Ali Albazaz has now raised nearly $100M for his new method of publishing that is rivaling the kindle. His venture Inkitt has acquired funding from top-tier investors like New Enterprise Associates or Kleiner Perkins.
In this episode, you will learn:
- How Ali perfects his pitch to raise tens of millions of dollars
- Suma’s story
- The incredible board Inkitt has built to surpass Amazon’s kindle platform
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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Ali Albazaz:
Born in Baghdad, Iraq in 1989, Ali Albazaz’s entrepreneurial instincts emerged when he was 13, when he started buying second hand phones on eBay, polishing them, taking better pictures of them and reselling them at a 20-30% higher price. His education culminated in a degree in computer science from the University of Bonn.
He describes Inkitt as a reader-powered publisher, where authors can upload manuscripts which readers can access for free. Books that perform well based on their reader engagement are then published by Inkitt in a variety formats and channels, including the Galatea app.
The inspiration to launch Inkitt came to him when he realised traditional publishers relied on gut instinct to select books for publication, leading to instances such as J K Rowling’s Harry Potter books being rejected by 13 publishers, and Stephen King’s Carrie by 30.
He became familiar with rejection slips himself, initially being turned down by 140 investors. But he persevered and within seven years has reached the stage where the concept is a proven success for writers, readers and his business alike.
He lives in Berlin with his fiancée and their labrador, Rocky.
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Connect with Ali Albazaz:
Read the Full Transcription of the Interview:
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Alejandro: Alrighty hello everyone and welcome to the deal maker show. So today. We have a very interesting guest. We’re gonna be making quite an announcement so there is quite an announcement that it comes all to financing that we’re gonna be sharing on this episode today. With with this guest that we have. We’re gonna be talking about building scAli Albazaz:ng pivoting multiple times having your investors giving you their backs and and half of the leadership team quitting I mean you name it I mean full of adrenAli Albazaz:ne. Just how we like it so without further ado. Let’s welcome. Our guest today.
Ali Albazaz: Um.
Alejandro: Ali Albazaz: Albas sa welcome to the show. Welcome.
Ali Albazaz: Awesome hey Alejandro nice to meet you.
Alejandro: So so Ali Albazaz: why don’t we do this. Why don’t we do a little bit of a walk through memory lane because your upbringings are are full of adrenAli Albazaz:ne and I think that people are gonna be able to really get to know you and obviously everything started for you in Iraq and then he moved to Iran then to Germany but. But I mean it’s a quite ah quite an interesting story. There. So kind of what walk us through memory lane. There. How were you born. How were you raised upbringings landing in Germany all of that good stuff
Ali Albazaz: Absolutely yeah, yeah, so I was ah born in in Iraq in Baghdad and and when I was very young. My parents moved to Iran that’s when I went to school and I learned to read and write farsi and I I stayed there up until like 10 years old and that’s when we moved to to Germany and in Germany it’s like the place where I have spent ah most of my my life at this point and I feel probably more german than than anything else at this point. Um, but like moving to Germany was like a pretty big. Big part of like how my my life changed and moving to Germany and especially um, you know being this foreigner that is trying to approve himself and and showcase that hey I can I can also be smart I can also do things and and I had like an amazing teacher. When I came to Germany who worked really really really hard and I thank her so much for helping me to learn german helping me to actually go to um, a level higherre of school and another higher school so I was able to actually go to university and actually have a career. And um, this this? Um, ah teacher that I had was quite a big inspiration and in my life and and probably we will get to that soon like she was also a very big inspiration to me to actually start ink it and and and help other people.
Alejandro: And talking about equal chance in life I find that when you are faced with adversity. You know you really get the opportunity to grow and I’m sure that for you finding that equal spot as a foreigner in Germany I’m sure it was not easy. So how was that for you. How do you think that has.
Ali Albazaz: Have an equal chance in life and.
Alejandro: Shaped your character and who you are yeah.
Ali Albazaz: Um, well look when I when I came to to Germany when we immigrated here. Um, there was there was this this person in the in the school system who decided which ah kids that are immigrating to Germany and who which school system. Ah, they should be going and in Germany there are like 3 types of school systems. Um, two of them are like very very very basic. It’s basically where you graduate after ninth or tenth ah grade and then you have to go and work. You’re not allowed to go to university or do any further education. And um, yeah, when we arrive here for for some reason I don’t really know it I was too young to to question it. Um, you know they said like yeah you know this is a foreigner. So let’s put him in the in the lowest school system possible because he you know he doesn’t have any future anyway. So that’s kind of like what I believe at this point. Um, but the cool thing was um in the end like my my teacher who did work there who who saw my potential who said like oh wow, this guy is actually smart and he’s actually capable of a lot more and um, let me help him let me let me help him to go to the higher school and. Um, and and yeah and she worked really hard with with me on that and to to learn german to yeah to figure out like all the bureaucracy in terms of changing schools and and so on. Um, so yeah I have seen basically both sides of it I’ve seen like being um, being put in the in the wrong school system just because of like you know where I come from not based on. Um, you know my my potential but then on the other side. Also I’ve had people here like such as my teacher who yeah who saw like oh this guy is actually smart should be in a different school system. He should be able to go to university so let me let me put him in ah in ah, a different different school system
Alejandro: So and I’m sure that that saying thanks thanks to that you are who you are today and part of the school system. You actually ended up studying computer science out of all things. So why computer science.
Ali Albazaz: So yeah, but I have experienced both the good and bad.
Alejandro: Now as they say you either succeed or you Learn. So what? what? What would you say that because I mean as painful as it is going through one of those Journeys where you don’t end up getting the success that you had hoped for I mean it is not easy is really not easy and and it’s ah. Journey and it’s a roller coaster of emotions too. So How was that for you and and what lesson did you take away.
Ali Albazaz: So absolutely I still remember. Um, yeah, the email like that I wrote to ah to my mentor the next day when I when I gave up and I was writing to her like you know how how much of a failure I feel and I feel like I’m like. Have failed in so many different things and like I can’t do anything and I remember writing that email and and and she responded to me and said um Ali Albazaz:e if you give up now that’s that’s failure if you keep trying. That’s not failing learn from it move on. And she wrote that very short email and I was like such an inspirational quote that I that I still ah carry with with me. Um, but in in the end like when I when I look back at um, at um, the phone fee company that I had created back then um obviously didn’t really fly high. But if I look back. There’s been so many things that I could have done differently and if I would be doing it today would be successful. Um, and and there were like things like such as I saw that there are some like verticals some some subcategories of services that I was offering on on funfe. Um, which we’re actually doing pretty well and I should have pivoted and worked a lot more on those instead of like creating this the overall platform. There were like some seo services some like technical services that were working really well I should have just focused on a lot of on those things and then it would have worked. And um, yeah, my main main learning out of it is actually like um I shouldn’t have given up I think I still get you know the the giving up was the was a bit big mistake if I if I would have not given up then it would have taken a bit of time until I would learn like what needs to be. Done and then I would have done what needed to be done and that’s actually my my big learning out of out of that failure and that’s something that I took with myself into starting inkit when I said um when I am doing inkit either. Ah um, i’m. Inkit is going to become successful or I’m going to die first. So basically yeah, ah succeed or die trying and um and and and that’s something that I that I you know the big big learning for me like never ever ever give up because. Um, if you if you give up, you don’t you don’t you you cannot adapt. But if you don’t give up at some point you will have the an amazing idea that will turn things around and you can you can make things actually work out.
Alejandro: And as they say those that give up do so because they didn’t reAli Albazaz:ze how close they were for making it Happen. So I Guess in your case you know after after this experience with funfi with funfy. Basically you went into it as um. Freelancer You were taking some you know jobs to us a developer and then ah all of a sudden you know, really the um the idea I mean as they say ideas are doorrmants. You know they take time to incubate in your case, you know it was like your life Really, you know that they that incubated this you know idea of inkit. But at what point do you reAli Albazaz:ze? hey you know I think this is time to really execute on this idea.
Ali Albazaz: And that’s kind of like when the idea um came up for me and I said what if what if I use this platform that I have created where authors are uploading and readers are reading I can just start measuring the behavior of the readers on the books see what are the. Ah, covers that the readers are clicking ah when they start reading. Do they actually finish the chapter. Do they go to chapter 2 do they ever finish the book. Do they share it with their friends when they share it with their friends. How many friends do they bring and I kind of like had this idea that I could start measuring. Um. The the success of a book or a potential success of a book based on the numbers of like how the readers are interacting with the book and this way I could make the discovery of which stories are actually performing a lot more objective and a lot less based on gut feeling and this way I could give. Authors a chance to become published. Um, you know in a very different way so previously. An editor would read the book and make a gut feelinging decision and I wanted to create a platform where we would measure the performance of a book based on these metrics based on these numbers. And if the numbers were good. We would go and actually become their publisher and um, that’s kind of how how inkit started and now um, five six years later after that kind of like that moment we have been able to discover hundreds of successful authors all around the world. Um, every second author we’re discovering is making more than $100000 in sales and we have a few authors we are like in millions in sales and um, my my absolute favorite. Um, success story coming out of inkkit is is the story from um, one of our authors. Her name is suma. Who is living in in India in a state called oudisha where only 67% of the women can read and write and it took a very um, poor area and and sumya literally wrote her entire novel on an Android phone on the inkit app. And she uploaded it and we saw it based on the metrics and the engagement on her story. That’s a great story and we contacted her published sumya and she has now crossed $4000000 in sales and is a globally successful author and these are the things that we are um, allowing. This platform that we have created we we have created a platform that um, that allows talented novelists from all around the world to be discovered and actually reach their full potential.
Alejandro: Now to really monetize on this and to have a business model that that allows for the business to be sustainable. It hasn’t been that is that much of an easy right? I mean you guys have been at it now for 9 years but you guys have pivoted three times.
Ali Albazaz: Yeah, looks.
Alejandro: So I know that in the journey of doing those pivots and finding your business model. Also I mean it was challenging too with investors you know with the leadership team quitting so tell us what has been that process tool of going from 1 business model to another one. And finally landing on the business model that you guys have to like.
Ali Albazaz: Yeah, absolutely. Um so the yeah the media often like you know creates this picture of of incat that like an overnight success and like we you know, raised our series a with kleiner perkins in 2019 that our series b with. Ah, ne a from CAli Albazaz:fornia last year with $59,000,000 series b and like the media creates this overnight success picture. But in reAli Albazaz:ty it’s been like ah yeah, and a long ride and as you say like we had to try 3 different business models. And along the way. Yeah, as you said like half of the leadership team quit because they lost faith multiple stakeholders from shareholders and and so on um, like really stopped believing in the company along the way and then um and then we still figured it out to some point we were. We were lucky but let me walk you through that. So. The the first idea that we had initially was to use this technology to discover authors and then sell these books to other publishers. So the idea was to go and see like okay there is a good book coming on the platform. Let’s go and. Sell this book to penguin random house. Let’s sell it to Simon and Shuster and we started doing that in 2015 and and we figured that it was really difficult to communicate with these publishers um like telling them about like hey these are the data points on these books that would. You know say like what the fuck is these data points like ah what what? like we. We have our editors who make the judgments. What do you mean with these you know with these metrics they didn’t really understand it and um and we did sell a few books here and there to some publishers. Um, and the problem was though that their. Their cycles were so slow it would take up to 2 years for actually a book to actually be released and um and that was way too slow for us as a startup like we couldn’t wait like for 1 book to take like 2 years to be released so that’s when we said okay if this is so slow and they don’t believe in us. Um, let us publish ourself. Let us find these books that are performing well on inkit and go sell them on Kindle so that was became our second business model and we said like hey let’s go do that and then um, we started publishing. We started to learn how to do Kindle. Um, we started growing our revenues to I believe something like forty fifty thousand dollars a month that was like in 20017? Um, and then we really struggled to to grow the revenues beyond Forty Fifty Thousand um and the problem was that um.
Ali Albazaz: That when you sell books on Amazon They don’t allow you to track who your customers are so you don’t know your customer’s contact address. You don’t know your email address. You don’t know that name you cannot upsell to them if they buck. If they buy like the first book in a series. Um, you don’t know who they are so you cannot sell the second book in a series to them so you have basically a 100 % churn um on every sale you’re making on on Kindle and ah, that’s kind of like where this kind of discussions started like within shareholders and leadership. Okay, is the problem Kindle or actually the system that we have created with in kid with like being data-driven and looking at metrics is actually completely wrong and it’s not working and that’s when a lot of people start stopped believing in it and said like hey this is just not working and that’s like when you know as you mentioned like half of the leadership team quit. And which started a lot of discussions also among shareholders about like okay if half of the leadership team quitting. They must know something so something is off with the company and you know the the shareholders started um to to lose faith in us and it was like ah you know 21018 was probably like. 1 of the toughest years in my in my life because the pressure was so tough on us. Um, and and we kind of came up with this idea and said okay we need to create our own platform instead of selling books on Kindle. We need to create our own platform to. Sell these books because we need to own the relationship to the customers and um and that’s what what? I basically pitched back then to our so all our shareholders and to the team and I said hey look we need to own the relationship to the customers and everybody was like okay what there is already Kindle. So why? how on earth. You want to create an act will compete with Kindle how how do you want to do that. That’s not possible and it was really really difficult because like the pressure was on us and and like again and every minute I was like myself like I don’t know like whether we are going to succeed and um. But long story short that platform that we created that year has now. Ah you know, reached a point where it’s making $40,000,000 in annual run rate we were just nominated as the thirty ninth fastest growing company in Europe. By financial times based on actual revenue figures and it actually turned out to be working so the the real thing that that made us grow really quick was to basically um, create our own distribution channel to not sell on Kindle anymore.
Ali Albazaz: Ah, create our own app. It’s an app called Galatea which is which puts us in a really cool position because once we own the direct sales to the customers. We are also now able to actually ab test our stories and test different beginnings of stories. Test different cliffhangers on on every chapter and this way we can improve the stories continuously and actually improve the sales because we are also selling chapter by chapter and not like book by book. So this puts us in a completely new position that we can a b test stories and actually turn stories that are. Okay, into even like super great stories and make them sell millions and in sales. So um, yeah, basically it was ah it was like a long long journey and lots of like you know struggles. But um, we were ah lucky that we we survived and and and we made it. And um, yeah, and now now we have like new sets of challenges on on scAli Albazaz:ng and like how to surpass how to surpass Kindle right? That’s the the next the next thing for us.
Alejandro: I Mean bigger bigger company. You know, bigger bigger bigger the problems and so I mean you’re you’re always gonna have problems on fire. So I mean it’s all about putting them out. So I guess in this case, how much capital have you guys raised to date. So.
Ali Albazaz: At this point I believe we’re out $85,000,000 in total.
Alejandro: 85000000 and we’re making a big announcement today. So what are we announcing Lay Ali Albazaz: ah
Ali Albazaz: Oh wow yeah, yeah, very very big announcement I’m really, we are really proud and excited to announce that Henry Kravis the founder of the private equity company Kkr. Ah, is privately joining us in as an investor he invested like a mid seven digits ah figure of his private funds and he is an amazing person. We. We did our series b in in October with with ne a with that was like a $59000000 and and yeah, um, ah series b and um, and then after that that’s like when I met Henry and I reAli Albazaz:zed like how much an amazing person. He is like he literally started kk r out of his ah bedroom. Ah you know with with a few other people with I believe $10000 and now they’re. Managing I believe like five hundred billion um in in under management and um and yeah like how he has created Kkr from the from the get go from the from the ground and how he has created this amazing company with a really cool. Ah. Company culture that he was talking with me about like he and he how he created that how he enforced things. Um, really amazing guy. He’s also very well connected to all ceos around the world and having him on board is like ah yeah, it’s it’s like a. It’s ah it’s it’s it’s like a you know dream come true like it’s as somebody that. Um yeah I would I would have never envisioned that you know like I would be working with such and such amazing people.
Alejandro: Now I mean you are a there in in in Berlin and you know here you’ve been able to you’ve managed to get on board. Some of the best investors in the world from the us I mean typically crossing the Atlantic is not is not an easy task. You know it’s a completely different mindset when it comes to fundraising. And as you were alluding to I mean you got the series a you got kliner perkins series b you got n a and new enterprise associates and now you got Henry Kraviz the founder of Kkr. How did you manage to get these people being based in Berlin right.
Ali Albazaz: Um, yeah, so the simple answer is just be out there and and like you know, go to Sand Hill Road and and talk to these people right? So um. I think once um I was talking to. Ah um, a silicon valley vc and I was asking them like hey why don’t you have actually a europe ah based office and what they said was you know what? because the best founders somehow make it here and. And that’s the reason that they they didn’t have actually any other second second offices and um, and yeah, so like it’s it’s not It’s not not a difficult thing. You just need to go over network your way find these people um and talk to them and um and if you have like. Um, you know and I can definitely talk for for for ourself like we have like very big ambitions right? Like we we want to build the Disney of the twenty first century we want to expand beyond ebooks and physical books into like audio books tv series movies merchandise games. Even hopefully even. At some point are on theme park. So we have like a very big vision and like where we want to take the company building the Disney of the twenty first century and and in order to do that I also wanted to have like the best investors in the entire world. The people who think very long term and and that tends to be often like you know the. Ah, climb perkins or the n nes or the sequoyias of this world who who think longterm who think really big and I wanted to have these people around around the table and you know like together with with n e a also Matthias Dubfna who is on the on the board. He’s the Ceo of axar springer and. And the board on the on um Netflix so he joined us as well. He’s also on our board now. We also have Michael Linton who who joined us who is who is a chairman of snapchat who used to be a Ceo of of Sony pictures. Um, so yeah, amazing people. Um. And yeah, it’s a pleasure to be working with these people who think really big who understand the business and um, yeah, we want to really? um, you know, create some um, big value for the world and and that’s that’s why it’s important to have like this. Um.
Alejandro: Now Storytelling is everything I mean everything is storytelling and I think that that’s what maybe it’s going to allow you guys to really you know, go into the other you know business lines as you were describing now and you know storytelling in in fundraising is is is really big.
Ali Albazaz: Amazing people on board. So.
Alejandro: I mean storytelling people are ultimately investing in future impossibility and in this case, you have an edge because you know you know based on data What kind of stories trigger Emotion. So I Guess for the people that are listening. Are thinking hey how do I structure my pitch or how do I structure my story. What can you tell?? the people that are listening about storytelling when it comes to fundraising.
Ali Albazaz: A.
Ali Albazaz: Um, I kind of say about storytelling. So I think the the key in in telling telling your story or or or pitching is for sure like Rehero. So um, like like a lot of lot of lot of training. Um, and trying your pitch in lots of different ways potentially recording yourself listening to it and seeing like whether you yourself would be sold um like figuring out if it’s if it’s emotional enough. Um, and I did yeah I I tried my pitch like with with employees I tried my pitch with. My fiancee even um, for our our um for our seriesb I believe it was yeah for the forsp for the first time I even hired. Um, um, an acting coach who was who was helping me with like. Um, yeah, who who is not like a very technical guy at all and I wanted to pitch him and make sure that he understands my pitch right? like the pitch has to be as simple as possible and it has to be emotional and um, yeah, and ah you you want to. Want to make sure that that your your pitch resonates with lots of different personAli Albazaz:ties because when you’re pitching you really don’t know who the person on the other side is whether they’re more emotional they’re more pragmatic. They’re more numbers driven so you want to cover all of those things. Um, so it’s it’s it’s a lot of yeah lot of training a lot of like you know rehearsal. Um, listening to yourself. Um, so yeah I definitely did did spend a lot of time on um on that and and how how how my message comes across I don’t know if I would be able to like you know condense it into say like hey do a b and c or something.
Alejandro: Got it got it I mean obviously every company is different every a background and experience that someone has gone through is different. So absolutely It’s very tough to really structure that but what I agree with you is all about figuring out how you trigger emotion and how you make it authentic. So 1 question that I wanted to ask you is. Imagine I put you into a time machine and I bring you back in time you know maybe to that moment that you were coming out of university and you were thinking about starting a business if you were to have a sit down with that younger Allie and give that younger Allie a piece of advice before launching a business. What will that be and why given what you know now.
Ali Albazaz: Very good question I think um I think like 1 one of the one of the key ones for sure would be to keep believing in yourself and things if if you. If you don’t give up and if you continue trying if you have that motivation and you keep trying and trying and trying and you don’t give up things always work out um things always work out. There is always a solution. Um, everything can be done but just don’t give up. Don’t and I think that that’s like my my learning with my first failed startup where I did give up too early. Um, so I think like not giving up and continue believing in in yourself. Even though things are super tough if everybody tells you you should be quitting and if you know if. Everything like all the signs show that things are not going to work out. It will work out just just work hard. It will work out.
Alejandro: I Love it So I leave for the people that are listening. What is the best way for them to reach out and say hi.
Ali Albazaz: Um, my email address is Allie Ai at http://inkit.com with DoubleT I n k I t t dot com. So.
Alejandro: Amazing. Well hey Allie thank you so much for being on the dealmakerr show today. It’s been an honor to have you. Thankd.
Ali Albazaz: Awesome! Thanks for having me Ajandro. Thank you.
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