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Questia chief still hitting the books
By Christine Tatum, Tribune staff reporter, June 11, 2001

Troy Williams smiles easily but looks uncomfortable in his blue suit and tie. "You're talking to a guy who has lived in his car," Williams said.

It's clear the 28-year-old chief executive of Houston-based online publisher Questia is smart and hard-working. His blue-collar background drove him to a public college where tuition was cheap. From there, he went on to graduate from Harvard University's law school but couldn't bring himself to work for a law firm until he tried to build the world's largest Web library.

It's a resource that he hopes eventually will level the playing field between student haves and have-nots. Williams was in Chicago last week to discuss his business, which went live in January, and the lessons he's learned since he started building Questia in 1998. This interview has been edited for length and clarity.

Questia laid off 139 people last month and has about 145 left. What was that about?

We are making a tremendous capital investment in the digitization of books, but we've had to scale back on the number of books we're putting online because raising financing right now is really hard. We were digitizing many thousands of books a month, but now that we've reduced production, we need fewer people. Now we're building our site and making it better for subscribers. We want to continue to grow it and to develop the tools that let subscribers manipulate content in the ways that best meet their research needs. It's the only place that a consumer can go right now and have online access to the full text of books.

How did you come up with the idea for Questia?

Frustration gave rise to the idea. When I was a student, I'd hear these stories about how whole libraries would be online, and I couldn't wait. I wanted something where I could write in margins, highlight a passage and return to my work whenever I wanted. I knew there had to be technology out there that would let me go home for the holidays and not have to worry about lugging books with me ever again.

You say you don't have any competitors, but aren't you afraid of a much bigger company coming along and trying to do this?

Listen, $100 million and 2½ years have gotten us where we are today. I don't see anyone spending that kind of time and money to do what we have. We've raised about $136 million to date, and after we did, the door slammed shut and no one else was right behind us. Microsoft wanted to do something similar but ran into copyright issues, and I think that's because publishers are more interested in smaller commercial endeavors that they could have a stake in. So, no, I'm not afraid of Microsoft. And, for the record, we haven't accepted any strategic investments, either.

We were first to market and we're already way ahead of any competition that might be out there. It takes a long time to digitize a book, and digitizing isn't cheap. I want a million books online, but that's a 10 to 20-year project. We're content to concentrate on making our site better until the market improves.

Tell us about the digitizing process.

It costs hundreds of dollars to digitize a book. We outsource the work to (two companies coordinating) 6,000 people working in the Philippines and India. Most of them have at least two years of college. If we did the same work in the U.S., it would cost thousands of dollars.

After the rights to a book are secured, every page is scanned. From there it goes through a reader that turns the image into text. There are always mistakes in that process, so someone has to proofread the entire thing. Then we tag everything in XML so that when you're on the service you can move seamlessly from the page of one book to the page of another.

We have 40,000 books online and another 20,000 that are in somewhere in the production process. We have librarians on staff who choose the books we offer. We don't have textbooks and nothing about medicine or any of the hard sciences. We're focusing on liberal arts because those books maintain their value for a longer period of time. A book about quantum physics goes out of date quickly.

What is Questia's sales strategy?

The capital to start this is enormous, but once it's there it requires very little to maintain. We'll make our investment back by selling subscriptions direct to consumer. We're going after the student market really heavily. A student could spend $15 on photocopies alone the night before a paper is due, and that doesn't count their trips to get a Mountain Dew on their way to and from the library. I'm convinced that parents will remember what writing a paper or looking something up in the library was like for them and agree that this is a service their kids really need.

We also want (academic institutions) to see how Questia could help them level the playing field. We're going after them, too.

What's been your biggest mistake so far?

We didn't plan for the dot-com bubble to burst. We built a business that required significant capital infusion and we thought that after we collected the initial funding, that would continue. Had I known just how tight things would get, I would have hired more temp workers and less full-time people. Laying off people was the hardest thing I've had to do. One person came up to me after the news (was broken) and asked if they could work for us for free. For free. It really got to me right here (pats his chest).

I also was mistaken in believing that Houston would be this really venture-friendly town. I thought I would build Questia there because Houston does everything big. Big cars. Big houses. Big money. I thought, big library. That was a mistake.

The mistake I'm glad I avoided was going forward with an IPO. So many (dot-com) businesses died because they weren't strong enough to IPO but did anyway because of the pressure.

What does the future hold for libraries as we know them?

If Questia 10 years from now has a million books online, a community college's library could compete with Harvard's. Students will have access to any material they need no matter what is stored on the library shelves n their campus.

I think major libraries will continue to be just as important and valuable social gatherings, but I'm not as sure of your smaller local libraries. They've already moved from access to the great works to access to CDs and video rentals. I don't think that's what Andrew Carnegie had in mind.

What's your favorite book?

"A Theory of Justice" by John Rawls.