How Barnes & Noble made a comeback, with CEO James Daunt

CEO James Daunt has now rescued two iconic bookstore chains: Barnes & Noble and Waterstones. He joins host Jeff Berman to discuss the turnarounds, plus how bookstores are preparing for an onslaught of AI-written content, his BookTok strategy, and why local control is the key to making great bookstores. Subscribe to the Masters of Scale weekly newsletter: https://mastersofscale.com/subscribe 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.

• 0:01Jeff Berman?

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• 2:06Speaker 02

  We really need to put in lots of filters to try and keep the AI rubbish out.

• 2:15Speaker 02

  There is going to come a time, perhaps when these books come through, we would ask publishers, to the extent that they know that they indicate where the books are, AI-assisted AI written completely. And then we can indicate that to customers. And I think transparency is important. But we are booksellers. If customers want to read particular books, we will sell them. And then everybody starts shouting at me to say that I'll only sell AI books, and that's all I want.

• 2:45Speaker 02

  But that isn't true. We feel a deep, natural suspicion of it.

• 2:52Jeff Berman?

  This is Masters of Scale. I'm Jeff Berman, your host.

• 2:57Jeff Berman?

  Today, we have the leader who has taken on the daunting task of turnaround Barnes and Noble and doing it with flying colors. I have been looking forward to this conversation for some time. Welcome to Masters of Scale, James Dott.

• 3:13Speaker 02

  Thank you very much.

• 3:14Jeff Berman?

  I'm thrilled to have you for so many reasons, not least of which being, I happen to be in London this spring. We made a point of going to one bookstore and one bookstore only. It bears your name. We probably spent 90 minutes there, walked out with far too many books to schlep back across the pond. But I'm an avid reader. I've got an Instagram just for my books. And I just, I'd love to start with where this comes from. You had a burgeoning career in finance. You could obviously have gone and done any number of things. And you sort of tossed it all aside to go open a bookstore. What happened?

• 3:50Speaker 02

  I think burgeoning career is quite flattering. I don't suppose any of my then colleagues will remember it quite as that. I was extremely young, and then I wanted to do something that married with my interests. And I read a lot, so I settled on a bookstore. And there I got stuck, actually, quite early on.

• 4:08Jeff Berman?

  What do you mean you got stuck?

• 4:10Speaker 02

  Well, you set up a business. And I think when you're young, and I was extremely young, you think, well, you know, I'll try this, and if it doesn't work, I'll go back and do something else. But actually, as soon as you're embedded in something, you get all sorts of obligations. I had investors, so I then had the obligation of paying them back their investments or the embarrassment of losing their money. And you're employing people quite quickly. And then you have those obligations. And that, in some ways, is a trap. And certainly, early on, I think I probably felt it to be a trap. Because at the beginning, we weren't successful.

• 4:46Jeff Berman?

  What do you mean you weren't successful in the beginning?

• 4:48Speaker 02

  I opened the store in 1990. The First Gulf War happened. There was a recession. Our neighboring stores all closed down. We simply didn't have enough business to pay the rent. And then you have to work all hours that God gives and scrimp and decide whose bill you're going to pay and whose you're not. And all of that can become quite difficult.

• 5:08Jeff Berman?

  What got you through it? And then what turned the corner for you?

• 5:11Speaker 02

  Probably stubbornness and application. I think there are many people who've set up businesses who probably have had the same experience. And then slowly, it began to work. And in fact, our sales grew every single month that I was open, from the moment I was open. So that just got over the tipping point, probably after about three or four years. We were underwater by 10%, and then we were underwater by 6%, and then we were flat, and then we were above, and then we could breathe.

• 5:39Jeff Berman?

  Was there an insight that led you to believe you could maintain that or accelerate and get past that tipping point?

• 5:45Speaker 02

  Bookselling is like most things in retail. It's attention to detail, and it's presentation, it's service, it's the assortment that you have, it's the inventory backing, it's the judgments you make. And we just were able to steadily improve all of those things. And frankly, that's now 35 years later. I still believe that every year, we make it a bit better.

• 6:04Jeff Berman?

  What allows you to make it a bit better every year?

• 6:07Speaker 02

  You try to really analyze every part of the store. And then you're responding to what's going on in the world. And reading tastes change. The makeup of your customer base slightly changes. And then how do you adapt the store to best optimize and really give the best experience to that customer base?

• 6:23Jeff Berman?

  When you think about how you merchandise a store, how much of that is gut, instinct, feel? And how much of that is data?

• 6:31Speaker 02

  I think a lot of it is gut, instinct, and feel in as much as it's a qualitative rather than a quantitative judgment. But you can teach it. And in fact, most of the time, including now that we run a very large business, it's about put the data aside. The data can occasionally be an interesting reference point. But it's the judgments you make, almost in defiance of the data, that will give you an inspiring store.

• 6:57Jeff Berman?

  How do you know when to defy the data?

• 7:00Speaker 02

  As booksellers, we are engaged in the process of curation. And quite often, it's about having the right allocation of space. As a simple example, board books, little kids, early reading, two-year-olds, sell fantastically well. But two-year-olds want to read the same book again and again and again. And you really don't need a big range of that. You can get enormous sales out of very small space. Once you get up to young readers, 10-plus-year-olds, they read everything. And you just want to give that as much space as possible. But if you're analyzing the data, and a lot of my predecessors did do that, they allocated space completely inappropriately. They had too many board books, too few young readers. Both groups became very unhappy.

• 7:43Speaker 02

  Because now the people after the board books don't just have Goodbye Moon, they've just got this enormous choice. So they're now finding it quite stressful and difficult. And then the young readers don't have enough.

• 7:53Jeff Berman?

  I can appreciate that blindly following data, being data-driven, is deeply problematic for all the reasons you just laid out. But if there's a meaningful variance in the data, are you looking at that and saying, hmm, that really contradicts the gut that we have?

• 8:07Speaker 02

  Yes. I mean, it is worth also observing that we are dealing here with booksellers. And booksellers and data do not mix easily. Booksellers and numbers tend to be sitting in opposite corners of the room. We are the nerds who read all our books. And when we got to the maths and science, just gave up.

• 8:26Jeff Berman?

  I mean, you're talking to one right here. So yes.

• 8:29Speaker 02

  And then my other problem always with data is, because it can be very, particularly if you apply intelligence to it and its interpretation, clearly, it's hugely valuable. But it also unlocks this Pandora's box, which is our danger, which is you then centrally control, because you've got the data. And the data tends to be held centrally. And then we use the data to impose uniformity on the stores. And that really is the death knell for us. It works in almost every other branch of retail. It doesn't work in books. So if you can drive out the data, that then empowers the local stores to really start interrogating how they're engaging with their customer base, how they're presenting their stores. If you do that long enough and you calculate that as a principle and that as a culture,

• 9:13Speaker 02

  then you can reintroduce the data and it gets used properly. And without this, I'm afraid, just sort of pernicious instinct to impose control, which a large corporate will always want to do.

• 9:28Jeff Berman?

  In the late aughts, in the early 2010s, the large iconic British bookstore chain, Waterstones, hit some financial skids. And as I understand it, you went looking for someone to finance you taking over that chain. Why?

• 9:46Speaker 02

  One, an arrogance that I felt that I could sort it out, that this was totally unnecessary. The sales in my own store were going up. The sales in theirs were cratering. Every one of their stores I went into was really awful and getting worse. So I knew that I could really turn it around and make it so much better. I also knew if they disappeared, then I could open up more stores. But I was never going to open up 300 stores. And I was never going to open up the size and scale of the stores that Waterstones had. So if you could keep it all together, you got your 300 stores, and you would keep all these communities with bookstores. And that seemed worth doing.

• 10:21Jeff Berman?

  And so you had courage of conviction, based on your experience with your chain of independent stores, that you could apply the same logic to a much bigger set of stores and turn around and get growth back?

• 10:32Speaker 02

  Yes. And loss of confidence that was going on, largely in the face of Amazon, was misplaced. Bookstores are different to Amazon. Amazon will sell your book extremely efficiently and great and all wonderful. And we all know how to do that. But at the end of the day, a book bought in a bookstore, discovered in a bookstore, is a better book, the same book, but is a better book. And also, it's just nice and enjoyable. These are places in which people will want to continue to come. And the loss of confidence just needed to be reversed. We needed to get our booksellers to believe that they could run good bookstores. And then our customers would come back and we'd be okay.

• 11:05Jeff Berman?

  How did you go out finding an investor to put the money behind you to go make this happen?

• 11:12Speaker 02

  I went around private equity firms and the like. And I said, here's this great idea and invest your money and it will come back in multiples and you will all be happy and I'll be happy and you don't have to put very much in. And don't you think that's a good idea? And everybody said, no. But one of them rang me up and said, you know, just met a Russian. In fact, he's having a cup of tea with me. Get on your cycle, put your helmet on, pedal over here and meet him because that'll be fun anyway, but you can pitch to him. And very sensibly and very agreeably, after about 40 minutes, maybe 35 minutes, this Russian entrepreneur said, yeah, okay, go ahead.

• 11:53Jeff Berman?

  Well, were you at all concerned that he might not be the right partner for you? Was there any?

• 11:58Speaker 02

  He wasn't an oligarch as such, so we didn't have those kind of problems. He was an entrepreneur. He loved books. He very much identified with the purpose of bookstores and really got that. So that was all sort of big ticks. And he observed that Waterstones cost roughly half what a Premier League player had just been bought by a London club, then by another Russian. So it was a bargain as well.

• 12:24Jeff Berman?

  Turnarounds are hard. They are not easy, even if you have deep experience in the sector and if you have real vision and if you have the experience to give you the confidence, you've got the right playbook. When did you have a sense beyond your faith and optimism that this was really working at Waterstones?

• 12:45Speaker 02

  I think I was reassured that in arriving at Waterstones, that the core of the people in the business were the same tribe as me. They were booksellers. So that was a plus. So I had people I could work with. It was also really upside down in terms of the principles by which it was being done. So sorting out that side of, if it seemed sort of fairly straightforward, it's hard work, it's a grind, you have to, you're changing a culture at the end of the day. And changing cultures is like stretching on a rubber band, you know, the minute you relax, it just pops back. But again, as you know, I'd been through it once before at Dawn Books, you know, you just knuckle down, you concentrate, you do the basics, you just drive forward improvements across the piece and be confident that it will come back.

• 13:30Jeff Berman?

  There was a frenzy around eBooks at the time, and obviously eBooks are a meaningful category now, not suggesting otherwise. Barnes and Noble, which you now lead, but didn't at the time, launched a competitor. There, I have to imagine, were arguments to lean into that and try to ride that wave and to run entirely counter to it. How did you handle that in that moment at Waterstones?

• 13:49Speaker 02

  I did it perhaps a little bit counterintuitively. Yes, we sold the Kindle. And the reason I did that was you should always do whatever your customer is in the best interest of your customer. But my main motivation is I wanted my booksellers to stop fearing Kindle. There was this sort of obsession that people were coming into our stores and photographing books and then ordering them Amazon and/or coming in and choosing books and then downloading them on their Kindles, which just simply doesn't happen, except in the most vanishingly small percentage of things. So I wanted them not to fear the Kindle and to realize that their store was where people should come to discover books. So if we could put the Kindle in the middle of it, then you could demystify this thing.

• 14:32Speaker 02

  So we put the Kindles in the middle of it, sold an improbable number of them as it happened. So that was sort of helpful from a financial perspective, but it also demystified it.

• 14:42Jeff Berman?

  The turnaround at Waterstones is underway. You are succeeding. What happens that all of a sudden you are in discussions to also turn around Barnes and Noble?

• 14:53Speaker 02

  I think that was simply Barnes and Noble, unfortunately, was a sort of mirror of Waterstones pre 2011. Sales were declining because the bookstores weren't very good. It was having a really tough time and as a public company, then they determined to sell. And again, we had an answer. I mean, we clearly had a model. And by then we had changed our owner and we had a new backer with the resources and they bought the company.

• 15:18Jeff Berman?

  Sometimes when you have directly applicable experience, it is of massive value and that same playbook is just going to work. You can have a coach go from one team to another, rebuild that culture, keep stretching that rubber band, not letting it snap back. But sometimes the game is changed and the same playbook won't work. Has it worked the same way? Have you been able to run the same playbook or has the universe changed and you've had to really adjust?

• 15:45Speaker 02

  The US is obviously different to the UK, it's rather larger. The stores are rather larger. There's some nuances within there, but essentially, no, it's very much the same. The customer buys books in the same way, almost literally the same books. The booksellers are the same. I call them a tribe. We are a tribe. So that sort of vocational drive that you have amongst the people that run the stores was the same. I have to say, I thought it would be rather easier and faster second time around, but in fact, the timelines are almost identical.

• 16:15Jeff Berman?

  Why hasn't it been easier and faster given the experience you had?

• 16:18Speaker 02

  I think culture changes slowly and you may want it to go faster, but it's enduring. And you can say, well, you know, to get from A to B, we really have to go this route because when we were at Waterstones, we went via that route and it was really tough. And everyone scratches their heads and goes the tough route because they're booksellers. That's how it works. Slowly, you get yourself into the right place.

• 16:45Jeff Berman?

  Still ahead, I talk with James about how introverted leaders often have underappreciated superpowers.

• 16:59Jeff Berman?

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• 17:40Jeff Berman?

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• 18:23Jeff Berman?

  The upside is real, but so is the risk and knowing when to act isn't always obvious. Creative Planning works with business owners to build a strategy around concentrated equity, when to diversify, how to manage tax risk and how to protect what you've spent years building. Creative Planning, where wealth works together. Learn more at creativeplanning.com/mastersofscale. Welcome back to Masters of Scale. You can find this conversation and more on our YouTube channel and be sure to check out the link in the show notes to subscribe to our newsletter. In the early part of my career, I was very lucky to work with leaders and in organizations

• 19:05Jeff Berman?

  that had a mindset of, we agree on goals, we agree on resources, and then we get the hell out of your way until you raise your hand and say you need help with something. It's how I prefer to work. It's how I prefer to lead. In the middle to latter part of my career, I have come into organizations that are very much command and control. There is as little autonomy as possible. Here's how we do things, et cetera. And I have found it very difficult. It takes, in a small organization, at least a year, in a larger organization, much longer, to get people to really embrace this idea that they do have autonomy, they do have decision-making power, that their opinion matters and that we want to trust them.

• 19:47Jeff Berman?

  What has worked for you in helping people make that same transition?

• 19:51Speaker 02

  Whether rightly or wrongly, I'm always trying to flatten hierarchies and that you tend to inherit, particularly in this business, quite established hierarchies, not least of which is you have a store manager and then an assistant store manager and so on. It's a hierarchy. Almost everything I do is about flattening those hierarchies and then trying to introduce collective responsibility amongst the team once you've done that. And it's a much nicer way to work, much more engaging and much more empowering and all of those good things, but it's so much more difficult that often people resist it. We'd rather have the hierarchy, just tell me what to do, please. But I think ultimately, if you can get to a point of reasonable collective responsibility

• 20:31Speaker 02

  amongst a team, it's a very much healthier environment and much more responsive and much more durable. Where a retailer, people come and go, but it's also a tough business. It's seven days a week. You go open at nine, you've got to close it at nine. It's really hard, hard work. And for that, you do need other compensations. The money is poor as well, so you really, really need other compensation.

• 20:56Jeff Berman?

  The hours are long, but you won't make much money.

• 20:58Speaker 02

  It's not a great sell, is it? So you better have a nice team and a vocational fulfillment from what we do. And it's for us and beholden upon us to make that really true for them.

• 21:12Jeff Berman?

  I have to imagine that that switch from that command and control to more distributed decision-making culture, there's also fear because in a command and control structure, if you make a wrong move, you'll probably get your head taken off, you're being fired, whatever it is. Have you found ways to model for team members that those decisions that look good at the outset turn out to be bad are actually to be celebrated and embraced to encourage this kind of autonomy?

• 21:39Speaker 02

  Yeah, I'm not very cuddly, so I had all the celebration side of things.

• 21:43Jeff Berman?

  All evidence of the contrary, sir.

• 21:45Speaker 02

  I'm not very good at that, but what I am good at is let's not look in the rearview mirror and let's quickly recognize anything that we're doing wrong, quickly, quickly, and that to be no consequence to that and no reflection upon it. So I'm not one for saying, why did we make that idiotic decision and who made it and why did we make it? Mine is just, okay, it was idiotic, move on. What are we doing now? And I think if you continuously do that, then people, but it becomes easier and easier to acknowledge mistakes for people newer, younger, less exalted in the hierarchy to say, are you sure guys? And for the people above to say, oh, let's switch.

• 22:24Jeff Berman?

  Particularly in a moment, not just in the US, but globally, where it's not just anti-intellectualism, it's anti-fact, it's anti-truth, it seems to be in vogue. Is that a trend that you don't worry about? Is that actually something where you can be counter-trend and that helps accelerate you?

• 22:45Speaker 02

  I think the latter. I mean, we obviously live in the societies in which we live with all of the concerns and tribulations that are there. But remember, as a bookseller, we serve every age and most demographics. I think there's a sort of feeling that bookstores are educated, more affluent folk, but it isn't. I mean, we appeal to everybody within our communities. But we've also, at the core of our market, and this has been since I started bookselling, 36 years ago, has been these young adults, so teenagers up into people through their early twenties. That's when people really engage with bookstores and with reading. And that's where a lot of the bestsellers come. And we then read constantly that now it's all about book talk,

• 23:30Speaker 02

  or it's all about romanticy, or it's all, as though these are new things. And they're not. It's just a constant cycle of this demographic reading books like stink. And that's why Harry Potter is a great thing, and now it's Sarah J. Maas, or whatever it might be. We sell books, and then everyone's going, oh, well, nobody's reading anymore.

• 23:50Speaker 02

  But of course they're reading. You can see it even in the cycle of our day in a bookstore. We start off the day with lots and lots of buggies in our store, and the people pushing them, and that can be the carer, it can be the young mom, it can be the this or that. But it's noisy and it's full of kids running around because they've dropped off their sibling at school. That's who comes in. They then leave and go back because they're getting tired and hungry. And then the old people are in our stores because they're not working, they're retired, and that thing, and they like it because it's quiet and they can come and natter and things. And then the lunchtime crowd comes in, and they want to get out of the way before voomph, all the kids who've left school doing turnip. And then it's full of teenagers. And then the teenagers go back because they've got to do their work and get their school things out of the way.

• 24:32Speaker 02

  And then all the young people who are introverts courting come in because you don't want to be in a bar and you can do it. And so it goes on. You know, everybody's coming into our store and they're all engaging with the store in different ways, buying different things.

• 24:45Jeff Berman?

  Book talk does feel like a new thing. When a trend like book talk begins to emerge, how do you determine when you should start investing marketing time in that?

• 24:55Speaker 02

  Well, we have the great benefit of not having a marketing department. So we have zero marketing dollars to spend. So that makes it an easy thing. So that's never happening.

• 25:04Jeff Berman?

  None whatsoever.

• 25:04Speaker 02

  None whatsoever. I mean, literally zero. But what we do have is young booksellers. And again, this model of leaving stores to do what they want turns out to be fantastically adapted for the social media age. And the media, sort of general media, sees things on a national scale, but most of it isn't going on on a national scale, it's going on on a very local scale. It's the book talk in the local schools, in the local area, and what's going on there. And if you're employing them at the weekend, you're going to be really locked into that. And we are. And if you give them time and let them do whatever you want. And as long as also, when they make mistakes, you go, okay, well, you know, stop being so silly. Please use common sense. Be nice. Use common sense.

• 25:47Speaker 02

  Otherwise, get on with it. You're very attuned to these social media waves. And book talk has been absolutely fantastic for us. A lot of it is taking place in our stores and quite a lot of it by our booksellers as well. I mean, I make this rather facetious joke of it. As long as we leave it to the kids with the blue hair, we'll be fine. And it is true.

• 26:08Jeff Berman?

  I have to imagine if I were on your board or working at Barnes and Noble, I would be asking, well, as a former boss of mine was fond of saying, it's easier to catch a wave than create a wave. You're catching this wave using the younger people in your stores who are native to TikTok and are creators of book talk. But James, what an opportunity to take the best of these book talks from Barnes and Noble local booksellers and put a little bit of money behind them, turn them into ads, et cetera. Why not have a really thin marketing department to amplify the incredible marketing being done organically by your teams?

• 26:45Speaker 02

  I'm sure we would be much better and richer a business were we to do that. But if you're almost literally allergic to central control, and you know that if you ever impose central control, you could break this rather fabulous thing that we have going, you don't need to. Keep it small. We have a small home office which sits above our, each of our flagship stores. We have a New York office which sits on the floor above the Union Square store. Waterson's office is above the Piccadilly store. So you've got to walk through the store, see the books all the time to get to work. And it's a small number of people. And yes, you could do all of those things. But then the kid with the blue hair is going to be told what to do. And the kid with the blue hair doesn't want to be told what to do. They just want to get on with it.

• 27:30Jeff Berman?

  But the kid with the blue hair doesn't have to be told what to do. It's just a question of, oh, kid with blue hair in Omaha, Nebraska, or Santa Monica, California, hit the TikTok algorithm with this great post. We can just push some weight behind it to amplify it further.

• 27:46Speaker 02

  They do it themselves. The booksellers are fantastically good at communicating within store to store. Books that start taking off in one store just sort of spread like a rash through the business. So you don't need to, and it keeps it authentic. And I think one of the things about book talk, or at least I'm told, because I have absolutely no idea about book talk at all, I'm told that the authenticity is what resonates. And if you really do literally keep your hands off the whole thing, it does remain authentic. It is authentic. And, you know, I also think if it's not broken, don't try and fix it. We follow that principle with most things. Other than if I can make my booksellers' lives easier in the center,

• 28:28Speaker 02

  then I should invest in that. So I need to invest in IT. I need to invest in distribution centers. I need to invest in kits that makes our lives easier. And that's where I spend the dollars.

• 28:39Jeff Berman?

  Not only are you not on book talk, you are somewhat famously one of the more open about being an introvert CEOs of large companies out there. What is a lesson about leading a large organization and a public-facing organization as an introvert that other introverts who are building and leading companies could take from your experience?

• 28:58Speaker 02

  I'm sure I would be much better at it if I wasn't. But at least it keeps me humble. And I think also I am of my tribe. I know I am genuinely a bookseller, put in 21 years on the shop floor. And therefore, I recognize booksellers. I know who they are. I've literally done every single piece of work that they do for very much longer than most of them have been alive. And I feel very connected to them now. I don't express that perhaps, but I do definitely feel it. And I think many introverts are quite confident in themselves. And if you can create a team that is assured in its direction, assured of its culture, assured of its strategy, things will be okay.

• 29:42Speaker 02

  And I think you can lead from a backseat. You don't have to always be in the front. I know there are wonderful, you know, flag-waving, rallying leaders, but I'm not one of those.

• 29:52Jeff Berman?

  When we ask business leaders for books that have informed leadership for themselves or that they recommend to others, there's a set of authors and books that you get pretty regularly. Jim Collins, Good to Great, Shoe Dog, Phil Knight. There's a long list of nonfiction authors who show up regularly. We hear about fiction less when it comes to leadership lessons. What is a piece of fiction that you recommend emerging leaders or leaders who are looking to grow as leaders should read?

• 30:21Speaker 02

  Really good fiction that delves into the nature of humans and how humans are. Relationships, rivalries, jealousy, all of those things. Most of the great novels are doing that one way or another. And I think if you're reading them, you're probably going to be better able to interpret and understand that and be responsive to. You start with middle march and you sort of move on from there. You're going to understand people perhaps a lot better if you're doing that. I think that's true generally of reading. If you're reading widely and properly, books are a civilizing force. They invite you to question, invite you to reflect, invite you to be more understanding.

• 31:04Speaker 02

  And all of those things are very necessary for leaders. Arrogance is a natural bedfellow of leadership and one that needs to be resisted. But also, you're constantly, or should be constantly, trying to think of how you are best equipped to help the people that you have working for you, how you make the team stitch together, how you recognize when egos are being either overinflated or challenged. How do you work all of those internal jealousies or fears or insecurities? I mean, you can sit down and just actually get a few plays out and read your Shakespeare. It's all going to be in there.

• 31:41Jeff Berman?

  One final question for you before we wrap, James. I have to believe that you are increasingly seeing books that are, at least in part, written by AI. How is bookselling and reading going to change? And what role will you all play in it with this AI revolution in writing and publishing coming?

• 31:59Speaker 02

  It's going to be very interesting. We are fortunate in not being the first line of defense, if that's what it is. Publishers publish the books, they edit the books, they choose what to publish or not to publish. And we then... Curate from amongst those. And we have a deep, natural antipathy to anything that isn't by a real author. And definitely, at the moment, exclude and go to great effort to exclude both from our online catalog, probably happens, we think, with what's in our stores naturally, because we're selecting and curating. But online, we really need to put in lots of filters to try and keep the AI rubbish out. Will there be a world, and I've, you know, I have said, you know, there is going to come a time, perhaps when

• 32:44Speaker 02

  these books come through, we would ask publishers, to the extent that they know that they indicate where the books are AI, assisted AI, written completely. And then we can indicate that to customers. And I think transparency is important. But we are booksellers. If customers want to read particular books, we will sell them. And then everybody starts shouting at me to say that I'll only sell AI books, and that's all I want. But that isn't true. We feel a deep, natural suspicion of it. And, you know, one of the things that we believe that we do as booksellers is support authors, create the careers of authors. And of course, that some of that is self-serving, because you need these great books to come.

• 33:25Speaker 02

  But I think there's a deep, natural respect and bond between booksellers and authors. And we really do believe that the author is important and necessary. And many of us, particularly those in our metropolitan stores, now, I've always felt as a bookseller, that one of my things is to bring authors to readers, to be a place in which they can meet and they can discuss and the like. And the idea that that isn't real is really sort of counter to everything in which we believe. Is AI going to write the next great books? I very, very much doubt it. But it will take categories of books out, quite clearly.

• 33:59Jeff Berman?

  Such as?

• 34:00Speaker 02

  Home study guides. That's an easy thing. You can just see whether you just sort of press a button and voomph, it's out, it's going to come. And it used to say, you know, Dr. Somebody or another at the bottom, and it won't, it'll say AI. So we're not going to be able to be completely pure around this, I suspect. But for editors and publishers, how much do they use AI is going to be a massive challenge for them.

• 34:24Jeff Berman?

  Is it your theory of the case that there will be a meaningful market of buyers who want artisanal books?

• 34:31Speaker 02

  Well, that is the case now. Going back to why is it that we sell so many new novels, so many things published now? It's because people are responding to authors. You know, otherwise, you just read Jane Austen, Leo Tolstoy, he wrote quite good books. You can go read all of those all you like. But they, they want the author, they listen to them, they, they hear about them, they read about them, they want the connection to. And we get these great ways, you know, when, whether it's Sarah J. Maas, or whatever it might be. Again, that's all very, very focused on the author. So I think people really connect. And I don't see that changing.

• 35:11Jeff Berman?

  James, such a delight being in conversation with you. Thank you for being on Masters of Scale.

• 35:17Speaker 02

  Great pleasure. Thank you.

• 35:20Jeff Berman?

  Thanks again to James Don for joining us. His quiet, steady leadership style is a model we can all learn from. And as an avid reader myself, I love bookstores so much. I love the feeling of walking into a space and not knowing what's going to catch my eye, what I'm going to find, what the local team at that bookstore has picked out to feature. Some of the best books I've ever read, some of the most eye opening, mind bending stories that I've ever encountered have come because of a random encounter in a bookstore that was created by a human being curating something special. James Don gets that. And I'm so grateful that he's saved not just one, but two iconic bookstore chains. I'm

• 36:05Jeff Berman?

  Jeff Berman. Thank you for listening.

• 36:09Jeff Berman?

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• 36:49Speaker 03

  Hey, listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday, we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely, from Ford CEO to NASA's administrator, to the lessons from the devil wears Prada. It takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

• 37:25Speaker 04

  Humans will never be more intelligent than AI.

• 37:29Speaker 05

  There's going to be two types of companies. Those are great at AI, and those that went out of business because they weren't.

• 37:34Speaker 06

  How do we build a future that is human centered?

• 37:39Speaker 07

  I'm Rana Elkhayubi. And on my podcast, Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find Pioneers of AI wherever you tune in.

• 38:09Jeff Berman?

  Masters of Scale is a wait, what? Original. Our executive producer is Eve Trow. Senior supervising producer is Tricia Bobita. Associate producer is Masha Makatenina. Video editor is Noah Walstein. Senior talent executive is Stephanie Stern. Mixing and mastering by the audio boys, Aaron Bastinelli and Brian Pugh. Original music by the legendary Ryan Holiday. Visit mastersofscale.com to find the transcript for this episode and to subscribe to our newsletter. And be sure to check out our YouTube channel.