Leanpub and Pubcoin

Abstract: We’re doing a Token Sale of a token called Pubcoin. Pubcoin will be a rewards program for Leanpub and other merchants, built on a permissioned blockchain based on Quorum, JPMorgan’s fork of Ethereum. Read our detailed whitepaper to learn more, and sign up for the newsletter at the Pubcoin website for updates on the Token Sale. Read on to learn why we’re doing all this, in the context of what it will mean for Leanpub.

Context

Leanpub is a bootstrapped startup which is both a writing and publishing workflow and a store. Since Scott and I launched Leanpub in 2010, everything that we’ve done has been in service of one goal: creating the best way in the world to write, publish and sell in-progress and completed ebooks.

While this is one goal, the resulting set of activities is more complex. Anything we do is basically one of these three types of things:

  1. Building and supporting the workflow. This portion of Leanpub includes book generation and author support, so it’s the largest piece of Leanpub. It includes Leanpub Flavoured Markdown and our beta of Markua support, Dropbox, GitHub and Bitbucket syncing, the in-browser text editor, and our minimalist in-browser visual editor. It also includes actually publishing the generated book, distributing updates to existing readers, and even exporting print-ready PDFs to make print books for sale on third-party stores.
  2. Building and running an elegant store. The Leanpub store is a beautiful way to sell in-progress or completed ebooks. It includes attractive book landing pages, variable pricing with minimum and suggested prices, analytics and mailing list integrations. It also includes all the manual processes including reader support via email and Intercom, royalty payments, fraud detection and VAT remittance. It even includes some marketing, including our Frontmatter and Backmatter podcasts and our social media work. Finally, it includes the much-neglected Leanpub mobile app.
  3. Bootstrapping. We have raised $0, so some portion of our time goes to activities completely unrelated to Leanpub, except for the revenue they generate. This has helped us support a larger team with a more diverse set of talents than we otherwise could have, had we paid salaries based solely on Leanpub revenue. Even though client work is distracting, it has gotten us to where we are today.

Now, obviously, there is some inherent tension here: when we’re focusing on the writing and publishing workflow we’re not focusing on the store, and when we’re focusing on the store we’re not focusing on the workflow. Also, when we’re focusing on client work, we’re not focusing on either of those!

However, we have gotten very good at managing complexity over the years. In a given week, a developer typically only works on one area; in a given month, on a maximum of two of them. And Ann, our designer, does great work on both Leanpub and our client work, and she has gotten very good at context-switching between the two since joining us over a year ago.

The big point is this: our ability to make forward progress on Leanpub is based on our ability to take on additional complexity, and then to prioritize and focus accordingly.

Our Current Priorities

Here’s what we’re currently planning to focus on for the next six months, in priority order:

  1. Courses. Our beta of Leanpub for Courses is scheduled to start in October. Yes, you will be able to write, publish and sell an online course as easily as you can a Leanpub book. We will also add support for Courses to the Leanpub mobile app, and make some other improvements to the mobile app while we’re at it.
  2. Pubcoin. This is discussed below. We’re actually building Pubcoin, not just publishing a whitepaper. We plan to launch Pubcoin support in Leanpub before the Token Sale starts. To see some of the design for this, see the Pubcoin whitepaper. To read how it affects Leanpub, read on.
  3. Markua. Markua is the evolution of Leanpub Flavoured Markdown, and we’re excited about finding the time to finish it. However, Markua is already almost as polished as Leanpub Flavoured Markdown, and it made business sense to prioritize Courses and Pubcoin over finishing Markua. Besides, support for Courses is part of the Markua specification, so by working on courses we’re arguably working on Markua—a specification without a full implementation should not be trusted.

While these are the three main development priorities for the next six months, I want to emphasize one thing: The book writing and publishing workflow is the core of Leanpub. Since launching over 7 years ago, we’ve put tons of effort into the workflow. This will continue. The only reason we could even think about doing something like Courses is that it got pulled out of us, because our book writing and publishing workflow is so good.

For an author selling a technical book, turning that material into a course is often the logical next step—and one that sells at a higher price point, which is attractive to us as well! As we thought about courses, we came to view them as a natural extension of technical books. For us, a course is essentially a book + videos + exercises + quizzes + a certificate, but all generated from a single Markua document. Courses fit so naturally in Markua that I managed to specify the entire thing in the Markua spec without it seeming out of place.

The Leanpub Store

We’ve taken a unique, opinionated path with the Leanpub store over the past 7 years, and we will continue to do so. We have prioritized features which we found philosophically appealing (variable pricing, sliders for prices, a 45-day return policy, no DRM) and we have neglected other features which would typically be considered launch-blocking requirements. For years, we didn’t even have a shopping cart. If you wanted to buy 5 books, you literally had to check out 5 times, typing in your credit card information or going to PayPal each time.

With the Leanpub store, we basically neglected it for as long as we possibly could while focusing on the book writing and publishing workflow, and then we put a bunch of effort into it—making it beautiful, and completely rewriting the front end in React. This took a long time, and was a risky decision, but it was totally worth it. Today, our store is much faster, the code is cleaner and our book landing pages are really attractive—especially considering all the variety of options that they have to support, including multiple packages, multiple bundles, multiple authors, contributors, languages and translations.

We’re now going to take this same “zero-to-hero” approach with another aspect of the Leanpub store: the rewards program. If you just said “What rewards program?”, you’re right. Like many publishers and other internet merchants, we don’t have one—even though a rewards program is probably the second most effective tool in retail next to “SALE”. Having a rewards program just never made it high enough in the priority queue for us. So, currently we’re definitely at the “zero” end of the rewards program spectrum.

We’ve been thinking about rewards programs for a long time, however, and now is the time for us to build one. But we’re not just going to build a conventional rewards program, we’re going to build something amazing. That something is Pubcoin.

What’s Pubcoin?

Pubcoin is a rewards platform for internet commerce, powered by a permissioned blockchain built on Quorum, JPMorgan’s fork of Ethereum. This enables bank-grade privacy through segmentation and cryptography, and transaction throughput measured in hundreds of transactions per second since no proof of work is required.

Pubcoin will be distributed via Token Sales on the public Ethereum blockchain: an Initial Token Sale (sometime in the next few months) and semiannual Subsequent Token Sales every June and November, starting in 2018. Pubcoin tokens (PUB) purchased in Token Sales can be used to acquire the Pubcoin tokens (QPUB) on the permissioned Pubcoin blockchain, and those tokens are usable for rewards at participating merchants.

Merchants can not only create Pubcoin-based rewards, they can also create their own branded Merchant Coins at a fixed conversion rate to Pubcoin. Since merchants can set the conversion rate and any conversion fees, this enables a range of attractive balances between transferability and exclusivity in creating an internet-based rewards program, simply by purchasing Pubcoin (PUB) on the public Ethereum blockchain and using them to acquire Pubcoin (QPUB) on the permissioned Pubcoin blockchain.

Pubcoin is completely generic, but is launching with a focus on ebooks. This is because Ruboss, the company that is creating Pubcoin, is also the company behind Leanpub—and as you can see, we’re in the ebook business. Ruboss is creating Pubcoin to solve a number of requirements that Leanpub and fellow publishers have, including a rewards program, cheaper, more fraud-resistant transactions and micropayments. Ruboss plans to use Leanpub to get Pubcoin in the hands of early customers, and will reach out to fellow publishers to grow Pubcoin.

Pubcoin is described in much more depth in the Pubcoin whitepaper. I’ve spent a long time writing it and debating it with Scott, Len and Braden, and the four of us have put a lot of thought into it. I hope you find it interesting. The whitepaper not only explains why we’re building Pubcoin and how everything will work, it also includes design screens of how we currently plan to use Pubcoin in Leanpub for rewards purchases.

Pubcoin on Leanpub

As discussed in the whitepaper, there are four things we’re going to be doing reasonably soon with Pubcoin:

  1. Giving out Pubcoin as rewards on purchases.
  2. Supporting opt-in normal purchasing of books with Pubcoin.
  3. Supporting opt-in special quantity-limited discounted book purchases with Pubcoin.
  4. Supporting book writing purchases with Pubcoin.

At Leanpub, we’re authors, and we believe in giving our authors as much control as possible. No Leanpub book will be for sale in Pubcoin unless the primary author opts in to selling it in Pubcoin. The primary author will set the minimum and suggested prices in Pubcoin, just as they do in USD. This will be true for new and existing books.

I want to elaborate below on the purchasing of Leanpub books with Pubcoin, since it’s not discussed thoroughly in the whitepaper. (A thorough discussion of Leanpub features would be out of place there.)

First, however, I want to say that we’re excited about supporting book writing purchases with Pubcoin. Ever since we started charging for book writing purchases in October 2016, the regular price of a book writing purchase has been $99. Charging for book writing purchases has helped Leanpub, and contributed meaningfully to our bottom line.

Now, while we’ve never cut the price from $99, since the beginning we have offered discounts to authors who already had a meaningful number of Leanpub book sales: if an author had earned over $1000 in royalties, book writing purchases were $49; if an author had earned over $10,000 in royalties, book writing purchases were free. Since authors will accumulate Pubcoin if they choose to accept it (or if they buy Leanpub books and earn Pubcoin as rewards), we can support more nuanced discount levels on book writing purchases. Just spend x Pubcoin to get a $y discount on a book writing purchase, or spend z Pubcoin for a free book writing purchase. The exact details are still being worked out; we’ll post them when we launch the feature.

Now, regarding Leanpub authors accepting Pubcoin: If you’re a Leanpub author, you can opt in to accepting Pubcoin for purchases of your book as well, if you want to collect Pubcoin for your own use. (Say you want to buy other Leanpub books which accept Pubcoin, or you want a free or discounted book writing purchase.) You can set the minimum and suggested price of your book in Pubcoin, just like you can with your book’s price in USD. Your book landing page will then show the price in both USD and Pubcoin, and readers will be able to choose which to use. To see what the checkout flow would look like for a Leanpub shopping cart which contained both USD and Pubcoin purchases, see the Pubcoin whitepaper.

Pubcoin royalties will be paid at 95%. If a book sells for 1000 Pubcoin, the author earns 950 Pubcoin in royalties.

The Pubcoin Shelf

Besides normal Leanpub book sales in Pubcoin, we’re also really excited about the marketing opportunities for quantity-limited Pubcoin sales at steep discounts. The place we’re going to support these steep discounts is The Pubcoin Shelf.

The Pubcoin Shelf will be a special new place on the Leanpub homepage, below the featured book. It will contain books which have opted in to supporting a limited quantity of steeply-discounted book purchases in Pubcoin. Say my Leanpub book normally sells for $10 USD or 5000 Pubcoin. I could opt in to allowing Leanpub to select my book for The Pubcoin Shelf, and set the lower price that my book would sell for if it was on The Pubcoin Shelf. I would also choose the number of discounted copies to make available for purchase with Pubcoin.

Suppose I chose to make 10 copies available for 500 Pubcoin, if my book was featured on The Pubcoin Shelf. Then, if Leanpub selected my book, it would appear on The Pubcoin Shelf with that discounted price, until the quantity limit was sold out. Leanpub would also be able to promote my book and the discount by tweeting about the discounted price and quantity, so there would be a sense of urgency as people tried to get one of the discounted copies.

The limited quantity discount is one of the most popular game mechanics in modern retail, because it’s so effective. There are many examples of this, but the most notable is Black Friday. The Pubcoin Shelf will combine the mechanics of the limited quantity discount with the mechanics of the collectible rewards program, so we’re really excited about it.

The Pubcoin Initial Token Sale

To launch Pubcoin, we’re doing a Token Sale. Actually, we’re doing an Initial Token Sale and Subsequent Token Sales. To learn more, read our whitepaper and sign up for the newsletter at the Pubcoin website.

We currently plan to launch Pubcoin support on Leanpub before the Initial Token Sale starts. However, since the whitepaper is launching today, we’re discussing Pubcoin here today as well—even though Pubcoin won’t be ready to launch on Leanpub for a while. (As discussed above, we need to focus and ship our Courses feature first!)

I want to thank all Leanpub authors and readers for their continued support of Leanpub. As you will see if you read the whitepaper, we’ve put a lot of thought into this, and we’re under no illusions that it will be easy. But we’re in it for the long haul, just as we are with Leanpub. We are really excited for Pubcoin, and we feel it can make the Leanpub experience even better for our authors and readers.

Peter Armstrong

October 5, 2017