Home » Big Publishing, Bookstores, Disruptive Innovation, Hugh Howey » The Secret to Following Someone

The Secret to Following Someone

6 May 2014

From Hugh Howey:

One of my favorite movies of all-time is The Zero Effect. If you haven’t seen it, you really should. Absolutely brilliant. One of the best scenes has Daryl Zero (played by Bill Pullman) explaining the trick to following someone without getting caught. It’s simple, he says. You just get where they’re going before they do. The obvious joke here is that it’s impossible to know where they’re going, which is why they need to be followed. But Pullman’s character in the film is a Sherlock-Holmes-sort-of-genius, and he expects that everyone ought to know where everyone else is going at all times. Just as a matter of course.

But we’re not all Daryl Zero. We can only guess at the future. We are resigned to follow.

A few years ago, I put forth a zany idea about where we in the book industry were heading: I thought there might come a day when agents and publishers would scour bestselling self-published books to wrangle in new talent. Doing so would allow them to mitigate risk; it would offload the arduous task of managing the slushpile by crowdsourcing it; and it would allow market research and experimentation to take place on someone else’s dime and time (the self-published authors’ and the readers’).

. . . .

Authors didn’t have a stage for their own gigs until e-books gained wide adoption. Once that happened, the rest was inevitable. Everything that musicians, photographers, comedians, fine artists and the like had been doing for generations was now open to writers. We could see where literature was heading because of the well-trodden path laid out before them.

By being at the forefront of this transition, Amazon has reaped most of the benefit. And not just monetarily, though that’s worth mentioning before we get to the meat of this rambling blog post. Amazon enjoys higher margins on self-published e-books. Before costs, they make 30% – 65% on every sale of a self-published work. For major publishers, their margin on e-books are likely less than 10%.

. . . .

Where Amazon really wins is with the data they collect. When Amazon purchased Goodreads, it seemed to me that they were mostly purchasing the reviewing, buying, and reading habits of its users. Data like that is worth a lot of money. And its value is only going to go up in the future. This data makes it possible to recommend more items that customers will want to purchase. This is the most important trick in retail. It was my job as a bookseller. Keep this in mind, as I’ll get back to it when I posit how someone can win the next revolution in retail.But first, I’d like to digress and point out what might be an equally powerful advantage Amazon wins from their data: Not only are they seeing what customers buy, they’re seeing how authors sell. They see the next big thing before agents and publishers can. In fact, they can often see an author’s career trajectory take an upward turn before the author is even aware of it.

. . . .

Employing hindsight (that clever genius), pundits have pointed out that Random House or a collection of publishers should have gotten into the e-reader device and direct e-book sales game early on. Rather than wait on a competitor to disrupt their business, they should have taken a page from Apple’s playbook and been the ones to disrupt. I’ll go one step further and use the power of hindsight to suggest something even more audacious: Publishers should have been the ones creating FREE self-publishing platforms. They should have created WattPad or their own version of Kindle Direct Publishing. Both offer ways to discover and profit from rising talent. Both offer ways to collect sales data from customers rather than relying on the infrequent and imprecise dribs and drabs of data that they get from retailers.

Link to the rest at Hugh Howey and thanks to David and several others for the tip.

Big Publishing, Bookstores, Disruptive Innovation, Hugh Howey

11 Comments to “The Secret to Following Someone”

  1. As I was reading the article, I was becoming more horrified at the happy happy picture Howey paints of international corporations skinning my posts and photos for data to sell me more s***.

    No, I don’t want them to conclude that if I post a photo of my delicious hash browns that I want to know more about french fries. If I pass along an animated gif of Grumpy Cat, am I going to get a free trial sample of antidepressants? I don’t want to receive “value-added” coupons of Viagra if I post a photo of a mushy banana.

  2. HarperCollins did create a sort of self-publishing platform. It’s called Authonomy and is how my former agent found my first book – by watching it rise in the charts.

    When a book posted on Authonomy reaches the top five (voted there by fellow writers), HarperCollins reads and reviews it, and if they like it, sends the author a contract.

    Least, that’s how it worked four years ago. Several of my friends on that site were “found” that way.

    • From experience of Authonomy there was one heck of a lot of begging/spamming to try and get into the top five to get a review. I say this as someone who was (many many moons ago, and this name didn’t exist then) the top reviewer. You can guess at how many requests I had to put people’s books on my shelf.

    • But Andrea, Authonomy was a disaster, a huge missed opportunity! I speak as a once enthusiastic beta member, who got two books to the top five before the charts became seriously corrupt.

      Harper Collins let what started as a brilliant site deteriorate into a squalid mess. What successes have there been, apart from Miranda Dickinson, whose novel never got near the top five on the site?

  3. Interesting what Hugh says “Publishers should have been the ones creating FREE self-publishing platforms.” A few blog-response months ago, as we sometimes opine about what the Trad-pubs should do in the new e-World, I suggested that if you cannot beat them join them. The Trad-pubs should have started a nursery e-publishing venture, sort of minor leagues for writers. Only e-books and the writer should meet certain minimum standards to be e-published under a trad-pub’s name and the writer pays if they want additional services, priced reasonably. Instead what did they do? They started affiliated shops for writers to self-pubs and rip them off with high fees. That’s why Amazon and CreateSpace are running circles around the Trad-pubs. The ingredient visionary, or thinking out-of-the-box is non-existent in traditional publishing. That’s good, for us Indie Authors, some of us have those ingredients. And if we don’t have it we can adapt quickly.

  4. William Ockham

    I don’t think the Daryl Zero approach is all that hard (and I’m no Sherlock-Holmes-sort-of-genius). Let’s say you are given the assignment of following the first person who leaves my house tomorrow. While there are an infinite number of paths that could be followed, the number of paths that will be followed is incredibly small. It’s constrained by geography, infrastructure, time of day, etc.

    So, tomorrow morning at 6:45am, you will see a woman and two gangly teenage boys get into a car and leave our house. If someone leaves my house tomorrow (or any other house in the immediate neighborhood) at or around 6:45am, there is 95%+ chance that their first destination is the local high school. And you can know that in advance by easily available public information. If you know who lives at my address, you can guess that the next destination for the car that left my house will be my wife’s office. And because you don’t have to stop at the high school, you will get there first.

    This sort of thing is pretty easy to do with companies. They have constraints as well. The Big 5 publishers are as likely to successfully compete with Amazon in direct sales as I am to head south from my house by driving to Lake Houston and swimming across (spoiler alert: I don’t know how to swim and publishers don’t know how to sell to consumers. Sure, I could learn, but I have a car and there is a bridge.) Changing the direction of a large company isn’t really like turning an aircraft carrier, it’s more like laying down new tracks for a train. It is hard work, it takes time, and it almost always happens in the open.

  5. But using something as untrustworthy as MATHEMATICS to detect the next big thing would remove the glimmering patina of cache’. How are bookstores going to know which books to order unless the popular kids at the cool table tell them?!

    Algorithms? Trajectories?! Why, that relies on actual READERS to determine which authors succeed and which fail!

    Preposterous! Readers aren’t fancy and respected enough to be in charge of books! Most of them can’t even afford five hundred-dollar lunches!

  6. I would love to apply a neural network to Amazon’s data on book sales. Train the net on the history of daily sales of books that sold a lot. Then apply the net to all the rest.

    I have no idea if it would work, but it’s worth a try.

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