Shortly after a startup called ComiXology unveiled its digital comics app, a board member received an email with an Excel file revealing all of the purchases made on the app. After a day of digital sleuthing revealed that the sender was a twentysomething in Seattle, CEO David Steinberger opted for a soft approach. “Hey, can you help me understand how you got this?,” he asked. “Oh, it was easy,” said the culprit. “I just hacked your app.”
“So, we hired him,” laughs Steinberger. “He still works for us.”
Nowadays, Amazon—which acquired ComiXology three years ago—might not take as kindly to such antics. But the anecdote illustrates a company ethos that Steinberger and cofounder John Roberts have tried to maintain since founding their company a decade ago: have heart, build karma, and work together to figure out solutions.
“We’ve taken care, culturally speaking, to define what’s important to us, and how we behave and relate to our customers,” says Steinberger. “When you’re 10 people in a room and everyone can hear conversations, they’ll pick up a founder’s mentality. When that grows to 50-60 people, we have to [formally] define what it means to work for ComiXology, and how to think about ourselves.” Today, the company has over 100 employees in its New York, Los Angeles, and Seattle offices.
The task of maintaining the individuality and values that propelled its initial success became more challenging when ComiXology integrated itself into a conglomerate the size of Amazon in 2014. Three years on, Steinberger—who continues as ComiXology CEO and also helms the digital comics business on Amazon’s Kindle ebook platform—has not only expanded upon the two companies’ common corporate values, but is creatively incorporating assets from Amazon to hone ComiXology’s business.
Life At Amazon
Although ComiXology’s focus on employee development and consumer experience meshed well with Amazon’s leadership principles, Steinberger particularly stresses empathy as part of problem solving. “Go above and beyond in consideration of all the people you work with, put ourselves in the retailers’, publishers’, and customers’ shoes, understand their perspectives, and have fun being a fan,” he says.
That approach survived a test early in the merger, when iPhone and iPad users railed against ComiXology for canceling their ability to purchase comics through the iOS app, in order to circumvent Apple’s cut of transaction dollars.
“That was the hardest thing we ever did,” says Steinberger of ComiXology’s attempts to win back customers’ trust after the switch. “We spent the first eight months with Amazon making it as easy as possible to go from a ComiXology website purchase to reading it on the app. But there’s no question it adds a click or two. We tried to respond with understanding, acknowledging when it’s harder for customers, and how to make it easier for them.”
The intertwining with Amazon not only has the Kindle and ComiXology apps sharing comics titles, but has also led to ComiXology streamlining its internal communications, infrastructure, and analytics via processes built by its parent company.
“We’re very integrated compared to some subsidiaries, so it’s important for us to balance the Amazon way, because we exist within and run parts of Kindle, with keeping the spirit of ComiXology in place,” says Steinberger. “It took us awhile to get used to a very writing-centric culture. [At Amazon,] there are no PowerPoint presentations. When you present an idea, it’s in narrative form. It helps me think ahead of time what people’s questions might be, and creates more critical thinking, so you make better decisions.”
“Amazon’s very data oriented,” he adds, “where the ComiXology startup did more stuff on gut. We’ve become much more data-oriented and less gut-oriented over time.”
That synergy has led to some profitable initiatives. Last year, the company launched the highly successful ComiXology Unlimited—a monthly subscription service, similar in concept to Amazon’s Kindle Unlimited, that offers access to some 10,000 comics. This year, it started publishing original comics, and added Marvel titles and a recommendation menu. The goal is to lure new subscribers, increase reading frequency, and introduce existing readers to other genres, and it’s working: Recent ComiXology figures revealed new customers comprising 60% of free trials, and ComiXology Unlimited increasing customers’ reading frequency by 58% and encouraging 74% of subscribers to try new genres.
Behind the service, some pretty powerful technology is at work. “We dialed up machine learning to assist with the comics it recommends,” says Steinberger. “We see a future where text recognition could be super helpful. Even people recognition in drawings could be super cool.”
Winning The Digital Comics Category
Ten years ago, a Julliard-trained Steinberger traded a struggling singing career for a New York University MBA. It culminated with him winning an NYU business-plan competition—and $50,000 in seed money—with an idea for an online comics fan community and digital pull list (individual preorders) of upcoming comics to help users plan their purchases. He, along with Roberts and a third co-founder (Peter Jaffe, who left after the Amazon purchase) spent the next 18 months finding time outside their day jobs to create that first app. As its technology became more sophisticated, the business expanded in subsequent years to offer web tools enabling comic book retailers to enhance their online presence and apps facilitating reading and purchasing of digital comics across platforms.
Despite pre-existing players, ComiXology managed to outpace some half-dozen competitors through a combination of factors:
Supporting Retailers. ComiXology debuted with an online service that helped comics fans manage their in-store subscriptions with their local shop. In 2009, it started selling digital comics, focusing on discounted back-list single issues, and directing readers to local retailers selling current titles. Soon after, it began offering incentives to local comic shops offering ComiXology digital retailer storefronts on their websites, giving brick-and-mortar shops a way to make money from the sales of digital comics. When the company began selling new single issues the same day the print issues released, it offered these digital comics at the same price as print.
Retailers and publishers warmed to the idea after discovering that the existence of these digital comics didn’t lead to a decline in retail purchases. And when ComiXology landed an exclusive deal with DC Comics in mid-2010, its competitive edge solidified. Today, the company sells day-and-date digital titles, and says that they continue not to cannibalize print sales, as readers often buy the same titles in both formats, or some as digital and some as print.
As the digital-comics business got going, “competitors came in saying new comics should be 99 cents. They thought they were Steve Jobs or something,” says Steinberger. “All the other companies were like, `We’re gonna disrupt comics.’ We were creating a safe system that had ComiXology connecting print publishers, retailers, and consumers.”
Guided View. ComiXology’s proprietary Guided View technology, which enables users to read a panel at a time on small screens, became its secret sauce. “When we launched, we were the only people doing anything like Guided View, which offered a better and easier experience [than competitors],” says Steinberger. “There was an inherent respect for the storytelling and artform that I felt was missing from cutting up panels onto iPhone size images, and I wanted something better. I wanted the feeling, timing, and beats of a comic book where the speech bubbles would work on a tiny device. That’s what Guided View did from an attitude point of view, and it’s a part of why we succeeded.”
Steinberger came up with the idea, crafting a rudimentary demo via slides in Apple’s Keynote presenttion app, and hired an iOS developer to transform it into reality. “There were a lot of people who tried to copy it, but there are lots of subtle animation tricks to make it feel really good that people don’t seem to understand,” he says.
Respecting The Artform. Steinberger believes that another less quantifiable but essential ingredient to ComiXology’s success was his ability to excite others in his vision—a skill he developed in his former musical career. “Singing an art song is like telling a story,” says Steinberger, who recently resumed singing lessons and occasionally performs at a Brooklyn church. “It taught me how to prepare to talk about something, tell a story, be concise, have a point of view. Connecting with an audience is akin to pitching the company, raising money, relaying company values to our staff, and getting people excited and aligned. That takes the ability to communicate and inspire and I totally connect that to performing.”
Finding New Audiences
ComiXology’s future goals involve finding organic ways to reach a wider variety of potential readers by leveraging other Amazon divisions. For example, the company recently published trading cards of comic creator all-stars curated by director Kevin Smith, who hosts the Geeking Out talk show on Amazon subsidiary IMDB. It also engaged a giveaway promotion with Amazon-owned Fabric.com at this year’s Comic-Con International in San Diego.
“We heard that cosplayers were buying comics only to research costumes,” says Steinberger. “We wanted to get them connected to the stories. We hired a VP of strategy who is also a cosplayer to look into communities that look like they should be reading comics.”
There are no plans yet for Amazon Studios to formally mine ComiXology for potential shows, the way other comic publishers, such as IDW, have created in-house production development arms. But Steinberger still sees untapped markets, given the comics industry’s burst of singular, alternative, and niche titles, and an increase in female readership.
“People looking back will give this time, from the 2000s to now, a name for what this age of comics is going to be called,” he says. “We’re on the edge of a huge explosion of diversity.”