The Kindle: A Platform That Can No Longer Be Ignored

The big news today is that Amazon released the new version of the Kindle, its electronic reader. I’ve been a big critic of e-books for years but it’s clear that Amazon is changing the game for e-books, perhaps in the same way that Apple changed the game for digital music. And that means authors–and the publishing industry–can no longer afford to ignore the Kindle.

This would mark a huge shift in attitude and practice. I remember back in 2000, after I wrote my first cover story for BusinessWeek on Napster, Random House editor Jonathan Karp made me an offer to do an electronic book about Napster. I passed on the opportunity primarily because my goal was to write a real book, i.e. a book that you could hold in your hands and show off on a bookshelf. I also passed because the money was not huge and it wasn’t clear to me that people even wanted to read books in a digital version.

Now, the tables have turned big-time. Amazon won’t say how many Kindles it has sold but estimates put the number around 500,000. Also consider that Amazon underestimated the demand for the Kindle because it quickly sold out and has been out of stock pretty much since last November. If the 500,000 number is true, that would mean Kindle outsold the first iPod in unit numbers by 32%, according to Citigroup analyst Mark Mahaney. In addition, Mahaney now estimates that Amazon will sell 1 million more Kindles this year, and another 3.5 million in 2010.

Add it all up and we could have 4 million Kindles in the market pretty soon, and that, thanks to Amazon’s huge and loyal customer base, Mahanney says “it’s not too hard to see 10 million Kindles sold one day.” Can you say PLATFORM???!!!

The stigma about e-books is going away. People are starting to read them as the technology improves. And now readers are, gasp, starting to actually request electronic versions of a book! A few weeks ago, I had lunch with a very smart venture capitalist. I asked him if he had read my book, Creative Capital. He said he wanted to buy it, and then he asked, “Is it on the Kindle?”

“No,” I said sadly. “I am looking into it now.”

This is true. I am in talks with my publisher Harvard Business School Press to create a Kindle version of my book. The main challenge is over the rights issue. Depending on what rights you have negotiated, authors and publishers may need to renegotiate permissions to receive rights to publish certain photos and text for the digital world.

So here’s the deal. Thanks to Amazon and the Kindle, e-books have gone from the “can afford to ignore” category to the “I am looking into it” category, and now are entering “I have to have it” bucket.

I think this should be good for readers and the publishing industry as a whole because it represents another outlet and market. But the transition may be a little bumpy as business models could be disrupted, and publishers become concerned that they are getting dis-intermediated out of their core business by technology companies.

But hey, it was inevitable that a technology that is thousands of years old would eventually give way to new forms of reading. And now that future has finally arrived.

Caveat Author: Two Readers Have Spoken

One of the great (and potentially humiliating) things about Amazon.com is that its Web site enables absolute strangers to publish reviews of your book. Caveat author.

In April, one of my friends wrote the first review of my book on Amazon. I was thrilled–especially because she liked it and made me see the book in a new light. The funny thing is I didn’t ask her too. She did it completely on her own volition, without any bidding from me.

Well, after reading her post, I started to get ancy about those darn reviews. I wanted more of them. I began to compare the number of reviews my book had generated with other books I’d been following. Amazon has a knack for exposing your insecurities as an author–writers’ obsession with the Amazon’s sales rankings is only the most obvious illustration of the site’s quasi-evil ability to inspire high anxiety.

So I began asking a few other family members to pen an Amazon customer review. I pitched the task as a sort of family obligation. The result: deafening silence and inaction. As I checked my sales ranking in April and May, that lonely review became a thorn in my side. In June, though, I started to kick my daily addiction to the Amazon author page. Now, I only check my site once or twice a week.

Here’s the happy ending: While I regained some balance in my life, two people published reviews of my book on Amazon like little elves in the night spreading happiness and joy. The first review from Harvard Business School student Franklin J. Seker came on July 7; and the second, from HBS student B. Beatty, popped up July 9. Thankfully, my patience was rewarded: both gave Creative Capital five stars. See the two reviews below:

An inspirational mentor — General Doriot, July 9, 2008
By B. Beatty “cirencester” (Winston-Salem, NC United States) – See all my reviews

I was in the General’s class at HBS in 1961. When he discovered that I was an active duty military officer, he took an obvious personal interest in me (although he did not call me “Bernie”, as he called Samuel Bodman “Sammy”). Nevertheless, I will never forget the inspiring interactions with him and his varied guests from many walks in life, including Jackie Cochran, pioneer aviator. The author has done a first-rate job of pulling together details that shed light on a great man, as well as his wife. I finished the book in record time.

HARVARD BUSINESS SCHOOL’S BEST, July 7, 2008
By Franklin J. Sekera – See all my reviews

I was General Doriot’s student at Harvard in 1960. He and his views had a profound impact on my life, both in business and personally. His emphasis on ethics, patience, creativity and freedom led me, in my various roles in life, to pass on these same qualities to all my associates.
The book is well written and provides a useful insight on the private man. It’s too bad that this information was not available in 1960.

The New Bar Money: Amazon’s Associates Program

In mid-February, I joined Amazon.com’s Associates program, an affiliate marketing system that lets you receive referral fees for sellling Amazon products. Around the same time, I had bought a bunch of Google keywords. Google is a great marketing vehicle but it has one flaw: There was no way to track sales conversion, or the rate at which people who clicked on my Google text ads actually bought the product I was selling.

That’s what led me to Amazon Associates. I became a member of the program because it allowed me to track sales of my book by placing a bit of Amazon referral code on my blog. So after two months here are the results. I sold nine copies of Creative Capital and two other books, netting $13.13 in referral fees.

Clearly, it’s not enough to pay the rent but it is good enough for a few drinks at the bar. Another interesting point: The conversion rate is pretty high. Out of the 54 people who clicked on the link to my book on Amazon, 11 chose to make a purchase. That comes out to 20.37% conversion rate–an incredibly high rate. To me that shows the power of a blog. People who visit your blog are really motivated to make a purchase. See the report below from Amazon:

Earnings Report Totals
January 25, 2008 to April 25, 2008

Items Shipped Revenue Referral Fees
Total Amazon.com Items Shipped 10 $210.04 $12.17
Total Third Party Items Shipped 1 $16.00 $0.96
Total Items Shipped 11 $226.04 $13.13
Total Items Returned 0 $0.00 $0.00
Total Refunds 0 $0.00 $0.00
TOTAL REFERRAL FEES 11 $226.04 $13.13

HOW TO BUY CREATIVE CAPITAL: To pre-order Creative Capital and get a 34% discount, click here and go to Amazon

My First Amazon Customer Review–5 Stars!

My friend Julie Chang posted a review of Creative Capital this week. And honest to god, I did not put her up to it, nor did I pay her!

1 of 1 people found the following review helpful:
WWII and Venture Capital History Lovers – A MUST READ!!!!, April 22, 2008
By J. Chang (New York, NY) – See all my reviews

Americans always talk of saving France during WWII, yet at the same time, here was an intriguing French immigrant who rose to be a top professor of entrepreneurship at Harvard Business School, a founder of the venture capital industry, founder of INSEAD the European business school and to top it all off- played a critical role in saving countless American lives in WWII by leading the innovation and production of quality military equipment and supplies.

Ante’s portrait is one of a driven maverick, visionary and Renaissance man who made an astonishing contribution to the war effort and modern business culture, and yet he seems very human and at times poignant. I was especially moved by Doriot’s tireless passion in helping American soldiers as well has his 48-year marriage to his wife Edna and how they spent their last years together.

I loved this book because it’s such an unusual and valuable contribution to our understanding of the 20th century. Doriot has been an unsung hero in many ways, and by bringing his life into focus, Ante weaves people and international events in a way that makes us see our world as ever more fascinating, multi-faceted and interconnected.

Tech CEO Survivor

This week, eBay CEO Meg Whitman announced she was stepping down after a ten-year run. That got me thinking about what other tech leaders may be headed for the exits in 2008. Check out this video in which BusinessWeek reporters Stephen Baker, Heather Green, Catherine Holahan and Spencer Ante play CEO survivor–and also talk about technology and the Presidential elections, and why the Internet is so annoying sometimes.

HOW TO BUY CREATIVE CAPITAL: To pre-order Creative Capital, click here to go to Amazon.com.