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Blurring Roles: Publishers as VCs and Authors as Startups

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/

Yevgeny Ioffe

Yevgeny Ioffe

Yevgeny Ioffe, or as people call him, Gene, has been working in both the startup world and established companies. His career spans from joining Xplana Learning as it launched to Cengage Learning to MBS Direct when it acquired Xplana in 2009. Yevgeny brings to EdTech Times his passion for start-ups and technology, along with his interest in evolving world of ed-tech. Yevgeny obtained his BSc and MA from Brandeis University and MBA from Boston College.

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