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Pronoun(s) and Data — an Update

Big news yesterday (6th Nov 2017) — Macmillan is shutting down public access to the Pronoun platform, that is the distribution platform for self-published authors:

As, I noted in an earlier post the motivation for Macmillian for buying Pronoun may not have been the distribution side or the self-publishing platform, but the data and analytcis capabilities that Pronoun brought to Macmillan. In essence this may have been a form of aqui-hire.

Thus we could view yesterday’s news simply as a move by Macmillan to shut down the non-revenue generating side of the business (it was all free), that it was not terribly interested in, and focusing the platform and skills on purely internal use cases, such as analysing price and sales trends for Macmillan’s traditionally published titles. The press release is so carefully worded that it easily distracts from this possibility. However, if somebody is so careful in choosing their words, I assume that there is a reason for doing so.

The next few weeks and months will show what is really going and I shall update this story as new information becomes available, but right now it’s all speculation, including the anecdata that the original purchase price was somewhere between $6 million and $9 million (of which the investors probably got the bulk in the form of liquidation preferences — it’s worth remembering that Vook/Pronoun raised at least $3.5 million and probably much more).

Never a boring day in publishing.

P.S.: According to Techcrunch, Pronoun raised $7.8 million when it was still operating as Vook and a further $3.5 million when it rebranded as Pronoun. That is a total of $11.3 million in funding and may not include early stage angel or seed funding. According to industry sources, Macmillan paid less than $10 million buying 100% of Pronoun in spring 2016, so if investor’s liquidation preferences were at least 1x (which is almost standard for VCs and could in fact have been 2x to 3x) then that means founder’s stock and employee options (except for possible retention options/bonuses/earn-outs post aqusition) would have been worthless. So financially this was/is not pretty. Shame really!

P.P.S.: This official reacion from Mamillan was published in Publisher’s Weekly recently:

Jeff Seroy, senior v-p of publicity and marketing at Macmillan’s Farrar Straus and Giroux unit, confirmed the shutdown.
Asked why Pronoun was being shuttered 18 months after the acquisition, Seroy said despite Macmillan investment in the platform and “terrific” feedback from Pronoun authors, “we came to the conclusion that there wasn’t a path forward to a profitable business model and decided to shut down the platform.”
Seroy said Macmillan will, “continue to invest in the data and analytics side of the company as we have found it of great value.” He also said that former Pronoun CEO Josh Brody and former chief product officer Ben Zhuk left Macmillan earlier in the year.