Madeline McIntosh is a trailblazing publisher whose career spans leading roles at storied companies like Norton, Bantam Doubleday Dell, Amazon, and Penguin Random House. Madeline talks about her newest venture, Authors Equity, which just celebrated its first anniversary. Authors Equity uses a new kind of business model where publisher and author collaborate to drive a book’s success.

This is the Open Book podcast, A behind the scenes look at the world of books and publishing through conversations with leaders in the field, hosted by David Steinberger, the CEO of Open Road Integrated Media, and chairman of the National Book Foundation. And now your host, David Steinberger.

Hi, and welcome to the Open Book podcast. Today we're talking to Madeline Macintosh, whose career spans from Norton to the old Bantam Doubleday Dell to Amazon in Europe, where she worked on the then new Kindle and then to Penguin Random House. Today she's the co-founder, CEO and Publisher of Authors Equity, a publishing company with a new business model that is working for both highly established authors and debut writers. I think you'll find her journey and perspective insightful. So excited to have you here and so excited about having you here around the one year anniversary of Authors Equity, so congratulations.

Thank you.

So we'll get to that, but I always like starting with some background. So where did you grow up?

Funnily enough, my childhood sounds like my family worked in the military because we moved around a lot, but actually my dad worked in arts administration. I was born in Pittsburgh. We lived in Savannah, Georgia, then St. Paul, Minnesota and then back to Pittsburgh. I'd gone to I think four different schools.

I remember you told me that later on you went on to study art history in college. You can see the connection there. Did you like reading as a

Child? I was definitely a bookish kid. I was not the social butterfly. I was much, much happier if I could just be there reading a Wrinkle in Time, perhaps prophetically, I was named after Madeline, the children's book character, so I guess it was the fate was set from the beginning. Books were absolutely my best friends when I was little and then went off to school, but I really didn't even know or think about book publishing as a profession.

So you didn't think you going to be the CEO of some big global

Publisher book publishing? No, that would've seemed completely insane. It probably would've seemed insane even well after college.

So you go to college, you went to Harvard, and you get out, you have an art history degree, so how do you get from there to,

I thought, okay, I'll go work in the art world. That's apparently the family business. That's what we do. But then I realized, wow, to do that, I really need to get a PhD. And you know what? I think I've had enough of school for a while, and so I went on a backpacking literally around the world, and while I was doing that in a remote fashion, applied to the Ratcliffe Publishing course, I got in and I got into it thinking that what I was going to do was go into magazines so you could sort of see the connection from art to magazines. And it was not until I was sitting there that first week that it really occurred to me that there was this whole other form of publishing, which was book publishing, but I hadn't really thought of that as a profession. Even when I was leaving the course at the end of it, I thought, okay, I would be fortunate to get a job in either books or magazines, so I will take whatever the first best job I get is after a little stumbling around, I found my way to being an editorial assistant at Norton.

Right. So how was that experience?

It was fantastic. I was working for Jerry Howard, legendary literary editor. Just the wonderful thing about being an assistant at a relatively small company, although Norton I would say today is huge compared to my current company, but being an assistant at a medium sized company means that you really get exposure to all the different functions. It's just a really good education. So I loved it. At the same time, I just started to get interested and curious in reading different articles as they were coming out about interactive media.

This is going to be a pattern in your career, something new, interesting, innovative, an opportunity to learn to.

Yeah, I

Think as you're drawn to those kinds of

Opportunities, for whatever reason, I really like the figuring out a new puzzle aspect of work. And I can actually remember my light bulb moment, which was that I was sitting in a laundromat on 14th Street on probably some hungover Sunday morning as a 20 something waiting for my clothes to come out of the dryer and reading the New Yorker, and there was an article, a profile of Bill Gates and the device of this profile, it was called Email with Bill, and it sounds completely prosaic now, but it was just a profile that had been written about Bill Gates where the interview had been conducted over email. So the most obvious thing in the world. Amazing. But that was like, oh my God, this is so different and what he's talking about is so different. So it sparked my curiosity. I considered for a little while staying at Norton and thinking about doing new media at Norton, but at the same time started to look at what was happening at other companies. Banham, Doubleday, Dell had an opening for a new media assistant and I got it. And interestingly enough, so obviously my last name is Macintosh associated with, I have no connection to Apple computers, but people joke about that.

So I was Macintosh reporting to John. Guttenberg was my boss. He was head of the department and then John reported to Richard Sarnoff, and so it was this funny little train of media names,

Right? You're at bdd. I remember Richard was there at the time also, and you're in the new media world, and what is new media?

So new media was at that point, supposed to be CD ROMs. Not surprisingly, CD ROMs didn't really go anywhere, and John and the other person in the department who actually had qualifications like business school and engineering, they were trying to put through business proposals for publishing, creating interactive versions of books that BDD had the rights to. I as the most junior person, was hunting around for things that I could work on, and it ended up being working with what were then called the Commercial online services. So a OL was new, there was E World, there was CompuServe, and the idea was to convince publicists and authors to do chats on these online services. So one thing led to another. My job became launching a website, and I realize it's almost impossible to imagine this now, but think about not knowing what the web was and needing to understand it for the first time, and then convincing all these other people who didn't know what it was that we should put books on it.

Oh man,

It's 25 or something, trying to convince people far senior to me that they should do this thing they didn't really want to do. But then within a year or so, people were paying attention to Amazon. Within a year people were paying attention to Barnes and Noble going online, and so it started to catch fire pretty quickly, and that was the point where I moved into the sales department to work for Don Weissberg. The idea was to be the person in sales who would start to work with these retailers as we all tried to figure out how to sell books online.

Now, does that lead to, you're actually going to Amazon, is

That It did in a roundabout way. I was in the sales department for seven years.

I got really curious and interested in actually unquote having a p and l, not just selling other people's books, but actually being able to participate in the craft of the business. And so I moved to audio. I was the publisher of audio books. This was another time when people looked at me a little funny, why are you leaving the sales depart to go to audiobook publishing? That makes sense. There's no future in audio effects. But I thought it was great and it was great, and I happened to be there as digital was starting to really become a thing. And as you know, everything that later happened in eBooks really first happened in audio. So really understanding what is the impact of going digital on pricing, on retail terms, on other compensation models, on content development, et cetera. But while I was, I got a call from old friends at Amazon saying, this is kind of a crazy question, but is there any chance you'd be interested in a job in Luxembourg?

And of course the first answer is Where's Luxembourg? And I had certainly never thought of either working for Amazon or moving to Luxembourg, but I went home that night and my husband Chris and I talked about it and we had at that point, a very young family of 4-year-old twin boys. Chris had lived in New York his entire life and was excited by the idea of moving to Europe. And at that point I'd been in the same company for quite a while and was excited about the idea of challenging myself to something new. After a series of very challenging interviews, as you would expect, I got the job and we moved to Luxembourg and I worked for Amazon. It was on the

Kindle and it was on Kindle. It was Kindle trying to make Kindle happen in

Europe. It was Kindle International, Kindle, Kindle International. So it was when I joined, the Kindle business was nine months old and it was only a US device with a US catalog, and so it was working with all the different parts of the Kindle team and with the publishing industry to figure out what did we need to do in order to internationalize the offer.

It sounds like a big job, but even bigger jobs are coming, right? Then you come back.

Then I came back

And you come back to

Penguin Random House. It was Random House at that point.

It wasn't Penguin Random

House yet. It was Random House, and I came back. The idea was having learned the ropes of digital from within Amazon, my main assignment coming back to Random House was to help all of us get through the digital transit. It was working with all the different functions culturally as well as from a business perspective to say to all of us, what would it be like if instead of resisting digital, we just embraced it? Let's just for a moment think about if we just embraced digital, what would that mean?

Right. Sounds hard.

It actually was maybe a week of, it was hard, but actually once you gave permission and assurance to an editor that what they knew how to do was absolutely vitally important, whether the output was digital or physical, then they were actually kind off to the races.

You couldn't stop being analog. You had to be both analog and you had to be both

As you do you do today, but it wasn't just like a switch that could be flipped. That would probably have been a lot easier.

Okay, so you do that and then the Penguin Random House.

Yes. So then there were a few years there of quite a lot of digital dramas. Then those calmed down and just as they were calming down, we learned that the Bertlesman are, the Random House parent company had decided to do a joint venture with Pearson, and that formed Penguin Random House, and then the deal was signed. Then I was the COO in the US of Penguin Random House, and my job was to merge these

Two, bring the companies together.

Companies

Could spend a lot of time on that, but let's go to the next job because then you're president of Penguin.

Yes. So I knew while I was experiencing it that it would probably be my favorite job of my career, and I would say the two jobs that are my favorite jobs are being president of Penguin and the job I have now. I think that the thing that was so clear to me then is that I really do love working directly with the book teams.

But now how about the challenge though? I mean, you got Random House in Penguin, different cultures, different

Backgrounds.

You're a Random House person coming in over the Penguin. People you didn't, you have a big issue building trust, building confidence, having people think that you're on your side.

I did, yes. I think there was a lot of suspicion in the beginning and particularly the thing that was the transition was not about Turning Penguin into Random House because Penguin was this extraordinary company with extraordinary strengths that was quite different from Random House culturally and structurally. It was more that it happened to align with a moment of generational change there at Penguin where David Shenks and Susan Peterson Kennedy had done this amazing job of Running Penguin for a very long time and had really run it like a wonderful family business where they were mom and dad and they were in charge, and I was coming in as they were leaving and saying to the publishing people, I'm not here to replace David or Susan. I'm a different kind of person. I have different background, different set of experiences. I'm not here to tell you how to publish your books. I just want to make sure that you get to publish 'em to the greatest success you possibly can. Basically what I was saying is I'm handing you the keys now. Now you are in charge of your imprint. You get to make the decisions, and I think where there was a little bit of anxiety if we talk to the penguins, is that, was that really true? Was I really going to back them up in the decision?

Right. Sounds suspicious. Okay, so just reflecting back, you do end up being then CEO of Penguin, random House usa. When you think about all the incredible books and authors that you were involved with in your whole B dd, penguin Random House journey, are there a couple publishing experiences that stand out to you that when you reflect back?

Yeah. I mean there were hundreds and hundreds of books that I voraciously read and adored and was so proud of us publishing, but there were a couple of those books that more stand out still in my memory as being particularly representative of a moment in the market and a kind of publishing that was really interesting. So one that I always use as an example in my own head anyway, was the DaVinci Code. This was back when I was the sales director at Van Double This double. Yeah, this was Doubleday. What was so fun about working on the DaVinci code was that Dan Brown, he had done okay, but he wasn't a worldwide global bestseller by any means, that this was a case where the manuscript came in, the editor started handing it around to people, and it just absolutely caught fire, and we hand sold the grassroots effort that was involved in hand selling that book to every bookseller in the country and then literally watching it catch fire and then becoming this global brand that impacted publishing for many years afterwards, to me was the greatest illustration of the publisher as gatekeeper in the best sense of the word that when the publisher having the power to say, this is the book.

This is the book that we believe in, and you need to trust us and we're going to put the resources behind it. But more than anything, you need to read it and then you need to tell other people to read it. That's the kind of thing that you could do at that point and that we did to great effect. That to me was amazing.

Right. It was a transformational experience for the whole publishing industry. I remember being at Harper Counts at the time. Everyone was fascinated. Yeah. How did they do this? This is incredible, right? Obviously it was the bestselling book for the year by a long shot, and it was a phenomenon that Yeah, comes along exactly once a decade.

I mean, if I fast forward all the way to much later in the story while I was at Penguin, Avery acquired Atomic Habits by James Clear,

And then I became the CEO of Penguin Random House. So I was not involved at all in the direct publication of the book, but what I could see is what anybody could see, the author James Clear by working really hard and really carefully over 10 years to develop a direct audience with his hard, hard work on developing his newsletter audience. He really worked hard on the framing of the content, the examples that he used, how he told the story, how he presented it, and our role as the publisher was to be a really good partner to him. But it was no longer publisher as gatekeeper determining the fate of a book. It was author really as the center of power author who has the best idea, the best control of his audience, able to be in the driver's seat, taking that book to market with the publisher, really in a partnership role, not a gatekeeper role.

So that ends up really informing your thinking about your new venture author's equity. James is very involved

In this, right? He is delightfully, he is very involved, yes. James and I had never actually met during my entire time at Penguin Random House. It wasn't until after I left, I left in the beginning of 2023, I had this idea that became author's equity. I started to talk to my two co-founders, Don Weisberg and Nina from about it, and none of the three of us had ever started a company before. So there was a lot of fumbling around in the dark for a while trying to figure out what's an LLC versus a C-Corp versus a whatever. As we were doing that, we were also working to figure out how to tell the story of what the vision was. I talked to every agent who I could get to talk to me about this idea even before it had a name. One of those was Simon Lipska at Writer's house, and that led over time to us having a chance to present to James, and it was a meeting of the minds really from the first minute, not surprisingly, because really the idea of author's equity of changing the relationship between the publisher and the author really came for me observing Atomic Habits and James. And so it's not totally shocking that then when presenting the idea back to the author, he was like, yeah, that seems like a really good idea.

Right,

Okay. And we're very fortunate that he not only was interested in working with us in an other publisher relationship, but also he became our lead investor and we call, I think his official title is Founding author.

Founding author. So this was a year ago that you founded. So what does it mean to be in partnership?

In a way, the business model is super simple. So in a way it's the least interesting part. It's more what it unlocks, but the business model is that instead of the traditional advance and royalty model that we all have grown up with, instead we work with a profit share, ours is a little different in that it is truly the only cost that get deducted from revenue are the direct third party costs that we incur to make the book, to market the book to sell the book, and then that defines profit, and then the author always gets the majority share of profit. I won't cite particular numbers, but let's just say it's the lion's

Share profit. Okay. That's a pretty fundamentally different model

Really. That means that from copy one, we are both on the same side of the p and l. Every single copy that we sell, every net dollar that we generate, we know what our share of that is going to be. What it means is that your then experience of going through the process of making all the decisions that go into a publication, selecting the editor, figuring out where are you going to spend money? Are you going to spend money in advertising or does this book get special effects on the cover? Or are you going to go really long in printing or do you want to be a little bit more conservative? Do you want to do an author tour? Do you want to do something that is totally different than nobody has ever done before to launch a book? Each of these decisions is the product of a collaborative conversation between the author and the publishing.

So you're not just talking about the author's work editorial, you're talking about the whole publishing process, all the key publishing decisions, right.

Everything.

Right. Which in the traditional model is more the purview of the publisher. Exactly. Now you're tapping into their understanding of their audience. Exactly.

I think before we went to market, we thought that the authors who would most likely gravitate to us would be the most obviously successful authors, the ones who easily earn out their advances. The more successful the book is, the more of the share crews to the publisher as opposed to the author. And there are certainly some very successful authors with whom we are working, but it turns out that the most consistent indicator of whether an author is going to be right for us and we're going to be right for the author, is it's an author who very much wants to be involved. It's somebody who knows their audience, who's interested in developing their audience, who is interested in the craft of what's going on in creating the book. And some of these perfect members of our cult, as we now call it, are people who've never published before and others have been publishing for a very long time.

So, alright, so let's talk about a, you've got a bestseller that's running

Right now. Yes. This is a wonderful, wonderful story. So the book is Don't Believe Everything You Think by an author named Joseph Nen. Joseph is now 27, he was 26 when we started working with him. He is somebody who had suffered from anxiety and self-published a book that was about how he himself has managed to control his own racing thoughts. He is a real natural in understanding how to sell things on TikTok. And so before any agent was involved, before we were involved, he was already a bonafide self-published success. When he signed up with UTA, Rebecca Gringer and Albert Lea at UTA, they brought him to us for a conversation. And the reason that I think Albert and Rebecca knew that this was probably going to be the right fit was because this is somebody who wants to continue to control his brand, his work going forward.

And what we did that was unusual was that we allowed and encouraged Joseph and have been delighted to have Joseph continue to do exactly what he knows how to do well. So he has continued with his own original edition of the paperback and the ebook and we did the counterintuitive thing of bringing to market an up speced version of the book. So he worked, we put him together with an editor, they slightly expanded it, we turned it into this beautiful cloth bound hardcover that's more expensive than the self-published edition and sent it out into the marketplace. And he is now, as of yesterday, is hit his highest number on the advice how-to list. He's a number five New York Times bestseller.

Congratulations.

Thank you. We have sold about, I think this week it's 200,000 copies

That really is different, right? Yes. Because the traditional publishing approach to a self-published successful author would be, will give you an advance, will take your edition, add a print, or replace it with a new edition that we're going to do and thanks. And we'll send you royalties.

Exactly. Yes. And the wonderful thing about this is that you would have to ask Joseph, but I think in Joseph's case, if he had had to make a choice between, we'll write you a big check, you have to hand everything over and then we'll take you to the rest of the market, but you have to give up control or you can just keep doing it yourself. But without broad distribution, he would definitely have decided to just keep going himself. So by offering the solution that we did, it meant that he now has readers who are discovering him at Target in Australia, in Urban Outfitters, in Barnes and Noble and in independent bookstores. And the big push that we have with him this year is to make sure that we're getting that book into every single independent bookstore and specialty retailer

Country. Can you tell us what to look forward to here? Do we have a book

Or two that's coming? Yes. I mean, I could go on for another hour. I know we don't have that much time, so I'll give a couple of appetizers. One that I'm very excited for is James Fry's novel coming out in June called Next to Heaven. About a year ago, his agent sent to Robin Desser, my colleague, the manuscript of this book. She forwarded it on to me and I happened to open it just as I was getting on a plane in California to fly back to New York. And it was one of those fantastic experiences that we've all had every once in a while where

You get the manuscript,

You get the manuscript, and sitting there in my crammed economy seat with bad neighbors and seatmates, et cetera. The flight went by, it felt like a blink. I read the entire thing in one sitting. It was just clear from that reading. This is White Lotus in Connecticut. James is at his best when he is bringing his keen novelist eye to this absolute eviscerating way, just picking apart the rich. And these are terrible people in beautiful houses. They are doing bad stuff. They have a sex party, somebody ends up dead and you kind of hate all of them, but you can't stop reading. So that's our big summer read. It has been incredibly fun to work a novelist who is really up for, what can we do differently? He does not like to play it safe to say the least.

Anything in the fall?

Yes, something totally different. Puzzle mania. This is a book that we're doing in partnership with the New York Times. They've been in the puzzle business for 75 years. They've done many puzzle books, but the reason they were interested in working with us on this one is that this is not a disposable paperback on ground wood paper. This is a large format paper overboard. Beautiful for color book that you would want to have on your coffee table, but you will also open it and find the incredible world of New York Times puzzles. So they have figured out how to translate wordles into a paper and pen solution. I challenge anybody to think of somebody on their gift list this fall that they would not want to get this book to

Right. Sounds like a must have.

It's it absolutely. I no it as gift book number one for holiday

20 20 20. Well, congratulations on that and congratulations on everything that you've accomplished.

Yesterday was our one year anniversary in the public eye and people asked us what we were doing to celebrate and apparently we just updated our substack. That was our celebration because we're all a little too busy to take some time

Off. Imagine Soon enough we'll get to celebrate. Imagine. Alright, well congratulations and thanks for being here.

Thank you. Thank you for having me. In

Just one thought before we go, there are a few individuals in publishing who were referred to simply by their first name. One of those was Sunny, no need to say Sunny Metta. And then there's Morgan. You don't need to add Intricate. That is also the case with Madeline say the first name and everyone knows who you mean. What I didn't know until today was that Madeline herself was named after the beloved children's book of the same name, and that as a bookish young person, she especially loved A Wrinkle in Time by Madeline Langle. It seems like sometimes name is Destiny and we're all lucky. That has been the case with Madeline Macintosh. Okay, thanks for listening and more importantly, keep reading.

Thanks for listening to Open book with David Steinberger. This episode was produced by Rick Joyce, directed by Hannah Moseley and engineered by Bren Russell. Our theme music is written and performed by Eric Freelander. And I'm Emma Chapnick. For more episodes and links to the books mentioned, visit our website at open road integrated media.com/podcast.