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CRAIN’S DETROIT BUSINESS
March 2, 2015
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Ex-Borders VP’s startup idea: Selling book content to websites BY TOM HENDERSON CRAIN’S DETROIT BUSINESS
A former vice president at Borders Group Inc., the onetime book giant that went out of business in 2011, is convinced there is money to be made from the book industry and has been meeting with angel and venture capital investors to help launch his startup company, ContentOro LLC. Bob Chunn, who has incubator space at Ann Arbor Spark, wants to license book content from publishers and sell it to websites in need of content. At least one local veteran entrepreneur, Chuck Newman, who founded ReCellular Inc., an Ann Arbor-based company that recycles cellphones, has bought into Chunn’s vision, literally, as his first investor. Chunn’s last job at Borders was managing the digital division, overseeing the Ann Arbor company’s website, eBooks, Readers, online marketing and social media. Before that, he headed up the division that bought books that were no longer being marketed by publishers to sell at deep discounts, often on racks in the entryway into the stores. Chunn said his contacts in the publishing industry, and knowing how to commercialize content currently not generating revenue for
publishers, are key. He said he has been talking with a variety of publishers and hopes to have deals signed soon. He said seed funding will enable ContentOro to build its own online marketplace, where potential customers can use search terms or phrases to find content they want. Each customer will have sole use of purchased content, which will help search engine optimization tools direct people to their sites. “There are 130 million books, and you can only buy 70,000 of Chunn them at Barnes & Noble, so there’s plenty of material to choose from,” Chunn said. Chunn said he got the idea for ContentOro after he left Borders in 2011 to join Houston-based Retail Concepts as its chief marketing officer. “We were paying a lot of money for content for our website, but people would land on our site and we’d give them garbage,” he said. “We weren’t a source of real information.” Chunn said funding will also allow him to hire former colleagues at Borders who were part of his team that bought books from pub-
lishers that were no longer being distributed or marketed. Ethan Goodman, vice president of digital and innovation at the Mars Agency, an ad agency in Southfield, is setting up a pilot program and expects ContentOro will be able to cut the cost of creating Web content for his clients by two-thirds. He said clients often pay high fees to have content custom created that misses the mark and leaves website visitors unengaged and unlikely to return. “Content marketing is a hot-button issue for our clients. Traditional and digital media have not performed as well as they want. There’s a big opportunity here for someone who can provide better content,” said Goodman. Goodman said he was introduced to Chunn by Tony Grover, a managing partner at RPM Ventures, one of several venture capital firms that have been doing due diligence on a possible investment in ContentOro, which is still in a pre-revenue stage and making the rounds of angel and VC investors to fund a seed round of equity capital. “Chunn can tap into an untapped source of content that no one has tapped before, and we’re going to see in a pilot if he can get us rich, engaging content that our customers can use for a fraction of the cost,” said Goodman. “Can he get us a large volume of content
that is fresh and relevant? That’s what we need to prove out.” Jim Adox, chairman of the Ann Arbor-based Michigan Venture Capital Association and managing director of the Ann Arbor office of Madison, Wis.-based Venture Investors LLC, is vetting ContentOro for a possible investment and says he likes what he sees so far. “Marketers need a constant supply of good and fresh content to engage customers on the Web and mobile. This can be expensive and challenging,” he said. “ContentOro is developing a process to create a content repository marketers can easily go to and find fresh content at lower costs. It’s similar to the stock images sites, but more complicated to do.” Skip Simms is the managing member of the Ann Arbor-based Michigan Angel Fund and a senior vice president at Spark. The angel fund is in due diligence for a possible investment, said Simms. “We like the fact that Bob has extensive experience and contacts in the book business,” said Simms. “We also like the market opportunity as it meets a real need for quality content. His idea to serve any and all businesses needing content is simple but not easy.” Travis Linderman, the director of entrepreneurial operations at Spark who has been helping Chunn refine his business plan,
said he has been impressed by how fast ContentOro has evolved. “Rarely have I seen this kind of momentum at a company at this early of a stage,” he said. Part of that momentum is getting Sean Moore, the president of Moseley Road Inc., a company in Irvington, N.Y., that helps U.S. publishers sell book rights to foreign publishers, to help him sign up publishers to provide ContentOro with publishers. “All the publishers I’m talking to are ready to get on board when Bob is ready,” said Moore, who says he plans to sign on 15 publishers this year. He will also represent ContentOro at upcoming book trade fairs in New York, London and Frankfort. “When I met Bob, it only took me 60 seconds to get it. I told him, ‘I want to be your partner,’ ” said Newman, who is CFO. “The idea is brilliant. You’re taking content that exists and recycling it, which is what I did at ReCellular. “I’ve been an entrepreneur my whole life. Since college, I’ve never worked for anyone. And this is the best damn idea I’ve seen in my career. This is going to be one of the real success stories to come out of Southeast Michigan.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2
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