A couple of years ago a young(ish) aspiring writer went to an office near Leicester Square to meet a literary agent. By the time they had finished off a bottle of cheap white wine the honey-tongued agent had convinced the writer that his half-baked idea for a book had enormous potential. The writer went away, fizzing with enthusiasm, and laboured away in the evenings and at weekends researching and writing a 20,000 -word proposal for his book. The agent expressed his delight with it and sent it out to publishers. Within weeks the verdicts came back: the proposal was universally rejected and the agent declined all opportunities to return the writer’s phone calls.

This week, over coffee at the Four Seasons, a Canadian multimillionaire businessman told me (for I was that luckless wannabe writer) that he could make me a published author. Not only that, but he could also turn you, dear reader, into a published writer. If it has been written, Bob Young will publish it.

Yes, that sounds like the fatal weakness of a publishing business. But Young insists that this is its strength. If you go to Young’s website, Lulu.com, you can browse thousands of titles, from How To Cook A Peacock to Lesson Plans for Helicopter Flight Instructors.

If you like the look of one you can download an extract and if you are intrigued enough to want more you can buy the book. The physical tome does not exist yet, but after you click on your mouse to confirm your purchase it will be printed and bound specifically for you and sent to your home.

If you want to download your magnum opus on to Lulu.com you can do so for free. Then if someone buys it they pay for the cost of having it printed and bound (from £3 per 100 pages, depending on the quality of the paper and binding) and then whatever the author wants to charge on top of that. The author takes 80 per cent of this fee and Lulu makes its money by taking the other 20 per cent.

Young made his fortune as a co-founder of Red Hat, the open-source software company that gives away its Linux software and makes money by selling services and enhancements to its customers. A few years ago it was talked up as a major threat to Microsoft but while Red Hat is now a successful company, with a market capitalisation of more than $4 billion, Bill Gates is still top dog.

Lulu.com opened for business in 2002, aiming to to do for intellectual property what eBay has done for the contents of attics. There are more than 20,000 titles available on the website; Young claims that 1,000 new ones are added every week, the company is turning a profit and growing at 10 per cent a month, with a turnover of about $1 million a month. Some 50,000 volumes are printed every four weeks. Lulu will start printing books in Britain and on the Continent this month.

The idea for Young’s digital publishing business came when he wrote his own book about Red Hat to counter adverse media commentary on his company. The book sold well, about 20,000 copies, but he was disenchanted by the way it was edited, the tiny amount he was paid after the publishing house had stripped out costs and the enormous number of copies that languished unsold.

“Why does there need to be a gatekeeper for content for the publishing industry?” he asks. Why can’t people just offer their books and if people want them they can buy them?

The obvious answer is that the existing publishing industry acts as a useful filter that stops dross cluttering up our bookshops and our lives. Young argues that many hugely successful authors, such as J. K. Rowling, Orwell and countless others, were rejected many times before they found a publisher. The literary Darwinists might counter that they were published in the end. Is it really the case that tremendous must-read books are lost in desk drawers all over the world?

Take a look at what is on Lulu. Much of it appears to be complete crap. “Yes,” says Young happily. “It is. But we take great pride in the fact that we are not the arbiters of what is crap and what is not.” He says that when you buy a book from a top publisher you know that it has been edited. Lulu is serving a different purpose. He cites the example of a Los Alamos scientist who has written a work that he regards as being of interest to only 160 people in the world and he knows 148 of them personally. “That community needs this book.”

He likes to compare his venture to eBay which operates alongside Sotheby’s and Christie’s. Ebay doesn’t sell many Picassos but it does sell a lot of Pez dispensers. His ambition is to have a million authors selling 100 copies each, rather than 100 authors selling a million copies each. He claims that in a few years there will be more titles being published on Lulu.com than in the conventional publishing industry.

A Lulu bestseller is regarded as a book that sells 500 copies. Some have sold in the low thousands but Young is reluctant to give exact figures. The bestsellers include Raw Foods for Busy People and Depths and Details: A Reader’s Guide to Dan Brown’s The Da Vinci Code. It seems unlikely that authors will earn a living through Lulu publishing but Young believes that will happen eventually.

Explore Books

• Book Extracts

• Book Reviews

• Books Group

• Audio Books

Times Recommends

• Superfreakonomics by Steven D Levitt and Stephen J Dubner
• The Times picks the 50 best paperbacks of 2009
• Vincent van Gogh’s letters show the soul of the artist