Follow the tech press and every day you'll come across headlines about the latest startup raising a boatload of money to bring some innovative new technology to market. This isn't one of those stories. 

This is the story of how one Austin-based startup is attracting top investors not with the latest innovation, but instead by nudging customers back to a low-tech alternative. The company is called Literati and it just raised a $12 million Series A round to help parents wrestle the tablet from their children's hands and replace it with a printed book instead. 

Making books as sexy as iPads

Started by former Googler Jessica Ewing and writer Kelly Carroll, Literati is a monthly subscription club for kids' books. For $9.95 a month families receive a curated box of five books grouped according to a theme, along with related art and activities. Parents and kids can check out the books for a week and then return whichever aren't a hit with the little ones, paying a discounted price for whatever they keep.   

It's a modern distribution model for an old-fashioned technology with a huge, still undisrupted market. And high-profile investors like former Twitter CEO Dick Costolo, Eventbrite co-founder Kevin Hartz, and late-night host Jimmy Kimmel, all of whom invested in the round, seem to think the business has legs. 

That enthusiasm for dead tree books may be the mirror image of a deep unease among the tech community about the effects of the addictive technologies they've developed, particularly on children. "It didn't take a lot for us to convince investors that parents don't want to see their kids on an iPad. A lot of them are very much the same way themselves with their kids," Ewing told Inc.com 

Parents want their kids to read more, they just need a helping hand making books as sexy as tablets, according to Ewing, who worked in product management at Google under both Marissa Mayer and Sundar Pichai before spending several years as an aspiring writer. 

"It's so stressful for parents because they're aware of the problem, but at the same time it can be hard to find the right allies," she says. That's why Literati carefully curates each box, pulling from large and small publishers, as well as self-published titles and presses' back catalogs to give parents fresh choices beyond a five millionth reading of Goodnight Moon, but without requiring them to sift through the endless options of Amazon. 

In addition, the fun packaging and additional materials help tempt kids to reading. These features "send the message to kids that, 'Hey, this is fun,'" Ewing says. "I think too many parents make the mistake of treating books like intellectual kale: 'We must ingest this because it's good for us.' And then they take away the screen and limit that."

The result can be a feeling among kids that books are dour if worthy, while yet more YouTube is a forbidden fruit. Literati is hoping its monthly box of joyful exploration will help books appear equally tantalizing.

Art + data 

Which isn't to say that Literati relies exclusively on literary passion and gut instinct. As a Google alum Ewing is also a firm believer in tempering intuition with data

"We've put things in the box that one of us was absolutely certain was the most brilliant, funny, enlightening piece of children's literature ever written," she relates. But when unwanted books were returned and the "keep rate" for the title was calculated, "it wouldn't support that. And we'd have to go, 'OK, we were wrong that time. What did we learn from that?'" 

It's an anecdote which neatly captures the basic recipe Literati is betting on: mix equal parts genuine love of books, backroom logistics acumen, data-driven insights, and a large, undisrupted market, stir, and bake. So far investors and parents seem to find the results pretty irresistible. 

Published on: Oct 24, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.