It’s interesting to study how industries shatter and reborn into new ones with new players. You can name a variety of examples like the record industry, where they denied the music reality and they didn’t catch up the opportunity, they should’ve built the iTunes. Or consider the bank industry, where they also denied their reality and instead of launching a digital payment platform in the early 2000, they waited and PayPal entered in the scene (now Bitcoin.) You can name any industry you want, but it always happens the same. Companies denied their reality and stick with the status quo, until somebody else shows up and take over control.
Today I want to show you a quick case we’ve recently lived and not everybody has noticed. The book industry.
The book business was almost as perfect as the record industry, with the inconvenient of the risk involved.
Before Amazon showed up with the Kindle, what happens was this:
1. Publishers have to find thousands of books to launch or they would be left behind.
2. They were in the distribution business. They used their financial muscle to put several books in every bookstore. And maybe, just maybe, readers would notice their book and at some point it would spread.
3. They took the financial risk involved, and that led to pay less and less to the writer.
4. They produced a product that has a high cost to reproduce. High cost, high risk.
5. They promote it by spamming people.
It was a risky business but a fruitful one. At some point they would got bigger, therefore they could reduce the distribution cost and writers would knock their doors.
They gathered a bunch of books first, and then they’ll push them to the market.
But when Amazon showed up this made no sense at all. For several reasons:
1. Amazon deletes the distribution problem by selling digital files. (And even with physical books, they now compete in rankings not bookshelves.)
2. Amazon (or any other platform) allows anyone, at anytime, at any cost, to launch their own books. You don’t need to get the approval of a publisher, you just publish it. (Even a printed version.)
3. Now that the distributions disappears writers get a higher percentage of the benefits. Then the risk to launch a book drops down.
4. And last, most important, writers create their own communities, so publishers are now in the other side of the table.
Here we have several points to stand out, but the most important one is that now (well, actually from several years ago) the process works backwards. You don’t push a product, you pull an audience.
It’s worth repeating again: You don’t push your product, you pull an audience.
Coming back to the book industry, they had cases that a book became a best-seller on the first day. Because those writers have been working out their audiences with their blogs.
But after that something happened.
Back in 2012, Seth Godin decided to make a kickstarter campaign to force his publisher to release the book months in advance. The condition was to hit 40.000$. If he was able to hit that number, they’ll go forward. He did. Actually he gathered more than 280.000$. It took him 3 hours to hit his first goal. He was able to achieve it because over the years, he has built a community that are eager to buy what he sells.
Maybe at that point publishers became aware of the potential of communities. Or maybe not. Maybe they just denied it.
A couple of years later, Seth Godin released another book, but this time he took over every step of the process. He developed the entire book from creation to distribution. And it became a best-seller right away. No publisher involved.
What happened here is that the world changed. And the only way to market your products and succeed is to pull an audience. A Tribe.
And since big publishers didn’t admit that reality now you can see new companies working on their communities. They’re specialized by genre and create products that the community seek. No niche is small if it’s yours.
When you detect these problems you can see there’s the opportunity of a lifetime. Unless you deny your reality.
Over time, reading and rereading books about innovations and how industries change, every book shows a pattern. Which is, every time there’s change involved, people deny their reality and stick with the status quo. Over and over again happens the same. People who don’t embrace change they get replaced.