SPR interviews Mark Coker of Smashwords

Smashwords is a service for helping small and self-publishers format ebooks in diverse formats (for example: kindle, epub, PDF, Palm) and distribute them through diverse retail channels (for example Amazon, Apple, BN, Kobo, and Smashwords itself). A few weeks ago I sent Smashwords founder Mark Coker a note asking if I could interview him for my site Wetmachine & SelfPublishing Review. He said yes; I sent him some questions about the current & future state of book publishing, and he answered. His replies appear below the fold (cross-posted on Wetmachine yesterday).

I found his answers interesting and direct, and I think you’ll enjoy reading what he had to say.

Q: When I told a list I’m on that I was going to be interviewing you and solicited questions, my friend Dirk replied: “Please ask him what the fuck is going on.” I think that’s a pretty good place to start. Can you summarize the important trends you see in publishing right now?

I can sum up this answer with one word: Change.

Now, more words… For the last century, publishers controlled the means of book production and book distribution. If authors wanted to reach readers, they had no choice but to kneel before the publishing oligopolists who had the power to determine who got published, and what readers read. The system worked fantastically well for the publishers, moderately well for readers, but less well for the authors they published, and even less well for the vast majority of authors who could never gain access to the cliquey club of the published. And like most clubs, the dream of the club often exceeds the reality of the club. Most authors lucky enough to have their books accepted by this old system received little more than fleeting ego gratification and bragging rights.

Change is an exciting, terrifying thing. It represents both a threat and an opportunity to every author and publisher.

The other week I gave a presentation to group of students at NYU, and I just posted about it over at the Smashwords blog. I titled it, “How Indie Ebooks Will Transform the Future of Book Publishing.” I started the presentation by quoting my favorite Tool song, Rosetta Stoned. It’s a song about a guy abducted by space aliens, and the aliens give him a message he’s supposed to deliver to his fellow humans, “a message of hope for those who will listen, and a warning for those who do not.” This is the message I shared. My message was that authors and publishers face greater opportunities today than ever before to reach readers with books. Yet authors and publishers who fail to adapt to the change, or who respond incorrectly to the change, will go suffer.

Q: You come from a background in “angel” and venture investing in Silicon Valley. You see all kinds of opportunities and could have chosen any one of dozens of technologies to get personally involved in. Why did you choose to form Smashwords and get into electronic publishing for independent authors?

Traditional publishing is a broken business on the precipice of major change. I perceived an opportunity create a business that can help facilitate this change in a constructive way that’s valuable for readers, authors, publishers and booksellers.

My motivation for creating Smashwords really came down to a crazy desire to change the future of publishing by empowering authors to be their own publishers. I wanted to turn publishing upside down by shifting the power center of this business from publishers to authors and readers.

For the last century, book publishing was built on the backs of undercompensated, underappreciated authors. If you cherish books as much as I do, how can you not honor the authors who create them, or the readers who purchase them?

I’m not saying publishers don’t honor authors. I just think their businesses are not set up to serve them as they deserve to be served.

There’s a huge disconnect in publishing. Publishers publish books for reasons different that writers write. Publishers publish works based on perceived commercial merit. Most authors are shut out and denied any chance to reach readers. Readers are denied the opportunity to discover the full diversity of great works. I think this commercial filter is not only myopic, it’s also dangerous to the future of books, especially if you believe, as I do, that books and authorship are essential to the future of mankind.

Publishers are unable to take a risk on every author, nor would they want to even if they could. They have businesses to run and Manhattan skyscraper rents to pay.

I created Smashwords so I could take a risk on every author. I think every author has a right to publish, and I think the vast collective wisdom of readers will help the best works get read by the right readers.

Q: One of the frustrations I have with Smashwords and its various channels is that it’s so hard to leverage all the positive reviews of my book that appear on the net. For example, there are 68 reviews of my Acts of the Apostles on Amazon, and none on Smashwords. Not to mention the many dozens of reviews on sites like Goodreads and individual blogs.

In the months ahead, we’ll add the ability for you to include other reviews at Smashwords, yet this feature will still be a poor substitute for the starred reviews given to you by Smashwords customers.

I think authors are well-served to invest their time and effort to build readership, reviews and sales rank at each and every retailer site they’re listed on. They should do this for Smashwords, B&N, Sony, Kobo, Apple, and every other retailer.

Q: Why do my Amazon kindle sales dwarf my Smashwords sales?

Comparing Smashwords to Amazon is like comparing an infant elephant to a full grown elephant. We’re small and new, but our reach is growing quickly.

Amazon has 70-80% market share for all ebook sales, so of course most authors will sell more at Amazon than anywhere else.

Some authors interpret this discrepancy between Smashwords sales and Amazon sales as a failure of Smashwords. Maybe yes, maybe no. The more foolish of these authors decide to abandon Smashwords and our retailers altogether so they can put all their eggs in the Amazon basket. It always pains me to see authors shoot themselves in the head like this because these authors are sabotaging their future ability to reach readers. It’s like in the print book world, an author says they want their book at B&N but not smaller indie stores.

Amazon has a bright future, and every author should be there. But Amazon will not maintain their 70-80% market share, and this will become apparent this year. The combined market share of non-Amazon retailers is rising quickly, led by new and fast-growing retailers we distribute to such as Apple, B&N, Sony and Kobo.

Authors should diversify their channel presence by getting their books on as many virtual shelves as quickly as possible, especially the shelves of these emerging ebook retailers. The first book on the shelf has the advantage. It’s important to get listed in these fast-growing stores early so you can build sales rank and reviews. Each retailer represents a separate community of customers for the author to nurture and support. Each retailer maintains message boards where authors and readers can meet. Participate in these forums.

Smashwords helps authors get their books out to retailers. If an author doesn’t want to use Smashwords as their distributor, then please by all means use another distributor.

Q: I would rather sell more on Smashwords, but don’t know how to drive sales there. Is there an easy way to harvest Internet goodwill and steer it to my Smashwords page?

I think it’s important to provide your readers the choice of multiple retailers through which they can purchase a book. Smashwords, and our small Smashwords.com retail operation, is just one of many options. To drive more sales to Smashwords, make sure that your fans know your books are listed here. Provide direct hyperlinks to your book page or author page. Offer customers Smashwords coupons as an incentive to purchase through Smashwords, or use the coupons as an incentive for them to write starred reviews at Smashwords. Communicate to your customers that when they purchase your book at Smashwords, they gain permanent, DRM-free access to your book in multiple formats. This means as they move from one e-reading device to the next, they can take their books with them. Communicate to your fans that when they purchase your book from Smashwords, more of the profits go to you, so this is an opportunity for them to support your future work.

Although we love serving customers at Smashwords.com, and our retail operation is growing quickly, you need not discourage customers from purchasing elsewhere. I think it’s important that authors promote all their retailers, because each retailer allows them to reach new readers.

Q: How do you think ebooks will affect content? Will novels change when more people are reading them on electronic devices than on paper? Or will the effect be negligible, like the change from hardcover to paperback? If novels do change, how will they change?

Ebooks enable a greater diversity of written content. A great example is the short story. Due to production and economic requirements alone, traditional print publishers are unable to serve up short form content, yet ebooks are ideally suited for this. Short form content will serve as an additional gateway to long form content. At Smashwords, we publish 1,000-word flash fiction, and 300,000-word epic novels. The average length of a Smashwords ebook is about 45,000words.

I think we’ll also see books become more interconnected. In the paper world, each book is a virtual island. In the ebook world, thanks to hyperlinks, each book can become part of a network of books. With a print book, if you want to read an author’s next book, you have to drive to the bookstore or logon to Amazon. With an ebook, you can click a hyperlink to the next book, purchase it instantly, and start reading.

The opportunity for authors is to create the shortest possible path between the reader and their book, so the hyperlink is key.

Further in the future, beyond hyperlinks, we’ll see the integration of richer media experiences in some books. The simplest things are the most exciting to me. For example, at the end of a novel, the reader might enjoy watching a video interview of the author explaining how they wrote the book, what their writing process is, and what’s coming next.

Q: Care to say anything about your competitors? For example, who *are*your competitors, and why is your service better?

May god have mercy on their investors :^) Have I mentioned I’m super-competitive?

Any publishing services firm that helps authors publish and distribute an ebook is a potential competitor, so throw a dart.

As many of these current and future competitors will learn, it’s really tough to make money in this business because the vast majority of indie authors’ books don’t sell well. Most publishing services firms trying to get into this market are making their money by charging authors upfront setup fees, conversion fees and paid services packages of nebulous value. Most of them are screwing their authors, IMHO, especially when you consider these authors can come to Smashwords and get everything for free.

Of course, if the author wants to be able to pick up the phone and call a sales representative, they’re better off with a paid service.

I wake up every morning asking myself how can I create the company that would put Smashwords out of business, and then I work to transform Smashwords into that business. I’m my own worst nightmare, and I wouldn’t have it any other way. This business is moving quickly so there’s no room for complacency.

I know a lot of potential competitors are chasing our tail right now, and I take every threat seriously, but I don’t look backward. The battle I wage every day is to earn and deserve the trust and confidence of our authors, publishers, readers and retailers. That’s how you win at the end of the day in any business.

We’re now publishing and distributing over 16,000 books from over 7,000authors and publishers. Most of the time, the system works really well. When it’s not working, we hear about it instantly. We make mistakes all the time, and some authors or publishers get mad and some leave us. Whether I think they’re right, wrong or foolish doesn’t matter. We try to learn from every mistake we make, both real and imagined.

We have an ambitious roadmap with hundreds of planned feature enhancements and strategic initiatives. What makes us better? Our authors and publishers. I love our authors and publishers. They tell me when they’re happy, and they tell me when they’re unhappy. My job is to make them happy. Our next greatest strategic advantage is our technology. Although we make publishing fast, easy and free, the technology driving our platform is extremely complex and intelligent, and not easily replicated.

We consider ourselves in permanent beta. I read a quote from one of the Twitter founders in which he said running Twitter is like rebuilding your rocket ship in mid-flight. I totally understand that. We’re flying fast, and constantly tweaking, iterating and improving as we go.

Q: Do you have a model for a successful ebook author, or does each successful person find their own path? Are certain genres (cookbooks,romances, car repair manuals, gay porn) more likely than others to produce success?

My first bit of advice is that if an author’s primary motivation is financial gain, they should get a job at Starbucks or McDonalds. It pays better for the vast majority of authors.

That said, the keys to financial success in authorship are as follows:

1. Respect your reader– If you create a quality read that resonates with the reader, they will open their wallet for you, and will tell their friends about you.

2. Respect the editing and revision process – Books get better with revision and editing. If you finished your first or second draft, it’s not ready to sell. This is part of #1 above.

3. Write more than one book– A single book is a fish hook in the ocean. Multiple books, networked together using tools such as Smashwords, become a net.

4. Utilize free – You need multiple titles to make free work. Two of our best-selling authors at Smashwords, Brian S. Pratt and Randolph Lalonde, offer free books as a powerful marketing tool to hook readers for their paid books. Some authors view free as an insult to authors. I don’t see it that way. When a reader reads your book, they’re investing their precious time to read your words. Their time is more valuable to them then their money. A free book removes the risk, and allows them to take a chance on you.

5. Market daily – Spend at least one hour a day on marketing. Read the Smashwords Book Marketing Guide for over two dozen ideas, all free to implement.

6. Maximize distribution– Get your book on as many digital shelves as possible

7. Leverage partners –This is self-serving for me to say this, but just because you can form a direct publishing relationship with 100 different retailers doesn’t mean you should. The time you spend building and managing such relationships is probably better spent on steps 3 and 5above. Use a distributor like Smashwords or someone else to efficiently reach as many retailers as possible.

8. Grow your social network– Network with fellow writers, and fans too, to keep your finger on the pulse of new ideas and emerging opportunities. Social networking isn’t about building large followings so you can spam them with solicitations. It’s about contributing to a community who cares about your success because you genuinely care about theirs. Give and ye shall receive.

Q: Assume for sake of discussion that I’ve written a novel that is in fact excellent & I’ve decided to publish it myself. What should I do now?Should I even bother with printed books? If I do printed books, should I risk doing a run on a traditional offset printer, or should I just stick with el-cheapo Print on Demand? Are there any indispensable marketing steps I must have lined up?

Print books are still over 90% of the market, so yes, you should consider a print book. Print books are more expensive to produce, so it’s important the author take steps to mitigate the risk and expense. If an author decides to utilize print, I would encourage them to investigate the print-on-demand(POD) route first, utilizing a POD service such as CreateSpace, rather than taking the risk of purchasing a garage-full of books in a big print run.

Once you build your business and can predict demand, then consider print runs to lower your cost per book.

It’s important to remember that POD books can still be time consuming and expensive to create, because they require more cover design to create the front, back and spine, and the interior layout can be expensive. Ebooks are cheaper, faster and easier to produce.

Q: What do you think of the current copyright and intellectual property regime in the USA and elsewhere? What’s your opinion of ACTA? DMCA? Are they helping or hindering artists and creators and the public at large?

I’m not an expert on either. I support any international effort to enforce better copyright protection, though I don’t support criminal penalties against individual consumers of pirated content. This is not to say I think pirating is okay, far from it. I think the key to better copyright protection is to promote education among consumers and go after the folks who profit by illegally commercializing pirated content.

Authors deserve strong copyright protection, but it doesn’t mean authors should overly obsess about protecting their work to the point they render it inaccessible to anyone.

I know a smart indie publisher who I respect very much, but who refuses to make his content available DRM-free. As a result, his content isn’t available anywhere. He’s sitting on a gold mine of books that could be selling now, but they’re not because of this misplaced fear.

Some large NY publishers don’t distribute their ebooks internationally because they fear this or that, and by limiting distribution they’re only encouraging customers to access it by illegal means. The bigger risk these big publishers face is obscurity. Their potential consumers have unlimited alternative choices for their next good read.

Authors and publishers can reduce piracy by making their content more accessible in more places to more consumers at a fair price. If you make it more convenient to access the official copy of your work from a legitimate retailer, most customers will pay for it.

Q: I have two novellas that depend a lot on typography, illustrations and book design. In my view, such a book is not merely the words in sequence,it’s the actual designed object. When you convert these books to formats like EPub or Mobi using tools like Meatgrinder, you lose lots of information and much of the charm of the books. I consider the original PDF versions of these books an OK substitute for the printed book. I know I can make an iPad oriPhone “app” of such books but that’s a lot of work — and only runs on one platform. Is there an answer for ebook publishing for people who care what their books look like?

It’s fair to say many authors share similar high standards for their highly designed books, and are reluctant to make compromises. Unfortunately, you risk missing out on this first stage of the ebook revolution because of such considerations.

I would strongly encourage you to rethink your approach. I would challenge you to re-envision your book, and to understand that the ebook publishing industry is still in its infancy. Your ebook can be and should be different from the print version. The standards and technology are still evolving. An author has the choice to sit on the sidelines and wait for utopian design capabilities to appear, or they can jump in now with the understanding that their book is a living thing, not a static thing, and as e-reading devices, standards and/or Smashwords evolves, they can participate in that revolution and upgrade their books in the future.

Don’t underestimate the power of your naked words, stripped of their fancy font or layout.

Although you may share a close affinity to your well-chosen font, your reader may not share the same aesthetic taste. Your reader may want to murder the formatting of your book by clicking a button, as they can do with Stanza, to change from Palatino to Verdana, or change the font color to yellow and the background color to purple. They may want to read in reverse type, or 30 point font. When you allow your reader to customize their reading experience, it can make your book more valuable to them, not less valuable.

Q: Do you have a favorite author that you’ve discovered through Smashwords that you’d like to give a shout-out to?

The sad reality is that since the launch of Smashwords, I’ve had very little time to read. One personal favorite is Norman Savage. At the risk of offending our 7,000+ other authors, I can tell you the next authors I want to read are Brian S.Pratt and Randolph Lalonde, because I hear great things about them from the Smashwords community.

More importantly, I’d like to give a shout out to our thousands of readers. Our readers are the ones who invest their precious time to scour our books to discover tomorrow’s next great indie author. These readers then support our authors by opening their wallets, writing reviews, and spreading the word to friends on Twitter, Facebook, online reading communities and elsewhere.