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[Upsize Informer]

Growth Challenge: Matter of Africa

Originally Published: May 2007

Matter of Africa children?s
book publisher urged
to focus on wholesale

by Sarah Brouillard

THE PUBLISHING INDUSTRY practically sets up independent publishers for failure, says Paul Dixon, president and co-owner of Matter of Africa America Time Corp., in Minneapolis. It?s one of three winners of this year?s Upsize Growth Challenge.

Selling books through popular e-commerce sites, such as BN.com (Barnes & Noble?s Web site) and Amazon.com, is a process fraught with obstacles and disadvantages. Not only does his company have to discount its books by 55 percent, but it also has to wait up to 120 days for payment.

And the Web sites always reserve the right to return all unsold books. That?s why only 3 percent of the company?s sales come from bookstores.

The company has four titles, with stories taking place in a small town in Mississippi. The main character, Papa Lemon, is based on a real person, the co-owners? grandfather (Dixon?s cousin, Lehman Riley, is the author).

With his magic train, which is a time machine, the supporting child characters journey into the past to witness several historic events, such as the Rev. Dr. Martin Luther King Jr.?s ?I Have a Dream? speech, and meet important people, such as Harriet Tubman.

The company posted $31,095 in revenue for 2006, mostly from conferences and trade shows and speaking fees from school presentations.

Last year, Dixon and his cousin went on a ?whirlwind tour? of conventions and expositions across the country. This year, they want to capitalize on all the contacts they made during their travels.

Dixon says he wants to triple business this year, while also making a profit and paying down debt ? mostly in the form of a $50,000 credit line.

While it?s difficult to be an independent publisher, Dixon says his company benefits by having a niche. According to his market research, there are no children?s book series that use a grandparent as a main character.

Elin Raymond, president of The Sage Group, a Minneapolis-based marketing and communications firm, says the company should use its limited resources wisely. Instead of selling school by school, the company should focus its energy almost exclusively on the national wholesale market.

?I would skip the PTAs and the individual consumer-type shows, and go to the ones like the librarians? associations and the teachers? associations,? she says.

She also advises the company to build a comprehensive learning package around the Papa Lemon books. A ?heritage journal? ? in which a child can research and write about his or her own family heritage ? is one example of how to expand and personalize the curriculum, and build on the themes presented in the original books.

Michele Vaillancourt, an attorney with Minneapolis-based Winthrop & Weinstine, says it?s important for Matter of Africa to protect its intellectual property.

After confirming that Dixon had copyright protection for the Papa Lemon character and the books themselves, Vaillancourt says he needs to get that information on the company?s Web site.

?You just need a line at the bottom,? she says. ?Your Web developer should know that.?

Also, make sure all contributors sign agreements that spell out what property belongs to them, and what belongs to the company, she says. Otherwise, one of them can run off and make money off the company?s ideas.

On the technology front, scalability is one area Matter of Africa should explore carefully, says Kirk Hoaglund, CEO of Clientek, the Minneapolis-based information technology consulting firm. Shoring up its Web site to prepare for a potential jump in online sales ? which could happen any day, especially in the event of some unexpected publicity ? will ensure all sales are captured.

James Alberts, a Clientek technology consultant, says the company should also prepare for the increased prevalence of technology for reading books. Instead of lugging around hardbound textbooks, he believes today?s young children, upon entering college, will use tablet PCs that contain their curriculum.

?The technology market ? and technology itself ? is driven by the demands of the people who use it,? Alberts says.

With all the red tape and organizational layers that complicate the public school system, Rick Wall, CEO of St. Paul-based Highland Bank, says the company may want to explore the home-school market. ?They may want more experiential learning,? Wall says. Instead of using the books as curriculum supplements, parents may want to use the books as actual textbooks.

Wall says he wonders if a change in business model is in order. Since school presentations have generated more revenue than actual book sales, perhaps the company should formally shift its focus.

?You wouldn?t be the first business that started off with one thing and found out you?re really doing something else better.?

Paul Dixon, Matter of Africa America Time Corp.: 612.730.8217; info@papalemonedu.com; www.papalemonedu.com

[WHAT THE EXPERTS SAY?]

?ABOUT WEB READINESS
A lack of "scalability" with a Web site can break a company, says Kirk Hoaglund, Clientek. Publishers have a knack for sparking publicity quickly, whether it be a visit on the Oprah show or a plug on Good Morning America. The result ? lots of Web site hits ? can ramp up sales, or bring down the entire Web site if it is ill-prepared for the increase in activity.

?ABOUT THINKING BIG
Think national, not local, and wholesale, not piecemeal, when it comes to selling books, says Elin Raymond, The Sage Group. Stick to the national conventions, rather than selling school by school or individual by individual. There is strength in numbers.

?ABOUT TRADEMARKS
Papa Lemon may be a fictional character in a book, but it''s also a valuable piece of intellectual property. Make sure it is protected with a copyright, so others can''t steal the company''s ideas, says Michele Vaillancourt, Winthrop & Weinstine. Similarly, put a paper and pen in front of all contributors to make sure they understand what belongs to them, and what belongs to the company.

?ABOUT BUSINESS MODELS
It''s never too late to rethink a business model, says Rick Wall, Highland Bank. If school presentations are a lucrative and expense-free source of revenue, why not shift the company''s focus toward that direction? If a market is too complex to tap into ? such as the public school system ? try a simpler but related one. Wall suggests the home-school market, where parents are free to make their own curriculum decisions for their children.

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