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Eric Jorgenson – The Power of Writing Books – Ep.211

Eric is the CEO of Scribe media as well as author of The Almanack of Naval Ravikant and The Anthology of Balaji. He also hosts the Smart Friends Podcast.

Episode Description

Ep.211: Alex (@aebridgeman) is joined by Eric Jorgenson (@EricJorgenson).

My guest on this episode is Eric Jorgenson. Eric became a close friend while my wife and I lived in Omaha. I love the energy and enthusiasm he brings to whatever he’s doing, whether it’s investing in tech startups, writing books like The Almanack of Naval Ravikant and The Anthology of Balaji, hosting his Smart Friends podcast, or telling you about the latest innovations in sandwich making. And as of last summer he is the CEO of Scribe Media, a book publisher where the author retains full creative control and financial upside from their creations, and in my opinion, is the perfect business for Eric to run.

In this episode, we talk about the publishing business, the power of books over other creative mediums, his new role as CEO of Scribe, and what he’s learned as an author himself.

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Clips From This Episode

The Business Side of Being an Author

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(00:00:00) – Intro

(00:04:18) – The power of writing

(00:06:27) – The business side of being an author

(00:12:44) – Is there a ‘right’ time in someone’s career to write a book?

(00:18:46) – The business of Scribe

(00:27:06) – Podcasts vs. books

(00:31:22) – The story of Enduring Ventures stepping in to buy Scribe and making Eric the CEO

(00:38:59) – Learning how to be a CEO

(00:44:51) – What are some publisher benchmarks to compare Scribe to?

(00:50:22) – Do you see large publishers trying to replicate your model?

(00:55:22) – Who would you be excited to write a book about?

(00:57:18) – What are some of the biggest lessons you’ve learned in your time as CEO?

Alex Bridgeman: I think a fun place to dive into would be the books you’ve written and some of the content side. You’ve of course done a rolling fund for a good period of time and gotten to know lots of investors and other interesting founders that way and are now CEO of Scribe. But just like from a content perspective, what’s been the driving force there for you?

Eric Jorgenson: Yeah, well, let me first say I’m a huge fan of you and this podcast and this podcast title. The words “think like an owner” have been present in my life since I was like old enough to hear and comprehend them growing up in like a small business household. So, this podcast, this mission like speaks to my soul, and I’m very glad to be here. I think there’s a very interesting discipline in writing that, at least for me, drastically increases my retention and absorption of a thing. I spend so much time consuming content and learning and trying to improve, and knowing that you have a deliverable, like a book, that you’re trying to create at the end of this thing really increases the bar. It basically increases the bar of my note-taking, trying to teach myself this thing and having the intermittent step of like, and I’m going to publish those lessons learned in a book, so I better really grok them and it better be really polished and really professional. It just gets me really psyched up to spend more time iterating on this book, more time with the content, more time with the material, more time really internalizing it and practicing it, like a productive use of that social pressure. So, the process of writing a book has changed my life. The process of having that book out in the world and seeing the feedback loop also separately totally changed my life. And those are both independently like amazing things to go through.

Alex Bridgeman: Yeah, I finished the, I sent you this screenshot, but I finished the Brad Jacobs book recently. And with Amazon Kindle, when you finish a book, it has like, oh, based on this book, here are other books that you should read that you might like. And one of yours popped up, I think it was the Naval book. And I was like, oh, look at that, I know that guy. What’s the business side of writing books? I kind of went down this like self-published author rabbit hole in college. And so, I have this kind of like way off to the side interest in writing books and how that works. So, I’m kind of curious, now that you’ve got two books out there, what’s been your experience with that kind of as a business?

Eric Jorgenson: Yeah, I’m really interested in this topic also. And I’m really surprised with how few, even how few authors, but especially how few business authors actually think in business terms about their book. Where if you ask them, what is the value of that asset? Value, the present value, the discounted future cash flows of your book, what is the value of that asset? Treat it like an equity or any other asset that you might think of. And what decisions are you making to increase the value of it? What trade-offs are you making like in terms of partners and things like that? And when you look at the traditional publishing business model through that lens, it’s kind of insane what most authors are doing. They’re making enormous trade-offs that most are not thinking about in economic terms at all. They have their eye on the prestige or they’re just trying to alleviate the pain of uncertainty about a book getting published or the fear that it’s not going to feel legitimate. But in doing so, they’re taking on this enormous controlling partner that is largely passive and somewhat detached from the actual outcome. The perception is, I’m going to give this publisher the majority, the skin in the game, the creative control, and they’re going to make sure that the book is successful. When the reality is they have this enormous portfolio effect. They publish hundreds of books a year, and they know that some percentage of them are going to break out, and they’re going to double down by piling resources on those, and the small ones that don’t thrive, they’re just going to cut off. But if you take on, and most people don’t realize how much control they take. It’s at least 50%, in most cases, like 85% or 90%. Plus you have an agent’s cut in there. They take the majority of royalties from an author for the lifetime of that copyright and assume creative control. And if you’re an author making 10% of each book sold, you don’t have the margins. You don’t have the capital. You don’t have the motivation to reinvest and actually be this super proactive evangelist of your book because you’re making pennies on the dollar and the publisher is getting most of it. You don’t have the motivation economically and the margins to go invest in the growth of your book and get it out there into more people’s hands and give away copies to start that flywheel. You’re really like shackling yourself with a ball and chain from the very beginning for the hope of being one of those breakout successes that, in my experience, are pretty predictable and somebody who comes in with 200,000 followers or a million followers or a great story or a really solid understanding of how useful their book is for their audience and who exactly their audience is already knows that they’re going to have a successful book. So, I think that is like 101 on think of your book like an asset. You’re creating this asset. You want to be the CEO of that thing. You want to retain creative and economic control of it. Because, and this is perhaps the most important thing, the book matters so much more than for its own sales. A book does not have to make money to make you money. It’s the line that I share over and over again. A book is just a way to package an idea and get it out there and be a lighthouse to people who resonate with your idea or are looking for the expertise that you have. And it can grow your business or change your life or impact an issue in dozens of ways. For most authors and most people who are thinking about writing a book, their North Star, the desired outcome is not to sell as many individual copies as possible. The outcome is financial impact for their business or impact on this social issue or transition their career, double their speaking fees, establish a category within their business, like become the industry expert in this niche thing, and become the person that everybody calls when they need help with this. A book is so, so, so useful. We have this perception, because of people like Brad Jacobs, which is an amazing book, and he’s an incredible guy, but he’s a classic example of like lived his whole life, then wrote the book. And if you look nine times out of ten, what actually happens is people write a book and it becomes the inflection point of their career. So, you see this with Guy Spier and Mohnish Pabrai in the investing and value investing space. Those guys didn’t wait until they were 75, retiring and wrote a book. They wrote a book when they were 30, 35, 40, and it helped increase their profile, helped them bring in new LPs, helped them get proprietary access to deals. It is a really fascinating thing to see how the prestige associated with a book can impact someone’s career in ways that people drastically underestimate. I’ve seen it over and over and over again, and it’s going to continue to be true. That’s a huge reason why Scribe does what it does and does it at a really high level and what our clients look for when they come write a book with us or have us write a book on their behalf.

Alex Bridgeman: Yeah, I was listening to the Acquired episode with Ben Thompson, the Stratechery author, and they asked him this question, like when should you, like when are you going to write a book? And the economics for him are phenomenal to just keep doing what he’s doing without the book. But he did say the right time to write the book, and he probably would have written it on aggregation theory, but he said the right time to write the book would have been like five years ago or five years prior to, I think the episode came out like last year. But he would have written it five years ago. That would have been the right time for these early professionals or like CEOs who are looking to do big things. Like is there a great time that you’ve tried to hone in on where, yes, this is the right time, the right inflection point in your career to write a book, or you have enough of an idea or enough of a story that this is starting to make sense?

Eric Jorgenson: I think the right time is going to be very context dependent. So there’s a whole series of questions I would ask somebody in a private setting that I think would help diagnose that. I will say the biggest hang-up I see people have is they feel like they need to be able to clearly visualize steps one through nine in order to take step one. Like, I’m not ready to start my book. I don’t really have it all fleshed out. No, that’s the process. That is what we do. Our expertise is helping you position the book and then frame it and outline it and figure out what is the change that you’re trying to create in your life? What is your expertise? How do we refine that? How do we filter? Maybe you actually have three book ideas that you’ve conflated into one, and we can help parse that out. How do we structure your thoughts in this logical progression to a newcomer? How do we bring along someone through all the things that you’ve learned over the course of 10, 20 years and show them your expertise without overwhelming them or confusing them along the way and lay it out really clearly. We’re not expecting you to have already done that work. That’s what we’re here for. We’ll take it step by step and then we’ll interview you, so you don’t have to spend a thousand hours at a keyboard banging your head against the wall trying to figure out how to do this. There are experts who can help you do it. We have those experts. We are those experts integrated into the rest of the writing and publishing process. So it is like one publishing manager, Mayo Clinic-style service, all the way from, hey, I think I might need or benefit from a book, all the way through the whole process of discovery and writing and positioning and editing and publishing, designing covers, designing interior layouts, publishing promotion, getting the book into the hands of the people who are your desired readers, your desired customers, the people that you’re trying to establish credibility with. And there’s all kinds of interesting ways that I’ve seen authors use their books to any number of means. Like you may have- there’s one in particular that comes to mind. He’s like, my business, my whole business revolves around Fortune 500 CEOs, CFOs. I’m sorry. I need to reach those people and I need to convince… If I convince five of them that I am an expert and the expert in this field, my career is set. So I’m writing a book in order to achieve that goal. I don’t care if anybody else ever reads it. I need 20 people to read it and 5 people to believe it. And we’re like, okay. But if that’s your mission, you cannot compromise the quality of any of those steps anywhere along the way. And you invest $50,000 in writing and creating this book and say 50 hours of this client expert’s time over the course of the year. But now we have this artifact that represents you and your expertise and is like out there doing the work of building people’s conviction in your expertise and what value you can provide for them in a way that by the time they pick up the phone and call you, like they’re already sold, they’re ready to invest whatever it takes to get your expertise and get the results delivered to them that you know how to do. Like, it’s a fascinating thing. It is a really fascinating thing.

Alex Bridgeman: I love the Mayo Clinic analogy. That’s great.

Eric Jorgenson: It’s such a simple model. I don’t know why more people don’t follow it. Everybody wants one highly competent point of contact. It’s a very clear, desirable thing from a client’s perspective. Just do the thing that works, that people want.

Alex Bridgeman: You’re designing the service too for people who are ambitious and really busy and don’t have a ton of time. They don’t have a thousand hours to bang their head against the keyboard. They have maybe, like you said, 40 across the course of a year to start planning. So like fine-tuning your service to serve a very busy customer base seems like a big focus for you.

Eric Jorgenson: Yeah, everybody needs leverage on their time. And the well-organized, highly professional experts tend to be really useful. That is what we do. We’re like a private publishing house. So, we’ll help you conceptualize the book, we’ll help you write it, we’ll help you publish it, get it into the hands of the people that you need for any number of reasons. They’re not all economically driven, but a lot of them are. I’ve seen incredible stories, like businesses built as a result of that. It’s not an exaggeration to say everything good that has happened to me over the last three years of my life is a direct or indirect result of publishing a book with Scribe in 2020. That was an amazing thing and has led to so many opportunities in my life, so many new friendships. It was totally unpredictable what they would have been, but it definitely increases the surface area of luck that you’re exposed to, and I’ve just been fascinated to see what dominoes have fallen.

Alex Bridgeman: Yeah, so did you write your Naval book with Scribe as a client first before running the company now?

Eric Jorgenson: I did, yes. I wrote the manuscript myself, and then brought it to Scribe for editing and publishing. I did our- We have a manuscript publishing service. We have a guided author service for people who want to write a book with the partnership of a coach and a guide, but they want to write it themselves. And then we have the full-service ghostwriting, like we do the heavy lifting, the high bulk of hours. So, I did the manuscript publishing service with Scribe the first time around. For actually the Almanac and the Anthology of Biology, both were published with Scribe before I became CEO.

Alex Bridgeman: Yeah, so you laid out three different versions of service there for Scribe. Can you walk through the business of Scribe and kind of the different options that customers have?

Eric Jorgenson: Yeah, so there’s kind of the main three modes. It’s like if you’ve already written a manuscript, you just want to help publishing it, bring it to us. We will help you publish it. What goes into that is it starts with an evaluation, a read by our executive editor who will give you basically a book report. Here are your high points, here’s your low points, here’s what you might consider, different types of editing that might improve it, missing pieces, missing ideas, anything like that. Or maybe just like, this is an incredible book and it’s ready to go. Let’s rock on. We go through cover design, which is multiple iterations, multiple options. We go through interior design, auditing and placing any graphics if we need to, layout, creation of all the files, adjusting all these things. I’m oversimplifying a 500-step process over at least six different domain experts that we manage. I can show you the big Gantt chart. But it is a fascinating- it’s a very well-oiled machine. We’ve done 2000 books now for over 1000 authors. We’ve published, we’ve got 150 books in progress right now. So, it is a very well-oiled machine. So that’s publishing only. Then we’ve got the private coaching for writers who want to do their own writing. But we will help you position it. We’ll help you structure it. We’ll help you find a writing plan that works. We’ll give you feedback as you go. And that’s really for people who are like, I want to write my own book, but I don’t want to waste any time. And I want to know for sure that when I’m done, one, I will stay on track and finish it when I said I would. And two, I do not want it to suck. Under no circumstances can this book suck. And I want to publish a book, and I want to do it within 15 months or 18 months. Guided Author is an amazing experience for them there. And that’s as much of an emotional coaching process. This is 50% therapy, 50% logistics in a lot of cases. And that’s not to be overlooked. If you’re looking at this space or considering working with a writer, find someone who you really can jive with and who really understands that you’re going to go through a journey as you unpack these ideas, especially if it’s something like a memoir or if there’s anything other than just like a really clinical specific story. This is a lot of people’s bucket list dream to write a book and it’s a journey. You don’t just wake up one day and decide to do it. It’s, at least in my experience, a thousand decisions to not quit and just keep at it. Even when you are consumed with fear that this thing is going to suck and no one’s going to read it and you’ll never get it done, and even if you did, nobody would care. Constantly overcoming that, actually, it really, really helps to have somebody who’s done it before, who’s seen it happen, who knows the next steps that need to be taken, and just feel like you’re on this conveyor belt, that someone is pulling you forward. And even if you just pass out and lay down, the next step will happen to you. That is a really valuable thing. And then Scribe Professional, as I mentioned, that’s the flagship where you’ve got… This is in particular for the time-constrained. But also, a lot of times for people who English is their second language, they just have a lot going on, or they don’t love the act of writing, and they just want to be interviewed. If you ask them what they know, it is so easy to just answer the questions that you are an expert in and lean on someone else to do the hard work of breaching that gap between your expertise and the reader and structuring the ideas the right way and turning them into, like fitting them into this sort of format that makes for a really good book. And it is really helpful to have a partner in doing that. And then there’s a whole kind of high end of services that go from… It starts at $130,000 and goes up from there. That is… You can spend $500,000 really without wasting money if you wanted to really create a huge impact or get the really world-class, super highly proven talent across everything. That’s not most people’s budget, and we certainly work within that. But we’ve got some people that we work with who are like… They are billionaires. They have built enormous businesses. They are enshrining their legacy. They want to become a household name or define a category or write history and make a really big splash. And for those people, it could be a very reasonable investment to create the impact or leave the legacy that they want to see.

Alex Bridgeman: Yeah, I like the focus that you don’t have to be a great writer to make a book. Like the book is just a collection of small tidbits that add up to this one big idea and the book is just there to communicate the idea. But you have the idea in your head, but you just need to communicate it well, and there’s no reason you have to be a great writer to get that idea communicated well.

Eric Jorgenson: I love Charlie Munger’s like the best thing a human being can do is help another human to know more. We all have something to learn. We all have something to learn from each other. In particular, I find the people often that I have learned the most from are not, they’re not the people out there with like bright orange book covers saying like, listen to me, I have so much to teach you. It’s the people who have been quietly kicking ass in their community, doing the right thing for 40 years or 60 years, and leading by example, and would never- maybe people have been telling them they should write a book, maybe they feel vaguely that they would like to teach others or like to mentor people, but they don’t know how to do it, or they don’t have the self-aggrandizing instincts to write a book. You don’t have to put your face on the cover. You don’t have to go on a book tour. But please be willing to share what you know with other people. Don’t die with all your best, hardest-won information in your head. Books are the greatest technology for capturing those lessons, preserving them over hundreds or thousands of years. We are still reading books that were written thousands of years ago. That is not true of almost any other thing that exists. Very few institutions even make it that long, but we have, with minor modifications or translations, the ideas that were packaged up thousands of years ago. And if you just view humanity as this just weird agglomeration of sentient meat trying to learn more and teach each other more, and we’re all just like ants in the hill dying every 100 years, the only thing that you can do to enshrine… You can have kids to enshrine your genetics, and you can write books to enshrine your knowledge, and try to help that snowball continue productively through the next generations. I think it’s a noble pursuit. I think it’s worth doing, even if you don’t necessarily feel like, oh my God, I have to- If you don’t want the benefits of writing a book, that doesn’t mean readers don’t deserve the benefits of what you could teach them. I think almost everybody has something to teach and a story to tell. The broader set of models we have out there, I mean, the DMs you get when somebody reads your book at the right time and it changes their life is like so fulfilling, so incredible. And it’s really rewarding to do that, even for a small number of people.

Alex Bridgeman: Yeah, do you think that- you’re right, there is something timeless about books, especially print that you’re not going to see in a lot of other mediums. There’s some movies that will probably last well beyond the normal like lifespan for a movie in terms of popularity. We’ll see if podcasts get there. I’m not sure if- do you think podcasts will be there, or do you think it’s just going to be books all the way?

Eric Jorgenson: I don’t know. I am super bullish on podcasts. I do, our friend David Senra, like podcasts are the printing press for the spoken word. Like I think there’s some truth to that. And I think that it’s easier to speak in terms of audio than podcasts specifically. I think we are technologically at a point where audio can be created and proliferated way better than it ever has been able to before. It’s just really hard to argue with thousands of years of Lindy-ness of books. I’m very pro-technology, digital revolution is incredible. It’s just not as clear to me that it will have the same sort of immortality as a book. It’s certainly not, I don’t think it necessarily has the same prestige in the moment, which we can debate whether or not that’s correct or incorrect. I think there’s a lot of podcasts that are a lot more valuable than a lot of books, but there’s something- it is very rare that someone’s like, come on my stage and talk about your podcast. Or like, let’s have an intellectual discourse about your online course. A book just has a gravitas and creates a conversation in a way that few other mediums do. I don’t know. It’ll be very interesting to see. I think it’s so much easier to lose. It’s so much more ephemeral. It’s so much easier to lose a podcast. It’s so much easier for it to get washed away. That is the reason that I’ve compiled these books. I see so much value being created in these ephemeral media, in Twitter, in podcasts, in YouTube, that’s difficult to… It’s not accessible to all of the people of the world the way a book is. There’s something about that format that just travels and speaks to people and gets gifted to each other and gets recommended and gets written about. It just hits different. I think there’s value to be created by transforming things between mediums, going both directions. David Senra spends his life making podcasts about books. I think that’s incredibly valuable. I have spent my career making books from podcasts. I think that is also incredibly valuable. So what are we- there’s nuance and value to be created in all of it, I think.

Alex Bridgeman: Yeah, thinking of folks who’ve created a lot of content. One thing that’s kind of interesting about books too is it’s a defining work. There’s not many people who put out 50 books in their lifetime. Both of us have put out 30, 40, 50, 100 plus podcast episodes and probably many more in our lifetime, but not that many in books. Books is a much smaller amount. Like I wonder if you went to someone like Morgan Housel who wrote for 17 years at The Motley Fool and has been blogging for it seems like forever at the Collaborative Fund and he’s been on podcasts, but he’s got two books out now. Like, I wonder which has had a greater impact, the two books or all the blogging separately? I’d be kind of curious at to his take, but there’s something, yeah, you’re right, there’s something defining and longer lasting about a book.

Eric Jorgenson: Yeah. And there’s pressure to it too in the sense that it’s not as easily updatable as a blog post or anything like that. So yeah, I think it’ll become more and more common. Like there are certainly very prolific authors, especially in fiction, less in nonfiction, and certainly like, if you’re Ray Dalio and that’s the kind of book that you’re writing, you’re writing the capstone book of your career, then yeah, you’re not going to do 10 of those. But I think Morgan will probably publish a book every few years, maybe forever. There’s no shortage of adjacent topics and demand for what he does. His stuff is amazing. He could keep doing it for a very long time.

Alex Bridgeman: Yeah, I agree. So, with the Enduring Ventures team, you became CEO of Scribe. Can you talk about how it worked? I heard a little bit of it through a different podcast that you were just like hanging out at Capital Camp or something like that when some of the ideas came together.

Eric Jorgenson: Yeah, this is kind of a wild story and a testament to the unpredictable nature of the surface area of luck. So, I had been following Scribe for a long time. Like Tucker and I read each other’s blogs, and as I was sort of producing the Almanac of Naval, I tweeted about it and Tucker reached out and was like, hey, let me help you publish that. Let me help you at least show you your options in the world of publishing. And I ended up publishing with Scribe, had a great experience, loved everybody I worked with there. I was coming back for book two, the Anthology of Balaji, so I was midway through publishing with them. And I got just- there were just like weird rumors that came up, that was like, hey, Scribe is like shutting down. And I was like, what, no way. Like I just went and visited their office a few weeks ago, everything was fine, like midway through publishing. And where there was smoke, there was fire. And I wasn’t really sure what to do there. There’re very few details at that point. It’s all wild speculation. This is like summer of 2023. And I had this fear that the business was going to either totally implode or end up getting bought by somebody that didn’t appreciate what it was, didn’t appreciate its importance in the world of publishing, didn’t appreciate the things that I thought made it special, or would like gut it, which would not be good for all the people that I know and love who had worked there, people that had helped me publish this book that I had a great experience with. And fortunately, you and I both know people who buy companies. So, I was like, I’m just going to make some phone calls and see what happens. So, I sort of got the contact at Scribe and just figured out, like tried to figure out at least what was happening, at least get some people’s phone numbers and made some calls to Permanent Equity and Enduring Ventures and OSV and like some folks that I trust them. I think they’ll appreciate what this is. Let’s see what happens. So Enduring Ventures got there first and flew to Austin, started meeting people, started digging in, doing their due diligence, trying to understand what the business was, where it had been, and what happened. I loosely kept in touch with Sieva during this time. Sieva and Xavier are the two partners of Enduring Ventures. They’re great dudes. If you haven’t had them on this podcast, they would be great and they would have amazing stories for you, I’m sure many more than this.

Alex Bridgeman: Sieva came on a few, I think late last year. Yeah, he was great.

Eric Jorgenson: Xavier too, they’re fascinating.

Alex Bridgeman: Yeah, I got to meet them both in that Berkshire dinner. Yeah, after the meeting. I think we’re going to do it again after the meeting on Saturday. I think we did it Friday and that caused some travel headaches as folks were getting delayed or something like that. So I think Saturday would be the better day.

Eric Jorgenson: It’s tough. Everybody’s coming and going so quickly. This will be an interesting year. I think that’s partly where I was hanging out with them. This was all before this happened, but I was just getting to know them early last year. Anyway, what transpired had happened, this has only become clear in retrospect, but basically 10 years ago, Tucker Max and Zach Obront started Scribe and built it up into this thriving business, the thing that had given me such a great experience. Along the way, they hired a CEO, and they eventually sold that company to the CEO who brought in his own investors, and Tucker and Zach stepped back. I don’t know all the details. There hasn’t been all the forensics or whatever. The CEO made some mistakes, a relatively either large number or small number of high magnitude mistakes that led to this business 12, 18 months after he took control of it hitting bankruptcy like absolutely brick wall. And as it transpired, there was no real like, it seemed like there was no real board oversight, no empowered CFO, some like sort of mistakes in the financial and accounting structure of the business that facilitated some mismanagement, to say the least. It was a rough bankruptcy in the sense that there’s a lot of creditors. A lot of people were owed money. There was a large and abrupt layoff that happened. This is what called attention to the issue that I experienced that then was like, all right, we got to hopefully find a new long-term, high professionalism steward of this business if it’s going to continue to thrive. It had done well in the past. It had just been mismanaged, and the bank had foreclosed on the business. What Enduring Ventures ended up purchasing were the assets and the liabilities, some of the assets from the bank. I’m not familiar with the legal details of that. This was like I joined after. So there’s a new business that was spun up, hired over some of the team, speculatively, then brought over the assets, which amounted to the logo, the website, basically. And then a few months later, hired me to become CEO of this company, which was not a phone call I was ready for. And I realized that in retrospect, it looks like I did an accidental hostile takeover, which is not what happened. I was just trying to get the business into good hands. My grandest hope was to be a small investor because I’m a believer in this company. I wanted to support it. I knew I would continue to use them. I just wanted to keep publishing books the way that I knew how to publish books. I was such a believer, as you can probably tell, in authors keeping their full royalty and their full upside, being the CEO of their book, having the creative freedom to make the decisions that they want to make. So, I wanted to keep that alive. And I’ve been an enthusiastic evangelist of Scribe for years. And so, Steve and Xavier called. They were just like, hey, we own this business. We think it’s promising. You brought us the opportunity. You’ve been an evangelist. You have some operating around. Clearly, you have a feel for this space and the customer’s passion for it. We think you should give it a shot. Come in and see if this is a good fit. So, it was some long contemplative nights, but joined in August. So, I’m six months in as we record this now. And things are going well so far. But it’s certainly like most of the people that I know who are CEOs built their business around them or spent a very long time working their way up. And I sort of like fell sideways through this bizarre backdoor, which I think is just an interesting story. If someone had told me that, that this is how this could work early in my career, in the whole world of stories that you and I share of like small business and private and permanent equity, and it’s just fascinating.

Alex Bridgeman: Yeah, it is fascinating. Do you feel like given the time you’ve spent getting to know other founders or executive CEOs through the podcast or writing your books, do you feel like you came in with at least some sense of how to be a CEO and how to do it effectively?

Eric Jorgenson: Yeah, I’m a little surprised. Yes. I’m a little surprised actually by what different experiences have served me in different ways. I was very lucky to grow up in a small business house. My grandfather started a business. My dad had spent his career running that business. So, we were eating dinner and having conversations about how to make payroll at the dinner table. That was how our family operated to some extent. And I’ve been interested in business and entrepreneurship for a very long time. I was selling candy out of my locker when I was a kid and selling t-shirts in college. There’s always been something to that. So, I’ve been slowly accruing that and spent maybe 10 years at a tech startup, like a venture-backed startup, being a generalist right-hand man to the CEO, taking on a lot of different duties. I considered that my CEO apprenticeship. I tried to absorb as much as I could about that. Of course, reading and blogging and podcasting and trying to build my own curriculum from people I thought were doing admirable work, leading great organizations. Munger was a very early touchstone for that. So daisy-chaining off of that in a bunch of different directions, just reading people and meeting people and finding people with those shared values slowly accrued. And now I’m learning to trust the instincts that were built there. It is different to trade with real money instead of play the video game. But so far, the success here is measured in decades, not months. So, I’m not getting too comfortable with anything yet. But I feel like it is interesting and I’m very grateful for the feedback loop of reality to get that more pertinent experience relatively early in life and feel what it’s like to be an operator. I’m extremely grateful for the context that I have, which is there’s an ownership group that owns 20 plus businesses in Enduring Ventures. They have a very well-trained expert CFO who is my partner in all of the financial side of things. The team itself at Scribe is amazing. And the people in particular who made it through the ambiguity and uncertainty of last summer are all incredibly dedicated and incredibly competent. And the other leaders there are really… make it easy for me to lean on them in a place where I’m not an expert. I think a classic CEO mistake is like micromanaging. And that is something that I am like fortunately released from having any inclination towards because I am the least expert person about publishing in our company. And so, I just have to trust the experience and the expertise of the people around me, which is a great, in some ways, just such a blessing.

Alex Bridgeman: Is there an instinct that comes to mind that you’ve unintentionally refined that’s serving you well now?

Eric Jorgenson: I think one that comes to mind, because it comes from the tech world, is just speed. I think the operating cadence of some small businesses is just a little more comfortable than tech businesses that are like, look, we’re driving towards a cliff of money in 18 months. And if we don’t make a lot of progress really quick, this whole thing explodes. And that just changes the metabolism of the business. And so, I think I was fortunate to have that experience. So, I think from the tech perspective, there’s a speed, hopefully a productive impatience and a vision, like a scale of not just, hey, let me try to operate this small business at its current scale, but I think there’s a path to real growth and to build a big business here. And I think this can become a large and thriving business that publishes a lot of books for a lot of people at a really high level and can eventually rise and go toe-to-toe with traditional publishing. I think that this is the right era for this particular model to grow and thrive. I can give you the whole TED Talk about the industry landscape, but that’s probably neither here nor there for this podcast. The other instincts, I think, like the people that had been my heroes and role models, Munger and Buffet and Peter Kaufman, it is a very high trust, look for the long levers, thinking long-term sort of orientation in a sense where you find the right people, you empower them, you create a context for them to thrive and do great work and be rewarded for their great work. You don’t over-meddle, you don’t get too impatient, you don’t try to do too many things at once. So just the clarity of prioritization that you get with a truly long-term perspective, I think that instinct comes from being deeply read and appreciating some of those stories and trying to balance that and find the right time to lean on that versus the right time to lean on my more tech-driven, more high-cadence, like impatient with action, patience for results. And finding the right places to place that I think, at least so far, has felt like the trick to me.

Alex Bridgeman: So you did mention the industry landscape. I am curious actually a little bit. You mentioned you’re doing around 150 books at one time right now. How does that compare? What’s a benchmark for a larger publisher like Penguin Publishing or something or someone else?

Eric Jorgenson: I think I’ve read Simon Schuster does maybe 2,000 books a year. There’s a lot of imprints within that. And so, from that perspective, I’m like, oh, we’re only like 10x off of being the biggest publisher in the world. And so, my tech brain is like, oh, we’ll be the biggest. One order of magnitude is nothing. We could be the biggest book publisher in the year and biggest book publisher in the world in a matter of years. And there’s differences between our models that actually makes that quite likely. And where we have a tailwind, they have a headwind on that kind of growth. So, I think it’s a very… I think publishing is in an interesting spot where the model that is the current dominant model in the traditional publishing is 100, 150-year-old business model in many cases. And on the one hand, that’s Lindy and there are well-worn grooves in the pavement that lead people that way. And there’s a whole artifice of agents and bookstores and media that sort of fits around that model. On the other hand, the whole like advance and take a back end of royalties from an author made a lot of sense in an era where you needed a huge upfront cost- a huge upfront investment of capital to print a ton of books. Then you needed to physically distribute those books to all those bookstores, and you needed to have access to those bookstores in order to get the distribution. Third, you needed connections to centralized media to get your authors on the Tonight Show or get a review in the paper or whatever. And now, so something like 90% of books are sold on Amazon. So, there’s no gatekeeper on who can list what on Amazon. Number two, most books are print on demand, not huge upfront print runs that require enormous chunks of capital. So that’s a very big and mostly invisible innovation actually in the landscape. So many authors are surprised to learn that you can publish a book with no upfront capital. And third, most people just recommend books to each other on social media. So again, no gatekeeper, no upfront capital, just more of a meritocracy. So when you think about that and the rise of creators who largely have built their own audiences, in many cases have direct access to their own audience through podcasts or through email, they’ve spent years building trust with that audience, embedding their messages, and proving that people are interested in hearing what they have to say. And then one of those creators goes to write a book, let’s say. Why am I giving up 80%, 90% to a publisher when there’s no upfront capital requirements? I already know I can sell 10,000 copies or 100,000 copies, which means my book is an asset worth, I don’t know, $100,000, $500,000, a million dollars. What’s the equity value of that book that this author is about to create? And it’s just not that expensive to publish a book. If you wrote a manuscript and you bring it to us, it’s $18,000 to publish that manuscript. To get that book well done, professionally copy edited, proofread, cover designed, spine adjusted, distributed, interior layout, all perfected, polished, QA’d, it’s just not that expensive. If that’s your input cost to build an asset with a direct value of royalties for $100,000 or $200,000, and then the indirect value of business that it could drive or opportunities that it exposes you to, come on, it’s not even close. And then the fact that you could have to be forced to compromise in some of those creative decisions in order to optimize for book sales for an entity that’s going to take 80% or 90% of those book sales. It’s crazy to me. So that’s what I mean in the context having shifted. And now, Scribe’s emphasis is always like we get paid up front, we do the work at an incredibly professional level, and then the author gets 100% of their creative decisions, all their rights, all their royalties in perpetuity. They can do whatever they want with it. Some authors go sell that to a traditional publisher. On the other hand, some people publish their book with a traditional publisher, are unhappy with the service or the marketing they experience, and bring their book to us to help them market it further, to get it more places, to get it into the hands of the customers they’re actually trying to reach because they lose the leverage over that traditional publisher. What are you going to do? They have your copyright roughly for the life of its copyright. It’s a tricky industry. But I think the context has shifted enough to make it clearer to more people that this is a model. I think Scribe is an innovator in this, a frontrunner in this. We are the biggest and the best of these businesses. There’s a long tail of small, independent people doing this kind of work. And I think all of those in that space will continue to grow. But I think there will be one dominant, big, there will be an IBM of this space. And I think Scribe is very fertile ground to grow that. And so that’s kind of what we’ve got our eye on. And I think we’ve got a great team and great momentum to get there. And I think you’re going to see a lot of growth here. And I think you’ll see the story of that industry change over the next few years. I hope to kind of play a part in moving that along because I think it’s the right thing for authors.

Alex Bridgeman: Do you see other large publishers trying to replicate some of the elements of your model? Or is there just too much institutional momentum with a lot of the larger ones that they just can’t switch on a dime like you can?

Eric Jorgenson: I think the innovators dilemma there is really tough. Truly, like I think that’s kind of what they’re caught in. I’m reading up, but I’m still not really an expert in this industry’s history yet. Hopefully, I will be soon. We’ve got a high bar for that, and I think that’s important. I know that there have been small experiments in the past or small acquisitions that I don’t think have made any lasting impact. I see that sort of as an acknowledgement that there may be some open-mindedness in some of them, that maybe there are alternative models that are worthwhile. But it’ll be interesting. There will be a fork in the road in 10 years to say, let’s say there are one or two $50 to $100 million businesses like Scribe that are publishing as many books as the traditional publishers and providing this really viable, alternate savvy path for these right kind of authors. What are those traditional publishers going to do? Are they going to spin up their own? Are they going to try to buy one? Are they going to change their model? It will be interesting to see. I say all this to say there are definitely authors for whom traditional publishing is the right path. I would be very open-minded and clear-headed about that. I just think it is a lot fewer than feel compelled to do so right now because I feel like that’s still the only option. Or feel like there’s a prestige associated with that, and they’re sacrificing a lot of freedoms or a lot of economics for this perception of prestige that I think is eroding relatively quickly, but of course that’s very subjective.

Alex Bridgeman: Yeah, I don’t really pay attention to who the publisher is for any book that I read. It’s not- It’s much more meritocratic than that.

Eric Jorgenson: Yeah. You read a book because your friends told you it’s great. And we are seeing many more, like Alex Hormozi is self-publishing. There’s a lot of people, and he made a bunch of bestseller lists. Balaji self-published and made bestseller lists. Tim Urban self-published and made, I’m sure he sold a lot of copies. I can’t remember off the top of my head if he was on bestseller lists. But I think it’s just becoming, yes, much more meritocratic, much more social, much more decentralized, much more like you get the recommendations you want from your friends or from trusted sites or whatever. And that’s what really drives reader behavior. And reader behavior then compounds. And there is no longer any guarantee that being published by a big traditional publishing house is going to give your book any lasting advantage in that sort of idea meritocracy of people recommending books to each other and the long tail. Which in my mind, when I design a book or when I publish a book or when I’m helping an author craft it, that’s what really matters to me. It’s like let’s create something with a lasting impact, all that value is going to get created in the long tail for you. You don’t want to spend a year of your life and $50,000 on something that is only going to be relevant for a year. You want that thing- In many cases, your book will outlive you. And that should be our bar. It should be something that you are proud enough of that you’ll feel some sense of relief that you’ve enshrined your knowledge in this thing that will outlive you. And I now love working on books so much more than writing or tweeting. I’ve become a much worse tweeter and blogger, and even podcaster since I started internalizing this because I’m just like, this is just all like playing Legos or Candy Crush or something. Twitter is Candy Crush to me and writing a book is like building a house. It’s just so much more satisfying to create something, even though it’s slower and more painful and more expensive. It creates more doubt. It’s like less of a feedback loop of dopamine, but it’s more peace in my soul that I’m creating something really lasting. And for me, that’s really satisfying.

Alex Bridgeman: So you feel like it’s less of a, I don’t have the same time for tweeting and podcasting and all that, but more of I just enjoy working on Scribe more and doing less of those other things?

Eric Jorgenson: Yeah, like working on Scribe and writing books. I would love to leave a really solid, useful, interesting, valuable shelf of books behind when I go. I want a happy family and I want to leave a bunch of books that I think could be useful for people for hundreds of years. Everything else is like…

Alex Bridgeman: They’ll sell your collection at the funeral and all the proceeds go to your surviving family and all that? That’d be perfect. Who else would you be excited to profile and write a book about?

Eric Jorgenson: Oh, I mean, there’s a lot of interesting people out there. I’m working on Elon right now. That one is, I don’t know, in the back half for sure. It’s always hard to tell when you’re in the back half if you’re 51% or 91% done. I am a really big fan of Paul Graham, but he does such a good job writing his essays that I’m not sure. It’s just a little different transforming something that’s a podcast from an essay. I think Steve Jobs is fascinating. I think Charlie Munger would be… There’s been a bunch of books written about him, but selfishly, I just love spending time with him and his ideas, so I would really love to work on a Charlie Munger project. I don’t know. I have a lot of ideas outside of this format or this style that I’ve done so far. I would love to write fiction at some point in my life. I would love to expand, write different kinds of nonfiction books. Once you go through the process, it’s very addicting to complete this creative journey and feel like you’ve birthed this thing that’s out there and it’s discreet and it’s done and it’s valuable. I feel like the experience gave me a little bit of x-ray vision on, I actually really now appreciate other creative work and the process of it and the bones of it. I got a little bit better x-ray vision about movies. I feel like I understand directors a little better as a result of just finishing the process of creating a book. It’s just fascinating. It gave me a new kind of lens on life. I think it’s an interesting thing and it made the next book and the next book and the next book feel more accessible to me.

Alex Bridgeman: Christopher Nolan would be a good person to write a book about too.

Eric Jorgenson: He is fascinating. I love the Founders Podcast episodes with him. Yeah, he’s brilliant.

Alex Bridgeman: Yeah, they’d be really up there. Are there any final lessons learned from your time so far with Scribe? Only six months in, but anything that has stood out to you as a profound lesson about leading a team?

Eric Jorgenson: I’m incredibly inspired by this team and what they’ve gone through and the dedication that they’ve shown to each other, to their authors, their customers. They went through a really hard thing last summer, a really hard thing. And everybody who is here now stuck by their post and didn’t give up and took a lot of heat for a problem that they did not cause, issues that were not their fault. They really supported each other and took some heat and came out the other side. On the one hand, from a business case perspective, I think it is fascinating that you can go through an absolute forest fire like what Scribe went through and now see regrowth. That can be actually somewhat counterintuitively a really powerful place to build from when you have a really dedicated team that really trusts each other because they went through this really difficult thing. Yeah, it’s counterintuitive, but it’s actually a pretty good starting hand. I’m really grateful that they embraced me joining and let me be a part of what I think we can do here. It is so great to work with a great team, and I deserve very little credit for creating it. I just got to show up, and in large part, they were there. And I just had to say, look, clearly you guys are great and everybody gets the benefit of the doubt and this thing works. So, all we’re going to do is try not to screw it up. Let’s preserve that and let’s rebuild on it. I think it’s just worth a second shot. It’s, of course, always worth working very hard in life to get into rooms full of people that you trust and respect and love to be associated with, which is, of course, not news to anybody here or who’s listening, I’m sure, but it always bears repeating.

Alex Bridgeman: Yeah, absolutely. Eric, thank you so much for coming on the podcast. I always enjoy getting to chat with you. Hope to see you here in a couple months, not too far away, in Omaha here pretty soon.

Eric Jorgenson: Yeah, it’s always great talking to you. I think we could go for hours in any number of directions and I hope we get to in the future. Yeah, hope to see you at a lot more stuff this year and appreciate you having me.

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