Zola Finds a Unique Outsourcing Model to Deal with Crisis-Hit Publishing World

By James Bargent

For high street bookstores, squeezed by the explosion in e-books from one side and the dominance of online retailers like Amazon on the other, the death rattle has been sounding. However, for an enterprising pair of literature lovers backed by a nearshore software development team, the new digital age has instead been marked by the sound of opportunity.

E-book retailer Zola Books was the brainchild of former literary agent Joe Regal and ex-Sotheby’s’ AVP Michael Strong. “They realized that there was a gap in the market for book readers, publishers and authors – to bring all those parties together in a social environment,” said Charlie Berg, Zola Books’ Chief Technology Officer.

Within that environment, users can not only purchase books but also construct their own literary social media network, sharing recommendations, reviews and even underlined passages with their peers. They can also connect with authors, who can use Zola to market directly to readers via a free email-marketing platform, and monitor sales information with a custom dashboard.

Retailers and publishers can also connect with their customers, to collect economic data or market new books, and independent booksellers can even claim a free branded storefront.

In addition to this, there are the Zola curators, bloggers and reviewers who share their comments and recommendations for the latest releases with their followers, and, for those who favor the less subjective views of algorithms, there is Zola’s “Curation Engine” – a custom built recommendation engine.

Revolution Brought About By Technological Advance

Two years into its life, and many of the Zola Books team’s innovative ideas about literature, retail and technology are now being made reality by nearshore ITO operations. The driving force behind the move into nearshoring was Berg, who has 20 years experience in the outsourcing sector, as well as around a dozen start-ups on his CV.

Berg’s first forays into outsourcing were focused on the offshore market, particularly India, but it was his more recent experience of working with ITO operations in Ecuador that influenced the direction he has taken Zola in.

While working as head of technology at a New York digital development firm, Berg first turned to nearshoring after finding a shortage of quality US-based engineers for projects that required a team of developers integrated into the production cycle.

The results, he says, were impressive. “This is a more agile approach, you are in touch with these people as if they were in your office, using Skype, IM, emails etc and they are involved in the day-to-day development,” he said.

Berg returned to Ecuador while looking for development teams to augment the resident engineers at Zola but turned his attentions elsewhere after having trouble recruiting in sufficient numbers.

Uruguay: Burgeoning Nearshore Destination

After dismissing Argentina over concerns about political and economic stability and Costa Rica over price, he turned his attentions to Uruguay, which colleagues in New York’s CTO Club – a private members club for technologists – had recommended as a burgeoning nearshore destination.  “I’ve had such a good experience with Latin America in general and this was the next place to look,” he said.

On an exploratory trip, Berg evaluated conditions in the country and met with ten potential service providers.

Uruguay, he found, may not be the cheapest destination – some of the quotes he received were as high as costs in the United States and on average at least two thirds of the price – but these high prices were matched by high quality conditions. “[Uruguay] is first world – there’s no question,” he said. The infrastructure is the equivalent to the United States.”

He also found the country possessed the high quality human capital he had been searching for. “I was very impressed, there was no question in my mind that these guys are as capable as US engineers or engineers in India or anywhere elsewhere.”

With their nearshore software development team up and running, the Zola Books team is now eying up an expansion into Europe and the UK. Berg, meanwhile, hopes to facilitate that expansion with a tech team that blends various IT development models. “My ideal company would have engineers in the States where I can actually talk to them and they can talk to me and the product definition people, they would be supplemented by a nearshore team and then for special projects that are more separable I might use an offshore.”

Berg believes this flexible model is not just the future for Zola, but the way forward for all IT operations. “I think that what’s going to happen is it will come to a mix of resident engineers, nearshoring and offshoring,” he said, “because in my mind it is driven by the project and what you are trying to get accomplished and because they offer different value.”

For Zola, meanwhile, by creating their own unique retail model, offering book lovers their own different value, Regal and Strong hope to find the opportunity in the publishing world’s crisis.