27 December 2015: The Hippocampus model children's library in Chennai is now closed. This has hurt many of us, including me. We loved the place. We loved the people behind it and we are disappointed that this beautiful institution has fallen. Additionally, I’ve launched my first book (Aditi Zoo) at Hippocampus Chennai (see picture) and my publishing house, Ms Moochie, has done two launches at the same place. So we’re really sad.

But why do libraries fall? Why don't they succeed like other Chennai institutions that have lived on doggedly for decades? The problem lies in the fundamental way a library is built and run - the business model. And the problem also lies with the book industry as such.

1. Growing Cost of Maintaining Title Count:
The book industry is a unique industry where every product is unique and no two books are fungible. Rentals from the top 500 books in a library pay for everything. The next 14500 books sit on the shelf. But if those 14500 books were not there, no one would even consider using the library (since it'll have only 500 books). The upkeep of these extra books costs money. Plus, during purchase, one doesn't know if a title will belong to the top selling category or the dead stock category. This sounds like a very trivial problem, but actually, this is a very big problem for mid and big-sized libraries.

2. High Marketing Cost:
Businesses grow by advertising themselves and by publicising themselves. Here are the list of advertising modes that libraries can't afford - web, social media, newspaper, radio, TV, local newspaper, newspaper inserts, stalls at book fairs, stalls otherwise, outdoor media, posters in apartment complexes (most apartment complexes charge for this), road shows, ... any mode you name - the price is unaffordable simply because there's a restaurant or a VC-funded internet company willing to pay double for the same mode. Libraries grow by word of mouth. Businesses that are dependent on word of mouth kind of publicity are weaker than those can afford advertising.

3. External Shocks:
The library business model is fragile. It is susceptible to external shocks. In the case of Hippocampus, the increase of rental costs tipped the boat.

4. Lower Revenue Growth:
In addition to increasing costs and external shocks, Hippocampus suffered a decline in revenue coming in from new customers. New customers pump deposit into the system, which allows for asset purchase (books) which fuels growth - but also increases costs.

5. Knotted business model:
Hippocampus was a uniquely beautiful space - a library, a children's theatre, a reading space, an activity center, and a hangout space. Combination businesses are complicated because it's confusing on what is the part that's earning the revenue and what is not. What can I stop doing? What should I do more of? The Hippocampus owners are of the belief, not without reason, that if they close the reading space, people will stop using the library. And also, there's enormous competition in the city for activity space. It wasn't possible for the owners to imagine continuing Hippocampus without the combination. It's easy for outsiders to speculate that it might have worked just as a library - but what if it hadn't?

6. Uncashable goodwill:
Libraries generate tons of customer goodwill. But it's mostly uncashable. Most businesses encash customer goodwill by increasing prices. But libraries can't do that easily because it's a rental product and a repeat customer. As a repeat customer who has been paying a certain price for a long time, I am justified in being annoyed if my price is increased.

7. Business owner's fatigue:
Business owners have lives. They have spouses, siblings, parents, kids, etc. And small businesses are subject to the owner's fatigue. The owner wants a break. But can the business give the owner a break? For that there has to be a chain of command that allows it. But this means having more employees than you actually need and that means more money, and that's not possible. So, in effect, if the business owner wants a break, or is even slightly tired, the business takes a beating.

My team has been a member of Hippocampus for over 5 years now. In spite of having the entire stock of The ilovereadin' Library, my wife is also a member at Murugan Library, Eloor Library and The American Council Library. We're that family that is a member of 5 libraries, and we own a Kindle, and we still buy books. So as a consumer of books, and of libraries, we're heartbroken.

But this is it. The Chennai center of Hippocampus is shutting down. It’s decided and it’s being executed. It’s for us to decide where we stand now? What do we do now? Here are my thoughts:

To other libraries who are watching this development -
Don't be happy. Don't think that the competition is less, so you'll do well. The problems that plagued Hippocampus are applicable to you. Work on safeguarding yourself. Work harder. Work now. The ilovereadin' Library, The Book Lovers' Program for Schools, and Hippocampus had a great friendship and it helped us. Cultivate friendships with others in the library business - otherwise you're going to be left out of the industry gossip. Think - do restaurant owners talk to each other? Of course they do. Do school principals talk to each other? Of course they do. Then why aren't you making friends with the library across the road?

To customers and well-wishers of Hippocampus -
Like you, I'm terrified. My baby is 2 years old and we had grand plans of enrolling her in Hippocampus - maybe celebrate it with a tiny KinderJoy party. For whatever reasons we kept pushing it to the next month. And now we can't enroll her. We're faced with this terrible prospect that she will grow up in a world without Hippocampus Chennai.

But we have to move on and find other options. New places will have to open. Playgyms across the city can double up as weekend activity centers. We can building reading spaces in our homes. And finally, existing libraries will have to step up.

The ilovereadin' Library (www.iloveread.in) is an option (Full disclaimer: I own it). It's not an activity center, it's not a reading space. But it's a well-stocked library.

For ex-members of Hippocampus - To help you transition into a world without Hippocampus, we, at The ilovereadin’ Library, have some discounts for you. Send us an email at contact@iloveread.in with proof that you were a Hippocampus member and we'll guide you into The ilovereadin' Library. Your discount will be proportional to the number of months you were a member with Hippocampus.

I feel that it’s important to assure you that just because the Hippocampus Chennai library has closed down, it doesn’t mean that all libraries are closing down. It doesn’t mean that kids will read less. No. With your collaboration, we will continue the great work Hippocampus Chennai has done and continue to offer to the city of Chennai the opportunity to fall in love with books.

You've read the reasons I listed for Hippocampus' failure to continue. I assure you that The ilovereadin' Library is a rock and we’ve built defences against these forces that are causing libraries to shut down.

We're not the biggest library in town. But we're thought leaders in the space because of two fundamental reasons - (a) Because we have read a lot and (b) Because our own poverty has taught us what is important and what is luxury. We started the library with 40 books, and roughly 40K. That's it. After graduating from IIT-M, I joined HUL, worked there for exactly 15 months and quit and started the library because I loved books. My entire life savings went into the library (it was only 40K). I built this library brick by brick from those 40 books and that 40K. And the library today is a part of a growing concern that works in publishing, printing, distribution, curation, retail and rental of books and we also do storytelling and training. So I want to assure you that our library is a credible option for you. If you’re worried, then just walk into our office in Adyar and we’ll share with you the business decisions we’ve taken to ensure that we don’t meet the same fate as Hippocampus.

Hippocampus is gone. But all's not lost. Just look around and you’ll find the options that will work for you and your children. And we’re one of those options.