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SILICON VALLEY: WHAT IT TAKES TO DO STARTUPS – Book Review

Here’s another one of my articles published today on Impakter:



SILICON VALLEY: WHAT IT TAKES TO DO STARTUPS

Book Review: Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcìa Martinez (HarperCollins, 2016, 528 pages)

Chaos Monkeys Book Cover

Silicon Valley continues to be hot news in the age of Trump and anti-globalization and it should come as no surprise that a clever book about it by someone in the know, loaded with revelatory insights on how it really works, was going to be a sure-fire hit. And that is exactly what happened when Antonio García Martinez’s half memoir-half prescriptive tech guidebook came out last year on 28 June 2016, becoming an instant “New York Times bestseller”. Considered an “irreverent exposé of life inside the tech bubble”, all the major book reviewers rushed in with praise, from the New York Times’ Jonathan E. Knee (“an irresistible and indispensable 360-degree guide to the new technology establishment”) to Bloomberg’s Ellen Huet (“dives into the unburnished, day-to-day realities: the frantic pivots, the enthusiastic ass-kissing, the excruciating internal politics”).

In short, in just six months, “Chaos Monkeys” has become the most popular and widely read book about Silicon Valley. I was curious to find out whether it merited its sudden glory. I uploaded it to my Kindle (disclosure: living far from bookstores, I am a fan of e-books) and I spent a couple of pleasant days enjoying the read. And I soon discovered that the best passages, literally pearls in the text, had been highlighted hundreds of time by enthusiastic fans. In fact, Amazon in its “about the book” section informs you that (at the time of my reading) 3,769 passages had been highlighted 122,000 times (ah, the joys of Big Data).

It is a clever book with a clever title, and a great read. In case you’re wondering about the title, it comes from the name given to the software procedure used to test the stability and resilience of online services/websites – and this neatly expresses the main message of the book: That tech entrepreneurs are society’s chaos monkeys, out to disrupt the way we live, from photo-sharing (Instagram), dating (Tinder) and movie viewing (Netflix) to transport (Uber), lodging (AirBnB) and space travel (SpaceX).

Unquestionably, the author’s persona was as much part of the excitement as his bracing writing style. Described as an “industry provocateur” on his Amazon book description page, he has lived up to his reputation and become something of an industry guru: today, whenever big news or scandals roil Silicon Valley, journalists rush to ask him his opinion.

 

Garcìa Martinez started his working life as a strategist for Goldman Sachs, survived three years and surprised everyone by abandoning New York for the West Coast. After learning the ropes at an IT advertising outfit called Adchemy, he launched his own start-up AdGrok with a couple of engineering pals (called “the boys” in his book). Ten months later, after raising some venture capital and before even making AdGrok operational, he sold it to Twitter for $5 million. However, it was not an unmitigated success; his team broke up, “the boys” went to work for Twitter to develop AdGrok while he accepted a more lucrative position at Facebook as product manager. Tasked with leveraging Facebook’s user data to make its advertising more effective and fix its monetization problem, he was outcompeted by a colleague and fired – the circumstances of his firing make for fascinating reading.

The description of what Facebook is like, what happened there and why he eventually left and landed an advisory position at Twitter is certainly one of the more interesting parts of the book – anyone thinking of joining Facebook should read it very carefully, drawing lessons from it.

The rest on Impakter, to read it, click here.

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Filed under Book review, Digital Revolution, Publishing, Startups, Tech, Uncategorized

2015: New Challenges in Publishing

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Now that the dust has settled on 2014, we begin to see what 2015 will bring. Is the e-book market crashing? Too soon to say, but there are some worrying signs of trouble. Here are the most likely:

1. A growing glut in books. The fast growth in titles in the Kindle Store will continue unabated: in August 2014, the number of books available was around 3.3 million, now, six months later, it’s getting to 3.7 million (as per the data available in the Amazon Associates search box; I just checked, the exact number of e-books is 3,647,578). At this rate, expect it to get close to 5 million by the end of this year.

2. Adding to the overflow in everyone’s Kindle is the fact that traditional publishers have now woken up to the market-effectiveness of low-priced e-books.

That’s a big change for 2015. Low prices and going free were the marketing strategies of choice for indies – no more. And Russell Blake was one of the first to catch on to this change (see here).

Big Publishers are no longer afraid that e-books will “gobble up” sales from their printed books. They’ve finally understood that e-books are no threat simply because they are not the same product. A printed book is an object, something you show off to your friends, give your family or use to scribble comments in the margin. An e-book is not an object, it’s a reading service: it’s hard to give as a gift (though it can be done) and it’s not even clear if it’s something you can bequeath to your children when you die. So now self-published authors must bear the onslaught of low prices on current New York Times best sellers – and that already happened at Christmas when Amazon showcased on its website a big sale of Hachette’s best sellers at $2.50 apiece.

Life was always hard for new self-published authors who had to withstand competition not only from the traditional, established “mega sellers” but from fellow “midlist” authors with huge back lists to self-publish and a big fan base acquired in earlier days when they were traditionally published.

Now life has just become a lot harder.

3. A breakdown in the e-book market caused by book subscription services. The latest arrival, Kindle Unlimited (KU), with 700,000 titles that KU members can access for the modest sum of $9.99 per month, is the biggest, potentially a much larger market than the other two, Oyster and Scribd. It is also the one that happens to pay its authors least, provoking the ire of many indies that have decided to “leave” KU (to do so is simple: all an author has to do is to get out of KDP Select).

Some argue that both Oyster and Scribd that pay authors better don’t have a sustainable business model, yet Scribd just raised $22 million to fund its e-book service (see here). Scribd’s aim? To get on board “all the significant publishers”.

No doubt Amazon wants the same for KU.

Perhaps it won’t be so easy, as a result of the possible withdrawal of some best-selling indie authors, the likes of J.A. Konrath who trumpetted he left KU or H.M. Ward who announced on the K-boards that “KU crushed my sales”, as the New York Times recently reported (see here). But KU will no doubt rely on traditional publishers, not to mention Amazon’s own imprints, and one can expect that eventually, KU will contain plenty of NYT best sellers as well as a myriad of unknown indies and better known indies who have smartly cut up their longer books in independent sections, creating out of each title, 3 or 4 books, as Bob Meyer suggested.

The strategy to deal with KU is simple. For example, if you have a trilogy, put all the books of the trilogy into KU and keep the omnibus edition out. If you have serialized your novel, publish every episode as a separate book on KU and keep the omnibus edition out – and available of course in the Kindle Store and on all other platforms (ibooks, Kobo, Barnes and Noble etc).

The implication of this strategy?

Expect the number of titles available on KU to grow exponentially this year. And the pay-out per book read to drop (Amazon pays the author as soon as readers have passed the 10% mark). It’s now around $1.40 per book read – overtime, expect it to drop to around 50 cents and below.

Are subscription services, and KU in particular, like Spotify?  More to the point, should we expect the destruction of the book industry?

The answer is complex, KU is not Spotify, books are not songs. Printed books will survive, what is at stake here are e-books.

First, an observation. So far, indies who became best-selling authors usually made big sales thanks to their “voracious readers”, i.e. people addicted to a certain kind of literature, like the teenager who reads every western that comes out, or the lady who reads every book about zombies, regardless of whether it is written by a big name or an unknown author.

In short, “voracious readers” are the ones who have made best-selling authors out of indies. They’re the ones who, because of their reading habits, were always looking for low-priced books in order to stretch their budget as far as it would go. That’s why going free or setting your book at 99 cents worked so well during the “indie gold rush” that began in 2010 and ended now with KU. It is clear that those price strategies are not likely to work all that well anymore. You can try them for your books that are outside of KDP Select, but not for those inside (there’s no need). And voracious readers are not going to respond to your price campaigns because they are safely esconced in KU and have plenty to read. Indeed, even for them, their Kindle may start looking like it’s over-flowing.

But, hold your breath, there’s a silver lining to KU. For an excellent, balanced and dispassionate analysis, read Jake Kerr on the subject (here); he’s had experience with the music industry and is probably one of the persons best placed to understand what is happening.

Kerr points out that KU won’t really make that much difference to big names like Rowling or best sellers in a niche, but “of all people who should consider KU, new authors are the safest bets for making the most of it”. Why? Because, bottom line, it provides them with excellent exposure to “voracious readers”, the real beneficiaries  of book subscription services and the ones who are likely to stay in KU.

4. Book marketing strategies in 2015 will have to take into account the “non-voracious reader”, that kind of reader who is more picking, more difficult to convince but once convinced, more effective at spreading the word about a book in a convincing way.  And they care about what is said about the book by people who can make professional reviews.They are always looking for a good read but like to check out on the author, they want to hear what is being said about books in the media, they are out to pick the ones that give them something more than mere entertainment from a “genre” novel, they don’t want to waste time with poor quality books. These are people who probably are not going to join KU or any other subscription service. They read less and they read in many genres and they are demanding. They buy fewer books than voracious readers but they do buy books – maybe 5 or 6 a year – and when they do, they are ready to spend more on a book if they think it’s worth it. Price is less important for that kind of reader than content. And what is important to understand: These are the people that turn books into lasting mega best-sellers because there are so many more people like them than there are voracious readers, the voracious ones have always been in a minority.

In a way, we are back to the traditional publisher’s eco-system of literary critics publishing thoughtful articles reviewing books in the mainstream media (from the New York Times to Granta magazine).

This is why Amazon will have to consider doing something to improve the review system in the Kindle Store. Fellow readers have told me that on Amazon they tend to ignore book reviews.  Given the quality of reviews now, they’re probably right to ignore them.

So what’s the problem?  Amazon, so far, has relied on “customer reviews” and the only effort at identifying top reviewers is through the Vine Program  – unfortunately, if you check them out, you will see that those “top Vine reviewers” were not necessarily knowledgeable about books and literature; they just happened to reach the top because of all the other reviews they did on Amazon products, from cameras to jewelry. For example, one of the Vine Program’s top reviewers for books is someone who likes to read and reviews exclusively a sub-sector of science fiction, military sci-fi, and nothing else. That is fine, it’s his right to do so. It is clear that he enjoys spending his time reviewing products like electronic gear which he gets to try out than the (few) books he gets to read.

What Amazon needs to do is to pull together a body of top book reviewers, thus creating a special Book Vine Program, showcasing those professional-level reviews separately from customer reviews. If this were done, book reviews would really help readers in selecting the right read – something that doesn’t happen now.

The digital age so far has been in the hands of Amazon’s commercial eco-system, where books are ranked based on sales in real time – no doubt, an interesting statistic that appeals to the competitive instinct in human nature but that also has a practical use: it allows Amazon to efficiently organize its bookselling website. Makes sense: you search for your favorite genre or sub-genre by refining your keywords, and you get a list of the top best-selling titles in that particular area. But you’re human too, you don’t really read beyond the 25th title in the list before choosing something on the basis of a catchy book description (pitch). Fair enough and a rather clever way to organize a website. But more can be done by adding a new feature, a ranking based on professional-level book reviews – not merely a filter for selecting books that have 4-star-customer-reviews-and-above, as is the case now.

That’s just one thing Amazon could do. And it could do more now that the Amazon-Hachette dispute is settled. Expect growing cooperation between Amazon and the Big Publishers in 2015 and some big surprises – probably not all of them going the indies way, but some might, I’m keeping my fingers crossed.

And this gets us to the crux of the matter:

5. Book discovery remains the #1 problem, still waiting for a solution. Can Amazon propose a solution? I suggested above an upgrading in their Vine Program to make it more appropriate to the book market.

Surely more can be done – for example, in terms of more book fairs aimed at readers rather than at publishing professionals. Let’s make books fun to read! Let’s usher in the Age of the Enhanced E-book, mixing words with images, music and video! Let’s link with Hollywood, with the videogame industry, let’s expand e-book markets around the world, making it easier to buy digital…For example, Google books is using a better payments model than Amazon, easier to use for people who live in  countries like India, and that should probably be the payments model for the future.

6. The rise in tie-in novels. As Amazon famously pointed out to Hachette, books need to be priced low because they compete with other forms of entertainment, from video-games and TV series to sport and travel. But low-pricing is not the only rejoinder to that challenge. Remember the saying? If you can’t beat ’em, join ’em! That’s why you can expect tie-in novels to play an ever more important part in the industry, as the New York Times recently noted (see here).

As authors, we’ve always dreamt of seeing our work turned into movies, like the Hunger Games or Game of Thrones – this is the reverse: books are written after movies have become stellar, like Star Wars or the recent case reported by the NYT, Sons of Anarchy, that recently ended its 7-year run on FX and needed a boost from good old-fashioned books.

7. The world of self-publishing is changing fast and the gold rush is over.  Now everyone acknowledges this and it is no longer the subject of debate as it still was last year. Everyone has also become keenly aware that publishing is a fast-changing and highly complex industry, as it continues to be buffetted by the digital revolution (not least by KU and book subscription services). The way forward for aspiring authors is hard to see and they would be well-advised to carefully consider their options and not rush into self-publishing. This is precisely the kind of advice they can get from veteran blogger and best-selling author Anne R. Allen, see here. I recommend a careful read of that thoughtful post full of interesting information. It’s the first time I see what happened to the first generation of self-published stars like Amanda Hocking who, after selling a million copies on Amazon, had joined traditional publishing (with a huge advance that drew admiration from the press): we are finally getting the bottom line from an editor at St Martin’s press who confesses the disappointment of Big Publishers with their newly acquired self-published authors, saying they discovered the “market was tapped out”.

So, as Anne R. Allen puts it, “the self-published e-book is no longer the new query“. Even if you sell hundreds of thousands of copies, don’t expect a Big Publisher to approach you. And bookstore chains like Barnes and Noble and W.H.Smith and Waterstone won’t like you. Amazon is no longer the “indie playground it used to be”, bonuses are awarded to big star authors who belong to traditional publishers and Amazon imprints. Bookbub, the top advertising venue for indies, has become overrun by “trad pub” titles at the expense of indies. “Social media has been spammed to death. Facebook has become pretty much useless for authors” – and I would add, so has Twitter and Pinterest. The final, most striking comment comes once again from Bob Meyer who told the New York Times: “If you’re not an author with a slavish fan following, you’re in a lot of trouble. Everyone already has a ton of things on their Kindle they haven’t opened.”

In short, if you have chosen the self-published route, be aware that you have to stay in it forever (or change name and genre). You may never get the Pulitzer or the Booker, but you will probably make a lot of money. Provided you sell hundreds of thousands of books of course…So yes, don’t expect self-publishing to wither away, there are still plenty of self-pubbed authors who make a lot of sales (and money), particularly in well-defined niche genres (romantic suspense is probably the biggest, as Bella Andre’s success shows). But the days of the successful “hybrid” author, with one foot in trad publishing and the other in self-publishing, could be soon over. One of the main reasons why a self-pubbed super star went with a trad publisher was to get books in print and into bookstores – but that may no longer be needed with the recent improvements in Ingram’s services (see Porter Anderson’s interesting post on this, here).

Your views about the changes 2015 will bring? Please share in the comments. What else do you see as a big challenge in 2015?

 

Post-scriptum: To usher in the New Year, I’ve lowered the price of my latest book, Gateway to Forever,  at 99 cents. Wonder what that will do to KU (chuckle), but if you’re curious, you can see it here, and this is the new cover:

A love story set 200 years from now…

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Is the Amazon Customer Review System Broken?

English: Studio publicity portrait of the Amer...

In principle, book reviews spur sales. But on Amazon, they don’t seem to. Any author who’s following the sales of his/her books can testify to this: when good reviews come in, they rarely signal a spurt in sales. Yet book reviews are needed to be able to use the better advertisers like BookBub that will not take an author’s books unless a sizeable number of reviews can be shown, and particularly reviews from “authoritative” sources.

Add to this the now confirmed fact that e-book sales have gone very badly in recent months and Amazon’s bottom line is showing it. David Streitfeld in an article in the Business Standard, (see here, it was then picked up by the New York Times) has drawn attention to the fact that “to secure its upper hand, Amazon disrupts its own model.”

What Streitfeld is talking about is this: some $250 million in profits that had been expected by analysts somehow went missing last summer. Why? It seems Amazon practiced deep discounts and giveaways, offering free music, videos and e-books and that hurt profits. And of course Wall Street took note.  The argument is that Amazon is doing this on purpose to secure an ever-increasing share of the market – until it will be the only retail colossus on the scene.

But a lot of people have rushed forward with other reasons for the slowdown in Amazon sales, in particular attributing it to the long drawn-out Amazon-Hachette dispute (it last 6 months!) and continuing disaffection from once-loyal clients.

Whatever the reason, there is one thing that works poorly on Amazon and it’s their customer reviews of books. As long as Amazon doesn’t make an effort to organize it better, Amazon’s hope to compete with Hachette or any other “Big Publisher” is doomed. Because traditional publishers have got their buzz-around-books model down pat: they get top reviewers to write in major newspapers and magazines, they organize big prizes like the National Book Award or the Puliter, all events that drive traffic and draw the public. All stuff that’s closed to self-published authors and where authors published by Amazon imprints get little space, if any.

But we all know the arguments: This is the digital revolution that has enabled self-published authors to compete with traditional publishers. And Amazon rankings work to show who are the top sellers. And Amazon’s system in the Kindle Store is totally democratic, driven by the customers likes and dislikes, allowing everyone to express his or her opinion and the sales numbers speak for themselves.

Until they don’t.

You have books with thousands of reviews…and they don’t sell or don’t sell as much as you might expect. You don’t believe me? Look here (a book with over 2,000 reviews and a ranking on Amazon above #6,000) and here (over 800 reviews and a ranking above #10,000). Of course, there’s a high correlation if you check out the pages with books that have over 1,000 four-star reviews and above (see here) – there are nearly a million titles there, and the correlation is strong at first, as long as the number of reviews is above one thousand, but as you keep going through them, the correlation starts to fail you.

First lesson: you need at least a thousand reviews (more or less) to hope to sell steadily in the Kindle Store. But your book can still peter out, like this one, the Shadow of the Wind: over 1500 reviews and a ranking that doesn’t reflect it, at over #5,000 – and that happens to be one of my favorite books, I highly recommend it, it’s an extraordinary combination of dark poetry and suspense.

Second lesson: reviews on Amazon mean relatively little. In spite of Amazon’s policing efforts (they’ve gone after “sock-puppet reviews” in a systematic way since the 2012 scandal), it is still a fact that a 5-star review can be written by a friend or by someone who has absolutely no idea of literature or more simply, doesn’t know the difference between a good read and a bad one.  Ditto of one and two-star reviews.

Consider this one, about Elizabeth Taylor’s performance (click here), a particularly juicy dyad of 2-star reviews; here’s the screenshot:

As the friend who drew my attention to this said: “I’d like to know what Tennessee Williams would have said.”

Indeed. And to think that the second reviewer (“Kona”) is ranked by Amazon as a “vine voice” and “top 1,000 reviewer”… In short, someone whose reviews are appreciated by both Amazon and its customers. Someone who presumably has an “experienced” taste and a professional touch: you get up there in the Amazon Hall of Fame of reviewers by doing lots and lots of reviews and having lots and lots of people clicking that button which says that “they found the following review helpful”.

So what is wrong? I am not going to go into what happens with reviews of other products on sale on Amazon, the endless electronic gadgets, apparel etc – I shall limit myself here to books (a product I happen to know something about).

And books require special handling. You can like or dislike a book but that is not enough to constitute a helpful review. The next person doesn’t know you and may not share your tastes. So anyone doing a review should always explain the how and the why a book is likeable or detestable: that’s only fair to whoever is going to read your review. And the reviewer needs to come to some sort of conclusion that is reflected in the number of stars awarded. You can’t say something is absolutely transcendentally wonderful and then give it 3 stars because it’s not the kind of book you normally read or like. If something is transcendentally wonderful, then it deserves 5 stars, full stop. There is an organic linkage between the value judgments expressed and the number of stars given.

Reviews are not easy to do.

In fact, since the 19th century at least, book reviews have been in the hands of literary experts, people who are both widely read and know how to express a judgment clearly. This is far from simple and not everyone can do it or has the time to do it. Professors of literature at universities can do this successfully, they have the time and in a way it’s part of their job; best-selling authors can do this, and in general writers are good at this because they were all born readers first. You are never going to be a good writer if you’re not an avid reader in the first place; and someone able to read critically, as Francine Prose has so masterfully explained in her book Reading like a Writer: A Guide for People Who Love Books and For Those Who Want to Write Them (HarperCollins, 2006) By the way, if you haven’t read it, I highly recommend it!

On this blog, I have argued in the past (see here) that Amazon should provide help in guiding book reviews, ensuring that major points normally covered in a professional book review are in fact covered (for example, the setting, the development of characters, plot pace, language/dialogues etc). But if Amazon is not willing to help and possibly fears that this type of guidance would be viewed by its customers as an unbearable intrusion, then there is another way to do this.

Amazon already has in place this Vine Program for reviewers (I blogged about it here). But at the moment, the program covers reviews of any sort, and top reviewers tend to review anything they wish, and remarkably enough, the very top reviewers (highest rank) cover all sorts of products but no books!  No books at all, or very few books, and in a most desultory way, reaping in fact very few votes from online viewers.

What Amazon should do is establish a Vine Program for Books Only. Book review guidelines should be issued and reviewers would be able to maintain their rank only if they follow the guidelines. And, once the system is up and running, the ranking of reviewers could start to take place, in order to arrive overtime at 1,000 top-notch book reviewers. My guess is that those reviewers are likely to be literary types of all kinds, including bloggers who specialize in reading  books in given genres.

Once Amazon has got a Vine Program for Books going, they should consider revamping the book description page, separating customer reviews from Vine Program reviews. That would be very important. Because at a glance, you could read the reviews that you can trust, that you know come from people who love books, read them all the time and can talk about them in a meaningful way.

At that point, and at that point only, would book reviews start to make sense and jumpstart the famous book buzz everyone is looking for, readers and writers alike…

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