BitLit began when CEO and Co-founder Peter Hudson, 33, had an argument about a book with a friend in June 2012. The friend, Dan Allard – one of BitLit’s investors who is on the board of directors – said, “I wish I had the e-book with me right now so I can show you the page.” His comment launched Hudson and Allard on a search to find out if a solution existed that allowed publishers to offer readers print book and e-book bundling. “The elation when we got on Google and couldn’t find the solution was even bigger than the moment we had the idea. If we could figure out a way to do this and patent it, this could be really big,” recalls Hudson who says he did not sleep properly for two weeks. At the time, Hudson was a founder and full-time executive at water monitoring and analysis software company Aquatics Informatics. He was in the process of preparing for the company’s biggest sale that would be negotiated in 10 days. In two weeks, Hudson and Allard figured out a solution and filed a patent for BitLit, an app that offers users free or discounted e-books of print books they own. Through cutting edge computer vision, the app validates users’ ownership of print books. Four months later, Hudson amiably left his nine-year post with AI to launch Vancouver-based BitLit in December 2012. “Founding a company is super easy. The hard part is what you do after that,” said Hudson.
Hudson says the hardest part about launching BitLit was reaching out to publishers. “The first 29 days were brutal. After 29 days, I got one publisher, ChiZine Publications, who said that sounds like an interesting idea.” While Hudson’s strength lies in pounding pavement, BitLit’s co-founder/CTO Marius Muja’s strength is in technical skills. Hudson and Muja had met through a mutual friend at mountaineering club. At the advice of Hudson’s former colleague at AI, they hired a lawyer to draft a contract to offer bundled e-books to publishers. "Some things were really easy. A lot of people would say the hard part is fundraising. We've had help along the way. We got quite a lot of National Research Council's Industrial Research Assistance Program money," said Hudson, on the financial support the government of Canada provides to qualified businesses. The company closed in May a seed-funding round in an undisclosed amount. Investors included BDC Venture Capital, Mike Volker of WUTIF Capital, super angel Jim Fletcher, and Three Angels Capital, the venture fund launched this year by Michael Serbinis, the founder and former CEO of Kobo. Currently, BitLit has contracts with nearly 100 publishers, offers close to 20,000 e-books, and has thousands of active users in the U.S., Canada, and the U.K.
Although BitLit has received substantial support, the company has experienced its share of criticism. “You’ve got to be motivated when people tell you no,” said Hudson. The Vancouver Island native recalls being in the second final round of the New Ventures BC competition that gives early-stage tech entrepreneurs education and mentorship. After reading BitLit's eight-page company blurb, one of the judges wrote as feedback, "Nothing other than I don't get it." Hudson remembers thinking, "I’m going to frame that. When we have a billion dollar IPO and I find out who that guy was, I'm going to hand him that framed copy."
Hudson’s doggedness as an entrepreneur began when he started his first company as a 16-year-old. Hudson had spent summers pulling weeds at an asparagus farm next door to his family’s Vancouver Island sheep farm. He learned to write HTML through attending a science and entrepreneur camp. Hudson decided to try his hand at building websites and reached out to a nearby law firm and high tech hardware company. “That was a lesson in cold calling and what to do next when there’s actually interest,” said Hudson, who earned $400 per website he created that summer.
Hudson’s undergraduate engineering physics program at the University of British Columbia included a co-op in Sweden where he worked for giant multi-national company Westinghouse. Although he appreciated the experience, Hudson realized he wasn’t interested to work for a big company. “I wasn’t making an incremental difference.” Through his time with Aquatics Informatics, Hudson gained experience in grinding – the other half of being an entrepreneur that Hudson says includes cold calling, attending conferences, networking, and working on weekends.
As a founder, Hudson discovered the critical component of team culture when he and Muja made a couple of hiring mistakes in the early days of BitLit. “It’s hard to bring someone on and have to let them go,” said Hudson. Since then, the founders have built a talented team of experts that respect each other and have a beer together every Friday.
An integral growth opportunity the BitLit team had was a three-month cohort with accelerator GrowLab. Takeaways included getting detailed feedback from VCs and angels and learning how to communicate well with VCs. Hudson emphasized the importance of knowing when to take feedback into consideration. “You can get mentor whiplash or mentor fatigue. Sometimes you've got to listen. Sometimes you don't. Someone who's spent five minutes thinking about your business isn't necessarily going to tell you the brilliant insight of how you need to pivot, change your team, or how much more or less money you need to be raising,” said Hudson.
The same goes for startup blogs, a resource that Hudson recommends. “You need to know when to listen to the blogs out there and when you need to ignore them and go with your own feeling of what's right." Startup blogs that Hudson has found helpful include Version One Ventures (his mentor Boris Wertz’s blog), Feld Thoughts, Steve Blank, and Union Square Ventures. Hudson also recommends Managing Startups: Best Blog Posts, a book published by one of BitLit’s partner publishers. “If you own the physical copy of the book, you get the e-book through us.”
What’s ahead for BitLit is content – finalizing contracts with more publishers so that additional e-book titles will be available for BitLit users and making the discovery of available e-books easier for users. "In the end, it's about serving your customer and loving your customer," said Hudson.