Source – Entreproducer
Twenty-six year-old Amanda Hocking doesn’t fit existing stereotypes of Internet entrepreneurs.
Described by the New York Times as a “hipster schoolgirl,” Amanda favors Teenage Mutant Ninja Turtles t-shirts, jeans, and prefers to go sans shoes.
Well, perhaps her fashion sense meets with some entrepreneurial stereotypes.
The similarities seemingly end there when you consider that Amanda is an author of fiction. Specifically, she writes paranormal-romance fiction involving vampires, trolls, and zombies.
Amanda’s been profiled in the Times and many other places because she’s sold around $2,000,000 in ebooks — without a publisher. She was one of the early success stories to come out of the Kindle Store, joining James Patterson and Stieg Larsson as one of the bestselling digital authors on Amazon.
Now, things have changed.
Amanda has a deal with St. Martin’s that pays $2 million upfront for her next four books. Her “Trylle” series of books has been optioned by Hollywood, with the screenplays penned by one of the scribes of the film District 9.
It’s certainly an amazing story. But does she qualify as an entrepreneur, much less an Internet entrepreneur?
Is Amanda Hocking an Internet Entrepreneur?
First, let’s be clear on what an entrepreneur is.
Here is the classic 12-word definition of an entrepreneur from Harvard Business School professor Howard Stevenson:
Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.
So, let’s take a look at what Amanda did to generate that $2,000,000 in revenue.
She’d completed her first novel at age 17, which was rejected by over 50 publishers. Years later, Amanda took a decidedly different approach:
- In 2009, Amanda started treating writing as a job, not a hobby (it’s a business venture).
- She began combing bookstores and doing industry research to see what was getting published and selling, as well as reading a lot in her genre (market research).
- She continued to submit her manuscripts to New York, and continued to be denied. Her last form rejection letter arrived in February of 2010 (no access to or control of traditional resources).
- In April of 2010, Amanda digitized her book “My Blood Approves” into the new .mobi format for the Kindle reader (adoption of a new technology standard) and uploaded it to the Amazon’s Kindle Store (exploitation of an emerging online marketplace).
- She offered her books for $.99 to $2.99 (industry pricing disruption).
On the first day, Amanda sold 5 books. The next day provided similar results.
A couple of months later, things got out of hand:
- June 2010, she sold 6,000 books
- July 2010, 10,000 books
- January 2011, over 100,000 books
- Summer of 2011, 9,000 books each day
Sounds Like an Internet Entrepreneur to Me
It seems like a magical story, but Amanda was very deliberate. She treated her book as a startup.
Then lightening struck, which is what would-be authors inspired by her meteoric rise tend to focus on. Most often, that won’t be the case.
Amanda was in the right place, at the right time, with the exact right product. It’s the way markets are supposed to operate if you eliminate all the noise. And make no mistake — a great book that people want to read is still the core requirement.
The opportunities for the authors of great digital books, whether fiction or nonfiction, are still in the infancy stage. But you’re going to have to add one exceptionally important element to Amanda’s deliberate approach.
You can’t depend on the marketplace to notice the book on its own until you’ve sparked enough initial sales. But how do you make sales otherwise?
It’s a classic chicken and egg situation, until you tilt things in your favor.
One way or another, you need to build an audience. And the smart entrepreneurial approach for authors involves creating free online content to build that audience before you try to sell a book (or anything else).
In other words, become an Internet publishing entrepreneur. Your first book is simply your first product, no matter the level of artistry you put into it, and your biggest asset is your audience.
Luckily, this entrepreneurial process can be much more lucrative than the indentured old school approach. Ironically, it’s the traditional publishing industry that gets credit for kindling this entrepreneurial fire among authors.
Big Publishing Drops the Audience Ball
Trey Ratcliff is a photographer who built a blog to showcase his work. The audience that platform attracted resulted in three prospective publishing deals.
Trey went with Peachpit Press, due to their size and reputation in the photography niche. Out to a fancy dinner with some of Peachpit’s top executives, Ratcliff realized the true nature of his publishing deal.
In his own words:
I’m sitting there in a nice restaurant in San Francisco with all these executives of a major publishing house. It’s one of these power dinners of lore. We’re there to discuss the upcoming launch of the book, and I’ll never forget what happened. They asked me, “OK, Trey, what are you going to do to market this book?”
It’s the dirty little secret no one tells you about the modern book deal: it’s up to the author to drum up interest, publicity, and sales for the book, despite the fact that publishers are ostensibly still in the “distribution” business.
It didn’t have to be this way.
To this day, Internet pundits plead with publishers to build “huge, vertical-specific communities, prime them with regular non-book value and establish direct relationships.” But the publishers rejected that very advice over a decade ago, a decision that forced authors to become online marketers, even within the context of the traditional book deal.
Author and entrepreneur Seth Godin saw it happen, upfront and personal.
A former book packager, Seth shifted to the Internet early, founding the email marketing firm Yoyodyne in 1995 and selling it to Yahoo! in 1998 for $30 million.
Godin’s first bestseller, 1999’s Permission Marketing, explained the online marketing practices he developed that allowed direct and profitable relationships with prospects. Moreover, the book itself achieved outsized sales using the very strategies and tactics Seth preached, via an opt-in email list that grew rapidly as Godin gave away a third of the book for free in exchange for an email address.
Seeing first hand the power of establishing a direct relationship with prospective book buyers, Seth tried to help the publishing industry see the power of building an audience for themselves and on behalf of authors.
How could an industry that exists to distribute books not want incredibly cost-effective direct distribution?
Strangely, Seth’s ideas were ignored, and sometimes rejected with the type of venom that accompanies an abject fear of change. Instead, the collective choice among book publishing companies was to throw authors under the bus and see who survived.
“By 2002, it was clear the publishers were not going to build an online audience,” Godin told me for this article. “The authors had to do it themselves.”
Got Audience, Why Stop at Books?
Meanwhile, Trey Ratcliff did some math.
The excited new author went to work, drumming up pre-sales support from his audience with a limited-edition print, along with a signed copy of the book. He promoted relentlessly via his blog and on Twitter. He even arranged and paid for his own book tour.
The book was a roaring success, selling out on Amazon in the US, UK, Canada and Australia. At that point, after all that hard work, Trey realized just how tiny his 15% royalty rate really was. Peachpit kept 85%, which in turn went to printing, physical distribution, big New York offices, staff, lawyers, bookstores, etc.
In other words, no one was making any money.
It was Trey, however, who was in the unique position to do something smarter. After all, he had the audience that attracted the publishers in the first place.
So, he became the publisher by founding Flatbooks. His fledgling ebook business hit 6 figures in revenue almost immediately, and now boasts 80% profit margins.
The secret to the quick success of FlatBooks? According to Ratcliff, it’s the audience-enabled author:
The best way to successfully market something is to have true believers with big followings talk about it on the Internet. Since we have many authors who are socially popular, a multiplier effect begins to take place.
Notice he said “successfully market something,” which is specifically not limited to ebook publishing. Once you have an audience, the door opens to consulting, paid speaking, software, innovative new platform launches, and more.
You’re really only limited by the needs and desires of your audience.
Three Key Takeaways:
- If your goal is to write books and make a living from them, build your audience before you need it. Start today.
- Don’t think self-published. Think publisher. Better yet, digital media producer.
- Accelerate. Once the audience is on your side, books are only the beginning. Be more like Jay-Z than James Patterson.
Not every author will do this, unfortunately. Many will grasp dearly to the Amanda Hocking story, depending on Apple and Amazon to become the new intermediaries that “magically” make them rich.
But Apple and Amazon don’t make money from caring about you. They’ll aggregate the hopes and dreams of millions along the long tail, letting just enough new stars shine to keep the dream alive.
At least the traditional publishers pretended to care.
Regardless, it’s up to you … now more than ever. Go make an audience happen.
Source – Entreproducer