Amazon Was Supposed to Kill the Bookstore. James Daunt Had Other Plans | Better in Person
Freakonomics Radio
James Daunt, a self-described 'naive' bookstore owner who started with a small shop in London, shares his journey of transforming independen
Key takeaways
- Long-term quality and consistency ultimately triumph over short-term financial gains.
- The success of a bookstore lies not just in sales but in creating a meaningful cultural experience.
Main topics
- The revival of physical bookstores
- Long-term thinking in business
Notable quotes
"The quality will out. And that one should never sacrifice the medium and long term for the short term."
"I left university with zero plan at all."
Conclusion
James Daunt's story demonstrates that even in an era dominated by digital disruption,
Transcript preview
Speaker 3 (0:00) This episode of Better in Person is presented by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Download the new ChatGPT desktop app today. Speaker 3 (0:12) Hey there, it's Stephen Dupner, and this is a bonus episode of our new TV talk show, Better in Person. If you want to watch the video, which is a whole different experience, it is on the Freakonomics YouTube channel, or look for Better in Person on Apple Podcasts. My guest today is James Daunt, a name you may not know, but after listening to this episode, I think you will understand why I was so excited to speak with him. As always, thanks for listening. Speaker 2 (0:47) I think 30 years ago, all the bookstore chains were ruling the world, and the idea that I would then be running them all is, yes, fanciful. And indeed, I may wake up at some point and find it was all some sort of weird mushroom that I ate last night. Did you have a mushroom last night? I did not. Well, not that sort anyway. Speaker 3 (1:09) This is Better in Person with Stephen Dubner and James Daunt. James Daunt is not a household name, at least in most households, but he always has been in mine. Years ago, he opened a small independent bookshop in London, Daunt Books, which many people consider their very favorite bookstore. From there, he somehow went on to revive two of the biggest bookstore chains in the world, Waterstones in the UK and Barnes & Noble in the US. You could argue that James Daunt helped save the very idea of the bookstore, maybe the printed book itself. So how did that happen? I wanted him to start from the beginning. So I asked what his sales pitch was when he first opened Daunt Books. Speaker 2 (1:53) This is going to be an amazing bookstore. We're going to absolutely nail it. And we're going to go and take over every other bookstore in the Western world. No. That's not Speaker 1 (2:03) what we were saying. Speaker 2 (2:05) But the idea was to create a nice bookstore and that hopefully it would work. Speaker 3 (2:09) I love that it came out the way it did. I don't understand how you could have such confidence in opening a bookstore in Speaker 2 (2:14) 1990. It was deeply foolish and born of naivety. And, you know, those who thought it would end in tears were nearly right. I left university with zero plan at all. Speaker 3 (2:26) What Speaker 2 (2:26) did you study? History. Oxford? Cambridge. Cambridge, sorry. Speaker 2 (2:31) That's the very UK, Speaker 3 (2:33) you know, but Speaker 2 (2:34) I had no idea what I wanted to do. But there were these things called banks, no idea what they did, but one of them was hiring and you could come and live in New York and that seemed really quite exciting. So I joined J.P. Morgan. And Speaker 3 (2:48) so what were those four years of work like? Did you enjoy it? Did you Speaker 2 (2:52) think about a career in banking? I thought it was completely fantastic. It was engaging. It was compulsive. It was really interesting. But it turns out only interesting to other bankers. So my then-girlfriend really didn't find it interesting at all. She thought it was... boring beyond belief and said no. Wait a minute. Speaker 3 (3:16) I was under the impression that the girlfriend who said that is your current wife or is Speaker 2 (3:20) that a different? You know, I've only had one girlfriend and one wife. You only have one girlfriend Speaker 3 (3:23) even? Speaker 2 (3:24) Yes. Speaker 3 (3:27) Okay. So I'm really dull. So no, I'm not passing any judgment at all. I think it's very, I think it's wonderful. But you quit. the job you love that was exciting because your girlfriend, ultimately your wife, thought it was a boring Speaker 2 (3:45) job. And she wasn't wrong. Speaker 2 (3:50) really having sort of left to try and think about what to do. I love reading a lot of books. I love traveling, but that I couldn't quite see how to parlay that into a future. But a bookstore I could see, so I thought I'd give it a go. Was Speaker 3 (4:04) it a hit from the beginning? No, it took maybe Speaker 2 (4:08) five years to really get going. To begin with, I took a lease on in 1989 when everything was up, and I opened in 1990 when everything was down. There was the first Gulf War. There was a big recession. Actually, that helps me now as somebody running a company because I really remember what bad is like. But it didn't work for a long time, and we got through really with hard work and tenacity. One thing I Speaker 3 (4:34) notice as I get older... I feel like what you could generally call experience, but particularly in business, is massively undervalued, I find, in the market and in life. But as it turns out, there are some principles that you learn along the way if you pay attention. And I'm curious what principles you've learned that you Speaker 2 (4:52) feel are really valuable now. Yeah, I've stayed in a very narrow world, so I hesitate to think that my principles apply everywhere. But mine is the quality will out. and that one should never sacrifice the medium and long term for the short term. Everything has to be done for the long term. Hold to quality, dig in, work very, very hard, and ultimately you'll be okay. That Speaker 3 (5:19) sounds so old-fashioned. Speaker 2 (5:21) It is very, very, very old-fashioned. Speaker 3 (5:23) I mean, I'm not going to lie. I love it. I've spent my life as a writer. I like to think that if you don't apply all that to your writing, then it can't be good. But I feel like the current economic culture goes against that, in part because so much leverage has been gained by the financial engineering industries, where it seems like they're not really producing or making anything and yet becoming fabulously rich. And so the principles that you just noted, an appreciation for well-made things, for well-curated stores, it feels like nostalgia. Speaker 2 (5:57) Yeah, well, I certainly think that people goosing up short-term gains or short-term glory at the expense of the long-term is something that has bedeviled our industry hugely, and one can see it going on elsewhere. The people who ran Waterstones before me, the people who ran Barnes & Noble before me, were not idiots, but they did destroy the business. And they did so, I think, by always pursuing the short-term and getting fixated on the short-term and then being locked into an ever... spiral of downward short-term decisions to try and fix what required long-term decision-making. Speaker 3 (6:32) Were they driven by short-term results because of their ownership? Partly the ownership, partly, I Speaker 2 (6:38) think, a pursuit of glory. And if you are constantly trying to achieve the maximum in the present, you will do badly in the medium and long term. Let's Speaker 3 (6:51) go back to Daunt. You open this bookshop. You say it took about five years for it to become successful? For it to become not unsuccessful. Okay. How successful did it become then once it, were you making good money? In time, Speaker 2 (7:06) yes. I mean, we opened more stores and it's a great bookstore. Sales have gone up every month, actually, since it opened. So it is one of, it's a great, great bookstore. Very small. But great. When Speaker 3 (7:17) I heard that you went then from being the inventor and proprietor of these wonderful independent bookshops to being the CEO of the big chain in Britain, Watterson's, I imagined that what had happened is that this big chain came to you, independent bookstore owner, and said, here's a very large check so that we can take over your shops and meld them with our failing shops and put you atop the whole thing until you fail. But that's not exactly what happened. You retain ownership of the independent stores? Yeah. How did that work? That sounds like a very unusual arrangement. Speaker 2 (7:54) Well, the purchase was extremely unusual in that I did feel it was a tragedy for Waterstones to disappear, which it was obviously