Goodreads: Otis and Elizabeth Chandler

As a young programmer in the mid-2000s, Otis Chandler watched as dozens of niche web sites began to take off. When he decided to launch his own site just for book lovers, a respected colleague told him there was "probably not a very big market there." Otis figured he might prove him wrong, and in 2007, launched Goodreads, a book catalog and review site that he coded from his LA apartment. His soon-to-be-wife Elizabeth joined the project, and they slowly built a following—without an office, a business model, or a single employee. In 2013, Goodreads sold to Amazon for an undisclosed sum; and today, it's the world's largest site for readers, with 125 million users. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 5:12Speaker 01

  I would come home every day and he'd be like, oh, look at what I'm working on. You know, it was really ugly in the beginning and there were spelling errors. And you sent out an activation email and it said, what is it? Let's read together, Otis? Was that what it said? Let's?

• 5:28Speaker 02

  Oh, no, that was the friend connection email saying, let's compare books or let's be friends or something like that. But I forgot the apostrophe in "let's."

• 5:37Speaker 01

  And he got just reams of emails that just said things like, I refuse to join a book site where you can't use an apostrophe correctly.

• 5:49Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:02Guy Raz?

  I'm Guy Raz. And on today's show, how Otis and Elizabeth Chandler launched a social network out of their LA apartment, turned it into the hugely popular book review website Goodreads, and how they sold it to the biggest bookseller in the world.

• 6:21Guy Raz?

  As I've said many times on this show before, some of the best business ideas aren't necessarily about inventing something new, but rather improving or sharpening an existing concept. Tim Leatherman didn't invent the pocket knife or pliers. He simply combined them into a single tool and called it the Leatherman Multi-Tool. Before Missy Park launched her apparel brand Title 9, women's athletic clothing was out there, but no one was focused solely on that type of apparel. And Don Katz didn't invent books on tape. He just made it a much easier and more user-friendly experience by coming up with Audible.

• 7:03Guy Raz?

  It's the same principle for today's episode: Goodreads. The idea Otis and Elizabeth Chandler came up with was inspired by the growth of social media networks back in the early 2000s. The success of Friendster and MySpace, and eventually Facebook, led to hundreds of other social media startups, especially niche-oriented sites, many of which we've forgotten by now. Networks like Eons, which was specifically for baby boomers, or Kappazoo for sharing music and photos, or Delicious, where people shared website bookmarks. Otis and Elizabeth Chandler were and still are big readers, and their big idea was to build a social network for other book lovers.

• 7:48Guy Raz?

  Initially, in 2006, Otis started the site on his own, with no strategy, no business plan, no office, and no employees. Elizabeth helped out in her spare time, and they managed to attract a few hundred users, basically by reaching out to everyone they knew. But eventually, they reached over 100,000 users without hiring a single employee. Today, Goodreads is part of Amazon and now has more than 125 million users. Otis and Elizabeth sold it in 2013, but they stayed on running it until 2019. And as a review site alone, it has the same name recognition as Yelp or TripAdvisor.

• 8:32Guy Raz?

  But Goodreads isn't just about reviews. It's also a place where books are celebrated. It's the world's biggest site dedicated to one of the world's oldest hobbies. Both Otis and Elizabeth grew up in California. Otis in LA, where he was a descendant of the renowned Chandler family. And Elizabeth in Palo Alto, where her dad taught electrical engineering at Stanford. And when she was growing up, she wanted to be a ballet dancer.

• 9:00Speaker 01

  I got into it when I was about 12. I did gymnastics before that, which I was really, really terrible at. I think I broke several bones. And my mom finally said, you've got to stop this. And so I decided to try ballet. And immediately, it was just a really good fit. And I fell pretty deep into it pretty quickly.

• 9:22Guy Raz?

  There's a lot of mythology around what that means, right? There have been films, obviously. And that could mean an intense, just punishing kind of life. Did that in any way reflect what your experience was like?

• 9:38Speaker 01

  Not at all. I think it was a great passion. It was a great way to express myself. I learned a ton about discipline, mastery, resilience. I mean, when you're learning to dance, you have to learn to fall down. You can't learn how to do a pirouette without falling.

• 9:57Guy Raz?

  Yeah.

• 9:57Speaker 01

  And for me, it was a fabulous experience that I think taught me a lot.

• 10:02Guy Raz?

  So were you so committed to it that you thought that that's what you would end up doing as an adult?

• 10:08Speaker 01

  Yeah, I didn't want to go to college. I just wanted to be a ballet dancer. But I was a really good student and a test taker. And I always did all my work. And I got into Stanford. And my parents were very insistent that I needed to go to college. So my plan was to go for a year and then drop out. So I did my freshman year at Stanford. And then I went to the Boston Ballet School. I was dancing in the highest level in the school. And the plan was to audition for companies. And I injured my hip socket really badly. It was so bad, I couldn't cross my legs for like a year. And it made me hate dance, being in that much pain. So I went back to college and decided that I probably should stop.

• 10:53Guy Raz?

  Wow. All right, so you go on to college. And I think you're an English major, is that right?

• 11:00Speaker 01

  Well, after I injured myself, I decided I should become a doctor. And I actually was pre-med and an English major. And I loved reading books and analyzing stories. I just loved it.

• 11:15Guy Raz?

  I want to turn to you, Otis, for a minute because I want to ask you about your upbringing. I know you grew up in LA. I know this because I grew up in LA and you are part of a really well-known, important LA family. Your family ran the Los Angeles Times. Your grandfather, Otis Chandler, was a publisher. The famous Dorothy Chandler Pavilion, named after your grandmother. Tell me about, what was your childhood like?

• 11:44Speaker 02

  I would say I had a lovely, wonderful childhood and I really had no idea that my family was well-known in some circles. I knew my dad worked at the Los Angeles Times and would take me to work sometimes and I'd go run around the printing presses and try not to get in trouble. But, you know, later in life, I think I started to realize I had a famous name. I would go to the dentist and they would go, are you related to the Otis Chandler? And I would be like, yes, yes, that's my grandfather.

• 12:13Guy Raz?

  But when you were a kid, you were not, you had no conception of that. It was not part of your consciousness.

• 12:18Speaker 02

  I mean, abstractly, I kind of knew that he was a big, important guy because he had, you know, he hobnobbed with presidents. He'd go to his house and he'd have pictures of him with all the presidents and tell stories about hanging out with Lyndon B. Johnson naked in the pool. I don't know why they did that, but they did. And he was like an Ernest Hemingway-type guy, you know? He liked, he went hunting, he drove exotic cars and had a huge collection of them.

• 12:45Guy Raz?

  Were you close with him?

• 12:47Speaker 02

  I don't think anybody was terribly close with him. And my dad, when I was growing up, told me all the time, like, I'm not going to be like my dad. I'm going to be a good dad and be around for you. And Big O, we called him Big O. I was, I guess, that made me Little O.

• 13:03Guy Raz?

  Little O.

• 13:04Speaker 02

  The family called him Big O. He was a very competitive guy. One day, when I was about 15, we were at a family gathering and we were staying, I don't know, 20 miles from where a party was that everyone was going to. And he said he was going to bike and I said, oh, I'd like to bike too. And he said, well, why don't you bike with me? And I was on an old mountain bike and he was on a top of the line fast road bike. And so we set off and I'm 15, you know, I have no phone. This is before phones and Google Maps. I didn't even have a map. I don't know where I am. And he's going pretty fast and I'm having trouble keeping up. And I'm like, well, surely he's not going to drop me. And he dropped me. And then I thought, well, surely he'll be up ahead waiting at some point. Nope.

• 13:46Speaker 02

  He just took off, left me in the dust and left me to find my own way to this party, which like three hours later I finally did, almost crying because I was like, I don't know where I am. And, uh, but that was big. Oh, if you got on the bike with him, it was a race.

• 14:02Guy Raz?

  Wow. I could never imagine doing that to my child or my grandchild. I have one. I know that when you were a little kid, um, your dad was diagnosed with cancer and, and terminal cancer. How did that begin to change presumably everything about, about home life?

• 14:20Speaker 02

  Oh, that was a huge change. So I think I was 10 and my mother came to me and told me that he had cancer and was going to have to move out for a week for some treatment. And he basically never moved back in and they told him he had two years to live. And he ended up doing chemotherapy that put it into remission and, and ended up living, I think another 15 years, which was great.

• 14:44Guy Raz?

  Wow.

• 14:44Speaker 02

  Um, but he went from, you know, a present father who lived with me to a, a sick guy in a wheelchair who lived, uh, two hours away in Ojai, California. And it was a very different relationship. And I think what it caused me to do is just grow up a little faster. I think it just kind of causes you to take a little more responsibility a little more earlier.

• 15:07Guy Raz?

  So it was mainly you and your mom and any siblings at, at home?

• 15:12Speaker 02

  Three younger siblings that my mom had to raise all four of us now by herself, which she did an amazing job of.

• 15:19Guy Raz?

  Tell me about, um, what kind of student you were. Were, were you committed to school? Were you pretty good, good at school from, from a young age?

• 15:26Speaker 02

  I was, I was one of those straight A kids, I guess, though I didn't get the journalism gene. I got the engineer gene from my other side of, my other grandfather was the civil engineer. And so. That's what I ended up focusing on. But you know, some entrepreneurs, they have that story. It's in a lot of books and interviews where, you know, they had some sort of business selling candy in elementary school and learned that they could buy it from here and sell it from over there and make their first business. I never did that. Instead, what I did is I took apart every single thing I could get my hands on. And sometimes I would put stuff back together. But mostly I just disassembled stuff because I was, I just wanted to know how stuff worked. I was very curious.

• 16:08Guy Raz?

  So you never felt like you had to, just out of family tradition, follow in along that path and join the newspaper?

• 16:18Speaker 02

  I never felt the pressure to join the newspaper. I think that that, I actually remember a specific moment. I think I was in high school and I went and asked my grandfather, you know, do you think I should go into the family business? Because, you know, it had been a business handed down generation to generation four times. And, and he said, no, stay away.

• 16:39Guy Raz?

  Wow.

• 16:39Speaker 02

  I recommend you go follow your passion. You know, maybe go work in that internet thing. That, that thing is up and coming. You know, probably 1998 ish. But I did feel pressure to go to Stanford. I was a fifth generation Stanford graduate.

• 16:54Guy Raz?

  All right, so you, you go on to Stanford and, and your objective, like your, when, when you got there, were you thinking, I'm going to become an engineer after this is done?

• 17:03Speaker 02

  Yeah, I put down that I thought I would major in mechanical engineering and I did major in mechanical engineering. And I loved building things. I actually thought that I would maybe work on cars someday. But when I graduated with a mechanical engineering degree in the year 2000, Silicon Valley was just a buzz with-

• 17:23Guy Raz?

  It was on fire.

• 17:24Speaker 02

  You know, it was the height of the tech boom. And being at Stanford, you were full of these stories of people who got a job at a tech company that was bought for a lot of money six months later. And suddenly they're millionaires six months out of school. So somehow I got a job as a software engineer, even though I'd only taken two courses in software engineering at a startup in San Francisco that had 20 employees.

• 17:47Guy Raz?

  It was called, it was Tickle.com?

• 17:50Speaker 02

  When I started, it was called emode.com and it later rebranded to Tickle.com.

• 17:55Guy Raz?

  And what did it do?

• 17:56Speaker 02

  It built personality tests. So the founder was inspired by the Myers-Briggs test, but that's copyrighted, so we couldn't call it that. So he built the ultimate personality test. What he had basically observed at Harvard Business School, of course, is that when people took a test together, it was a social event. People were talking about it for like 10, 15 minutes after taking it. And that's, it's rare to actually find something that that's powerful. You know, ironically, I think books are like that, but you kind of have to have spent a lot of time with something that taps into your emotions to have that powerful of an experience. And so he launched this company with the intent to do serious tests. And then, of course, what we found out was that serious tests weren't that popular.

• 18:41Speaker 02

  And what was popular were fun tests. So our first viral test was what breed or dog are you? We built this test and it went instantly viral all over the internet.

• 18:51Guy Raz?

  Wait, you would ask, oh, you would answer questions and that would tell you what kind of dog you were?

• 18:56Speaker 02

  Yeah, I'm a St. Bernice Mountain Dog because I'm hardworking and loyal. So we had a PhD psychologist on staff who would write these 20 questions and then break it down into like eight or 10 result types that would tell you something about your personality.

• 19:10Guy Raz?

  Right.

• 19:11Speaker 02

  What color are you? What kind of car are you? What kind, you know, hundreds of them.

• 19:15Guy Raz?

  And, and I'm not, and this is no judgment at all, but like, wow, that Harvard Business School, the Stanford engineers, they were all taking their brain power in, in making that product.

• 19:27Speaker 02

  Well, what ended up happening was the fun tests got us a lot of traffic.

• 19:31Guy Raz?

  Right.

• 19:32Speaker 02

  Because they were inherently viral. I think we maybe had 400 fun tests and 80 serious tests by the end of, when I left Tickle. So it was kind of a traffic acquisition funnel where, where you take the fun ones and then, and then we try to see if you're interested in any of the serious ones.

• 19:47Guy Raz?

  Was it like startup craziness? Like, were you working from morning till night and sleeping at your desk? Eating pizza out of a box, was it like that?

• 19:57Speaker 02

  Yeah, it was a fun startup. It was a big floor. There's a whole bunch of us in our 20s programmers working there. And the other cool thing about Tickle was they didn't just build the personality test. Built a couple of other products, too, including a dating site and an early social network. So as soon as we saw Friendster taking off, we built a social network as part of Tickle. So it went from you could take those tests and see what kind of dog you were to you could take the tests and compare what kind of dog you were with all your friends. We built a social network, a photo sharing social network called Ringo.com, which was kind of like a early Instagram, but it was not on mobile because there was no mobile in 2004 or 5.

• 20:42Speaker 02

  And it was really a fun time to kind of learn from the inside, like, how do you build a social network? How do you make it viral? How do you do all that? Really fun engineering challenges.

• 20:54Guy Raz?

  All right, I want to come back to you, Elizabeth, because when we left off, you were at Stanford and thinking about pre-med and then went to English. But after you graduated, I read that you kind of went through the post-college exploratory phase, which is not uncommon, right? Like, most people don't know what they want to do. They just kind of try different things.

• 21:13Speaker 01

  Yeah.

• 21:14Guy Raz?

  And I guess you tried to, sort of took some science classes at a community college in Palo Alto, but also started to gravitate towards journalism?

• 21:22Speaker 01

  Oh, yeah. I quite liked science, but I wasn't sure exactly what I wanted to do. And I also got an internship at the Palo Alto Weekly while I was living at home again.

• 21:32Guy Raz?

  Which is like a free, weekly, alternative newspaper?

• 21:35Speaker 01

  Yeah, it was actually, well, I was kind of placating my parents, saying I was going to apply to medical school. And it was really the first time I had found a job besides dancing that I liked. And it suited me that you go out in the world, you interact with people, and then you come back and you write, because I really do enjoy writing. And I think because I had done dance for the love of it, I had a really hard time compromising in a job. Like, you don't become a dancer to become rich or famous. You really, most of the girls I know that I danced with, the women I danced with, did it because they loved it. And journalism felt like... Like a fit. I liked the other people I worked with. I loved the diversity of it.

• 22:19Speaker 01

  You know, you throw yourself into something new and you try and learn everything about it. It felt, it felt right.

• 22:25Guy Raz?

  All right. So you are back in Palo Alto. And Otis, you are working at the startup in San Francisco. The two of you did not know each other in college.

• 22:37Speaker 02

  Correct.

• 22:37Guy Raz?

  You've been at Stanford together, but you didn't know each other. You actually met after you graduated a party, I think in Palo Alto, right?

• 22:44Speaker 02

  Yeah, I think Elizabeth was a year and a half out of school and I was six months out. And we both met at my good friend's house party. And she walked in the door and sat down right next to me. And I couldn't tell you anything else about what happened at that party because I was immediately captivated by this beautiful girl who sat next to me. And then she told me she's a journalist and also taking physics classes at night. And I was like, well, that's just the coolest thing I've ever heard.

• 23:15Guy Raz?

  And apparently you told a friend that evening that I think she's the one. Like, I think I'm gonna marry her.

• 23:22Speaker 02

  Yeah, I was in the habit at that time in my life of, we're all through college, of sleeping out for Stanford basketball games. We were super fans and always first in line. And so after that party, I went to the sleep out. And we were, you know, having a beer in our sleeping bags. And I told the friend, I met this really amazing girl.

• 23:42Guy Raz?

  You would stay, you would sleep outside?

• 23:44Speaker 02

  We would.

• 23:45Guy Raz?

  The box office to get tickets?

• 23:46Speaker 02

  We would.

• 23:46Guy Raz?

  Was it that hard to get tickets?

• 23:48Speaker 02

  No, we had the tickets. We would sleep out to be first in line for the game.

• 23:52Guy Raz?

  Oh, because it was just open seating?

• 23:54Speaker 02

  The student section is open seating. Yeah.

• 23:57Guy Raz?

  And Elizabeth, when Otis said, yeah, I come here and I camp out at the gates to go to the basketball game, you're like, oh, this is the guy. He's the one.

• 24:07Speaker 01

  He was, he was pretty nerdy. I mean.

• 24:10Speaker 02

  Where was our first kiss, Elizabeth?

• 24:12Speaker 01

  No, we're not putting that in this. I do remember, I think we all went out to a club afterwards. Was that the first time or the second time, Otis? That was the first time. And and he was dancing and I remember thinking, I could marry that guy. I just liked how steady he was and sweet. What I also really liked was he was very direct. I mean, he called me up and was like, I want to take you out. I'm going to take you out this time. It was definitely very clear that he liked me and I really liked that because I think probably even more so now people are so wishy washy. And I found that really attractive.

• 24:53Guy Raz?

  All right, so the two of you started today. This is in 2001. Otis, you're working at the startup tickle.com. Elizabeth, you are applying to graduate school to study journalism. And from what I read, Elizabeth, you get in to USC to study journalism and you moved down there in the fall of 2001. So presumably you guys start a long distance relationship.

• 25:18Speaker 01

  We did.

• 25:18Speaker 02

  Yeah.

• 25:19Speaker 01

  So we hadn't been together very long when we when we started long distance relationship.

• 25:23Speaker 02

  We our best friend was southwest.com and we we just booked every weekend and probably flew three out of four weekends a month. And I think we did that for like four years.

• 25:35Guy Raz?

  And then eventually, I guess it just the strain of that cracked and and you guys split up around around 2005.

• 25:43Speaker 01

  Yeah.

• 25:43Guy Raz?

  What Elizabeth, what happened?

• 25:46Speaker 01

  Well, it just wasn't really going anywhere. So I broke up with him.

• 25:53Guy Raz?

  And what did you do, Otis?

• 25:56Speaker 02

  My response was to tear my hair up for a couple of months because she wouldn't take my calls. And then I went to coffee with my boss, who's now my good friend. His name is Stan Chudnoffsky. And I, you know, kind of told him what was going on and I said, I don't know what to do. I think I maybe need to go down to LA because I can't get her on the phone. And he said, well, leave tomorrow morning and let me know next week how it went. So I just drove to LA and she kind of opened the door and gave me a hug. And basically, the end result was we I said, I'm going to quit my job and move to LA because, you know, I'm still I would like to be in this relationship still. I remember the boss actually Stan told me another thing that was smart, which was

• 26:42Speaker 02

  like who you marry is the most important decision of your life. And the number of times you run across another soul that. Is in the camp where you think they could be that. Don't let that go.

• 26:53Speaker 01

  I never heard that before, Otis. That's a nice story.

• 26:57Speaker 02

  Yeah, so then I told them I think I need to move to LA. And he said, great, I'll process your resignation next week. And I said, actually, I had a thought. I'd like to work half time from LA. And he accepted that. And so then I think around Christmas, I moved to LA and got an apartment across the street from Elizabeth.

• 27:18Guy Raz?

  In the meantime, Elizabeth, in that period, you actually got a job in LA at the LA Times. Is that right?

• 27:25Speaker 01

  Yeah.

• 27:26Guy Raz?

  And at that point, this is, I think, 2005. Otis, was your family even involved with the LA Times anymore at that point?

• 27:33Speaker 02

  No, the Tribune company had bought it. My family had sold it to Tribune, I think around 2000.

• 27:40Guy Raz?

  Right. And what were you doing, Elizabeth? What was your job there?

• 27:44Speaker 01

  I got hired as an assistant editor in the Sunday Magazine. So it was me and one other editor who were running the whole kind of feature section of the magazine. And I planned and was the editorial person on photo shoots. And then I also wrote features. And I planned for fashion magazines a year, two men's and two women's.

• 28:05Guy Raz?

  Wow. I guess, Otis, not too long after you moved to LA, tickle.com got acquired by monster.com.

• 28:15Speaker 02

  The joke was we became tickle monsters.

• 28:18Guy Raz?

  Tickle monsters. You became tickle monsters. They bought it for like $100 million. You were not, obviously, a founder, but presumably you got some cash out of that.

• 28:27Speaker 02

  I did. And it was a seminal moment. I remember my boss coming around or the CFO coming around and handing me a check. Well, I mean, before that, when the CEO announced, you know, we're being acquired for $100 million, we thought this was the best. We thought we'd won the Super Bowl.

• 28:44Guy Raz?

  Yeah.

• 28:45Speaker 02

  And so then a couple of weeks later, when the CFO gave me the check, it was, I remember, it was $80,000 post-tax. So tax had already been taken out. And so it was kind of like doubling my software engineering salary at the time. And I was like, I had two reactions. I was like, wow, this is great. And then the other reaction was like, this doesn't change my life at all. I realized that, yeah, you have to be a founder to make life-changing money.

• 29:08Guy Raz?

  So what, when, when did you start to think that you were ready to start your own business? After you got that $80,000 check?

• 29:17Speaker 02

  I mean, what, I knew I always wanted to start my own business. I had no idea if I could actually do that, or if, you know, what it would be. But what it was, I mean, I, I grew up with two grandfathers who were CEOs of their own companies. And, you know, I think the positive side is you look at your grandfather and you can read about him in the press and read books about him. And on the other hand, then you go to Christmas with him and you realize he's a real, just normal person. And it gives you a sense of belief that if he can do all that, I could do all that. And I think that was honestly one of the core things that led me to think I could be an entrepreneur was, he did it. So I can do it.

• 30:02Guy Raz?

  And at that point, did you have an idea for, for what you were going to start? Like what you were, you were gonna work on?

• 30:09Speaker 02

  Well, I think at some point in 2005, I had maybe what you could call an inspirational moment, which was, I was in a friend's apartment in San Francisco. And when I walked in, he had, you know, his bookshelf in the living room. And, and if you're like me and Elizabeth, you know, whenever someone's got that bookshelf on display and you see it, you kind of gravitate right towards it. And, and so I had the opportunity to just kind of grill my friend about every book in his bookshelf. You know, did you like this one? And what, what about that one? And, ooh, this sounds interesting. What, what was this one like? And I walked out of there with like, five or six books that I was excited to read. And, you know, because in my day job, I was building these social networks that have profile pages. And in

• 30:52Speaker 02

  our case, it tickled the profile pages were full of personality test results. But I was kind of like, that would be kind of amazing if I could just like, break down the door of all my friends' houses and grill them about every book that they've read in their bookshelves. I'd probably have like, you know, more book recommendations than I could ever read. And that would be awesome. Well, maybe I could just build a website where that's the profile page. The profile page is your bookshelf, the same one you've got at home. And people would just put it there and we could browse each other's bookshelves. And like, we'd never lack for a good book recommendation again.

• 31:25Guy Raz?

  So you were thinking about some kind of social network idea that you wanted to build in general?

• 31:32Speaker 02

  Yeah, because I knew how to build one, because we were building two of them, right? Tickle was one, Ringo was one. And I think much, much later on, I landed on the really geeky term, social objects. Objects that people like to talk about that therefore can be the basis for sharing on a social network. Photos are super strong for that. Articles, cooking, like anything that people could kind of experience together or separately, but like have the same experience and then want to talk about afterwards. And, you know, I think maybe subconsciously I was looking for books because I was a huge reader when I was a kid. I was the kind of reader like my 10-year-old daughter is now, who reads under the covers at night.

• 32:14Speaker 02

  And then when I got to Stanford, I kind of had to stop because you can't go to Stanford and read for pleasure. And then I went to Tickle and I also kind of didn't get back into it because I was working so hard. And I was kind of, I kind of didn't like that about myself. I kind of wanted to get back to reading more books. And so I think maybe subconsciously it was, there was the idea that, hey, if I do it around books, I'll have, I'll probably be able to read a lot more books and that would be cool.

• 32:41Guy Raz?

  But you knew that social networks, I mean, they were popping up, you know, left and right, and they were becoming more and more niche, right? Like a social network for dating and then a social network for specific types of dating and then, right?

• 32:54Speaker 02

  Exactly. And so I could kind of see that social networks were going to probably start to do the same. And I remember I took out the CEO of Tickle for lunch and I told him, I think I might do Ringo, but for books. And he was like, that's a good idea. It's probably a really small idea, you know, there's probably not a very big market there, but, but it'll probably work. And I was like, A, I was like very encouraged by this and B, I was a little bit like, small. No, that's okay. I'm okay with small and maybe I'll prove him wrong.

• 33:25Guy Raz?

  Why don't we come back in just a moment, how Otis launched his new website with no investment, no employees and no business model, and why he decided to add an S to the end of the word "good read." Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 33:51Guy Raz?

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• 34:35Guy Raz?

  and people bring taste, judgment and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities. It's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 35:17Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is all about. Also reshaping how people and teams work together. And that shift is already underway. That's why NetSuite wants to put a new expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 36:02Guy Raz?

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• 36:47Guy Raz?

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• 37:25Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2006, and Otis Chandler has decided to take some of his savings and launch a website for people like him: book lovers.

• 37:38Speaker 02

  And then I just started coding and spending all day sketching out what the feature set could be. And I think for most of 2006, that's what I did is I went to the cafe every morning. Elizabeth went to her job at the LA Times. She'd come home at, I don't know, six, seven, eight. We'd have a quick dinner and then we'd both crank a little bit more.

• 38:00Guy Raz?

  Where were you guys living in LA?

• 38:02Speaker 02

  In Santa Monica, kind of two tiny little apartments. We each had roommates, yeah.

• 38:08Guy Raz?

  And initially it wasn't called Goodreads, right?

• 38:11Speaker 02

  Yeah, so initially I had a working name never used called Bookster.com, which, you know, stirs were hot back then.

• 38:18Guy Raz?

  Yeah, Friendster.

• 38:19Speaker 02

  The person who owned Bookster wouldn't want to sell it to me. So we did a, you know, a bunch of brainstorms around names and, and one of my coworkers at Tickle said, you know, I think I said like good books and, and she was like, how about Goodread? And I was like, that sounds good.

• 38:34Guy Raz?

  Yeah.

• 38:35Speaker 02

  And then I tried to go by Goodread singular and it was like $50,000 and I was like, okay, forget that. And then I tried the plural, Goodreads, and it was not available. So I just bought Goodreads with a Z dot com for, you know, just to use while I built it.

• 38:53Guy Raz?

  Yeah.

• 38:54Speaker 02

  But then I went and negotiated for Goodreads with an S and, and I think the negotiation over email went like this, it's $5,000. And I said, well, that's a lot of money, working out of my savings here. So how about 2,500? Like a few days later, 5,000. And I said, how about 3,500? A few days later, 5,000. I was definitely like not rich enough for wanting to spend my savings that, that I would, that I thought $5,000 was a small amount of money. I thought that was quite a large amount of money. And I remember calling my mom and being like, I can buy this thing for 5K. Like, do you think I should do it? And she was like, I don't know, honey, you gotta decide, but it sounds like a nice name.

• 39:34Guy Raz?

  Yeah.

• 39:34Speaker 02

  But I'm super glad we did it because we ended up having, I think, the best name.

• 39:39Guy Raz?

  So 2006, you finally get it, get a sort of a beta version by the end of that year. And just to kind of understand, the idea was this was going to be a social network site where people could upload their favorite books and write reviews of them? Essentially, that was the idea?

• 39:54Speaker 02

  Yeah, that was the idea, that you could search for any book in the world, add it to your profile and kind of say, I read this, give it a rating and say something about it. And then you'd have your, your collection and you could browse other people's collections on their profile and, and then we'd build. You know, didn't call it that at the time because Facebook hadn't coined the term, but a news feed on your homepage where you could see like all the recent updates.

• 40:19Guy Raz?

  And did you have in your mind any business model around this? Did you, did you?

• 40:25Speaker 02

  Not at all.

• 40:25Guy Raz?

  No.

• 40:26Speaker 02

  I mean, I suppose I had watched Tickle have a business model of advertising plus lead gen and paying for premium tests. And I thought maybe I could put ads on it, or I really wasn't thinking about that, to be honest. Like I, I had no, no business model documents or spreadsheets or any, any real thought about it at all.

• 40:45Guy Raz?

  So when you, when you finally had a beta site up in December of 2006, what did it look like? Was it, it was a website with a bunch of different images of, of book covers?

• 40:56Speaker 02

  Well, it was about the ugliest website you've ever seen, but it worked. And then I remember I went to one of my Tickle designer friends and said, hey, do you think you can do a side project and design this thing I made? And he said, sure. And so we iterated a little bit and he came up with a logo and then design. And then like a week later, it transformed from the ugliest thing you've ever seen into something that looked quite good.

• 41:25Speaker 01

  I remember it was green when he showed it to me the first time. It was this horrible green. And I remember that we had to tell the designer, you know, what should it look like? And I think we just found some site on plants. Do you remember this Otis? It was like grow or something? And it had all these pretty kind of soft greens and soft browns. And we thought, uh, can you just make it a little bit, look a little bit like that?

• 41:53Guy Raz?

  I guess like just a couple of months before you launched, you discovered that there were competitors doing, looking to do the same thing. Some of them were well-funded. I think one, one had like a million dollars in funding, right?

• 42:06Speaker 02

  Yeah, we had two moments building it where we kind of had like, we discovered a competitor. So the first was library thing. And I discovered it maybe four months into real coding. And I was like, oh man, someone had already built something like this. But they're really much more focused on cataloging and, and problems that people with really large bookshelves have.

• 42:26Guy Raz?

  Right.

• 42:26Speaker 02

  And I realized this isn't really the problem I want to solve. You know, I, I really believed that the best way to find good books was through your friends. And, and I, I think that's still true today. And then literally two weeks before we were gonna launch, we discovered Shelfari, which had two co-founders, three employees, and a million dollars in seed from Amazon. And I was like, oh, man, it's over. We're about to launch, and these guys have already launched. And Amazon's just gonna king make them. They're gonna put them on the book page, on the Amazon book page and link to them, and they're gonna win.

• 43:01Guy Raz?

  Yeah.

• 43:01Speaker 02

  But, you know, kind of again, I kind of tore into their product and realized, well, it doesn't really quite do things the way that I think they should be done. So I'm just gonna carry on trying to solve the problems that I think we should solve. And but it was definitely a scary moment.

• 43:16Guy Raz?

  When you were about to launch, did you have any employees? Was it still just you?

• 43:20Speaker 02

  It was just me. And then I secretly coerced a partner.

• 43:25Guy Raz?

  And your partner was Elizabeth?

• 43:26Speaker 02

  My partner was Elizabeth. But she had a full-time job.

• 43:29Guy Raz?

  So what did you start to do, Elizabeth? How were you? How did you start to get involved?

• 43:34Speaker 01

  Well, I would come home every day, and he'd be like, oh, look at what I'm working on. And I'd look at the stuff. And, you know, it was really ugly in the beginning, and there were spelling errors. And I remember we used to joke, because everything said after you had any action, successfully updated. It wasn't friendly. It was very functional. And I was like, Otis, you've gotta fix this. Like, this language needs help. And I think you turned to me and you said, well, I kind of need a co-founder. And I was like, oh, well, I'll be your co-founder. And, I mean, one of our favorite examples is you sent out an activation email,

• 44:17Speaker 01

  and it said, what is it? Let's read together, Otis? Was that what it said? Let's?

• 44:22Speaker 02

  Oh, no, that was the friend connection email. So if I clicked on, I want to be your friend, it sent an email saying, let's compare books, or let's be friends, or something like that. But I forgot the apostrophe in let's.

• 44:34Speaker 01

  And he got, you know, just reams of emails that just said things like, I refuse to join a book site where you can't use an apostrophe correctly. So I got kind of roped in.

• 44:46Guy Raz?

  So how did you get to make the site successful? You need users on there uploading their books and talking about them and talking to other people and getting other people to do it. And so how did you get the initial group of people on?

• 45:00Speaker 02

  Well, we wrote an email to everyone we knew.

• 45:05Speaker 02

  Every email address we could find and we BCC'd them and said, hey, we built this thing, come check it out. And I think people started to sign up and I would sit there watching the logs and, oh, someone's on. And I think it got up to about 800 people that way. And then I said, you know, kind of in January 2007, I was like, Elizabeth, do you think we can like, get some press? And so she wrote a press release and pushed it out to a couple of places. And Mashable wrote a story saying that we had just launched and our growth went from 10 users a day to 100 users a day. But actually, the first growth wave really didn't come from that. It came from discovering that there was a

• 45:45Speaker 02

  huge community of book reviewers who were existing on kind of the blogging platforms of 2006, 2007. And what they were looking to do was just connect to other people who were reading the same stuff as them. And when they found Goodreads, they started adopting us in droves because we were better at that than the blogging platforms. You know, you could just go to the book page for the book they were reading and they could find everybody else who'd read that book. And they loved that.

• 46:12Guy Raz?

  As you, I mean, early on, you know, after that Mashable article came out, you're getting 100 users a day. Presumably, you had costs, like server costs and other attendant costs. So how were you paying for that?

• 46:26Speaker 02

  Server costs were never super huge. But I did put on advertising, some ads, just Google AdSense tags right in the beginning because I got the advice from one of my advisors that get your users used to the fact that there are ads. And I think in the beginning, maybe for the first year or two, the ads covered the cost of the servers.

• 46:48Speaker 01

  And well, and also, I think we had affiliate links if you wanted to buy the book. But we realized pretty quickly those were not very significant and would not be funding the business.

• 46:58Speaker 02

  But, you know, we got it up to 100,000 users, I think, registered users by the end of 2007 with no other employees, no other help, just the two of us.

• 47:09Guy Raz?

  So what did that mean, having 100,000 users? You're doing tech support and also improving the site and also, I mean, I can't even imagine. And you had a full-time job at the LA Times. You were going into work every day, right, Elizabeth?

• 47:24Speaker 01

  I was, and I was planning a wedding and it was...

• 47:28Guy Raz?

  For the two of you?

• 47:28Speaker 01

  Yeah, I was planning our wedding. It was also a really complicated time at the LA Times. It was during the Sam Zell, I think, being sold to him. So it was kind of crazy at the office. I mean, I was working really hard, but I also was able to squeeze out a little bit of time to be working on our project as well.

• 47:49Guy Raz?

  So Otis, tell me about your day-to-day schedule. I mean, you've got 100,000 users by the end of 2007, and it's just you full-time on this job.

• 47:59Speaker 02

  Correct, yeah. It was insane. It was fun. I mean, I would just wake up, go get a big cup of coffee, and put my headphones on and code. And I was kind of happy doing that. I didn't mind that. I quite liked it, actually. I actually really loved doing the customer service. When you do your own customer service, you learn so much about what's working and not working for your product.

• 48:23Speaker 01

  And I feel like we started to get to know a lot of our users, and they were very, very passionate. We had this whole librarian's group to have people help us manage the metadata on all the books. And I think one of our first employees, Rivka, was the super librarian who was just incredibly passionate about making sure that the data was correct. And eventually, we hired her to be like the chief customer service librarian.

• 48:49Speaker 02

  Sorry, we should clarify that super librarian was a status on the site.

• 48:53Speaker 01

  Yeah.

• 48:53Guy Raz?

  Right.

• 48:54Speaker 02

  So we had librarians who were people we approved to edit the catalog. They could actually go edit the title of the book and add a cover if it was missing. And they had full power, just like Wikipedia. And I think by the end of Goodreads, we had maybe 40,000 of them were making tens of thousands of edits a day, which is why Goodreads has one of the best catalogs out there in the world.

• 49:17Guy Raz?

  And they were all volunteers?

• 49:18Speaker 02

  And they were all volunteers. And Rivka was like their leader, and so we eventually hired her.

• 49:24Guy Raz?

  So by the time you hit 100,000 users, right, at what point were you able to hire your first employee?

• 49:32Speaker 02

  So I think there was a moment where I went back up to San Francisco where I used to live, and I met with James Currier, the Tickle CEO, who now had agreed to be an advisor to Goodreads.

• 49:45Guy Raz?

  Right.

• 49:46Speaker 02

  And I showed him my traction, and he was like, "This is pretty impressive. I think you can raise some money on this traction." And I said, cool, how do I do that? And he said, well, I'll lead an angel round. I'll put you in touch with four or five other people I know and we'll raise you a couple hundred thousand dollars. And I said, great. And so he made a couple of email intros. I went, talked to those people and showed them the product. I had no deck and they all liked it and said yes. And so then after that, we were able to finally go and hire some employees.

• 50:19Guy Raz?

  And did you move, I mean, at that point, because I'm assuming in 2007, you're still doing this out of your apartment. When did you first get like office space?

• 50:28Speaker 02

  Everybody worked from home and we were, you know, like super early to the 2020 trend of working remotely. We used Skype and we used IRC chat boards, which are kind of like an early version of Slack. And Michael was up in San Francisco, our first engineer. And but then I found a couple of people in LA to do sales and to do another engineer and.

• 50:52Speaker 01

  When, when we first started, so Otis was working from, especially, we had a couple of employees after we were married. And in our apartment, you would work on Skype every day. And the people who lived below us thought that we were illegally operating a business from our apartment because they kept hearing Michael's voice.

• 51:10Speaker 02

  Over Skype?

• 51:11Speaker 01

  Yeah, over Skype. We had some pretty nasty neighbors. So a guy from the city came to inspect. He's like, I looked up your site, it looks pretty cool. And Otis is like, yeah, no one's working in here. I don't have a bunch of employees.

• 51:25Speaker 02

  Once I had two people in LA, I think I was like, let's get an office. And so I looked around for the cheapest place I could find that was within skateboarding distance of my apartment. That was important because I didn't want to drive a car. And we found a dingy little office above a liquor store on like 10th and Wilshire in Santa Monica. And I remember the guy at the liquor store was like, just wanted to shake my hand. And I was like, no, I need a document saying I have a lease. And so he tore off a piece of cardboard from a beer container and wrote something on it and gave it to me.

• 51:57Guy Raz?

  All right, so meanwhile, the site is getting noticed, starting to get thousands of users. But when did you start to realize that this actually could make some money?

• 52:06Speaker 02

  So I think in 2008, I went to this entrepreneur gathering and I met a guy named Neil Patel, who was like one of the top SEOs in the world. And I was telling him about the site and he was like, how many page views do you have? And I forget the number, but I was like, 2 million a month or something? And he was like, dang, you got an SEO site. And I was like, what does that mean? Because I kept looking at my Google Analytics and it kept saying we have a lot of traffic, but I didn't really understand where it was coming from. And we had this unique content that was really good. And I think that's why Google's algorithms kind of recognized that and started throwing us more and more traffic. You know, it wasn't overnight. It was like over years. And so, you know, completely unwittingly, we'd made a site that started ranking really

• 52:50Speaker 02

  well for every book title. And so then what we did is every time the advertising revenue got big enough where I could afford another developer, we added another developer. And I think it took us several years until we had like six or seven developers.

• 53:05Guy Raz?

  And clearly it was going to be ad-supported, right? Because the site wasn't, there was no way for people to subscribe or pay more to be a super user or anything like that, right?

• 53:14Speaker 02

  No, no. So that, I think we kind of stumbled onto a business model. Early on, someone at Random House, the very nice woman named Julie Sills pinged us and said, hey, I love your site. And, you know, I'm at Random House, in charge of marketing books. Is there any way we can work with you? And so she set me up with the guy at Random House who does that. And he said, I'd like to do a $10,000 campaign. And I was like, whoa, you know, that'll pay for months of servers. But I kind of just calmly said, great. And then I hung up the phone and I was like, man, now I got to figure out, how do you serve an ad campaign? And so I Googled it and I found that there was this new thing called Google Ad Platform, something like that, was about to launch, but it was in private beta.

• 53:59Speaker 02

  And I pinged an old roommate who worked at Google and was like, can you get me into this? And he got me into that. And it took me a whole day to set it up. And that was kind of the beginning of realizing that we had an audience that book publishers loved.

• 54:13Speaker 01

  And we got better and better at amplifying a good book through, you know, a whole array of techniques as the company progressed. But also, I think the audience was very attractive to all kinds of advertisers because they knew it was a highly educated audience. I think we had a lot of statistics on our users in terms of just... Education, gender, the site 75% women. So advertisers who wanted to attract educated women knew that this was a good place to get eyeballs. Yeah. So I think our, our audience was always very attractive.

• 54:48Speaker 02

  But I mean, also the, the deeply targeted nature of what we're able to do. So we, we don't, we're not able to just tell you that you're getting book lovers. We're able to tell you, do you want to advertise to fantasy book lovers? Do you want to advertise to World War II history buffs? We knew who these people were and what they read and, and we could design ways to put books that we think they would like directly in front of them. And it quite works well.

• 55:12Speaker 01

  Also, because I think we were respectful to the users as well. So, you know, the advertising was always clear that it was advertising and it was tailored in a way that I think that users found it useful.

• 55:26Guy Raz?

  From what I understand, you, over the course of the several years before you were acquired, which we're going to talk about in a sec, you didn't raise that much money, right? I think you totaled about $3 million, is that right?

• 55:37Speaker 02

  Yeah, we didn't raise that much. No, it was a $200,000 or $300,000 seed and a $2 million Series A from True Ventures. And like, like most startups, we gave our employees a good amount of equity and that incentivized everybody to, you know, be an owner in the company and, and believe in it.

• 55:55Speaker 01

  Well, and I also just, all of our employees were real book people. We had people who were all just former bookstore employees, engineers that reached out to us wanting to work for us, like our second engineer, Louise, right, Otis? She found us because she was a user and she wanted to work for us. I think we were incredibly, incredibly fortunate. So it was a really happy work environment, too, I think.

• 56:22Speaker 02

  Yeah, we talked about books at every lunch.

• 56:25Guy Raz?

  And you guys actually reached profitability within, I think, what, three or four years, right?

• 56:30Speaker 02

  I, I actually don't remember the moment, but I remember that I kept a spreadsheet. The instant revenues went up enough, we could afford another engineer. I'd be like, let's go get another engineer.

• 56:40Guy Raz?

  Right.

• 56:41Speaker 02

  You know, we, we weren't like Twitter, which kind of exploded over two years into a huge company, you know? We were growing slowly but steadily over, you know, a period of four or five years. But the growth was very consistent. And so we kind of just kept it right at that profit level. And I remember when we were looking at the Series B, we still had most of the Series A in the bank.

• 57:02Guy Raz?

  So when you, when you guys, by 2012, let's say, you've got, you know, at this point, something like 20 million monthly web visits. You've got 10 million registered users by the middle of that year. You're based in San Francisco now. You've got 30, 35 employees. Do you remember what your annual revenue was at that point?

• 57:24Speaker 02

  I don't remember. It was enough to cover the salary of 30 engineers or 30 people.

• 57:30Guy Raz?

  So probably what like, just because I'm just curious, like, because some people, you know, they think, oh, tech company, you're doing billions of dollars. But probably you were probably doing like, what, 10, 15 million in revenue a year?

• 57:42Speaker 02

  Not even that much.

• 57:43Guy Raz?

  Not even that much. And all this was coming from advertising?

• 57:46Speaker 02

  Advertising and affiliate. So affiliate was we get, you know, an 8% cut of a book when we refer a customer to Amazon or Barnes and Noble or somewhere where they buy a book.

• 57:56Guy Raz?

  Presumably, the two of you were not the highest paid employees.

• 57:59Speaker 02

  Oh, no. I think for the first year of Goodreads, I had no salary. Then I had like maybe 30,000 a year. And then I just, once we had enough money where we were hiring some people, I, I just kept my salary at the top person's level. I never paid myself more than the top person we had.

• 58:16Guy Raz?

  But at this point, 2012, you had to make some decisions because you're profitable, but not, you don't have enough cash in the bank to, to do the kinds of things that you would need to do to get bigger, like huge marketing campaigns or

• 58:30Speaker 02

  Right.

• 58:31Guy Raz?

  maybe to introduce expensive features or, you know, I don't know, video or whatever. So I'm, I'm assuming that at this point, you're thinking about what, maybe raising more money?

• 58:42Speaker 02

  Yeah, we were looking at raising more money because the growth was accelerating and that was pretty exciting. And then we moved to San Francisco and I started talking to lots of venture capitalists.

• 58:55Guy Raz?

  When we come back in just a moment, why Otis and Elizabeth wound up not needing that VC money and why they decided to sell Goodreads to an 800-pound gorilla. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 59:19Speaker 03

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• 59:57Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2013, about six years after launch, and Goodreads now has all the things it did not have in the beginning: an office in San Francisco, millions of users, and hundreds of millions of book titles. But what it needs now is money in the form of a sizable investment. And how much money were you looking to raise?

• 1:00:23Speaker 02

  I don't think that was ever disclosed. So Guy Raz has the exclusive. I think it was 10 or 15 million. I actually don't remember, but one of those.

• 1:00:30Guy Raz?

  Right, so you were going to really be able to scale.

• 1:00:33Speaker 02

  Yeah.

• 1:00:33Guy Raz?

  But at this point, I think 2013, I mean, you guys were, you were getting more views on your book pages than Amazon. There's a New York Times article around that time came out that said you were rivaling Amazon as a platform for promoting new books. So they must have been... And Amazon had acquired similar companies like yours previously, right?

• 1:00:54Speaker 02

  They had acquired our, yeah, Shofari, who we talked about earlier, that they had seeded for a million dollars. They ended up acquiring. But yeah, it's funny. And that New York Times article you just referenced, I remember going to New York and going into their building for that interview because I was there for a book conference. And I told them how many page views or monthly unique visitors we had. I forget what it was at the time, maybe 30 or 40 million monthly uniques. And they were like, that's more than the New York Times has. And I was like, oh, that's crazy. You know, like, I kind of knew that we had a lot, but to hear it compared that way, you're kind of like, that's one of those moments where I was like, oh, we have something interesting here.

• 1:01:33Guy Raz?

  So had Amazon, did they just come out of the blue? Had they been kind of pinging you in previous years? Because I remember when I interviewed the late Tony Hsieh, you know, he had been approached by Amazon a few times. Because Amazon tried, when he originally rebuffed him, they tried to build their own version of Zappos and they couldn't. Had they come to you before?

• 1:01:56Speaker 02

  Yeah, we had talked to them like once a year for the past four or five years, I think. You know, when Kindle launched, which was also late 2007, it changed the book industry.

• 1:02:08Guy Raz?

  Yeah.

• 1:02:09Speaker 02

  You know, not overnight, but it started the path where a lot of book discovery moved online. That was pretty exciting to us because one of the problems we had at Goodreads was sometimes people wouldn't remember to come back to us after they finished a book. And what I really wanted to do was pop something up at the end of a book saying, hey, what'd you think? Give it a rating, write a review, share your thoughts. And you could do that in a Kindle. And so we had this strong vision and we met with Amazon, like I said, four or five times over the years, kind of talking about, would we do this? And they were always into it. The issue was it required deep integration to pull off. And they weren't comfortable doing that unless they owned a piece of us or all of us. And every time we talked about that,

• 1:02:54Speaker 02

  the numbers just weren't there. And we weren't interested in selling a piece of us for the wrong number.

• 1:02:59Guy Raz?

  Okay, so meantime, you're trying to raise $15 million and you're going to raise it. You're getting all these term sheets because you've got incredible traffic. And what happens? I mean, again, just a routine call with Amazon?

• 1:03:11Speaker 02

  Well, somehow their corruptive guys knew to ping us. And so they said, hey, we want to have you, we've talked about this exciting idea in the past. We'd like you to come up to Seattle and meet some of the team and chat about it again. And so I flew up there and I met with the Kindle leadership team. And you know, there's a saying in business that companies are bought, not sold. And I think that's really true. To any entrepreneur who's ever like, how do I sell my company? Like, that's the wrong mental model. So we weren't trying to sell. We kind of sketched out these ideas and I think they liked them. And I think more to the point, they got to the place in their roadmap where they wanted to invest in social. And they therefore kind of said, hey, we're either going to build something in social

• 1:03:54Speaker 02

  or we're going to buy something in social. And this time, you know, it turned out that we were able to get to an agreement on the numbers. And more to the point, I was super excited about the vision we had sketched. On the other hand, I was not sure at all what to do. This was the hardest decision, I think, hands down, I've made in my life.

• 1:04:15Guy Raz?

  On the one hand, I'm thinking, why was that a hard decision? I mean, Amazon, the biggest bookseller in the world, and you guys have this great platform. And I mean, working with Amazon, you would reach exponentially more people and you could do things that you could not possibly do with a $15 million raise. On the other hand, you were an independent, trusted brand and, you know, fair or unfair, Amazon is seen as the 800-pound gorilla, right? Even more so today than in 2013.

• 1:04:42Speaker 02

  Yep.

• 1:04:43Guy Raz?

  And that might have made people angry.

• 1:04:45Speaker 01

  I think either way, raising a Series B or selling the company was a lot about the kind of giving away our baby.

• 1:04:52Guy Raz?

  Yeah.

• 1:04:53Speaker 01

  And I think that was painful for us. Both paths felt painful because it was our first child in many ways and we'd spent so many years tending it and taking care of it. And that was really a source of tension.

• 1:05:06Guy Raz?

  I mean, a source of tension, but I think somebody listening to this would say, but you guys were going to get a payout. You were going to finally get some money from this thing you've been working on.

• 1:05:14Speaker 02

  Yeah, but we owned most of a website that was one of the top 100 websites in the US by traffic. Like, we kind of knew we'd do well off it somehow. It was more just like, what's the right thing to do for the product, for the customers?

• 1:05:30Speaker 01

  For our employees.

• 1:05:31Speaker 02

  Yeah. I mean, but I think Elizabeth's right. I think it was, do we want to be captains of our ship? Or do we want to give up that control so we can go after a bigger vision faster? But I will say, Amazon made it a little easy in that they told us they would want to run us as an independent subsidiary and an independent brand, just like they run Audible and IMDb and Zappos and now Twitch. And they have a long list of

• 1:05:57Guy Raz?

  Yeah.

• 1:05:58Speaker 02

  track record of doing this. That felt right.

• 1:06:01Guy Raz?

  What kind of things were you thinking about at the time? Or what kind of advice did you get about making this decision?

• 1:06:08Speaker 02

  Well, have you ever heard of the regret minimization framework?

• 1:06:11Guy Raz?

  I haven't. Oh, tell me about that.

• 1:06:14Speaker 02

  It's a really geeky phrase coined by actually Jeff Bezos, which is basically a framework that says, imagine yourself at 80 years old, looking back on your life. Would you regret doing or not doing the thing you're contemplating right now? Like, what would you regret more?

• 1:06:28Guy Raz?

  Yeah.

• 1:06:29Speaker 02

  And that turns out to be a great way to make decisions.

• 1:06:33Guy Raz?

  Right.

• 1:06:33Speaker 01

  It was interesting to me, too, just growing up in Silicon Valley, because my dad, he definitely said to me, you know, I know so many CEOs who have an offer and they say, no, no, no, I'm going to, in 10 years, I'll do it. And, you know, the company will keep growing. And he was just very, very measured about, you know, you should really consider offers when they come, because it's not like they happen at every moment, because he had just seen it over the past, you know, several decades in Silicon Valley.

• 1:07:07Speaker 02

  Silicon Valley is funny, because for every, everybody's got a story. So I remember somebody told us the story of Cliff Bar, when, and how he walked into the meeting to sell his company for a life-changing amount of money, didn't sign it, walked out and kept it independent.

• 1:07:24Guy Raz?

  Yeah.

• 1:07:24Speaker 02

  And another person told me the story of Foursquare, who, you know, once upon a time, had a huge offer to sell for a lot of money, and then the deal blew up. And then, and then it looked at the time like it was going to go to zero. Now, now, now they've turned it around into, into something again, I think. But You know, there's always the story of like the company who should have done this, but the opposite thing happened.

• 1:07:46Guy Raz?

  Yeah.

• 1:07:47Speaker 02

  And I think in the end, you have to do what you think is right for yourself and for your company.

• 1:07:52Guy Raz?

  Amazon announced that it would acquire Goodreads in March of 2013, but presumably, I mean, this conversation started maybe in early 2013, and I have to assume you had to be totally silent about it.

• 1:08:06Speaker 02

  You do.

• 1:08:07Guy Raz?

  Like, you had to still run the company, but you couldn't talk to anybody about it.

• 1:08:10Speaker 02

  Yeah, I think it was late 2012, I flew up to Seattle, and I think it was, there was definitely a month, which was probably the most stressful month of our lives, where we couldn't talk to anybody, we had to stop talking to all the VCs, we had to stop talking to anybody else, and all we did, probably 18 hours a day, was due diligence.

• 1:08:29Guy Raz?

  And you were just ghosting the VCs, like, they'd be like, hey, man, what's going on with the term sheet? And you would just, what? You couldn't respond?

• 1:08:36Speaker 02

  Couldn't respond. That's common, but it was tough.

• 1:08:39Guy Raz?

  Yeah. Did you feel like, because Amazon, with all of its resources and all of its creative talent, has the ability to do something like this, was part of the equation in your mind? Because I think it would have been in my mind, we have to do this, because if we don't, Amazon can just make it on their own and could basically unravel this thing that we've worked on for so many years.

• 1:09:02Speaker 02

  Well, most people would think that, and I thought that.

• 1:09:06Guy Raz?

  Right.

• 1:09:06Speaker 02

  But no, I mean, it turns out, Amazon could not have built a successful social product, because they are wired for commerce. This is my impression. You know, they shared with us a bunch of thinking they had in the social space, and it was just clear that they, what they were thinking wouldn't have worked, because they were so geared to think about commerce and not social metrics as success. Right? Success to them, the bottom of the funnel, always had to be a purchase, not like a user engagement, or a recommendation, or a like.

• 1:09:40Guy Raz?

  Right.

• 1:09:41Speaker 02

  And I don't think that they were geared to like, understand that, or act on it, to be more fair.

• 1:09:47Guy Raz?

  When you sold to Amazon, the sale price has never been disclosed, but there's been all kinds of reporting on it, and I think there's some good reporting on it. So usually when that happens, they want to bring on the executive team and the team to keep it going. And usually the commitment is two to three years. So you guys now become Amazon employees. And did a whole lot change? I mean, were you able to, did Goodreads feel different after that?

• 1:10:18Speaker 01

  I mean, well, it grew a lot.

• 1:10:20Speaker 02

  Yeah, I think that was the big change is Amazon wanted to invest in social and I finally had permission to go unprofitable. So we grew from 35 employees to over 100, I think in two or three years.

• 1:10:34Guy Raz?

  Wow. So, once you were an Amazon company, did it kind of take the pressure off in a sense? I mean, did you feel like a weight was lifted because you didn't have to hit certain benchmarks and be on calls with investors? Or were there other pressures that actually increased?

• 1:10:50Speaker 02

  Yeah, I don't know how I did this to myself, but I started working harder than I'd ever worked after the acquisition. Amazon was not a place where you go to cruise. I actually remember I had coffee with another friend who'd sold his company too, and he'd sold it to another big, slow-moving company. But I was like, how's your day going? And he was like, well, I play golf every morning, and then I go into the office for four hours, and then I go for yoga, and I'm bored out of my mind. And it's only been a year since we sold. And I was like, wow, I'm working 12-hour days as hard as I've ever worked. It's stressful, but it's super fun. And, you know, I think the learning curve of learning

• 1:11:32Speaker 02

  Amazon, the learning curve of, you know, learning how to be not just a manager, but a manager of managers, and then a manager of managers of managers, was immense.

• 1:11:42Guy Raz?

  You guys stayed on for, both of you stayed on full-time for six years, I think, with Amazon, a little over six years. Is that right?

• 1:11:49Speaker 02

  That is correct.

• 1:11:50Speaker 01

  Yes.

• 1:11:50Speaker 02

  It was funny. I kept having friends go like, why are you still there?

• 1:11:54Guy Raz?

  Right.

• 1:11:54Speaker 02

  You know, when's your and out over? Oh, you're past it? Why are you still there? And I was like, I'm having fun. I like it. And they were like, I don't get it. But that was just the nature of Goodreads.

• 1:12:05Guy Raz?

  So I know that you both stepped away in 2019. I'm speaking to you are in France right now. You moved to France with your kids, I guess, for a year to just move to France. I mean, I do that in a sec. And to kind of just maybe be a family for a year and focus on your kids. But you are both young. I mean, you're in your 40s. First of all, do you miss, either of you, do you miss the grind? Maybe grind's not the right word, but do you miss that adrenaline rush of going to an office and being around people and working on a project every day?

• 1:12:41Speaker 02

  Of course you do. I think that was actually a lot of my fear of stepping aways. But I was kind of like, you know what? I kind of want to be creative again. Like, I value and miss that part when I had time to think. You know, you don't want to see my calendar from when I was at the end of running Goodreads and I had every square inch of the calendar was full with a 30 minutes of something.

• 1:13:05Guy Raz?

  Yeah.

• 1:13:06Speaker 02

  Oh, it was fast paced and crazy, but it was busy and you didn't get time to tinker on something.

• 1:13:13Guy Raz?

  Yeah. Elizabeth?

• 1:13:15Speaker 01

  Well, I probably should have left maybe a year earlier than I did. I ended up having three kids in five years and I ended up developing pretty serious health problems in which I would go in and out of the hospital and they would write papers on me. And it was pretty.

• 1:13:34Guy Raz?

  Wow.

• 1:13:34Speaker 01

  Yeah, it was pretty unpleasant, so.

• 1:13:37Guy Raz?

  How are you doing now?

• 1:13:38Speaker 01

  I'm fine. I'm actually great, but I really needed to stop. Like, I had just not listened to my body for years. And for me, I was also, as a parent, I was at a place where I was really unhappy with the. Balance I had between my work life and my life with my with our three kids. And I I knew that it was absolutely essential that for me to be happy and to just give them the attention they deserved that I had to stop. So no regrets.

• 1:14:15Guy Raz?

  You guys are now, you still have the rest of your lives ahead of you. And you probably have enough money to fund a new business venture if you wanted to. Is that something you're thinking about? Is that something you might do? Start a new business?

• 1:14:29Speaker 02

  It turns it turns out it is. So I'm actually starting to tinker. For the last six months, I've been starting to tinker on on a new project, which has been exciting. I don't have anything to announce, but it's in the space of trying to address the problem that I think the new how people get their news and information today is is broken, perhaps is is the word. I don't think people are reading the right content. I think the right content is often not the content put in front of us by the various algorithms and feeds. And I think that can be improved. So I'm kind of grateful and having fun just going on a learning journey and reading a lot of books.

• 1:15:08Guy Raz?

  How much of what your success and what happened with Goodreads do you attribute to? How hard you worked and your intelligence and the decisions you made? And how much do you think has to do with just being lucky?

• 1:15:19Speaker 01

  The one thing that I always was really humbled by with Goodreads is it feels like we got so much of the glory, I guess, because we were the founders. But the people that we worked with, they were all really, really incredible people that worked just as hard as we did and and are really a big part of the success story, too, of of Goodreads. So I don't know if it's just luck, hard work. It's also, you know, the people.

• 1:15:47Speaker 02

  I was once at a tech gathering and this exact question came up. And I think the consensus in the room was we were about 50% lucky and 50% because we worked hard and were smart or earned it, because I think luck matters. And we did work super hard and we did get lucky in that I worked at Tickle and was connected to an amazing set of advisors that all helped me in different ways. And I attribute a lot of our success to having those people to go ask, what do I do? But if Kindle hadn't launched in 2007 and moved, you know, started the digital reading revolution, I don't think

• 1:16:29Speaker 02

  Goodreads would have flourished. Industry trends have to align. And if that hadn't happened, you know, my old CEO would have been right. It would have been a small site. I wouldn't have grown like it did.

• 1:16:42Guy Raz?

  That's Otis and Elizabeth Chandler, co-founders of Goodreads. And by the way, even though they both obviously love books, they often disagree about what a good read actually is. And they realized that early in their relationship when one day they were browsing the books at Barnes and Noble.

• 1:17:01Speaker 02

  I saw Dune and I was like, oh, there's my favorite book.

• 1:17:03Speaker 01

  And I said, I've never heard of this book. What is this book? And he got very agitated and said, what do you mean? You've never read Dune? And I said, okay, how about this? I'll read that if you read Pride and Prejudice.

• 1:17:16Guy Raz?

  Fair enough.

• 1:17:17Speaker 01

  So we bought the books. He read Pride and Prejudice in one night. He stayed up all night reading it. Meanwhile, I suffered through Dune for like three weeks. And he wrote a review on Goodreads about Pride and Prejudice. And then I wrote this review in Goodreads about how Dune was not my kind of book. And I gave it one star.

• 1:17:37Guy Raz?

  You gave Dune one star?

• 1:17:38Speaker 01

  I did.

• 1:17:39Guy Raz?

  That is just, that's trolling. That's serious trolling.

• 1:17:42Speaker 01

  I'm the first Goodreads troller.

• 1:17:49Guy Raz?

  Hey. Thanks so much for listening to the show this week. Please do follow us on your podcast app so you always have the latest episode downloaded. If you want to contact us, our email address is [email protected]. And if you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz. Our Instagram is at How I Built This NPR, and mine is at Guy.Raz. This episode was produced by Casey Herman with music composed by Ramtin Arablouei. It was edited by Niva Grant with research help from Claire Murashima. Our production staff also includes Farah Safari, Liz Metzger, J.C. Howard, Julia Carney, Kerry Thompson, and Elaine Coats. Our intern is Margaret Serino. Jeff Rogers is our executive producer.

• 1:18:33Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This. This is NPR.