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hi i'm catherine klein i'm the vice dean
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for social impact at Wharton I'm a
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professor in the management department
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and I'm delighted today to be talking
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with Kyle Zimmer the president CEO and
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co-founder of first book
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Kyle great to see you I'm delighted to
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be here great to have you with us
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so first book I'll just give the
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accolades
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I think of first book is really one of
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the most impressive nonprofit social
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enterprises I know you've been at it a
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long time and are passionate about
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continuous improvement so I'm excited to
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talk with you and share this story with
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our audience how do you describe first
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book what is what we are a non-profit
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social enterprise and we're at the
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highest level what we're dedicated to is
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equal education but the way we do that
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is we focus on fixing the lack of
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resources physical resources in any
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space serving children in need zero to
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18 years of age so it's we provide books
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we provide computers we provide winter
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coats when they're needed anything that
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is a barrier between kids and an equal
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shot and first books has been that was
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the initial starting point right right
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and is that the major focus of your work
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or what's the balance when you talk
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about these other resources books are
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always the heart first book and in fact
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we were delighted this last year to hit
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a hundred and sixty million books over
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the lifetime of the organization we have
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distributed and right now we're running
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at a clip of about I think last year we
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did about 18 or 19 million books through
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our system in a single year and that's
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growing 20% a year and which are just
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fabulous numbers who are these books
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going to they basically go into the
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hands of anyone serving children in need
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it can be the most informal teen drop-in
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center it can be a headstart program it
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can be a WIC clinic a church basement a
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barber shop where they're doing outreach
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trying to get neighborhood kids reading
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or a title one or title
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one eligible classroom so it's a
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gigantic range yeah and we'll talk about
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how you get these books into into the
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hands of all these these people in
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organizations the name of first book
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sort of suggests that this is might be
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the first book in kids lives or the
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first books in their homes why first
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book well you know I fell in love with a
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poem by Rita Dove that's called first
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book and that's where the name came from
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and it's a poem about the its it doesn't
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have anything to do necessarily with it
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being the first book when you're an
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infant it has to do with being the first
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book that really grabs you and turns you
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into a reader that's great
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alright so you found it first book 25
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years ago I did this year 25 years and
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you made the jump from a careers as an
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attorney by - I'm gonna start this
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nonprofit social enterprise in France
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form the world through books and I'm you
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know what I've seen in my role is in the
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social impact world there's a lot of
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people who have passion passion and
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pursue this larger sense of purpose but
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plenty people who have a larger sense of
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purpose but don't take the plunge so how
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and why were you able to take the plunge
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you know I think that I took the plunge
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for two reasons one is I I was raised to
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focus on education I was always raised
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by people who believed deeply that
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education was the road to equality and
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to this day I believe that it really is
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the next wave of the civil rights
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movement and I think that that has
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always been at the core of who I am and
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so when I started I actually was
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practicing and I went over to in the
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evenings to a soup kitchen and you know
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just hung out with kids from the
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neighborhood it was in the late 80s
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early 90s and it was a tough period for
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Washington a period of the height of the
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crack epidemic and so very violent and
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these kids were doing everything right
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coming in from a tough neighborhood
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looking for adult intervention and I
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realize
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that even though I wasn't a teacher that
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those hours could be a lot more
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productive if I just had books and I
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could pull a kid onto my lap and start
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reading and the lack of books in that
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setting sort of set me on a trail of
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exploration I started looking at schools
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in the neighborhood what resources they
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had available reading studies about it
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and one thing led to another and I like
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probably every social entrepreneur you
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know in the world I have that split
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where my head is fundamentally private
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sector and my heart is social sector and
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so I you know began to put together a
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business plan and to understand the
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intricacies of the publishing industry
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and to start imagining how you develop
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an actual business plan that would fix
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the chasm yeah so that's just what I
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want to talk about it I love how you put
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this with the heart and the social
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sector and the head in the private
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sector another way people talk about
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organizations like yours is as hybrid
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organizations they can be for-profit
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they can be nonprofit but there's a
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strong social mission and a
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revenue-generating model as well so how
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does that work in your case at this
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moment we have two big jet engines one
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is called the first book National Book
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Bank and what that does is it accepts
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fundamentally it's focused on books but
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there are other products as well it
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accepts large-scale contributions from
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really almost every major publisher in
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the US and Canada and we take that
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inventory in and we make it available
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through an online system to our
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expansive network of classrooms and
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programs who have signed up with us and
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who are eligible to receive you so that
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that one line is it is essentially a
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donor model where companies are donating
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books and write distributing and while
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that sounds more traditional it does in
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its design the the people who receive
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the books the books remain free but they
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pay a shipping and
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uh-huh on average it's about 55 60 cents
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per book but what that fee allows us to
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do is not only pay shipping and serve
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the hard out-of-pocket cost yeah but it
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allows us also to pay a hundred percent
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of the cost related to running the
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national book bag and so what that means
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is that that is completely revenue
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neutral for the organization and that
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places 14 million books a year something
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like that so it's a powerful engine
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right right and then the second the
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second engine and the second edge is
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called the first book marketplace and
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about 10 or 11 years ago what we
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realized is that though we love the book
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bank it's wildly efficient it it places
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enormous quantities of books and
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resources out there but what it doesn't
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do is fix the problem for publishing
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publishing is a consignment industry and
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what that means is that they know that
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when they hit the print button every
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year on whatever titles they select that
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25 or 30% of that inventory is coming
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back to them and that means that they
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elevate the price at retail to reflect
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that so we have a market now where a
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premium picture book for kids in the
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u.s. runs up just a hair over 18 dollars
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so you have a entire publishing industry
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that really has a restricted market to
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about the top 5% of the US
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socio-economic ladder well that's not
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good for the industry no one wants to
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have that kind of construction so we
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went to them and we said we are going to
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crack open the bottom of the market for
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you
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we will aggregate the market we will
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take care of talking to them so there'll
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be no advertising costs and we will buy
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for the first time ever on a
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non-returnable basis which took the
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consignment risk off the table as well
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so we now offer about I think it's 6500
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titles you know it changes it goes up
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and down but about 6500 titles and the
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average price of a picture book through
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us is 285 and it includes ship
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right and so we often these might be
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paperback books different slightly
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different furtive it's the same picture
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same story same everything right but
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maybe not hardback maybe not hardback
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sometimes they are hardback and the cost
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is a little higher on those but you're
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right we change format sometimes to keep
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the cost so it's accessible yeah but it
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also works for the publishers you know
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it's a brand-new market and they're
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still making money on those sales and
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and how are you these groups that you
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are selling these books to how are they
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paying whether it's a community center
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or school system you said the local
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barbershop you know it depends on the
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program sometimes its title one funds
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you know which are governmental funds a
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lot of times what we know is about more
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than ninety percent of teachers in the
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United States take money out of their
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own pocket to pay for resources in their
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classroom and if you're a teacher at a
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title one school that needs are so high
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that first book believes that none of
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those people should be first of all
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paying for it themselves but secondly
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paying eighteen dollars a book right and
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so we're able to make those dollars that
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they do bring to the table whether
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they're out of their own pocket whether
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their school funds sometimes it's local
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foundations or affluent folks who come
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to the table and recognize the need it's
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a huge range and we just want all we
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care about is making sure that every
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dollar that comes in pushes the maximum
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number of resources out the door so with
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your model it sounds like there's not
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really you're not experiencing a tension
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between the revenue generating aspects
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of the model and the the social impact
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that you know the more books you are
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having that are getting donated the more
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books that you're selling the more books
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are contracting the greater your impact
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that's not always the case and and I
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wonder if you have you know if there are
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things that you've learned along the way
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if you were giving advice to others who
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are looking for this a successful hybrid
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model where you get that win-win you
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know do you have advice do you have
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insights about how you find that I think
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that were
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particularly fortunate to have our our
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model is directly on point with our
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mission and it means that there really
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is no distraction between the two I
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think that if I were advising somebody
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to design one what I would suggest is a
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couple of things one is I'm a big
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believer in writing a business plan I
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it may sound old-fashioned it may sound
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boring as hell I but what you need to do
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is you need to sit in front your
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computer and you need to make sure that
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you can clearly articulate exactly what
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you intend to do exactly what the risks
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are and you need to do it fearlessly
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and ask yourself every tough question
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also I think young people especially who
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are trying to start social enterprises I
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think they need to step out and ask for
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help you know no I talked to a lot of
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classes and I think what they say a lot
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of young people even people who are very
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highly educated they have MBAs from
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great programs like Wharton and they're
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still worried that they don't know
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enough they don't know enough about
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logistics or whatever the topic is and I
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I think that the best minds recognize
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that team leadership is a way to go and
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that what you really need to do you're
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never gonna know enough and even if you
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do when you start it within six months
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you'll be facing challenges that you
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really couldn't even foresee and so you
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need to routinely get yourself in the
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mode of reaching out asking for help
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asking people who you know will give you
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great advice but who will also ask you
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the tough questions so that you don't
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run the risk of falling so in love with
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your design that you lose track of your
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business model and so I think there are
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lots of wonderful models where they
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don't have the alignment where they're
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running a restaurant to fund you know a
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homeless program and many many fantastic
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models but I do think the centerpiece of
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that is refined thinking
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forcing business practices forcing
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yourself to answer the tough questions
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so let's let's take a little bit more
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into this the some of the leadership
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aspects which you've just alluded to how
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is it so many many organizational
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leaders will struggle you know from
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their position of CEO and Founder to get
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real information to have somebody you
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know speak up to you and and give you
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content I say no that's not a good idea
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or here's my great idea and bring it
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forward to you right and I know this is
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something you've thought a lot about so
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how do you get that bottom up
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information I think we have really as
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you say we've really worked hard on this
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at first book and it's it's
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multi-layered one is we believe deeply
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in team leadership and so there's no one
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head of the organization it's a team of
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four people we have enormous faith in
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each other and that sets a tone because
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the rest of the organization will they
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watch how we interact and they see that
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you know Jane the CFO or Chandler Dan
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they asked me very difficult questions
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or I may come up with a what I believe
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is a completely genius idea and they
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will shoot it down pretty pretty
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aggressively with great you know caring
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and and all but but in great humor but
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but the interaction is very clear and so
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it emboldened people and teaches them
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that it's okay to question so that's
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that's one thing I think a second thing
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is we really do focus on how we interact
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at meetings with our team and so for
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example I will say present an idea and I
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will say to a junior person tell me
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three things that you love about my idea
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and they'll stand up and come up with
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three things and then I'll say okay now
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tell me three things that you hate about
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my idea and usually it's so playful that
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it's you've you've lowered the threshold
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you've lowered the barrier and they feel
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as though they can step forward and you
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know by the way I think
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that's critical not just with our
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internal interactions but I also think
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it's critical for our relationships with
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corporations we often have almost
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identical conversations with the
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companies and support us because it's
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hard sometimes for them and to feel like
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they can be critical of of their
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nonprofit partners and that's sometimes
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the most important thing they can do for
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us yeah so and as the social impact
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spaces evolved as social enterprise
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models have evolved there's a big focus
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on data as you know how are you using
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data whether to to guide your strategy
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and your projects or to assess your
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impact we yeah we use data every single
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day at first buck and and we use it in a
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lot of different ways so from an impact
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perspective we survey our recipient
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groups routinely in fact we just closed
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a survey a pretty large scale survey
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recently and got some wonderful
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responses we found that I think 88% told
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us that the books that we provided
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helped them close the learning gap the
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achievement gap 87 percent said that
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they noticed an increase in interest in
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reading from the children they served as
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a result of having new books and
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resources and my favorite number out the
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whole thing is seventy nine percent of
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the teachers we serve came back to us
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and said that use the first book
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resources felt like it gave them the
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ability to be the best educators they
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could be which is fabulous because this
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is a group of people who are working on
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the front lines and very different
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difficult situations but we also look at
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other kinds of data we we do focus
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groups routinely
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with the people we serve we get all
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kinds of feedback from them about what
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they need what categories of products
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they need but also what keeps them up at
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night
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what are they worried about in the lives
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of their kids and and we get tremendous
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input from that I think also we look at
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the macro level through data and we are
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monitoring constantly how big a buyer
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are we in the publishing industry if
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we're really about trying to invert the
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market for publishers how close are we
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to doing that I'm happy to report we're
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one of the largest specialty buyers of
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most of the major publishers in the u.s.
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now which is terrific but we do we learn
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that we watch those numbers so that we
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know what our impact at the macro level
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right and that makes me you've that
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makes me think of the times when you've
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talked about you it to me about your
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impact in unpublishing mm-hmm and we
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haven't talked about that so is first
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step is first book changing the
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publishing market what gets published
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and for whom I think we are in small
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ways right now and we're taking bigger
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and bigger steps in that I believe that
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a couple of things have happened I think
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that we have opened the eyes of
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traditional publishers to the fact that
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there's another market out there that
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they haven't served for a couple of
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hundred years right and I believe that
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in that they have been more deliberate
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in the choices they've made about the
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the cultural identities of authors they
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back because they know that first book
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will be there as an open market to them
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let me give you a couple of examples
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everybody almost everybody knows good
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night moon sure and I think you I've
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read that to my own kids thousand times
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and I there was an English version and
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there was a Spanish version and our
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Network responded to us and said don't
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make us buy both we really need a
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bilingual edition and we learned that
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there wasn't one and so we went to the
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publisher and said how about if we buy
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30,000 copies and of course that was
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welcome news to the publisher because
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it's
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non-returnable it's all great and when
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we did that they that was and that had
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never been done before
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because when you're selling it to a
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retail market at the high end of the
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market if they need both they just buy
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both copies and so we I think we've been
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through a hundred and fifteen thousand
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copies of that book now and now it's
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available at retail so we it but it
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wasn't before we began that our work for
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stories for all which is a program a
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first book that focuses on cultural
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diversity and it you know which is a
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dramatic need in children's literature
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in the u.s. especially and we have
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really held hands with publishers and
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we've said we will buy the first 10,000
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copies of books that we hand select
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before they are ever chosen by the
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publisher so what that enables the
00:21:01
publisher to do is to take a gamble on
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an author that they might not be as
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confident about the retail market for
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because they know that the first 10,000
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are out the door great yes so final
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question we've talked about a lot of the
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successes for first book I know that you
00:21:17
are always looking forward and
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contemplating new plans and new
00:21:22
opportunities new challenges so what are
00:21:25
you thinking about for the future
00:21:27
maybe a puzzle that you haven't quite
00:21:28
cracked or you know a new venture this
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is my favorite part of my job I we have
00:21:35
several big plans underway one is
00:21:39
recognizing that not only are we focused
00:21:42
on publishing but we're focused on what
00:21:44
are the resource needs that are barriers
00:21:47
for these kids and you know we've
00:21:50
already stepped out as I said in winter
00:21:52
coats and hygiene kits for homeless
00:21:54
children in many other areas and what
00:21:58
we're realizing more and more is that
00:22:01
not only is the pilot has the publishing
00:22:04
industry been designed really to only
00:22:06
serve the upper veneer but the retail
00:22:10
industry fundamentally is really only
00:22:12
design
00:22:13
and and it's not anybody's fault they
00:22:16
are they are victims of their own market
00:22:19
design they're victims of their own
00:22:21
business strategy and and so now we have
00:22:25
a gigantic and growing number of
00:22:27
families who are at the very bottom of
00:22:30
the poverty ladder and these are people
00:22:34
who can't afford diapers they can't
00:22:37
afford books they can't afford school
00:22:39
supplies they can't afford the very
00:22:42
basic items that allow you to raise a
00:22:45
child in a healthy environment so we're
00:22:48
looking at that we're saying what's our
00:22:50
role what's our role in that and we have
00:22:52
some strategies underway for that I will
00:22:54
just say cement and secondly we are also
00:22:57
working on developing a research arm
00:23:01
once you know we have three hundred
00:23:03
thousand members of our network and they
00:23:06
have big opinions and they share them
00:23:09
with us wonderful a very openly and so
00:23:12
with that we realized we have a unique
00:23:15
opportunity to really harness the voice
00:23:18
of people who are serving kids in need
00:23:21
and so what can we do with that
00:23:24
so we're beginning something called
00:23:25
first book insights that we're looking
00:23:28
at this next year launching fabulous
00:23:31
thank you so much great talking with you
00:23:33
great talking with you thank you
00:23:50
you
00:23:53
[Music]
