Small Business Salon: Doug Seibold

By Marc Tracy

"I think for a lot of people the entrepreneur thing always looks desirable, but it's not necessarily for everybody. I believe what people say about starting your own business, or being a writer: it's not something you should really do unless you feel really compelled to do it. That's the situation I was in."

Our guest today is Doug Seibold, president and founder of Agate, a small Chicago-based book publisher. In a litte over five years, Seibold has expanded to four employees and four imprints, has acquired an older and larger publisher, and is on the verge of releasing e-books.

If you are a small business owner interested in being interviewed for Small Business Salon, or know one who would be (or should be!), please email us at bizboxonslate@gmail.com.

BizBox: Please tell us briefly about your business.
Doug Seibold: Agate is a five year-old diversified independent publishing company. I started it--I incorporated in '02, and we began publishing our first books in '03.

What made you want to start your own company?
I started the company at a difficult juncture in my own career. I'd been trying to start a company from about seven or eight years previous to that. I had an idea that I would go out and try to raise money from investors--this was in the mid-to-late '90s, when enthusiasm for what people called "the dead tree business" was particularly low. I was starting a family at the time, and I was cautious.

I had been working in publishing in Chicago since '86, which is itself a difficult thing, because if you make a decision to build a career in publishing outside of New York, it's by definition going to be a contrarian or on-the-margins thing. I'd worked in magazine publishing, in trade publishing, in commercial ventures. I had worked for a small press in the earlier '90s, and that's what really agreed with me. I had also been a book reviewer for the Chicago Tribune. I found that the rhythm of book publishing--you work for a long time with a particular project, and lots of projects at once that are in various states of fruition--really suited me a lot more than, say, monthly magazine publishing.

How did you go about starting up?
I was out there with my business plan for all that time, trying to get people interested. I kind of had a "If you can't beat 'em, join 'em" experience. I got recruited to work at an online education dot-com in '99. I had a typical sort of dot-com experience: we were very well-funded, and we grew rapidly, which is what you're of course supposed to do with the money, I built up an editorial staff of a little less than three dozen people in nine months. Then, over the following nine months I laid off all but two of them.

Then 2002 came along and I'd saved a lot of money as a job-search warchest. But then I looked at my life, I was about to turn 40, and I realized that a lot of my ideas were still valid, and my wife was supportive of the notion.

What were some of those ideas?
A lot of my ideas about publishing had to do with the idea of the entire field as a sort of an ecosphere. The key was really less about the kind of content as opposed to the scale at which you operated relative to other players in the space. As in a lot of other businesses, there's a bunch of giant multinational conglomerates that are the big players, and they leave a lot of waste behind them. My feeling was a company that functioned efficiently at the appropriate scale could do a lot of business by being cost-effective and opportunistic. Not too little, but not too grandiose: growing at a careful, natural pace. And that ended up being about what we've done.

How big is Agate?
Right now, four employees, but I usually have two interns.

Could you describe exactly how you grew?
I started out publishing two types of books: African-American fiction, and nonfiction. I'd gotten a lot of exposure to the African-American media world through the company I used to work for. I thought that, for a company like Agate, the African-American world represents an ideal small market to get into: it's perennially under-served, and there's also a great deal of commitment and attachment to good, quality stuff that comes to African-American people and is respectful of their interests--there's a real hunger for it. I thought a company like mine could compete in this market, and I think that's still somewhat the case. Our most important books have been under that.

In the dot-com world I was working with a company trying to create an all-star MBA curriculum. So our second imprint is related to business-related nonfiction. Our most successful book was a book called The Chicago School, about which there'd never been a book-length study. By the same author we're about to bring out a book about Ben Bernanke.

Tell us about some of your other books.
Our first book, which came out in '03, was by a writer named Jill Nelson, and it was basically a book that she had had in a drawer. And we had worked together before. It was a comic novel about two middle-aged black women who started a male brothel serving female customers. It was called Sexual Healing. It was not a home run, but it was a very solid effort. We sold a lot of books, we sold rights in four markets around the world, we sold film rights, we sold paperback rights. The success of that first book allowed me to bootstrap it from there, and it's been my own resources ever since then. By '04, we'd gotten to about the size I felt was appropriate.

Another book we did was a novel by Denise Nicholas called Freshwater Road, in 2005. It was one of the very, very few novels that's ever been published about the civil rights movement from the point of view of a black main character.

What's it like competing in an industry dominated by a few large companies?
It's like independent film or music. There are opportunities for us. The big guys turn down projects because they simply can't publish that much. They can find the things that have the most obvious commercial potential, but that leaves a great many equally worthy projects. That creates opportunities for us.

For me, I believe that you've always gotta be trying to grow--that's one of the basic fundamental things about any business, is pursuing growth. I have made the choice to keep reinvesting in growth rather than to take money out of the company.

How do you secure financing for Agate?
I've had a series of good relationships with my banks. I started out working with a small bank. I had an idea--I actually interviewed a number of bankers at local banks, and I basically went to them and said, "I'm not gonna ask you for any money right now, but I'm probably going to ask you in a year or two, and I want you to get to know me so that it's not about numbers but just about appreciation for what I'm doing." And I had a great relationship, and he ended up extending credit to me.

Then, I was recruited by a big bank, a multinational conglomerate bank. They basically were looking for locally-based businesses in the area, and they came in and essentially made me a tremendous offer--a broad range of banking services, extended line of credit. It's been really positive. They can do more for me. I was frustrated that I've had to work with a rotating cast of people. But for the most part they've been extremely supportive of what I'm doing, and they've basically allowed me to expand the company and take the appropriate amount of risk.

Where are you currently trying to grow?
In '06, we had started a third line of business, something a little bit different for a small publisher. It was a service creating textbook-like content for online education ventures: either creating digital textbooks that would be completely customized to one of our client's courses, or other supplementary materials, or even entire courses. In book publishing, they call this packaging. We create material, and our client publishes it. We called it ProBooks.

We were able to generate some really terrific cash-flow, and what we did was we bought another company, which was something I had wanted to do for a while. With the new cash-flow and our bank, we were able to structure a deal where we were able to buy a small press, an older and bigger one. The company we found it turned out was right in Chicago--Surrey Books. What that gave us then was we kept Surrey as an imprint of Agate.

So basically, by '07 we had grown to have four distinct lines of business that were all quite diverse. They were all distinct niches.

Did that prove helpful or harmful?
As things got tougher, that diversity proved to be really important. As certain aspects of the business slowed down, we were able to get enough revenue and opportunity in other parts that we kept the company flush. It also allowed me to make sure I had plenty of work for my growing staff. I took care to hire people who were generalist enough to work in all of these areas. This is a very unusual thing for small publishers: you're typically not in both the textbook and not-textbook worlds.

To me that's one of the big challenges for small business. To what degree do you go to your niche?

Are you glad you went into business for yourself?
I think for a lot of people the entrepreneur thing always looks desirable, but it's not necessarily for everybody. I believe what people say about starting your own business, or being a writer: it's not something you should really do unless you feel really compelled to do it. That's the situation I was in. I was so unhappy working for other people. I knew I had problems with the people I'd worked for, the different bosses I'd had--that it wasn't their problem. I had a boss problem. Understanding that about myself was important in realizing that I really needed to do this. And paradoxically, even though my professional life is filled with a lot more stresses now, I feel a lot more composed, because I have so much control over what I do. I feel like I have a material effect on what happens to my company. I get to be the one who ultimately makes the decison. I feel much more comfortable with that.

Also the fact that I have an enormous amount of flexibiltiy, not only in terms of how I integrate my work life and my personal life, but also how I run the business. I've done things that have been very unconventional, which I've been advised not to do but have worked out for me, partly because they reflect the unique expertise I have. That's a great feeling.

I think that the flexibility thing has been very important to me in terms of building my staff. The people I've hired have all appreciated the opportunity to come to an environment where there's a lot of flexibility. Because of that, I was able to hire better-quality people than I could have afforded because I was offering a more flexible environment, where they could do gratifying work and basically have control of how they arrange their time. I could not have competed with them on the open market.

How exactly have you extended this flexibility to your employees?
We have a virtual office: everyone works at home. We meet once a week in person--I think it's essential that we're face-to-face at least once a week, and we devote most of that day to meetings, getting everyone on the same page. But I hired people who I knew could be responsible for their purviews.

How do you make the virtual office work?
Most stuff [is done] by email and phone. We don't use a lot of sophisticated software--we don't really need to.

How has this set-up helped you, besides its ability to attract good employees?
It allows us to have an incredible amount of flexibility. Keeps costs low. As the company has grown, I have really realized the tremendous value of being able to do it this way, and I've begun to dread the point where we'd have to do it less. My hope is that we'll always be in a place where our physical plant costs are less than they would be, even if we do grow to the point where we need a conventional space.

We're pretty globalized. Printers in China, typesetters in India, authors all over North America. We work with a distributor called PGW, a division of Perseus, through which we have worldwide distribution.

What are your future plans for Agate?
We're about to start a big e-book rollout. 40-50 of our titles are going to be available. It's what any company has got to do to try to move forward: find new ways to reach readers with our books.

Comments (0)

January 14, 2009 9:25 AM