Quo Vadis Writing

Back in 2009 I wrote my Master thesis about the optimal way to publish a debut novel in Switzerland using business strategy tools. I had a raw draft of my first novel in my pocket and slowly started to think about how to get it out there. The thesis was accepted and I got my MBA, but I was wrong about my conclusions - not back then, but in retrospective. Well, maybe even back then.

Synopsis of my thesis

Amongst other results, the analysis showed an expected further concentration in the publishing industry and an erosion of margins. It also predicted an overflow of manuscripts in the market based on the possibilities of the digitalization. 

Basically, I developed two strategy options:

• To create a pull via social media in order to overcome the lack of publicity and find a publisher as a second step
• To go the self publishing route using digital media solutions

Later, I abandoned the second option due to the expected erosion of margin as well as the lack of experience as a debut novelist with regards to the end-to-end publishing process. 

How it developed in the meantime 

At the time I wrote my thesis, e-book readers were still in their fledgling stage. Kindle 2 and Nook had just been released and back then in Europe they still had the nerd-factor. But the real revolution was the introduction of KDP in the US, cutting out the middle men and gatekeepers. However, KDP was not released in Switzerland in 2009.

The expected concentration took place. There is this wisdom in business that every industry will consolidate until 7 +/-2 competitors control 80% of the market. Starting in the 1960 the book publishing industry saw a consolidation down to the current big five. Then the technological development disrupted the market. Recent statistics from Author Earnings indicate that only a third of e-book sales are the big five and over 40% are self or indie published. Obviously this is only for e-books, however based on Nielsen, e-books made 30% of overall book sales in first half year 2014. 

At the same time, we've seen major bookstores like Borders disappearing and Barnes and Nobles stalling mainly due to the increasing competition through channels like Amazon. Interestingly, small independent bookstores seem to be more resistant than I originally expected. 

However, while digitalization led to concentration in channels, it also led to a higher variety in content and worked as a catalyst for small businesses. As every other entrepreneur, independent authors need suppliers during different steps while creating an e-book, from editing, design services to marketing and consulting.

You might say the gatekeepers have been watching quality and with their falling the quality is at risk. Well, I would say quality is now defined by the market - I call it voting with the wallet. About a year ago I bought a book from an independent author in Wyoming. He was a park ranger at Yellowstone and wrote a thriller about a terrorist attack with a potential natural disaster. The story was ok with a nice plot twist, but there was far too much back story in it. His knowledge about the park was his darling and he wasn't willing to kill it. Honestly, I don't remember the author and I probably won't buy another book from him. The quality was just not good enough. However, the amount spent was low enough it did not really hurt.

Why should I have seen it coming

Well, I was right in some aspects, like the margin erosion, but I didn't realize it would hit more the publishers than the authors. I also didn't consider the additional additional sales due to the lower prices and the increased availability of the digital content.

But I was wrong about some other major aspects.

When I wrote my thesis I was focusing too much on the impact of digitalization on the creation of content and the use of existing social media. I should have seen that the real change will be in the distribution. Other industries had similar changes, from retail via tourism to news. I also did not consider the potential of additional online tools, like goodreads or bookbub.

I have not seen all this, because... well, because I have no crystal bowl. But some of it would have been foreseeable by having a more open mind and include broader basis of interviewees, rather than focusing on publishers, bookstores and authors. They tended to be too much focused on threads and not seeing the opportunities of the digitalization.

I also should have taken a look at the US. Europe, except maybe the UK, tend to adopt change later than the US.

Quo Vadis Writing

That's the question. Over the next blog posts, I will try to give an outlook where the industry will go. This time I'm going to focus on one topic or aspect at a time, from content creation via distribution to marketing and sales. Probably I'll still be wrong, but once in while it's healthy to try to look ahead.

In that sense, happy scrying,

Your writer in a foreign land

The Third Hat: Marketing and Sales

As a writer you need two hats. One is for writing, where you should limit your thoughts on such profane things like grammar or the perfect word. Everything you write is good the way it is. The other one is for editing. With that one on, nothing is good enough. It has a built-in adverb-adar. At least that's what I thought so far.

Well, there is a third one which is for marketing and sales. Wait a minute, I hear you say. That's my publisher's and the bookstore's job. You are right and if you feel, you are in good hands and you'd rather focus on writing, you can stop reading now and go writing. However, even if you are with a traditional publisher, marketing and sales will become an increasingly important part of a writer's life. A writer will become more and more an entrepreneur, with all upsides and downsides. So, let's get started with some basics and then climb up the tree to the fruits. 

Marketing vs Sales

In a nutshell, Marketing is the planning side of how to sell your books, sales is the moves and measures to increase the number of sold books. With other words, marketing is strategic, sales is tactical. 

Marketing

There are several concepts in marketing, from the 4P-model, that evolved into the 7P-model, via AIDA (Attraction-Interest-Desire-Action) to the design school model that largely bases on the SWOT analysis, and you can be sure that this is not the end of the story. Technological and social change continuously impact the different models, but ultimately they still circle around the same fundamentals. 

Following, I'll use the 4-P model (marketing plan) to make my point.

Product

The core of the product is given, will say not depending on marketing. You hear it from all sides - write what you love. Don't write for the market. Next to all the creativity arguments there is a strong marketing argument; due to the identification and production lag your book will hit the market with thousands of others that tried the same. 

However, there are things around product you have to decide and which have an impact on the other P's and vice-versa. Print and e-books have different needs for place and different price tags. The book cover is probably the same for the front, but the spine and the back give you an additional option for print books. 

I can only scratch some dimensions here; there are a lot of decisions to be made, including font and title and I haven't even started with the audiobook angle.

Place

Which are your distribution channels? Amazon/KDP, Kobo or you own webpage? You could also select print on demand and try to get into some local bookstores. Ultimately it all boils down to how easy it will be for a potential customer to buy as soon as he decided to - the link between desire and action in the AIDA-formula.

Price

I already talked about price points and price elasticity in my last blog post and in April I re-blogged a post by David Gaughran about e-book pricing. However, outside the direct impact of pricing on sales, there is a psychological component to it.

A book is a typical experience good. Despite sneak peeks, book covers and reviews, a reader knows its value only after he read it. As a consequence he attributes value through various indicators, including price. In general, an e-book for 2.99 is perceived to provide a higher value than a book for 0.99. 

Last but least, giving away an e-book for free might provide you with an increased e-mail list, but you also have to be aware that free stuff might also transmit the underlying message of no value. One way to get around this could be to label the e-book 1.99 and offer it for free if signing up for a newsletter, but we are already getting into sales here.

Promotion 

Promotion is all about information, i.e. how do my potential customers know about my product. For books, this is the most crucial part of the marketing mix, because it has a direct link to the number of sales. The more people notice your book (attraction), the more will request more information, the more will have the desire to buy it.

In this sense, notice does not only mean see, but also be open for it or expect it. When you are not open for a message, you perceive it as spam (products offered via Facebook, unwanted e-mail offers or buy my book-tweets). On the other side they are open when they expect a message, e.g. in a newsletter or information about the progress of your new book on facebook or twitter. 

In a second step, they should have valuable information available at hand. At best, there is a seamless handover between noticing, information and the ability to purchase and receive the product as fast as possible.

Last but not least, don't forget to track the success of your promotions. Only that way you can improve the success and with the possibility of the digital media it isn't even difficult. A simple way would be to use specific links that allows the tracking of each campaign.

 

Sales

Sales campaigns are temporary adjustments to the marketing mix in order to increase sales. Usually it includes a promotion combined with a price reduction or a value add. You could for example offer your book for a special week with a discount or offer two book at the price of one. In addition, you have to tell the world in one or the other way (newsletter, fellow blogger/podcaster). BookBub is a typical sales campaign. 

Product as well as place might change too, but not necessarily. Offering a signed copy is a change to the product and a sales campaign during a book signing is a change to place.

You have almost limitless options and combinations - some work better, some don't. I'm following The Creative Penn podcast and the Sell more Books podcast and I'm always astonished about their tips and ideas.

 

Portfolio Management

As soon as you have a second book out, you can start thinking about portfolio management. Again, there is no right or wrong. However, different combinations have different advantages. Spreading your stories over different online channels might reduce the cluster risk, but it also dilutes sales. Offering some stories on KDP and others on Kindle unlimited gives you different type of income streams, you can even think of grandfathering stories on Kindle unlimited or writing a Kindle unlimited series. Again, sky is the limit.

But why do you tell me all this?
Often, when I read blog posts or listen to podcasts, the terms and ideas are mixed up. Promotion is called marketing and then the article is about sales activities, or in another example the place and product are completely ignored and it is all about getting your name out.

Marketing is much more; a strategic way of thinking in order to generate optimal revenues and sales campaigns are tactical ways to boost sales in a given timeframe.

The moment all i's are dotted and all t's are crosed, the details of the market introduction should be defined and the promotion should already have started. However, it should be a well thought-out decision rather than just the way the author always did it. And after it is published, the author has to change the hat and stay on top of it - keep the ball rolling. Then it's time for thought-out sales campaigns.

Happy selling or should I say happy marketing

Your writer in a foreign land

The Craft vs. The Money

Recently I read and heard a lot about money in writing, business and all the discussions around it. Last week I read a blog post from Michael Hyatt about "Why you should do it for the Money (and Stop Feeling Guilty About It)" which he had re-published on Facebook, and I remembered an earlier one from K.M Weiland about "3 Reasons You Shouldn't Be Writing for Money" and guess what; both are right in their own way. 

I don't know when this discussion started to take off, maybe with the increasing indie movement. Although I'm pretty sure it was already cooking before that. The following blog posts addresses writers that want to make money in one or the other way. If you write for fun, please go on - write and publish for free. There is nothing wrong with that, but this blog post isn't for you then.

The Seeming Conflict

At the first glance, this strikes me as a simple conflict of targets. Either you focus on the craft (e.g. more research, longer writing cycles, more reviews and edits equals less books produced) or you focus on making money (e.g. more books produced in the same time equals more money). This conflict of target is similar to one most companies face: Quality vs. earnings.

But is this really a conflict? I can already tell you, no it's not; neither in business nor in writing. In business you can reduce you quality to a certain point in order to increase quarterly profits, but usually you damage long term profits much more. In writing it is the same, but before we get there let's look at the industry.

The Industry and the Changes

Let me get this very clear at the beginning: Writing is a Business. The moment a writer wants to earn a single cent from his books it is a business. Even when he simply wants to get break even and have a payout for his investments. It is a business. Hence, lets look at the value chain. 

The Traditional Model

In a very simplified view, the writer is responsible for writing the story and does rewrites and edits to some degree on his own, to some degree requested by the publisher. At a certain point the product is handed over to a publisher, who improves the work together with the writer in order to make it publishable (i.E. sellable). The publisher also takes care about the physical production as a book or e-book as well as the marketing and sells the product together with a bunch of other products to the book stores who act as distributors (including Amazon). At the very end, the distributors sell the books to the consumer. 

In addition to the real cost the publisher also takes some risk with regards to the unknown trends in the market. Nobody can predict, which book will be picked up by the marked generating enough profit for the whole value chain. The distributors only take limited risks as they don't really invest in a certain book. The writing also takes only a limited risk as he usually received an advance. The publisher on the other side pays an advance and invests into the product as well as marketing and sales. He copes with this risk by spreading the efforts over a high variety of books.  This approach is similar to Private Equity firms investing in different start-up companies, hoping the next Twitter or Facebook is among them.

In this model the author gets about 9% of the book price (after 1% goes to the Agent). Lets assume the book is priced for $20. In order to have a monthly net pay of $2,000 for his work, physical book sales must be at 1,111 per month. With e-book prices it is worse, as e-book prices are usually lower around $6.99 to $9.99. As an example, at $7.99 book sales would have to be at 2,781 books per month. In reality this would probably be a hybrid calculation - with a 20% share of e-books, the number of monthly book sales would have to be 1,263.

The Indie Model

In the same simplified view, the indie model cuts out the publisher and goes directly to the distributors. All cost related to the additional review, marketing and sales, but also non physical cost like networks, risk taking and know-how, have to be taken over by the writer. 

In order to keep it simple, let's do the above calculation for e-books sold via Amazon KDP with a book price of $1.99. In order to have the same $2,000 per month with a royalty rate of 70%, an author has to sell 1,436 books. But with this amount none of the fixed cost is covered. Most of the additional work will stay with the author, especially the cost for the additional reviews and edits, but also the efforts for networking, marketing and last but not least the risk. 

For the sake of the calculation let's assume a non specified writer needs 6 months to produce a book. For review, editing and book cover cost end up to be between $3,600 and $5,000 I've taken the lower end examples out of a blog post from Miral Sattar "The Real Cost of Self Publishing a Book". With these additional monthly cost of $600 to $800, the number of books sold increases to 1,866 and 2,010 respectively.

Impact on the Writer

Don't misunderstand me, I am not arguing in favor or against one or the other model. Additionally, there are other aspects to be considered, such as the rights to your book etc. However, every writer has to answer the question which model he selects for himself. Each of the models has advantages or disadvantages. 

From a monetary view point, the traditional model means less work and risk, but also less upside potential and the indie model means more work, more risk and more upside potential. Now here's the clue. Basically, the author has four options to increase income:

Increase Sales of One Book

The author can try to increase the sales of one particular book by increasing marketing cost and efforts. However, sell more of one book means usually sell to new customers. This is always more difficult than selling new products to existing readers, given that they enjoyed the previous books with their quality. Additionally, marketing studies show that there is a limitation in efficiency and effectiveness with marketing activities.

Increase the Book Production

Increasing the production of books is probably the easiest way to make more money. One one side every new book has a tickle-down effect on new books and on the other side new books with new covers and new stories mean attracting different readers.

Ask for a Higher Price per Book

Simple, isn't it? Well it's not, because there is something like price elasticity. In simple terms; the lower the price the more you sell. The degree of how much more depends on the product. Gas usually has a steep price elasticity as past price increases have shown. For e-books there is probably not enough data yet to plot a reliable curve, but looking at the feedback of various indie authors prices between $0.99 to $2.99 seem to result in reasonable books sales whereas higher price points significantly reduce number of sold books. Hence, there are limitations for higher prices as they are counterproductive and result in less revenues.

Reduce Production Cost

You can reduce the production cost to almost zero; no editing, do your own cover designs and do the formatting and digital conversion yourself. You even don't need an ISBN. 

Out of above options, there are two low-hanging fruits: 

• Produce more books (i.e. less effort for plotting, reviewing, editing, proofreading)
• Reduce external cost for editing, proofreading, formatting

There is a built-in incentive to reduce the quality of the product, if there wouldn't be...

The Importance of the Craft
And that is where the craft comes into play. The will, the poise and the integrity towards what it means to write a good book. The craft needs to be the holy grail, basic motivation to write. Because if it isn't, the money will not follow. Readers might buy one book from you, but if the craft isn't the foundation of it all, they probably won't buy another one. It's the same as in companies with the quality. You might buy it ones, but the second time you will switch to a better product if you weren't satisfied. 

The craft is the soil, to grow the tree of money. But there is more to it, even a tree needs water, nourishment, some cut downs and a lot of care. More about this in next week's blog post.

Happy crafting

Your writer in a foreign land

Midweek teaser: You Are Not Special

Inspiring commencement speech from Wellesley High School. 

This is not only true for high-school graduates, but also very much for new writers. I don't want to know how many new writers emerge every across the country, trying to get their stories on paper and into the bookstores. The message is the same as in the video: You are not special, but you might create something special.

You are what you create. Write the story to have it written, not to sell it. Sales will come, if you do it right.

http://m.youtube.com/watch?v=_lfxYhtf8o4

Writing Advise: Read a Lot

Among all writing advise there is one, which I find the most compelling one: Write a lot, read a lot. I'm trying hard to write a lot, keeping up with my daily writing goal and most of the days I'm succeeding. Well, reading is a whole different animal. Still, I do what I can.

Here's my bookshelf:

Books I have (and want) to read because they are part of the culture. Books kids read in high school and I missed just because they were not on our reading list. I have to catch-up on these books:

• The Catcher in the Rye by J.D. Salinger (tick)
• The Old Man and the Sea by Ernest Hemingway (tick)
• The Great Gatsby by F. Scott Fitzgerald (tick) 
• This Side of Paradise by F Scott Fitzgerald 
• To Kill a Mockingbird by Harper Lee
• Of Mice and Man by John Steinbeck
• Great Expectations by Charles Dickens
• Frankenstein by Marry Shelly
• War of Wolds by H.G. Wells
• Fahrenheit  451 by Ray Bradbury
• Brave New World by Aldous Huxley
• Sanctuary by William Faulkner
• Lolita by Vladimir Nabokov
• Etc.

Some books I actually read in German, but to get the original language I probably want and need to read them again:

• The Hitchhikers Guide to the Galaxy (all five books of the trilogy)
• The Innocent Abroad and Adventures of Huckleberry Finn by Mark Twain
• The Time Machine by H. G. Wells
• One Hundred Years of Solitude by Gabriel Garcia Marquez - I read the original and I would really love to see how they translated the Spanish
• The Lord of the Rings by J.R. R. Tolkien
• Breakfast at Tiffany's by Truman Capote
• Snow Falling in Cedars by David Guterson
• Uncle Tom's Cabin by Harriet Beecher Stowe
• The Outsiders by S.E. Hinton
• Gone with the Wind by Maragret Mitchell
• Etc.

Of course, I also want to keep up with emerging good stuff:

• A Short Stay in Hell by Steven L. Peck (tick) - this was a writing tip from writing excuses and I love it!  
• Amped by Daniel Wilson (tick)
• Odds Against Tomorrow by Nathaniel Rich (tick)
• Time Keeper and The Five People you meet in Heaven by Mitch Albom (tick, tick)
• Myth Man by Alex Mueck
• Shambling Guide to NYC and Ghost Train to New Orleans by Mur Lafferty
• Empire State by Adam Christopher
• Etc.

Additionally, further advise from fellow writers who already made it is part of the reading list:

• On writing by Stephen King
• Beginnings, Middles and Ends by Nancy Kress
• Crafting Unforgettable Characters by K.M. Weiland
• 500 Ways to Tell a Better Story by Chuck Wending
• Etc.

And last but not least, there is the long, long reading list and so little time:

• Robot Dreams and Foundation Series by Isaac Asimov
• Anything from Philipp K. Dick
• The Shadow of the Wind by Carlos Ruiz Zafón
• Catch 22 by Joseph Heller
• Plot Against America by Philipp Roth
• A Clockwork Orange by Anthony Burgess
• Slaughter House Five by Kurt Vonnegut
• Fear and Loathing in Las Vegas by Hunter S. Thompson
• Perfurme by Patrick Süskind
• Neuromancer by William Gibson
• Trainspotting by Irvine Welsh
• Cider House Rules by John Irving
• Lord of the Flies by William Golding
• Kiss the Girls by James Patterson
• Starship Troopers by Robert A. Henlein
• Enders Game by Orson Scott Card
• The House of Spirits by Isabelle Allende
• and many, many more

Happy reading

Your writer in a foreign land

Tribute to Gabriel Garcia Marquez

At first, I wasn’t sure if I should write a tribute to Gabriel Garcia Marquez, at least not as aspiring writer. How presumptuous, as if I would critique The Old Man and the Sea or War and Peace. But I could do it as a reader.

And then again I can't really separate the reader from the writer. 

I loved Gabriel Garcia Marquez' stories. I loved the magic and the sometime surreal touch I also found in Argentinian films. A way of looking at the world with the ken that there is more in the world than just matter. I was working in Buenos Aires, when I got his first book into my hands “One Hundred Years of Solitude”. I read it Spanish, it took me almost three month and not only helped my language skills, but also gave me another view on storytelling. After that I picked up the “Autumn of the Patriarch” and again I was impressed by the way he was able to create this vacuum of power, an almost Kafkaesque reading. With “Love in the Time of Cholera” I was halfway through until I got stuck, mainly because I was back in Switzerland and reading in Spanish became much more difficult.

At the same time I was writing my travel journal on the emerging internet, a kind of blog without knowing back then, what blogging means. Looking back, it was the point where I started to think about bringing all these stories and ideas I had (and still have) on paper. Probably it wasn’t him who triggered this wish to write, but he’ll be always connected to that time and my experience.

I loved Gabriel Garcia Marquez stories, I still do. Maybe it’s time to pick up “Love in Time of Cholera” again to continue reading it. I’d love to.

Your Writer in a Foreign Land

Starting Point

When you come from another language you realize several pain points as soon as you start writing. 

First your vocabulary is mostly business, well at least mine was. Also, you need to overcome powerpoint speech or technical requirement sentence building or whatever other use of english you are coming from. And then there is punctuation, where to put the commas or how to write dialogue tags, especially, where to put the commas.

Don't get me wrong, you know all these in your mother tongue; you've learned to write in school and with the writer already set-up in your head, you probably even tried it out and it worked. You know how to write - in German or French or Italian or whatever language you've been raised.

Writing in a different language exposes you to a new layer of complexity in all parts of writing, setting the scene, plotting and character development. 

I started this blog to let you participate in my journey discovering the differences but also the similarities between english and german and my struggle with it. 

There is one first advice I got from a pro via Twitter: Read a lot. An advice I already put in place - with a little twist: Read with focus on vocabulary, punctuation and dialogue. Oh yeah, read a good mix between current fiction and the classics. 

Apart of that, writing and sending in short stories seems to be an efficient way to shorten the feedback cycle and improve the crafts.

And if find an error or a misplaced comma, just write me an e-mail; I'll be happy to correct it.