This excerpt from The Membership Economy is reprinted here with permission from my publisher McGraw-Hill Education. It’s about my favorite bookstore in the world, Kepler’s. I have been buying books at Kepler’s since I was 4 years old. So it is a thrill for me to be launching my new book The Forever Transaction there on April 1 (no fooling).
When a Menlo Park bookstore was economically threatened, the community stepped in and created a membership program to improve long-term sustainability.
Founded in 1955 by peace activist Roy Kepler, Kepler’s Books is a large independent bookstore. After its founding, it quickly became a center for intellectual thought and community discussion for the people living in the suburbs surrounding Stanford University. Over the years, the bookstore moved to increasingly larger locations, until it found its current home in downtown Menlo Park, California. Kepler’s is a neighbor to many of the Membership Economy pioneers featured in this book. After its move to Silicon Valley, many of the most innovative and successful investors and entrepreneurs frequented Kepler’s as a favorite browsing destination.
By 2005, however, the bookselling landscape had changed, due in large part to the innovations of online retailers like Amazon. On August 31, 2005, Kepler’s Books closed its doors.
What happened next at Kepler’s was unprecedented and a great example of the Membership Economy in action. Local citizens responded with demonstrations to support Kepler’s and to protest the loss of their favorite bookstore. Citizens including Ricky Opaterny, an early Google employee and a Kepler’s fan, and serial entrepreneur and local resident Daniel Mendez and his wife Vivian Leal organized supporters to restructure Kepler’s and raise new capital. Within weeks, Kepler’s reopened its doors with new shareholders from the community, a renegotiated lease, a new board of directors, a new Literary Circle Membership Program, and tons of volunteer support.
Over the next few years the membership program provided funds to expand Kepler’s events programming and community activities leading it to win many awards and industry recognition. In 2012, Kepler’s was taken over by Praveen Madan and his wife Christin. Madan has said he wants to turn Kepler’s into a member-owned business such as outdoor clothing and gear store REI or the publicly owned Green Bay Packers football team.
Their current plan, supported by community members, is known as Kepler’s 2020. Under this innovative plan Kepler’s award-winning events program was transferred into a new nonprofit organization with a vision of growth and sustainability. The new nonprofit called Peninsula Arts & Letters was able to get off the ground by raising start-up capital from the community, including many Literary Circle members.
Today, Kepler’s Books has become a role model for independent bookstores from all over the world, many of whom are turning to their communities for more formal support in competing against the online retailers and major chains. While Clark Kepler is no longer the owner of Kepler’s, he advises companies on improving their community focus and participating in the Membership Economy. While the Membership Economy isn’t for all small businesses, he notes that it can provide a useful model for organizations that have already developed strong loyalty. He told me, “Certainly membership models represent one future for small businesses, however, they must be authentic and community-focused to warrant customer loyalty.”