Technology and Business Book Publishing, Digging Deeper

In the last post, I focused on the downside of technology: how publishers have a long history of jumping on the latest technological invention before anyone had a sense of whether there were viable business models there. In this post, I want to dig deeper to explain why this happens in an industry full of incredibly smart people.  

First, publishers are often fearful of losing the label of “first adopters” or, at the very least, “early movers” when it comes to new technological formats or products.

But a most pertinent Druckerism can help us to understand why publishers often leap before they look.  In 1964, a prescient Drucker warned managers of the one thing they need to ensure success and survival: 

The purpose of a business is to create a customer…and knowledge alone gives the product of any business that leadership position on which success and survival ultimately depend.”        

The problem is that when publishers “overshoot” by buying into a new technology lock, stock, and barrel, they don’t possess the knowledge they need to make the kind of multi-million dollar decisions needed to launch a new publishing imprint or division.  That insufficient knowledge led smaller e-book companies to file for bankruptcy, but even the largest players fell prey to their own over-the-top ambitions.

In late 2001, Random House, which was one of the most aggressive houses to leap on to the e-book train, announced not that they were getting off the train entirely, but that they were shutting down its e-book division called “AtRandom.” Once a giant like Random could not make it work on a large enough scale, it send shivers down the spines of the rest of the publishing executives throughout the industry who had made similar “bet the job” decisions.

However, my thesis is not that these senior managers are dumb or uninformed. The opposite is true. These are incredibly bright, talented publishing executives. The problem, in part, is that in our industry it is very difficult to gain the kind of knowledge that Drucker spoke of above. And in Drucker’s view, that knowledge is gained in the marketplace—“the only place that matters,” he called it. 

In business book and most all other types of publishing, it is very difficult to obtain that knowledge. That’s because unlike other consumer products companies, we are putting out upwards of 100 or 200 or more “products” per year (depending on the size of the publisher, of course). Coca-Cola does not bring out 200 new products per year, nor does Gillette bring out 100 new razors or any other new men’s products. Lastly, it is very difficult to test market a book. One of my early mentors asked me “if I knew what marketing research in business book publishing is? When I had no response, he answered “the first printing.”        

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Last week, I promised to discuss the positive aspects of technology on publishing, and there are many. I keep my word. That’s what is on board for Friday’s posting.       

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