewarding at scale. The same can be said of money.

In terms of revenue for content on the internet, it’s essentially like this:

Tweet (-) < Blog Post ($) < Book ($$) < Course ($$$)

As an author, there’s a ladder of value for your writing—and courses are the next step up the ladder. So, if you wonder why you see so many authors and publishers getting into MOOCs, now you know.

Now, in terms of, say, relative effort involved to create that content, it’s similar:

Tweet (-) < Blog Post (!) < Book (!!) < Course (!!!)

What Leanpub does, however, is to save authors days or weeks of work in creating a book or course.

The way this is possible is that we are obsessively focused on the book and course creation workflow used by our authors.

For Leanpub, our most important customers are, and have always been, our authors. Frankly, we are happiest when we’re improving the tools they use to write. We are putting a lot of work into Markua, not only to finish implementing it for books, but also in order to bring the power and simplicity of our Lean Publishing process to courses.

With Leanpub for Courses, we want many of our authors to evolve their books into courses. Since these courses can start with the same Markua manuscript as the book, quite often these courses can just be an extension of the book, not an entirely new undertaking. This is what I’m doing with Programming for Kids, and it’s what we hope many of our authors do.

With our Markua-based course creation workflow, we’ve already made Leanpub the best way in the world to create a MOOC. And the fact that this is all done from a single plain text document is magical.

Magical, Not Free

While we want to create a magical experience for authors, one part of this magic is that it costs money.

Leanpub is a bootstrapped startup. We have raised $0 from investors. Because of this, we control our own destiny, building the startup we want, the way we want to build it.

However, it also means we need to earn money.

We currently make money the following ways:

1. Selling books to readers in the Leanpub store.
2. Selling book writing purchases to authors and publishers for a flat fee.
3. Selling spots on The Shelf, a special spot on our homepage where authors can promote their books.

To, this, we’re also adding three new ways:

1. Selling courses to students in the Leanpub store.
2. Selling course writing purchases to authors and publishers for a flat fee.
3. Selling monthly plans to create books and courses, in tiers meant to reflect different authors’ needs.

Finally, it also means that we are changing the royalty rate for all new books and courses.

(All existing books, courses and bundles are grandfathered to have the same royalty rates as they currently do. Also, all existing books and courses are considered to have been paid by a flat fee, and do not count toward any monthly plan. This is discussed further below.)

Before getting into all the specifics of how courses will be priced, and the changes to Leanpub’s royalty structure, it’s important to ask how courses should be priced.

How to Price Course Writing Purchases?

From one perspective, course writing purchases should be a lot more expensive than books:

• Being able to create an entire MOOC, complete with automated marking, from a single Markua document is amazing.
• This will save course authors even more time than our Lean Publishing workflow saves book authors.
• We expect courses to have more support cost for us, both in helping authors create courses and in dealing with any issues that students have.
• We expect courses will generally be priced higher than books, and arguably be more lucrative for their authors overall than books. So, we’re providing more value, and could charge more.

From another perspective, course writing purchases should be cheaper than books:

• Our book workflow has been live for eight years; our course workflow is brand new. There’s much less proof that it’s awesome.
• Fundamentally we need to ensure that students of Leanpub courses support each other in the forums—providing support at MOOC scale does not work, so the work we will be doing will be focused on providing better user experience, enhancing our forums, etc.
• The cost to support students needs to affect the royalty rate we pay and the way we price courses in the storefront, not the way we charge authors to create them. Otherwise, it doesn’t scale for a successful course.
• Since we expect courses to be more lucrative for their authors than books, we expect to make more money from the storefront as well. So, we could charge less.

$99 Flat Fee Option for Book and Course Writing Purchases

Since there are good arguments on both sides and since we have very limited data for courses, we’re just going to price courses the same as books.

Besides, we think it’s fair this way.

If you already love Leanpub and only plan to create a couple books or courses, paying a one-time charge for each of them is a great choice. So, we’re happy to offer it for books and courses.

The $99 one-time book or course writing purchase does not have a free trial period, however. Instead, it has a 45-day refund period, just as all Leanpub purchases do.

Leanpub Monthly Plans from $8/month to Create Books and Courses

Now, we want Leanpub authors creating tons of books and courses.

Because of this, only having a $99 flat fee option to create books and courses is silly. $99 once or twice is doable for many people, but paying it 3, 10 or 20 times is prohibitive.

So, today we’re introducing monthly plans as well.

Just as books and courses can both be purchased for the same $99 flat fee, we will count books and courses the same in the monthly plans.

A monthly plan is simply a price per month to create a certain maximum combined number of books and/or courses. Each book or course takes one slot, and you’re simply paying for slots.

The monthly plans for individual authors are as follows (all prices in US $):

• Standard: 3 book or course slots, $8/month
• Pro: 10 book or course slots, $19/month
• Gold: 25 book or course slots, $29/month
• Platinum: 100 book or course slots, $59/month

We’re proud of these monthly plans, and think they offer great value for authors creating books or courses.

If you want to create 3 books and/or courses, you can now just pay $8/month instead of paying $99 * 3 = $297.

All the monthly plans will have the same new royalty rate as the flat fee option. Royalties are discussed below.

Why Monthly Plans Now?

There are a number of reasons why we’re introducing monthly plans now. Here are the top two:

First, as a bootstrapped startup, having monthly recurring revenue (MRR) will be very helpful to us—primarily since it recurs monthly! This will produce more predictable revenue than one-time book writing purchases, and as long as we can keep adding new customers and upgrading their plans faster than we lose customers to churn and downgrades, this will ensure we have not just steady but increasing monthly revenue. Even better, the lifetime value (LTV) to Leanpub of many monthly plan customers will be higher than $99. We’re proud of that: Leanpub is a great service, and is worth paying for.

Second, having monthly prices as low as $8 will encourage authors to try Leanpub, some of whom may have otherwise balked at paying $99 for something they’ve never used. It’s much easier to pay $8 than $99: $99 implies some level of commitment, whereas $8 does not. Furthermore, while we do offer full refunds on the $99 book writing purchases for 45 days after purchase, relying on a refund policy to function as the free trial implies a level of trust that we have not yet earned from many potential customers.

Fine Print

First and foremost, all existing books or courses are considered to have been paid by a flat fee, and do not count toward your monthly plan. Plans only apply to new books which are not created for a flat fee.

In terms of coauthor situations, a book only counts toward the plan of the primary author of a book. Coauthors can be added for free, without needing a plan. If they already have a plan, the book does not count as one of their books in that plan.

Plans can be cancelled any time. When cancelling a plan, we will automatically refund the most recent monthly charge. We only want to earn money if the author is happy with our service.

Finally, every monthly plan will have a 14-day free trial period. During this free trial period you can fully try out our workflow, creating and previewing books and courses. The only thing you can’t do during the trial period is publish and sell your book or course in our store. (If you do choose to do publish and sell, we prompt you to re-enter your payment information, and charge you right away.)

What About Discounted Flat Fees?

We previously had special discounted flat fee rates under certain circumstances. This included special prices for translations, and special discounts for authors who had been paid at least $1,000 in royalties.

With the launch of monthly plans, however, we’re now updating our rewards to be for free plans instead of for flat fee discounts. All the flat fee discounts have been replaced by these rewards.

We want to reward the Leanpub authors who have supported us over the years. So, we have a special set of rewards for authors, based on the amount of royalties they have been paid up to this point.

Here are the grandfathered rewards:

• Any Leanpub author who had been paid $1,000 in royalties by April 20, 2018 gets a free lifetime Pro plan, good for creating 10 books and/or courses.
• Any Leanpub author who had been paid $5,000 in royalties by April 20, 2018 gets a free lifetime Gold plan, good for creating 25 books and/or courses.
• Any Leanpub author who had been paid $10,000 in royalties by April 20, 2018 gets a free lifetime Platinum plan, good for creating 100 books and/or courses.

Thanks very much to all our authors for supporting us over the past 8 years.

What About Rewards Going Forward?

We really like the idea of free plan levels as reward for royalties, so we’re making this an achievement which can be unlocked going forward as well.

So, if you haven’t earned a free lifetime plan based on the royalties you’ve been paid to date, you can still do so going forward.

Now, these grandfathered rewards above aren’t sustainable for us to offer going forward, however. We need higher royalty thresholds, so that we don’t lose almost all our subscription revenue before it starts!

So, we have a different set of rewards for authors, effective April 21, 2018:

• Any Leanpub author who has been paid $1,000 in royalties gets a free lifetime Standard plan, good for creating 3 books and/or courses.
• Any Leanpub author who has been paid $10,000 in royalties gets a free lifetime Pro plan, good for creating 10 books and/or courses.
• Any Leanpub author who has been paid $50,000 in royalties gets a free lifetime Gold plan, good for creating 25 books and/or courses.
• Any Leanpub author who has been paid $100,000 in royalties gets a free lifetime Platinum plan, good for creating 100 books and/or courses.

Obviously, if you have been grandfathered into a better plan than the above, these don’t have any effect. (So, if you’d been paid $6,000 in royalties by April 20, 2018, you’d have a free lifetime Gold plan, good for creating 25 books or courses. Going forward, this is a reward which is unlocked once someone reaches $50,000 in royalties. Your next free lifetime reward would be at $100,000 in royalties, to get a free lifetime Platinum plan.)

Again, the existing books and courses don’t count toward plan slots. So, once you’ve unlocked a reward level, instead of getting a discount to create new books or courses, you’re getting to create a number of books or courses totally free.

If you’re already paying for a monthly plan, this plan will become free once you’ve been paid that level in royalties. (We count all your royalties here, of books where you’re the primary author or a coauthor, not just royalties from books in your plan.)

Also, in the near future, we will support the most expensive free plan level you have unlocked being a discount on more expensive plans. So, if you unlock a free Pro plan, you also unlock an $19 monthly discount on more expensive plans.

Because of this, we think these free plans are a huge improvement for our authors over our previous discounts.

Here’s an example scenario: Say you sign up for a Standard plan and write a book which earns over $1,000 in royalties. Your Standard plan goes from being $8/month to being free. You then create your next book for free, instead of for $99 (or the $49 discount we previously offered). You can even create a third book, or a course, for free as well. At this point, you have two books and one course. Shortly after these have all launched, you may be at $10,000 in royalties, upgrading you to free Pro plan. This gives you 7 more books and/or courses for free, as part of your Pro plan. At this point, chances are you have more free books and courses at your disposal than you have time to create—and this all started from paying $8/month and writing one book.

All Existing Books, Courses and Bundles have Grandfathered Royalty Rates and Do Not Count Toward Monthly Plan Slots

As discussed, all existing books, courses and bundles have grandfathered royalty rates and do not count as one of the book or course slots in a monthly plan.

This is true regardless of the state of the book, course or bundle. It doesn’t matter whether it’s published, unpublished, retired, stealth, whatever—if it exists on April 20, 2018, it’s grandfathered.

Specifically:

• All existing books are grandfathered to be free (not part of a subscription plan) for the author, at a royalty rate of 90% minus 50 cents. This is what they get now, so it’s what they will continue to get.
• All existing courses (in the beta) are grandfathered to be free (not part of a subscription plan) for the author, at a royalty rate of 85%. This was what we had been telling people we were planning for their courses, so it’s what we’re giving them.
• All existing bundles are grandfathered at a royalty rate of 90% minus 50 cents. This is what they get now, so it’s what they will continue to get. (No books or courses can be added to existing bundles, however.)

We deeply appreciate the support that Leanpub authors have given us over the years. Nothing changes for any of your existing books, bundles or courses.

Flat Fee Books and Courses Do Not Count Toward Monthly Plan Slots

Any book or course which was purchased for a flat fee does not count as one of the book or course slots in a monthly plan.

The monthly plans for books and courses only affect books or courses created after April 20, 2018 which were not paid for by a flat fee.

80% Royalty for All New Books, Courses and Bundles

As previously mentioned, going forward all NEW books, courses and bundles will be paid an 80% royalty, at all price points. (Leanpub authors can sell their books, courses and bundles in the Leanpub store for free or between $4.99 and $500 inclusive.)

Again, this royalty rate change only affects books, courses and bundles created after April 20, 2018. All existing books, courses and bundles are grandfathered at their previous rates.

This 80% royalty is identical to the previous 90% minus 50 cents royalty rate at the $4.99 and $5.00 prices, and it is a lower royalty rate for authors at higher prices.

Now, the difference in the royalties on an individual purchase when comparing the new 80% royalty and the previous 90% minus 50 cents royalty is relatively small. However, since we were earning so little money on every sale until this point, this relatively small change will make a huge difference for us.

• A $10 purchase earned the author $8.50 under the 90% - 50 cents rate, and earns the author $8.00 under the 80% rate. This is a change of 50 cents. The author earns 94.12% of the previous royalty rate. However, what Leanpub earns after subtracting the various PayPal fees goes from approximately $0.70 to $1.20. This is also a change of 50 cents, but it means Leanpub earns 171% of its previous revenue for this purchase.
• A $20 purchase earned an author $17.50 under the 90% - 50 cents rate, and earns the author $16.00 under the 80% rate. This is a change of $1.50. The author earns 91.43% of the previous royalty rate. However, what Leanpub earns after subtracting the various PayPal fees goes from approximately $1.20 to $2.70. This is also a change of $1.50, but it means Leanpub earns 225% of its previous revenue for this purchase.

Why is an 80% Royalty So Important for Leanpub?

To understand why this increased profitability from the 80% royalty rate is so important to Leanpub, it’s important to understand the following:

With the previous 90% minus 50 cents royalty rate, the Leanpub store was essentially a non-profit that ran for the benefit of our authors.

Besides the PayPal fees on purchases, of about 3% plus 30 cents, there are also fees to remit royalties to authors. For authors not based in the US, this fee is about 2% of the royalties, capped at a $20 fee. It’s cheaper for us to pay US-based authors, either via MassPay or via PayPal’s newer Payouts API. But for non-US authors, which are many of them, we’re paying an extra 2%.

In addition, there are other fees, including $10 chargeback fees, and 30 cent fees on every refund. (We have never subtracted these fees from royalties.) So, of the 10% plus 50 cents we were keeping, typically over 5% plus 30 cents of it was going to PayPal.

To make matters worse, there are the PayPal currency conversion fees when we withdraw USD for ourselves. (We’re Canadian, and USD from PayPal must be withdrawn as CAD.)

Finally, to add insult to injury, there are two currency conversions (USD ⇒ CAD ⇒ Euro) when we remit VAT to the EU.

All these costs are variable costs, meaning they grow as we do. They all come out of our margin.

Besides these, there are also the fixed costs, such as the servers to actually run Leanpub. Oh, and salaries.

Since we had run the Leanpub store at such a low margin, and since we’re bootstrapped, this hurt our ability to spend money building the features we need to grow.

So, we’re going to take Marc Andreessen’s advice to heart and raise prices. [8]

Finally, besides the improvement in Leanpub’s business model, there’s another improvement here: 80% is much less confusing than “90% minus 50 cents”. You shouldn’t need a flowchart to understand the royalties you’re getting paid. If we had a nickel for every time we were asked whether the 50 cent fee applied to free purchases, we’d have a lot of 50 cent fees. (It doesn’t, by the way. Free purchases are free for the author; they don’t cost the author 50 cents. If you think this is hard to explain: you’re right.)

Our Margin is Your Opportunity

With the change to an 80% royalty rate, we will now have room to breathe. This opens up other possibilities that we couldn’t consider before.

For example, once upon a time we had an affiliate program. However, because of our low margins, we couldn’t fund it out of our portion of the sale revenue. Instead, it had to be a complex opt-in process where individual authors could choose to be part of the affiliate program, and then produce special coupon code links for the affiliates, etc. It was a nightmare of confusion.

With this change, we will actually have enough margin to consider building one which comes right out of our portion of the purchase revenue.

Now that I’ve explained why the 80% royalty is so important to us, I want to explain how our 80% royalty rate is still so much better than our competition.

Opting In to the New 80% Royalty Rate for Grandfathered Books

Some Leanpub authors want to support Leanpub by voluntarily switching to our new royalty rate of 80%, instead of keeping their grandfathered royalty rate of 90% minus 50 cents.

We deeply appreciate this, and we want to reward these authors.

So, if you opt your book in to the new 80% royalty rate, and it has earned at least $100 in royalties, we will give you a free spot on The Shelf (transferable to other books you are an author of) for a certain length of time.

There are 72 active spots on The Shelf available at any one time. If they are all full when you opt your book in to the new 80% royalty rate, we will create you a spot on The Shelf which starts in the next available future opening, and goes for the appropriate length of time. If you have multiple books which qualify here, you can get multiple spots.

To learn more about opting in to the new 80% royalty rate, just sign in to your Leanpub account, edit one of your books, and click the “opt in” link in the author app. This will show you a page with more info about what type of spot on The Shelf you would qualify for, etc.

Lean Publishing, Variable Pricing and 80% Royalties make the Leanpub Store better for Authors than Amazon and Apple

When you sell a book in the Leanpub store, we handle everything.

We want the quality of the reader buying experience to be similar to that of buying something from Amazon or Apple, so we handle all the support. This includes refunds, download issues, emails for receipts, lost passwords, fighting fraud, etc.

The competition to using the Leanpub store is not running your own store, it’s Amazon and Apple. (I say “the Leanpub store” here, not “Leanpub”, since Leanpub authors are free to sell their books wherever they want—including on Amazon and Apple.) Now, most authors don’t write books so that they can run a store on the internet.

We do this, and trust us: It’s work.

So, when evaluating the Leanpub store, the relevant comparison for an author is to what is provided by Amazon and Apple, not to DIY options.

Ironically, we’re customers of both Amazon and Apple, and I personally admire both companies greatly. Everyone at Leanpub has a MacBook Pro, and many of us have iMacs or iMac Pros as well. I’m an Amazon Prime customer, and Leanpub itself runs on Amazon Web Services.

Now, the combined market cap of Amazon and Apple is currently over $1.6 trillion USD, and Leanpub is a bootstrapped startup. Who are we to compete with them?

Despite this, the Leanpub store is already a better place to sell ebooks than Amazon or Apple, for three reasons:

First, Lean Publishing.

The Leanpub store is optimized for selling in-progress ebooks. To distribute an updated version of an in-progress ebook to all their readers, all the author has to do is click a button. They can provide release notes, etc. Because of this, Leanpub helps authors build a real community around their book, as they write it.

Second, variable pricing.

Books and courses on Leanpub have two prices: a minimum price and a suggested price. We call this approach variable pricing. One popular approach is for an author to set a free minimum price, and a $20 suggested price.

When readers buy books on Leanpub, they can drag a slider to change the price they are paying, or they can type in a number. The only constraints are that the price must be at least the minimum price, and that it’s either free or between $4.99 and $500.

If you’re new to Leanpub, the following will be hard to believe, but it’s true:

Many readers voluntarily pay more than the minimum price.

Readers often pay the suggested price, or some other price which is higher than the minimum price. This is for many reasons, but one of them is that we clearly show how much the author is earning (via a separate, draggable, slider), and readers love to support authors.

Third, Leanpub’s 80% royalties.

Now, here’s what Amazon and Apple pay authors for ebooks, last time we checked:

• Amazon pays <= 35% royalties on ebook purchases above $9.99 or below $2.99. Seriously.
• Amazon pays <= 70% royalties on ebook purchases between $2.99 and $9.99 inclusive
• Apple pays <= 70% royalties on ebook purchases

Yes, because of Amazon’s royalty policy, an author earns less on a $12 ebook sale than on an $8 ebook sale!

Note that these figures aren’t exact, since with Amazon or Apple there can be costs for amount of data downloaded, different costs for territories, etc.

But the big point is the following: Most successful Leanpub books sell for over $10 per copy. At this price point, Amazon pays 35% royalties. By contrast, Leanpub pays 80% royalties at all price points. That’s over twice as good.

Leanpub’s 80% royalty rate is better than Amazon’s and Apple’s at all prices—and this is after we changed it from 90% minus 50 cents.

Leanpub’s Revenue Streams

With all the changes that have been discussed, we now have a number of improved or new revenue streams:

• Leanpub storefront sales of books and courses
• Flat fee book and course writing purchases
• Monthly recurring revenue from subscription plans
• Extra revenue from promotional features such as The Shelf

Combined, these revenue streams will help us grow. Now, we’re huge believers in Lean Startup principles—we are called Leanpub, after all. As such, we’re always iterating, and while I don’t like to talk about release dates, I do like to talk about the big picture.

Leanpub’s Expanded Vision

Our expanded vision is to be the best way in the world to write, publish and sell in-progress and completed ebooks and courses.

We will get there by focusing on our authors and our readers. From most companies, Amazon excluded, focusing on customers is a meaningless platitude. For us, it’s real. We care more about the writing and publishing workflows used by our authors than any other company does. For us, this is the basis of our entire product. For other companies, it’s an afterthought at best.

We will make the best plain-text-based ebook and MOOC creation platform in the world. Our work will be based on Lean Publishing principles, and our platform will be powered by Markua.

More specifically, this includes things like actually finishing our Markua support for books and courses, supporting courses in the Leanpub mobile app, improving our in-browser text editor, building a Leanpub native app for computers, etc.

Now, with the expansion of Leanpub’s vision, it’s equally important to remove things which are not part of that vision.

Focus Means No More Writing in Word (but we’re adding Word import)

With this expanded vision all these changes which have resulted from it, it’s equally important to remove the parts of Leanpub which don’t fit with this vision.

After all, if all you do is add scope to a product without removing any scope, you end up with a confused, incoherent mess.

Now, we thought pretty hard about all aspects of Leanpub, and we’re actually pretty happy with it. However, the one part of Leanpub which did not make the cut is writing in Word.

Previously, it was possible to write in Word and either upload a Word document or put the Word documents in a Dropbox folder. It seems promising, but only if you stick to what we officially support. We blogged about what we did officially support here [9], and linked to that from a few places.

The short version about what we supported was “.docx files, almost no formatting works, and you can either upload via a Word upload form or referenced from Book.txt”.

Now, when I say that almost no formatting works, I mean it. So, many Leanpub authors who used Word end up frustrated and unhappy.

Ironically, while we “supported” writing in Word, we did not have a Word import. If you were writing in Leanpub Flavoured Markdown or Markua, the only way to import a Word document was to save it as plain HTML and import that.

Given that Word was supposedly an officially supported writing mode, that was pretty weak.

Anyway, what we’re doing now is bringing our relationship to Word in line with our vision, and we’re going to flip what we do:

1. Word will be officially supported for importing.
2. Word will not be supported for writing.

Specifically, here’s what we’re doing:

1. We’ve added an import from Word option, just like you can import from HTML, WordPress, Blogger or Wattpad. This will import your Word document (.docx only) into Markdown. (If anyone wonders: yes, we’re using Pandoc for this. We’re not doing anything special here at the moment; just using vanilla Pandoc to convert from Word to Markdown.)
2. We’re removing the Word upload form option. Books which already use it still can stay in that mode, but no other books can switch to that mode. We don’t want to break our existing authors.
3. We’re keeping the “reference a Word document from Book.txt” feature “working” for a while, but we’re going to completely remove all documentation about it. This will be a stealth feature, like the In-N-Out Burger secret menu. Except instead of a tasty burger, you get a deprecated mess. Essentially the only thing we’ll keep will be the sample documents, which will live on GitHub. Over time this will probably end up breaking. Sorry.

Finally, if you are doing anything complex in Word, and want to continue to do so, then File > Save as PDF and using our Bring Your Own Book choice is an option. But then you don’t get EPUB, MOBI or the Leanpub app. So, if you’re starting with a Word document, we strongly recommend writing in plain text and using our new Word import feature.

What’s Next?

Leanpub turns eight years old tomorrow. Leanpub has a bright future, one which is much brighter because of these changes.

These are very exciting times for Leanpub. We have worked incredibly hard over the past eight years to put ourselves in this position, and there is an amazing opportunity in front of us.

All of us would like to thank every Leanpub author and reader who has helped us build Leanpub over the past eight years.

Personally, I am so grateful to all of our authors and readers, as well as to my co-founders and to our employees. Thank you so much for getting us to where we are today. My sincere hope is that the changes described here will help us grow Leanpub even faster in the years ahead, and build a better Leanpub for all our authors and readers.

Peter Armstrong

April 20, 2018

Notes

1. The previous pricing change essay is archived at https://leanpub.com/pricing.
2. https://www.youtube.com/watch?v=0CDXJ6bMkMY
3. Lean Publishing is explained at https://leanpub.com/lean/read.
4. http://www.joelonsoftware.com/articles/LeakyAbstractions.html
5. The Markua specification is at https://leanpub.com/markua/read.
6. The Programming for Kids book is at https://leanpub.com/programmingforkids. Ironically, the Programming for Kids course isn’t even published yet—I’ve been so focused on helping the team ship the courses feature that I haven’t even shipped my own course!
7. If you don’t know what git is: you can also create a course on Leanpub in Dropbox or even in our in-browser text editor. You don’t need to use git repositories. However, using git plus either GitHub or Bitbucket for syncing with Leanpub is the most advanced workflow for course creators, as it takes advantage of the powerful collaboration and revision control tools that software developers use.
8. https://tim.blog/2016/05/29/marc-andreessen/
9. https://medium.com/@leanpub/writing-leanpub-books-in-word-95822292078a