People in Business

UP CLOSE / DAVID MURPHY, CEO of Better World Books: Book power
Using capitalism to promote global equalizer, literacy, 'is almost intoxicating'


The Atlanta Journal-Constitution
Published on: 05/18/08

David Murphy does well by doing good. As CEO of the for-profit, socially and environmentally conscious Better World Books, Murphy turns used books into bucks and, along the way, fights illiteracy around the world.

Better World, with 160 employees, scours college campuses and libraries for deals and offers philanthropic satisfaction in return.

Here's how it works: Say a University of Georgia student at semester's end is unhappy with the $10 offered by the campus bookstore for his Chemistry 101 text. He donates the book to a campus fraternity or sorority staging a book drive with BWB. Maybe 1,000 books are collected and 700 deemed resale worthy.

Better World gives the sorority .50 per book — $350 for 700 books — and puts the books on sale online (@ betterworld.com). The sorority may donate the $350 to a non-profit of its choosing.

Better World sells the book —- one-fourth of sales come from overseas —- and donates 8-10 percent of net revenue, according to Murphy, to one of four literacy nonprofits working in Africa, Asia, Latin America and the United States.

The Atlanta-headquartered company has donated $4.5 million to the nonprofits and library partners since its founding in 2003. Nearly 7,000 tons of books have been diverted from landfills. And 2,400 tons of carbon offsets —- a few pennies worth of shipping surcharges help plant trees —- have been achieved.

Better World revenues last fiscal year topped $16 million. In April, the independent book seller —- "a virtuous Amazon," according to one publication —- raised up to $4.5 million in private equity.

Murphy spoke recently with reporter Dan Chapman.

Q: Why literacy?

A: Literacy is the big equalizer. It's proven in Africa that a woman who is literate is many times more likely to not contract AIDS. It's pretty much a proven fact that if you get people literate, get people educated, you can make a difference in their lives.

Q: Better World organizes book drives on 1,600 —- roughly half — of the nation's college campuses. You're now targeting libraries. An obvious question, but why?

A: It really helped get us out of the seasonality aspect of the (college) business. Before we were in a feast or famine mode of two times a year when students were selling between 5,000 and 6,000 books a day. We now get half of our revenues from libraries.

Q: But aren't you competing with the lawn-sale book events that libraries love to do?

A: We tell them, 'We don't want to compete with your yard sale, but you're missing a whole opportunity to create revenue by not selling online.' They may have a book worth $20 online. We sell a lot overseas. A book may be bought by a book dealer in London, especially with the way the dollar is.

Q: The Gwinnett Public Library was one of your first biblio-partners. What library books sell well? And how do libraries profit?

A: Childrens books, cookbooks, a lot of table books, non-fiction, biographies. Take, for example, a book on gardening from the Gwinnett Public Library. When I buy that book money is going back to Gwinnett's library and to a non-profit of Gwinnett's choosing.

Q: Hundreds of companies sell used books online. Seems you've got a lot of competition.

A: There's certainly a trend as the Internet and e-commerce become more pervasive. So we have to work harder and smarter to get these books. But we have size and (proprietary) software. The internet allows you to get in and play from your garage. But the minute you say you want to make a business and scale it, well you need some capital to really propel you down the road.

Q: And how will $4.5 million in new financing fuel your business?

A: It's a seminal event when you attract outside capital. It gives us the capital to be a really big company, to achieve a better level of scale. We'll use it to invest in our current infrastructure to ultimately get more books and get more space to house them. We will also be able to build out our e-commerce site.

Q: What's next?

A: There will always be competitive threats, like e-books. But someday we look to sell e-books on line too. But my sense is that (regular) books will be around for a long time. Our biggest challenge is can we continue to scale our business cost-effectively? Can we continue to innovate and be creative? As companies get bigger there's always a challenge. We've got to make sure we don't get cold, stale, conservative.

Q: What's Better World's cachet?

A: We appeal to people who want to vote with their dollars. We're very much positioned for buyers with a conscience who are, basically, purchasing with their values. I'd like to go to a place and buy a book and know a certain percentage is going back to something I support.

Q: You've drunk the do-gooder Kool-Aid.

A: The richness of the experience with regards to how capitalism can really make a difference to address social issues is almost intoxicating.

Q: Sounds like a young man's game. Are you the company's oldest employee (at 50)?

A: It is very much a young company, but I don't think I'm the oldest — but I'm darn close. And my energy level is pretty high. We move fast. We still pull some all-nighters and crazy weekends.

THE DAVID MURPHY FILE

> Title: President & CEO, Better World Books

> Background: Corporate finance with First Boston Corp., Hutchinson SA, International Paper

> Education: University of Notre Dame (BA, economics; 1980); Dartmouth College (MBA, 1984)

> Residence: Alpharetta

> Family: wife Mary, children Caroline, Elizabeth & David John

> Age: 50

> Pastimes: Running, reading, travel, anything Fighting Irish

> Recent books: Team of Rivals, The Breakthrough Company

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