#3 From Barry Eisler - The Writer as Entrepreneur

All writers think of what they do as an art. Smart writers understand that writing is also a business. Really smart writers see themselves also as entrepreneurs.

As a veteran of both a Silicon Valley technology law firm and a Valley start-up, I’ve known people who labored for years late at night and on weekends to create a new product while holding down a full-time day job; who, when the prototype was ready, found a venture capitalist to help make the prototype commercial-grade, validate the product by attaching the venture capitalist’s imprimatur to it, and introduce the entrepreneur to prospective customers; who then started a real company and learned to run it, creating new products and selling them to new customers in new markets.

You can learn a lot by applying this classic technology entrepreneur model to what writers do. The writer labors alone for years creating the first cut of a manuscript (product). When the manuscript is ready, the writer finds an agent (venture capitalist), who invests not money, but time in helping the writer re-write and otherwise tune up the manuscript. When the manuscript is more ready, the agent introduces the author to publishers (customers), with the agent’s imprimatur helping to get the publishers to take notice. The publisher buys the book; the author quits his day job, and thereafter devotes himself to his new business – writing new books (creating new products) to sell to his original publisher (the original customer) and to new ones (foreign sales and subsidiary rights).

In technology, the closest analogue to the writer’s business model is the so-called fabless semiconductor company. Big semiconductor companies like Intel run multi-billion dollar fabrication plants to manufacture their chips. But there is also a smaller breed of chip company that doesn’t run the fabs, and instead only designs chips and then licenses the design to the Intels of the world for subsequent manufacture, distribution, and sale. These fabless companies create nothing but intangible intellectual property (copyright, patent, trademark, trade secret). Their business is licensing that intangible property to someone else. Likewise the writer: the product you sell to your publisher isn’t really a book, but rather the underlying copyright in that book. The publisher then prints the books, markets them, and sells them.

From this model, several important points emerge:

First, creation of the product (writing the book) is only the first step. You are now running a company (albeit a sole proprietorship), and your company is responsible not only for creating the product, but also for marketing, branding, and selling it. Yes, other people will be involved in these efforts (see below), but the ultimate consequences of success or failure will be yours alone. Run your company accordingly.

Second, although in various ways your and your editor’s interests are aligned (you both make more money from a better book), and although your editor might also become your friend, the most fundamental aspect of the writer/editor relationship is that of salesman/customer. Never lose sight of the fact that your editor is your customer. Before anything else can happen, your editor must decide whether to buy, and how much to pay for, the product (copyright in a book) that you are trying to sell him. Do you feel that your manuscript is weak, but that once you show it to your editor, she’ll help you make it better? Maybe she will. But, in any other industry, would you show your customer a product that you didn’t feel was ready? Bear in mind, “ready” doesn’t mean perfect; it means good enough to accomplish your objective, which in this case is a sizeable advance; the editor’s enthusiasm sufficient to infect the publishing house (no corporate customer makes a buying decision alone, and you have to remember that not just your editor, but the entire publishing house, is your customer); the customer’s ongoing impression that you are professional and can be trusted to turn in nothing but similarly “ready” products in the future.

It bears mentioning here that, unlike your editor, who is your customer, your agent is more like your partner. Your editor is buying something from you. When he does, you and your agent will make money the same way (by dividing revenues, commonly 85/15). This financial dynamic puts you and your agent on the same side of the negotiating table. But even here, as in all partnerships, the principals will stay together only so long as they each believe it is in their interests to do so. Accordingly, the points in the paragraph above bear thinking about in relation to your agent, as well.

Third, strictly speaking, readers are not your customers. They are not even your publisher’s customers. They might not even be your publisher’s customer’s customers: Putnam sells to Ingram, who sells to Barnes & Noble, who (finally) sells to a reader. There are many layers of distribution, marketing, and sales between you and what is known in the software business as the end-user – the reader. Obviously, this doesn’t mean the reader is unimportant to you; the reader is still your indirect customer, and if readers stop buying, so will everyone else in the customer chain. But it does mean that your marketing efforts should be directed, to the extent possible, at all levels of the customer chain. Almost all writers know they should market to readers; author websites are a good example of this type of effort. But how many writers recognize, too, that they need to market to their publishers? Does Dell Computer want to know that Intel is investing in chip R&D? Of course it wants to, and Intel markets not just to end-users (computer customers), but to the Dells of the world, too. Similarly, you should keep your publisher apprised of your own R&D efforts: conferences you attend, connections you make, ads you take out, media coverage, etc. When your customer sees you investing in yourself, your customer will be confident that she ought to invest in you, too.

It all comes down to this: as an entrepreneur, you have a unusual degree of control over your business future. That is to say, you are unusually responsible for that future. Some people find this degree of responsibility intimidating, and this is one reason entrepreneurs are rare. But if you believe in yourself and you know what you’re doing, what could be more comforting than knowing that you are in charge of the course of events? All that’s needed is the right roadmap, and I hope the points above will provide a good start.

Suggested further reading:

Dale Carnegie, How to Win Friends and Influence People
Bill Davidow, Marketing High Technology
Roger Dawson, Secrets of Power Negotiating (audio course, available from Nightingale Conant)
Guy Kawasaki, Rules for Revolutionaries (and all of Kawasaki’s other books)
Brian Tracy, The Psychology of Selling (audio course, available from Nightingale Conant, also available as a book)

Comments

[JA Konrath]

Excellent post.

I'd add that all businesses have a structure to them, but the structure isn't always apparent, even to the business.

The hackneyed expression "think outside the box" has some application here.

The more that you learn about the way publishing works, the more that ideas spring to mind about who to best exploit it.

I found an agent in an unconventional way. I studied the industry and figured out what should work, even though all the how-to books said otherwise.

I've been selling my books in unconventional ways as well. I'll spend 6-8 hours in a bookstore, shaking the hand of everyone who walks in. I've met thousands of people, and sold thousands of books. Not too many other authors take this approach.

I consider short story sales and drive-by signings essential to a career, and I've been preaching this for a while. Not because Writer's Digest told me so. Because I looked at the industry, found a niche to exploit, and exploited it.

These methods may not work for everyone. But other methods could.

To be an entrepreneur is to be an innovator. Necessity is the mother of invention, and authors need to find better ways to sell their books, or else they won't last long in this business.

Learn all you can about publishing. Not only from the outside, but from the inside as well.

You're a consumer, as well as a writer. What makes you buy a book? Figure that out, and concentrate your efforts on reproducing that effect for other consumers.

[Barry Eisler]

Agreed on all points, Joe, especially your last paragraph. Putting yourself in the other person's shoes -- that is, trying to see the world through his eyes, experience and understand it the way she does -- is the key to success in communication, business, romance... and survival, if you're John Rain.

:-)
Barry

[elizabeth]

Great ideas here, Barry, and as a pre-published author, I'll take them to heart. As I was reading your post, I was reminded of when I worked in the big bad corporate environment and how the customer-vendor relationship evolved into, over time, a very specialized relationship. The vendor was not only informing the customer of his constant investment in time, expertise, product development etc, she/he was also listening, very carefully and very fully, to what that customer needed from the vendor. And a successful vendor would make modifications to her/his product to satisfy that customer's needs. If I follow your resoning then in applying the business relationship to author-publisher relationships, in order to sell successfully to the publisher, you need to listen and modify your product, your work, as needed. Hmmm. So where do creating a unique piece of art and meeting market demands meet? Or is this just the inevitable conflict that those of us who create face in this cold nasty world?
Thanks for the great post.

[Jessica Keener]

Stupendous post, Barry. You've hit the mother lode on this one. Entrepreneurship is what this writing business requires. Nothing less. And thanks for the detailed analysis. I'd also like to suggest adding TIME TO MAKE THE DONUTS to your recommended reading list. I co-wrote it with the founder of Dunkin' Donuts, Bill Rosenberg, and though the book is about starting a coffee and donut franchise/empire, it's really about how to think like an entrepreneur. Rosenberg was a consummate innovator. The lessons I learned from his stories and life experiences have helped me attempt things as a writer (of fiction and non-fiction) that I might not have attempted before--not in the writing itself but in the business end of writing. Because of my time spent with Rosenberg, I've gotten braver about following my so-called “crazy ideas.” Recently, I sold 200 books to a professor who directs an entrepreneurship program at a university in Florida. The “sale” involved a few emails and some phone calls. But I don’t think I would have tried making those phones calls five years ago (pre-meeting Bill Rosenberg). So, yea. I’m ravenous when it comes to the advantages of entrepreneurship for writers. I think entrepreneurship is perhaps the only place where the art and commerce of writing have a chance to successfully co-exist.