Founders Fund Bets on Oyster, a Subscription-Based eBook Business

Scrappy startup aims to give you something new to read.

The cofounders. (Photo: Oyster)

An under-the-radar local startup named Oyster has raised a $3 million seed round, GigaOm reports, led by Founders Fund. Other backers include SV Angel, Founder Collective, Shari Redstone’s Advancit Capital, Chris Dixon, Sam Altman and others. But despite the foodie-friendly name, the company has other designs–namely, to feed you books to read on your iPhone.

As cofounder Eric Stromberg explained to Betabeat via email, “Simply put, we are building the best way to read books on your phone, and we think we accomplish that through the subscription model,” he added.

The product is still in the testing phase; if you visit the company’s site, you can sign up for an invitation, but there’s not much digging around you can do. Eventually, however, the company will launch an iPhone app through which–after paying a monthly fee–subscribers get all-you-can-read access to the Oyster library.

On that most pesky of reader problems, discovery, Mr. Stromberg said, “we think about it in three ways – social, algorithmic, and curated. All will be an important part of finding the book that is right for you.” We suppose that almost anything would be better than merely browsing the “recommended reads” (i.e. paid-for placement) in the front of Barnes and Noble.

And yes, there’s something similar but free in the form of the IRL public library. However, it’s worth noting that Oyster probably won’t require signing onto a waiting list of 15o people for one of three copies of Bossypants, nor will they turn your unpaid library fines over to a collections agency, as the Queens Public Library has been known to do.

As for Oyster’s business model, Mr. Stromberg somewhat pointedly added that, “Spotify and Netflix are interesting access-based models for other forms of media, but just like those two are different from one another, our product will be different from each of them.”

Oyster’s introductory blog post elaborates a little more on this theme:

Currently, people buy books online in the exact same way that they buy lamps, blenders, and kitchen knives. The process of finding your next book is very different from purchasing a knife, and it should be treated that way.

By moving from individual transactions to an access-based model, readers can explore and enjoy books freely; more like your corner bookstore than a big box retailer. This leads to a more fulfilling experience built exclusively on taste and relaxed reading.

The founders are a pack of tech-world vets. Mr. Stromberg previously did biz dev at Hunch, Andrew Brown worked at Google (GOOGL) and Willem Van Lancker was formerly a UX designer for Google Maps. (Of course, the question is how far that’ll get them in the publishing world.)

Asked why books–it’s a tough business and the competition is Amazon (AMZN), the ultimate goliath–Mr. Stromberg tried to strike a balance between dreamy-eyed ambition and practicalities: “We love reading and wanted to see this product exist,” he told Betabeat, adding, “At the same time, we were very thoughtful about what makes sense for both publishers and authors, and have crafted our product and model to align with that.”

Mr. Stromberg couldn’t share a timeline for when the the service will open fully to the public, as the team plans on “slowly and carefully building the community and adding new users over a period of time.” Nor could he provide any specifics in terms of what’s in the library, but he did promise that “we do have agreements in place with several publishers and are expanding our catalogue every week.”  

Founders Fund Bets on Oyster, a Subscription-Based eBook Business