DigitalBookWorld published an interesting observation article, Why Authors Are Start-Ups and Publishers are Venture Capitalists — Now More Than Ever. The author, Andrew Rhomberg, notices that there are quite intriguing similarities between the publishing industry and Silicon Valler, as well as in ways the start-ups are being financed and developed.
The sharp drop in costs associated with writing a book and publishing it can be compared to the same phenomenon observed in the technology industry (be it computing power, cloud computing, reduced costs of payment processing, reduced costs in UI and QA testing, and so on). Just as high tech startups now need much less in the initial funds to start, the authors can now reach their readership at far lower cost than ever before — thanks to Kindle Direct Publishing by Amazon, for example.
Of course with this development the obstacles to getting funded have increased, as the competition has increased and thus, now you need an actual product and (growing!) consumer base to get the VC’s attention, while in the past you could possibly get VC’s attention by simply waving business plan and a prototype in front of VC. Yes, exceptions are always present — companies do get funding based on nothing more than an idea.
This observation can be extended to publishing: authors now can publish their work as an eBook, and publishers now want to see evidence of traction or readership growth before committing to a project. Likewise, just as one needs extremely good networking ties to meet with VC (e.g. a friend of a VC, usually an angel investor or a startup founder), one needs to have an “agent” to meet with publishers. Now, with increased competition and lower funding requirements, the angels have become super-angels – in essence, morphing into early-stage VCs. Likewise in publishing, there are micro-publishers who perform the same function.
For more, please read the original article at: http://www.digitalbookworld.com/2013/why-authors-are-start-ups-and-publishers-are-venture-capitalists-more-now-than-ever/