PicPocket Books

Founder: Lynette Mattke, 41
Location: Silver Spring, Maryland
Employees: Two interns
Funding: $30,000, from Mattke and two silent partners
2009 Revenue: $7,500
Start-Up Year: 2009
Breakeven: January 2010
Insider Insight: Mattke saw that her kids loved the iPhone's touchscreen and that no one had built apps out of quality kids' books.
Blind Spot: It's hard to generate profits selling books-as-apps for $1 to $3, even if you keep costs low.

At established publishing houses, sifting through unsolicited manuscripts -- the slush pile, as they are collectively, and derisively, known -- for children's books is the work of young editorial assistants hoping to get their big break by spotting the next J.K. Rowling.

Lynette Mattke, founder and publisher of PicPocket Books, is happy to do the job herself. After all, her company didn't exist two years ago. And though she studied literature in college and has a passion for children's books, Mattke had never been involved in publishing. So reviewing manuscripts remains a thrill -- as does her success at bringing them to market: In the past year, Mattke has put out 40 children's book titles, to critical acclaim and modest commercial success.

Mattke's literary career is built partly on a technological innovation. She publishes children's books in the form of iPhone apps. In early 2009, Mattke's husband got an iPod Touch and started using some of the inexpensive software programs, or apps, available for download at the online App Store. (Apple says more than five billion such apps were downloaded in the past two years.) Mattke, for her part, noticed a striking lack of high-quality children's books among the offerings. The stay-at-home mom had been thinking about what to do, given that her three kids, 16, 13, and 10, were getting older. So she set out to fill the void.

Having little technological experience, Mattke found a part-time software developer -- a family friend with a full-time job -- to build a publishing platform to her specs. Then she approached some children's book publishers and offered, for free, to turn some of their books into apps. A few saw that they had little to lose and agreed to share the revenue of any app sales. Mattke signed her first contract with a publisher in spring 2009; she found a team of graphic designers in Seattle to execute the transfer from paper to digital form and figured out how to navigate iTunes Connect, the Apple portal that outside developers use to upload and manage their apps.

In July 2009, just a few months after getting to work, Mattke released her first app. Soon, unsolicited manuscripts began to find her, which meant she could publish original titles in addition to app versions of previously published books. She added another graphic-design team, this one in India, and by spring 2010, she had 30 titles for sale in the App Store and 10 more in the works. So far, her most successful is Monster Trucks, a board-book-format title by Robert Gould aimed at the "preliterate-male" audience, a.k.a. little boys. Mattke is particularly proud of Round Is a Mooncake, by Roseanne Thong, which is illustrated by Grace Lin, winner of a 2010 Newbery Honor. Reviews for PicPocket's titles have been solid, including good mentions in Publishers Weekly and USA Today. Most marketing efforts, however, have taken the form of blog posts and networking, especially through Moms With Apps, a 130-member support network for entrepreneurs like Mattke, who co-founded the group.

These days, sales range from 50 to 100 downloads per day, at prices from 99 cents to $2.99 each. Mattke splits revenue with the publishers and authors -- and, of course, with Apple, which gets 30 percent. Revenue runs from $2,000 to $6,000 a month. That covers costs and the production of new titles but doesn't yet allow Mattke to draw a salary.

Adding more titles may change that, but Mattke has other strategies as well. Most notable, because so many traditional publishers are asking her to put their books on her app platform, she has started charging a modest fee to do so. Meanwhile, Mattke searches her slush pile for promising but unknown authors to champion.