Joe Matthews’s path to the CEO seat at Independent Publishers Group, following his father, Curt Matthews’s, retirement this past December, was not without its curve balls. “Successions are always very difficult. I think we did some things right and some things wrong,” Joe says. “I came to IPG 10 years ago with the hope and the goal that I could someday be CEO. [Curt’s] attitude was that you sink or swim on your own merit. He in no way helped me—in fact, he may have made it a bit harder.” One thing they got right is that his father insisted Joe work in different departments and, in particular, manage the giant systems upgrades the company made, says Joe, who oversaw operations as COO since 2013 before becoming CEO. “It caused me to learn everyone’s role in the company, and I, in turn, became amazed by the complexity of what everyone was doing. If I hadn’t had those experiences, I don’t know if I would appreciate and respect the team the way I do now.”
Joe spent two years putting in a new warehouse management system, which caused him to work out of the warehouse almost every day. “I learned warehousing is an art and a science. Anyone who thinks it’s just putting books in a box is utterly naïve. It’s way more complicated,” Joe says. “Knowing how everything works and what everyone does is what allows me to have credibility as the CEO. No other employee has as wide a view and depth into all aspects of what we do.” While Joe has his own unique vision for the future of IPG—including maximizing sales and services across all departments and continuing to invest in its employees—he knows he can count on the solid foundation left by his father to ease the way. Below, Joe shares several lessons learned from his legendary father, who helped change the publishing game with his bold idea to create an organization for the purpose of representing titles from independent presses to the book trade.
1. People Matter Most of All
I tend to be more analytical—looking at the data. I’ve learned from him to really pay attention to the people themselves. He’s always said, it’s not really about the products or revenue or title counts. Those things are nice, but the important thing is the actual people themselves. When you find someone interesting, intelligent, passionate, you are likely to have a prosperous relationship. On the other side of that, he always cautioned me to avoid opportunities that might look good on paper but those personal attributes are lacking. Over and over again, I saw that play out.
2. Question Everything
My father is a very inquisitive guy. His attitude was to question everything. He said you should pay attention to the opinion of experts but know that they are often wrong. Companies would develop certain assumptions and fold those into their business model but those assumptions may be incorrect. I’ve always taken his approach that whenever someone makes an assumption, you dig into the data to make sure it’s supported. He would oftentimes come off a bit contrarian or possibly disagreeable but in the end, his stance would turn out to be very wise. For example, when Borders went bankrupt, he looked at the situation and insisted that we hack our credit to Borders by more than 50 percent. At that time, other companies were trying to prop up Borders. They were extending terms and credit. They were shipping to them even when it was questionable whether they would get paid. There was internal resistance to his plan because the sales guys were worried that we were going to kill our sales at Borders. That it was going to be a lot of work if we started short-shipping Borders, meaning we started analyzing their orders and shipping them just enough to stay under the limit that Curt imposed. To our surprise, we actually ended up increased our revenue at Borders, because even though gross sales went down, returns went way down to almost nothing, so our net revenue increased. Most importantly, when they finally did fail, we were able to absorb the loss and even pay our publishers to cover the books they lost whereas had we kept the credit line to $2 to $3 million as it had been in the past, it could have put us out of business.
3. Respect the Value of the Niche
It’s better to have a book that a few people care a lot about than books that a lot of people care very little about. Those niche titles, they’re going to backlist well. They’re going to drive growth for years for the publisher and distributor. It’s more productive and easier to market to a niche whereas general titles tend to be very ephemeral. We always want to have a breakout book that’s a bestseller and we welcome it, but it’s likely not reproducible. As soon as one does break out, you can be certain that there will be saturation of that category with copycat titles.
4. Embrace the Future
I’m really proud of what my father did. It’s extremely rare that someone starts with one book and then grows to be this really big company. It’s an amazing legacy that he built. We have a lot of momentum right now, a lot of changes happening with competitors but we’re sort of sitting pretty after a couple of really competitive years. We’re in a position of strength and optimism. Our staff is the best it’s ever been. We’re positioned for really great growth. In this era where authors are wondering if they need a publisher and publishers are wondering if they need a distributor, the way we justify our existence is really solid. It’s that huge technology build-out, it’s that massive access to accounts, and the economies of scales coming out of the warehouse where we’ve got truckloads of books going out every day.
Seeking Risk Takers
Chicago Review Press, Inc., the parent company of Independent Publishers Group, operates two publishing companies alongside IPG: Chicago Review Press and Triumph Books. As such, Joe Matthews says the company is “acutely aware and constantly involved in the struggles of small publishers.” The critical challenge facing indie publishers today is the amount of white noise one has to cut through in order to get a title in front of an audience. “The sheer number of books published per year now … every category feels a little saturated,” Joe says. “It used to be that an indie publisher just needed to win awards and good PR. That’s just step one in the new environment. Step two is to communicate those awards and PR to everyone through every available channel: social media, advertising, at trade shows, etc. It’s just harder to get attention for your book. You have to be really savvy and aggressive in marketing to cut through all that white noise.” However, this same over-saturation of the marketplace does present an opportunity to stand out, he says. “Indie publishers can take risks. Whereas the big presses are using cookie cutters to crank out titles, bookstore owners are getting tired of sifting through books that look the same. They’re so happy to have a unique book. Indie publishing is where all the innovation is coming from.”
Notes of Discord
Prior to joining IPG, Joe Matthews worked in the sister industry to books—music. Along with a partner, he started his own music business, recording for local musicians at first and eventually offering music lessons and launching their own record label. He wound up running that business for 10 years, managing a catalog of 34-35 titles and sub-distributing for a few other record labels in town. “I learned so many things out of that experience. I was managing a team of people, doing their payroll, learning everything about distribution, sales, and marketing,” Joe says. Then something happened that shook the whole music industry. “I started that business in 1996 and in 2001, iPod came out and I just watched the entire music industry get utterly transformed by the disruption of digital audio. It left huge impressions on me,” he recalls. Fast-forward to 2006 when Joe joins IPG and Kindle comes out in 2007. “I thought, ‘uh oh,’ I’ve seen this movie before. I was the digital evangelist at IPG for a long time, just running around saying, ‘this is real, this is serious, we have to do this,’ at a time when the industry was questioning whether e-books was really going to be a thing.” Joe says the emergence of e-books was undoubtedly the biggest industry change IPG had to navigate. Partly because of his foresight of the potential of digital tools to revolutionize the book publishing industry as it did the music industry, IPG invested early on in developing a strong digital team. “We never outsourced that, we just folded that into our core competency and it turned out to be a fantastic decision. Now we really have some secret sauce in the digital world. We have very robust and scalable systems. It’s turned out to be a huge boon for us,” he says. Thanks in large part to the leadership of Joe’s brother, Clark Matthews, a Silicon Valley trained computer scientist who is currently vice president of digital distribution, the company is in an enviable position. “Internally, we now see ourselves as a technology company and not just sales, marketing, and fulfillment. I really feel like we have a Silicon Valley-caliber software developer working at a little independent book distributor, which is really special and is allowing us to just be way ahead of the curve on software and systems. The industry is going to see a lot of that in 2016–17 as we leverage that huge investment in technology we’ve made.” In fact, Joe hints that there are some big surprises in the works in regards to new capabilities and programs IPG will be rolling out in the coming years. Stay tuned!