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