Part 2: Free searches, copyrights and inspiring frustration

What is Questia.com and how is it unique?
Well, there's really nothing out there like it. Questia at its core, is a software application. A lot like a word processor is a software application. It works like hand and glove to enable a student to write a research paper.

Before, you had to go to the library, write these notes on little slips of paper. You go to the books and maybe you can't check them out, so you photocopy sections. Then you take notes on 3 x 5 cards, you write all the bibliographic information at the top, then you put them in order.

You sit down to hopefully a typewriter with lots of correct ribbon and you put in your endnotes and you have to do it in footnotes. By 1990, you can type directly into the word processor, you cut and paste and you don't have to do all the typing. But you still have library fines from keeping all those books too long.

What Questia provides is for a student to get online, search, access books, have the footnotes and bibliographies automatically done for them. Questia, with your word processor, is the holistic solution and I think it's just as big a revolution for writing research papers as a word processor. I think it's going to become just as indispensable over the next five years for students going to college, as the word processor's become over the last ten years.

How does this equalize the intellectual playing field?
Well, I come from a little town in Connecticut, about 3500 people. I graduated from a high school in a graduating class of seven. I went to a small college outside of New York and the library was really poor.

Ultimately, I transferred to Rice because I knew that I wanted to get in to a top law school. Rice has one of the top 100 libraries in the country and Rice ranks about 100th. I then went to Harvard and Harvard has about fourteen million books and it's number one.

The disparity is tremendous. Number two is Yale which has nine million books, then number six is UT which has about six million. Drop to about 100 and you have two million books. Drop to 750 and you have about 250,000 books. You just keep dropping down. The other 3300 libraries in the country have less than 250,000 books.

By subscribing, every student, every subscriber has their own personal collection of 50,000 titles, which we're going to grow into over 100,000 titles by the end of the year. Those travel with you wherever you are. Wherever you go online, you have your own holistic, carefully customized selection of books. No book is ever checked out here. Any number of people can be reading the same book simultaneously. That's never been done before.

And you offer a free of charge search function for people who don't subscribe?
Yes, and it's an incredibly powerful tool, because you've never been able to search the text of an entire library before. You can pick out any three words and you can find the books that reference that. You can take a quote that you've seen and type it in and it will bring the book up. We provide this free because we wanted to have a tool that benefits everyone whether they are subscribers or not. I really do want to see more people having better access to education. I'm really a true believer in education. It made a huge difference in my life.

That said, I can't provide access to the content for free, because it's not my content. Publishers and booksellers own it, but at the very least it provides a great start to anyone who needs to do the research.

The hardest thing about writing a research paper is finding the sources. What this does is allow you for free to do a complex search and find ten books, let's say, that you know are going to be relevant and go into the library with confidence. You then have a very good head start on your research project. And I think it's a great tool for librarians whose ultimate goal is to direct people to better content.

How did you secure the rights from all these publishers, most of which have never granted anything like this before?
Well, it was very difficult to do and it took us two and half years to do that. The first thing we had to do was build a business model where everybody wins. The librarian, the faculty is better off, the publishers and certainly the copyright holders.

What we knew is that a student needed unlimited access and you couldn't charge them on a per page access basis. That was very clear and then we went out and tested it. Not one student wanted a per page access fee, they wanted a subscription fee. So with that said, how do you compensate the publisher?

So with the publisher the thing I came up with is, "I will pay you on a per page basis." But what if I said, "Look, I'll pay you five cents every time a page is accessed" and then I charged twenty bucks a month and the average student looks at 1000 pages. Then I'm only getting two cents a page and I'm paying out five cents a page, that won't work!

Right, and you've just described the downside and downfall to many a dot gone.
Exactly. So we solved that early on by making the page view payment to the publisher a variable based on our revenue per page on a monthly basis. It's a percentage of our revenue per page sale. It's always the same percentage. So if I'm making two cents, it's the same percentage of two cents. If I'm making twenty cents it's the same percentage.

So my interests and the publishers interests are aligned along the side of trying to maximize the revenue per page view. At the same time, I can promote philosophically to students to spend as much time as they want on the service and encourage them to read deeper and study more. So it really was the final stroke that made the whole business model very strong and viable.

Because everybody wins...
Yes, and every time a page is viewed the publishers get paid. If a book is at a library, they're checked out or photocopied and there's never additional revenue for a publisher. But we're turning all that demand into a revenue stream for the publisher, a better one than the current model. And at the same time the student is getting better research and more education. And it really is rare where you have a business model where everyone wins.

It's the same thing with the management team I pulled in; most of them were in retirement and I said to them, you have a chance to make some money if this is a go, and at the same time you can help people to further their education.

Finally, what would you say to anyone who wants to come up with a great Internet idea or business and pursue it?
The first thing I would say in regard to coming up with ideas is to focus on what frustrates you the most, and solve those frustrations with a business solution. All great entrepreneurs are basically solving their own frustrations. They are frustrated by something. I was frustrated by not being able to search text online and get text online. I could do it with the legal cases but I couldn't do it with any book in the library.

I was on a panel just a couple weeks ago with a woman who started feelpretty.com. It was a lingerie company she founded for plus size women. She was frustrated because she couldn't find any lingerie for herself and so she started a company.

And that's the course you take. Focus on a frustration as far as identifying a business. If you think something is just going to be cool, forget it. That's what's happened with a lot of these dot coms. The key is solving a real market need. Questia is solving a real market need.

Once you have the idea, then the question is, "Are you the right person to start the company?" And only you will know that. You have to have an unbelievable amount of belief in yourself; to the point that people think you're obnoxious and arrogant.

If you're not that confident in yourself, you're not going to make it through, in the end it all comes back to you. If you don't have strong willpower or belief in yourself, stay where you are. Talk to other people about the idea.

There was this myth in 1998 that it was easy to start a company. I think it really was a myth. It never really was that easy. Maybe the money was easier to get. But starting a company is never easy. So even though you see these companies dropping off, you still have to respect these guys for trying.

The articles you read in "Industry Standard" or "Wired" make it sound as if anybody can do it. But it's not true. There are going to be a lot of hard, dark days and so you have to have that core of just undying belief in yourself and never give up.

That's a wonderful way to end this interview.