Trip Adler remembers when his father tried to publish medical research but was told it would take 18 months. "He just wanted a really simple way to publish and share," says the Harvard alum, who cited his experience as the inspriation behind Scribd, which he launched with pal Jared Friedman in 2007. "It was started to let anyone with any kind of written content publish things on the Web," says Adler.
Scribd caught its first lucky break--and $12,000--when it joined Y Combinator in 2006. The Kinsey Hill Group then invested $40,000 in angel funds, followed by a $3.7 million Series A round.
In those early years, Scribd billed itself as the YouTube for documents and allowed anyone to self-publish. But the company struggled to become a meaningful brand. "The problem is there's so much free written work all over the Web that it's hard to get people to pay for it," says James McQuivey, a Forrester analyst.
After raising a whopping $22 million in two additional rounds of capital, Adler decided last year to pivot the business. "We realized the best way to monetize content was through a subscription model," he says. A $9 a month e-book subscription service was released in October 2013.
From a marketing perspective, it also made sense to get access to publishers' backlist catalogs, says Adler, who has since teamed up with Lonely Planet, Simon & Schuster, HarperCollins, Workman, and Wiley. "Once we flipped to the subscription model, it took off," he says. Readers have the freedom to explore all kinds of books, while publishers receive the same amount of money they would have had their e-book been purchased at wholesale price.
These days, Scribd boasts a catalog of more than 50 million documents and 400,000 books from more than 900 publishing partners. The site draws more than 80 million monthly unique visitors, and though he declines to reveal hard subscriber numbers, since launching the e-book subscription service last year, Adler says he has increased subscriber count an average of 58 percent per month.
Still, as more startups vie for the title of the Netflix of E-books, Scribd faces a battle in carving out its niche. "Books is our main type of content, but we include user-generated content and will include other verticals such as scientific papers, sheet music, and comic books," says Adler, who recognizes that upstarts such as Oyster and Entitle pose a challenge. "We've got three really big [deals] we're about to close soon and are getting a lot more publishers to work with us."
McQuivey says Scribd is on the right track. The company competes with Amazon's Kindle library, and "Kindle does a really good job of attracting people who seriously want to write." The challenge for Scribd, then, will be getting its audience to stay on the site. "They don't have a monopoly they can bank on," McQuivey says of Scribd's content, so they need to get people to think about doing specific things such as reading comics or publishing long interviews. "I definitely think they are moving in that direction, but it doesn't guarantee it can work."