38enso Inc

Feed Rss

One night last summer I couldn’t sleep and was surfing the internet. I stumbled across a few articles on POTTERMORE, the start-up web site founded by J.K. Rowing. After five years, they announced their first profitable year. I thought, if it takes five years to break even for one of the strongest brands ever, then what chance does anyone else have?

I then started to think back to the previous decade and all of the start-ups entering publishing. The rise of digital (in ebooks, audio, marketing, publicity, data, etc) has created untold opportunities. But, opportunity does not always lead to success. Frankly, the majority of the start-ups failed. I focused on some of them, but I actually wanted to look at the success stores more. I had consulted (formally or informally) with dozens after I founded 38enso Consulting. So, I had insight to the mentality of various publishing start-ups.

I wrote up a rough outline and sent to Andrea Chambers, head of the NYU SPS Masters Program in Publishing. She liked the idea but had some suggestions to the format to make the class fit better with NYU standards. We went back and forth 6-7 times to get it right. I enjoyed the collaboration as the class was being built.

The class was offered as a 7-week elective in Fall 2017. Not enough students signed up. So, it was postponed.

It was offered again in Spring 2018. This time, 19 people signed up. I had planned for less than 10. So, immediately pivoted and changed aspects of the course.

The first class was in late January, and the last class was this week. Final papers are graded and will soon post the grades.

So what did I learn?

It is an enormous amount of work preparing 2.5 hours of lecture on a weekly basis. It is necessary to create at least and extra hour of material.

  • Video is effective – show a clip of the founders describing their vision.
  • The pitch decks for some of the most successful companies are not that profound, but were effective.
  • Started with 200 companies as possible discussions, and selected 20 (two were suggested by students):
    • Oyster; Scribd; EPIC!; The Atavist; Book Riot
    • Goodreads; BookBub; Open Road Integrated Media; Bookish; Wattpad
    • BookBaby; Smashwords; Callisto Media; the Skimm;
    • Mail Chimp; Uber; Casper; Slack; Warby Parker; Humble Bundle
  • Have great guest lectures. Learn from those who have the experience / who have done it. Our class was blessed to have four:
    • Thea JamesBook Smugglers (also Workman and currently PRH) – a ten-year old company that just ran a successful Kickstarter campaign.
    • Evan Schnittman — OptiQly (also Hachette and Oxford) – his story of how fast things can move in start-ups.
    • Brendan Cahill — Open Road and NatureShare (now at PRH labs) – did a brilliant job discussing funding and process
    • Anthony ZaccardiPost Hill Press (also S&S and PRH) – his two-year old publisher is one of the fasting growing in the industry.
    • I also asked Josh Shanker (BookBub), Molly Barton (Serial Box), John Kilkullen (Callisto Media and many other start-ups) and Thad McIlroy (The Future of Publishing). Other committments didn’t allow them to speak – but maybe next time. Josh, Molly and John all have great stories to tell about running a start-up and Thad has done some excellent research on start-ups in publishing.
  • The final paper was for each student to select a publishing start-up over the past decade and do an analysis. There were some great profiles. One of the better ones was about Aer.io (started by Ron Martinez and sold to Ingram)

We also did a very-deep dive on Amazon. Given that they were a start-up just 20 years ago. Plus, Amazon is involved as a competitor, partner or parent to every one of the 20 start-ups . Amazon is everywhere — as most in publishing know, but their depth and expansion into so many areas is amazing

One of the pieces used to evaluate Start-Ups was from a TedTalk by Bill Gross, founder of IdeaLab:

IMG_3996-2The New York Times Bestseller once upon a time had no separate Children’s book lists. Occasionally a book for children would pop onto the list. But for the most part, the book would hit low on the list and go away quickly. But, as with almost everything else Harry Potter related, things changed once J.K. Rowling’s titles hit the USA.

It all started innocently enough on the December 27, 1998 list. HARRY POTTER AND THE SORCERER’S STONE debuted at the bottom of the list at #16 (with an asterisk that it was tied for #15 – the list only goes 15 deep). The synopsis: “A Scottish boy, neglected by his relatives, finds his future attending a school of witchcraft.”  The description was later changed to “A British boy finds his fortune attending a school for witchcraft.” 

Throughout 1999 –  January, February, March, April, May and most of June, STONE remained on the list bouncing from #6-#10.  A long run for any hardcover on the list, but not unprecedented.

On the June 20, 1999 list HARRY POTTER AND THE CHAMBER OF SECRETS debuted at #1 on the NYT List. STONE was #7 and had been on for 26 weeks. Both books remained on the list in the #3-#7 range for a few months. The third book had been released in the UK and the demand in the US was rising steadily although it wasn’t available stateside.

On the September 12, 1999 list, STONE hit #1 on the list and CHAMBER was #3. Both books would remain on the list until the Times created a separate Children’s book list.

On the September 26, 1999 list, HARRY POTTER AND THE PRISIONER OF AZKABAN debuted at #1. CHAMBER was #2 and STONE was #3. This pretty much lasted throughout the rest of the year. The December 26, 1999 list has the titles at #1, #2 and #3.Screen Shot 2017-10-17 at 10.12.34 PM

It has always been a goal of most writers to make it onto the NYT list. There were author bonuses, bookstores would discount and promote books on the list, and publishers gauged success and celebrated when making the list. But now, there were three Harry Potter titles at the top, and there was no sign of them ever leaving.

It was announced that the fourth book, HARRY POTTER AND THE GOBLET OF FIRE would be released in July 2000. Unlike the first three, this was when the launch parties started. This was the first book to published after the enormous sales had been established. This title would be one more book “clogging” the list and keeping other titles off the list. What is to be done?

The New York Times solution was to create a Children’s only bestseller list. The debuted on July 28, 2000 with the top four titles Harry Potter.

JK+Rowling+JKBut that is not the end of the impact. Because the Harry Potter titles (eventually seven) dominated the Children’s list, the Times created a separate list for Children’s Series.

The amazing success of Harry Potter has had a major impact on the world. The books are record setting, brilliant and a story for the ages. The books were so impactful that they altered the way the New York Times, the most prestigious list in the book world, reported on books and forever changed the way the NYT Bestseller list looks like.

bruceJust finished Bruce Springsteen’s masterful memoir, BORN TO RUN. I am a fan of his music, but am not a “super-fan” and didn’t know a lot of his life. Springsteen is one of the most successful musicians of a generation. Besides his incredible talent and his will to perform, I found many valid business lessons in his story.

  1. There can only be one leader — Springsteen discusses how he wanted to avoid decision-making squabbles and confusion as to who was in charge. He made it clear from the onset that the “buck would stop here, if I could make one.’ (page 149).
  2. You have to get rid of the weak links — A couple of times, Bruce fired close friends who were in the band. In one case, he let go his drummer Vini. It was a combination of things, but ultimately “…it all came down to the fact that my music was changing and I needed someone with a more sophisticated palate.”  Although close friends, Springsteen still fired him to make the band better. (page 199).
  3. Team chemistry is critical to success — Springsteen, when putting together The E Street Band, “You’re not looking for the best players. You’re looking for the right players who click into something unique.” (page 235).  As in business, it is important to have a team with varied strengths that all work together. Success is achieved by everyone knowing their roles and performing them.
  4. Be aggressive and proactive — After one of the band’s legendary performances, he says “at the moment I learned that unless you are very aggressive, very proactive about what you want, what you’ve created can be co-opted and taken away from you.” (page 231).
  5. Contracts are important to set expectations— Although he signed a bad one to get started, it helped launch his career. But once successful, Springsteen let “everyone knew where everyone else stood, and was given and what was asked. Once signed, those contracts left us free to just play.” (page 375).
  6. Look for advice outside your usual group — Later in his career, looking for new inspiration, Springsteen writes “the need to look for direction, input and some guidance, outside of yourself, can be healthy and fruitful.” (page 397).
  7. Some times you have to strike a bad deal just to get in — As with so many musicians, the agents screwed them. The same is of Bruce’s first contract. “In the end, I would’ve signed Mike’s jockey shorts…but in the end, I just said fuck i, I had to get in.” (page 169).
  8. Read books to get a sense of history — Ok, maybe not as much a ‘business lesson’ but still important. Bruce mentions reading “Henry Steele Commager’s A POCKET HISTORY OF THE UNITED STATES, Howard Zinn’s A PEOPLE’S HISTORY OF THE UNITED STATES and Joe Klein’s WOODY GUTHRIE: A LIFE all provided me with a new view of myself as an actor in this moment in time.” (page 291).
  9. Be true to yourself and your mission –This is the basic theme of the entire book and his life. There are dozens of examples where Springsteen did things the way he wanted and what he believed. Even if it was risky and not the obvious path, it was his path. Maybe it could be called “Zen and the Art of Springsteen.”

More than just a rock bio, this is a lesson is business and living a good life.

mrrobot

If you have not watched MR ROBOT, I think you should. The second season just ended and it is a mind-warping experience. It is one of those shows that I am thankful for the internet. After each episode, I can find others online who are analyzing the show. I watch it, I love it, I am challenged by it, and I am confused by it. All is good.

It is the story of a computer hacker.

It is the story told from the mind of an insane person.

It is the story of paranoia.

It is the story of how a small group of people can alter the world’s economy forever.

It is the story of survival.

It is the story of madness.

I am a huge fan of the show. It also brings to mind a few authors I enjoy. So if you like MR ROBOT, I suggest you read (or probably have already read) the following.

  1. Franz Kafka — the original. Because of the change within but also the enduring madness and the paranoia of government powers.
  2. Philip K. Dick — the inner voices and the paranoia again. The descent into madness. Most any of his stories are acceptable here.
  3. Haruki Murakami — the blending of what is real and what is not. One of the world’s greatest authors. He has so many great novels, good one that has parallel worlds is HARD-BOILED WONDERLAND AND THE END OF THE WORLD. It it an amazing book with two intertwined worlds within one another.

kafka dick murakami

 

 

 

 

 

 

 

I am sure there are other writers who are creating novels and stories that would be great for this list.

If you haven’t seen MR ROBOT, I suggest you check it out.

A few weeks ago, President Obama selected five books for his “vacation reading.”

What was the sales impact of the presidential picks?

images

 

Five well received and award winning books. This list has been written about by most news outlets. What i want to do is explore a bit of the impact the President has on actual book sales with his picks.

First off, eliminate THE UNDERGROUND RAILROAD (Doubleday) because it was an Oprah Book Club pick. Although Oprah does not have the enormous impact she did when her book club was in full force, she can still move units. Her pick perhaps influenced Obama? But the sales increase is attributed to her influence not his.

Also take out THE GIRL ON THE TRAIN (Riverhead). This book has been a top best-seller for 18 months and now is a major motion picture. The publicity driven by a big movie always drives sales of the book. Being a #1 best-seller being made into a movie with A-list talent is a ticket to printing money. read it – loved it. Ready to see the Emily Blunt movie.

So that leaves us with the other three books. All three have been reviewed well. All three have a good sales record. All three are now in trade paperback (my favorite format for reading books). BARBARIAN DAYS (Penguin Press) won the Pulitzer; H IS FOR HAWK (Grove Press) is on every “best-of” list; and SEVENEVES (Morrow) is from the acclaimed Neal Stephenson. So all three have great pedigrees.

I appreciate that four of the five are in trade paperback. My favorite format.

Sales? The print sales on all three books went up 30-40% the week after the announcement and subsequently fell about 20% the following week after. So there was a significant bump but it was short lived. Time will tell if the weekly sales maintain at a pre-Obama level or settle back to their normal sales pattern. The numbers are from Neilsen Bookscan. Will be interesting to track the sales over time. I do not have access to the ebook sales, but my sense is there is a similar pattern. 

The bottom line is there was an impact. Although the sales have declined from the previous week, they are still up considerably. These books may end up selling better over the long run because of this publicity.

But also, the President’s picks are all well-received and a sampling of some of the most talked about books of the season.

One last note. The first time and perhaps one of the most profound presidential picks was Reagan’s selection HUNT FOR RED OCTOBER from first-time author Tom Clancy and published by Naval Institute Press. Not only did the sales of the book go to #1, but Clancy became one of the best-selling authors for decades.

 

 

IMG_1827

I was cleaning out my shelves under the TV last week. I came across a bag with a dozen instruction manuals for all of the various parts of the entertainment systems. From the Optimum online connection to the DVD and sound systems and the TV set. I had kept them all for a decade but never looked at them once. If I had a problem, I went online. Look at the bundle!

So much wasted money on printing, paper and shipping:

  1. Optimum Online Quick Installation Guide – but it is 24 pages long.
  2. Acoustic Research Performance Home Theater Hook-Up Guide – this is a poster that has dozens of lines and graphs and is the most confusing thing.
  3. Samsung DVD Recorder Quick Setup Guide – not sure what this is for.
  4. Samsung Instruction Manual DVD-R135 – the same as the one before but in a different style.
  5. Samsung Plasma Display TV Owner’s Instruction – a manual for a TV? Really?
  6. Peerless universal wall mounts assembly instructions – just make sure you find a stud — and if not, anchor it with the plastic mounts.
  7. Harmon Kardon gird to set up stereo – another really confusing grid of lines and diagrams.
  8. Some “Important Safety Precautions!” sheet with a picture of a house – just don’t stand in water when handling electricity?
  9. Optimum Quick Reference Guide – basically the same as #1, just extra stuff.
  10. Cablevision remote control Operating Instructions – remote control? Point and click…
  11. Plus a dozen other brochures and the like- you get the idea.

I tossed everyone of them into the garbage can.

I used to be so diligent in keeping every instruction and manual. I would put them in a plastic bag or a folder. I kept it nice and neat and placed it on the bookshelf next to the entertainment center. Then it just sat there for a decade. Collecting dust.

Not everything is better with our digital world — but instruction manuals are definitely better online and on demand.

 

 

 

SILICON VALLEY is a brilliant show. Co-created by (Office Space, Idiocracy, Beevis & Butthead), and King of the Hill), Dave Krinsky, and John Altschuler.

silicon-valley-s3-e2-conjoinedThe back and forth between the Sales and the Engineers… great discussions.

“The product is …whatever makes the value of that stock go up, that is what we are going to make.”

“I need to move the needle today,”

“It’s now taught in business schools.”

THE CONJOINED TRIANGLES OF SUCCESS:

“Isn’t that just a square?”

  1. Manufacturing and Engineering.
  2. Growth and Sales.

The main thing is to “compromise” to reach the sales goals. This is NOT the way to do things but it is so smart of SILICON VALLEY to have this as the way to success. HBO actually sells posters with this “business plan.”

silicon-valley-conjoined-triangles-of-success-poster-11-x-17-557_272

This show is so great at making fun of business and the tech world. It is all about getting to market quickly — and not about what is best for the product.

No doubt within the humor there must be a compromise between the creation of the product and the selling/marketing of it.

The lesson? Even the most absurd things can be put into practice with a few graphs and some corporate jargon.

 

Last week, a rumor was started when a mall executive off-handedly mentioned that Amazon might open 300-400 bricks and mortar stores. People started getting all excited and upset. Book executives pontificated about the value of bricks and mortar and how Amazon is realizing the need for a presence. The media went gaga — and this was all just based on a throw-away comment by an executive not even associated with the Seattle monster. The executive quickly recanted the comment and Amazon refused to comment.

Amazon has opened one bookstore in Seattle. They have ads up for employment in another location in southern California. Who knows what will happen next? But even a hint of what Amazon might do gathered a lot of angst and comments.

Screen Shot 2016-02-20 at 9.27.16 AMBarnes and Noble stock took an immediate 17% drop on the rumor that Amazon was entering their playground. Although the news was corrected, B&N’s stock has not recovered. To be fair, it has been in a tailspin all year, so the market analysts were already looking for a reason to sell. As of today, B&N stock is down 72% since July 17 (when it was $28.66 a share). It is now $8.30.

So what if the rumor is true? It doesn’t really matter.

What if Amazon actually opened 300-400 stores?

What would happen? Why?

  1. Amazon has more consumer data and spending habits than most any company in the Universe. They could use this information to better target the areas of where optimal locations would be. They already have the addresses of millions of customers, know their buying habits and how much they spend a year.
  2. When Amazon tried to publish physical books and be “more like a NY publisher” they were stymied to make it successful. Although they had a partnership with HMH for sales and distribution, the stores who compete with Amazon didn’t want to carry their titles. So, although it a digital world, there is still a necessity for physical locations to sell certain types of books. This would give Amazon a platform for doing so.
  3. Glut of retail space plus Amazon’s market power could create a series of favorable leases. This might be the perfect time for Amazon to commit to hundreds of locations as retail offers better deals for them.
  4. Amazon is great at “counter programming.” In a world where bricks and mortar stores are closing everywhere, there is an opportunity for Amazon to go against the tide. As others are retreating, Amazon can attack.
  5. Apple is successful at retail. No doubt there is a huge difference between the two tech giants. Apple used the “need to fix the device” reason to open up stores. But since these two companies compete on so many levels, an Amazon store might be a way to compete.
  6. Amazon could use the stores to sell basically anything, Given books is just an opening to all the crap Amazon sells. Having retail outlets might open up opportunities to sell other things. Perhaps music? There are no record stores left.
  7. Would give Amazon a place for consumers to pick up orders that they can’t have shipped home or to the office. Plus, Amazon could offer specials if picked up at a location. They currently have lockers in the major cities, why not put the lockers in the stores — or make the stores into lockers?

The bottom line is regardless of what Amazon does or does not do, even rumor has a profound impact on the bookselling and publishing industry.

 

IMG_0816Although the Academy seldom rewards actors for starring roles in blockbuster movies, it would be refreshing if they gave the Best Actor Oscar to Harrison Ford.

I enjoy STAR WARS, but am not a rabid fan engrossed by the enormity of it. Ford’s portrayal of Han Solo in STAR WARS: THE FORCE AWAKENS was the best performance of the year.

Generally the Best Actor award goes to a role as a historical figure (Lincoln, Idi Amin, Ray Charles, Truman Capote, Harvey Milk, King George VI, Stephen Hawking) or a character that overcomes some major obstacle. But this year, why not give it to an amazing performance in the creation of one of the greatest characters in all of movie history?

A few reasons:

  1. His role was pivotal in the movie. Without Harrison Ford’s Han Solo, there is no movie. He had the most important role in the biggest movie of all time.
  2. Ford brilliantly reprised one of his signature roles nearly 40 years later and didn’t miss a beat. How many actors can reprise a role nearly four decades later and maintain the essence of the role?
  3. STAR WARS: THE FORCE AWAKENS is the biggest movie of all time. It deserves more than just technical and special effects Oscars. IMG_0815
  4. Ford has only been nominated once (for WITNESS) although he has been in numerous great roles. He has been ignored way too often by the Academy. It is time to right this injustice.
  5. Ford is in his 70s, he deserves the Oscar for a lifetime of achievement. Many actors win in a way that represents an entire body of work.
  6. Han Solo is one of the greatest heroes of all time in any medium — movies, books, music, tv shows etc. Ford took what was on the page and made it one of his signature roles. He created an amazing character and for that he deserves to win.

 

Harrison Ford deserves not only to be nominated, but he deserves to win.