Wednesday, July 3, 2013

How Can Indie Authors Create Sustainable Competitive Advantages ~ REBLOGGED #ASMSG

This is a posting from on June 18th, 2013

It was so well written, I just had to reblog it: 


How can Indie Authors create Sustainable Competitive Advantages?

Jack Welch had 6 rules. One of them was – If you don’t have a Competitive Advantage, don’t compete.

This is true in pretty much every field and every business.

Indie Authors currently have lots of competitive advantages and several important competitive disadvantages. Their success, and their ability to ward off all the ‘indie authors are bad for writing’ attacks and the subterfuge of the stores, depends on building up sustainable competitive advantages and rendering Publishers’ competitive advantages unsustainable.

Let’s explore how Indie Authors can create sustainable competitive advantages that will allow them to become the superstar authors of the future.

Cialdini’s Influence & Seeing Reality As It Is

A lot of this post will be based around Cialdini’s Influence: The Psychology of Persuasion. If you’re an indie author, you need to read this book. It’s that simple.

A lot of this post will also factor in another of Jack Welch’s 6 Rules – See Reality As It Is, Not as it Was, or as You Want it To be.

This (Seeing Reality As It Is, in the Present) is very, very critical. You have to understand that we’re in a different world. There are a few realities to think about carefully -
  1. This isn’t the Publisher controlled world any more. Readers will buy your books if it’s good. The relentless drop in prices in ebook stores is proof of this. Only Indie Authors and ex-Published Authors dropped to $1 and $3 initially. Now everyone is being forced to. Readers bought those books without the stamp of Publishers. They still are.
  2. Absolutely anyone can top the charts now. This sounds like heresy. However, there are now so many different websites and apps and channels to promote books that you just need enough marketing. It doesn’t matter what the quality of the books is. Price the book at $1, get it listed in enough places, and you’ll hit #1. It’s not just a possibility, it’s guaranteed. If you don’t believe me, then see what Amazon Publishing is doing with its titles. All the titles that people weren’t even buying are now in the Top 100 (with a few exceptions). Note: Amazon Publishing uses all the sites and channels I’m talking about. Strange as it seems, Amazon pays other people to advertise their own books in their own store. This shows how powerful the outside channels have become. The first really hard to believe reality you have to admit, and internalize, is that with sufficient marketing (which is attainable by ANYONE with some money) you can get your book to #1 in the Store. It doesn’t matter how good the book is. Quality and Product Market Fit only determines how long the book will stay in the Top 100.
  3. Absolutely anyone is topping the charts now (notice the subtle difference). If you don’t believe this, take a look at what happens with the Kindle Daily Deal. Most of those books are not special. Yet they almost always hit the Top 10 or Top 20. Take a look at all the $1 and $3 books in the Top 100. Read the reviews. These aren’t marvellously written books. There aren’t once-in-a-lifetime books. A few are undoubtedly very, very good. However, most are just normal to good books.
  4. Amazon’s job isn’t to help you. In fact, even Amazon isn’t clear what its job is. It’s torn between suppressing lower priced books to make money, promoting its own titles, and keeping book prices low to bring people into its ecosystem. This means that you absolutely MUST assume that Amazon will use books as the loss leader. So the only way you can make a living from books is planning around that. How do you make money if Amazon turns books into loss leaders? In a way, this is already happening. The average selling price of a Top 100 book is $6.287. That includes $13 and $10 books from Publishers - Which means that the average selling price for Indie titles is between $1 and $4. How will you survive in that world?
  5. Publishers are stuck. They need to make enough money to keep their massive dinosaur engines running. At the same time prices for ebooks are dropping and the market share of ebooks is rising. What does that mean? It means they have to carve out more for themselves and less for authors. There is no workaround around that reality – If Indie Authors succeed, Publishers and Published Authors die. They aren’t writing long meandering essays on ‘Quality of Books is Falling’ because they care about the quality of books, or because it is (it is, actually). What they really mean is – All these annoying Indie Authors are selling good books for $1 when they should be selling for $10 like we are. It’s unfair.
These are REALITIES. You’ll have to test them (see the facts and then see what the facts show you, not what you want to believe) and then accept them (if the facts show you that these are indeed Realities).

You’ll have to replace all the negative beliefs and misconceptions with these Realities. Get rid of all the brainwashing -
  1. You need Publishers to approve you. This might be true if you are looking for validation. If you actually want to sell books and be read and make money, then you only need to publish your books. Self-publishing achieves that.
  2. You need to sell paper books. You don’t. Again, if this is part of your need for validation or your need to impress your friends and family, then it’s fine. However, it doesn’t matter whether or not your books are stocked in stores. If you succeed with ebooks, Publishers will flock to you and this will happen automatically.
  3. You can’t make money from $1 books. Yes, you can. You just need to sell more. The current ebook stores are optimized for a model of $1 to $5 books that sell at high volumes. You don’t really have any other choice if you’re an indie author. Soon, no one will have any other choice – might as well switch and adapt now.
  4. You need Amazon to succeed. You don’t. There are indie authors who are in the Top 100 in B&N and making enough to not care two hoots about Amazon. If you sell well, then it hurts Amazon to not have you, so they will come for you.
  5. You can’t make money being an indie author. There are lots of indie authors making hundreds of thousands of dollars a year. A few are making hundreds of thousands of dollars a month. If you want to make more than that – well, first you should figure out how many authors actually make millions a month. It’s not a long list.
  6. You can’t gain recognition as an indie author. If you get a movie deal or a Top 10 rank – that’s recognition. It doesn’t matter whether you’re ‘published’ or not.
This part is the toughest. This is where a lot of indie authors fail. The more you can drum out all the brainwashing and look at things with a clean slate, the higher the chance you can pick the right approach for you (and that might be Publishers). The key is – Publishers are one option out of many. Same for signing up with Amazon.

Now, on to the real stuff.

Indie Authors’ Competitive Advantages
  1. Value for Money. Indie Authors can price their books at $1 and $3. This does two things – Kills Publisher Books at $7 and $9 and $13, Reduces the friction in a user buying and trying your book. At $1 to $5, you’ll have 10 to 3 times more readers willing to take a chance on your book. If you don’t have the first book in a series (or one of you books) free, or at $1, then you’re losing your biggest competitive advantage.
  2. Being able to sell at $1 to $3. Not only is this making you more attractive, it is killing Publishers. Literally killing them. If 20 indie authors at $1 and $2 are selling in the Top 100, that means 20 books at $10 and $13 aren’t. Publishers are losing millions every single day. The faster the transition happens, the less time Publishers have to adapt. Indie Authors can not only gain a big competitive advantage by pricing their books between $1 and $3, they can also literally kill off Publishers.
  3. No Illusion that Marketing will magically happen. A lot of published authors are under the misconception that they can just write. Apart from the established superstars, everyone has to market themselves. As an Indie Author you are free of any misconceptions that the Marketing Fairy will magically make everyone aware your book exists.
  4. A Deeper Connection with Readers. Who do you think readers relate to better - Big large soulless corporations or new authors making a name for themselves? As an indie author, you’re the People’s Champion. Your readers will fight for you. Give them a chance. You have to do your part and give of yourself – be available, talk to your readers, get feedback, be a human being and not a name on a cover. Get yourself out there.
  5. Speed to Market. Read this post on Indie Authors being much faster to market. You can react quicker. You can improve your books quicker. You can send out sequels quicker. You can react to and cater to Hot New Markets quicker.
  6. Creative Control. There are multiple perspectives on what might work and what might not. The truth is that you don’t really know. No one does. If a Hot New Market exists or is created, you can cater to it. However, there’s no way you can guarantee your book creates a new market. If you just want to write something in your heart, with self-publishing you have total creative control. In my opinion, this leads to better work, provided indie authors embrace quality enhancers like editing and proofreading.
  7. Constant Improvement of the Book itself. As an Indie Author you can take the typos and errors and keep adding to them. You can add free stories. You can add sequels. You can add downloads like wallpapers and stories and illustrations. A Publisher will move very slowly and a Publisher will only do this when a book is a success. You, on the other hand, can keep improving the value proposition and the quality of the book. If you don’t do this, you’re throwing away a big competitive differentiator.
  8. Betting 100% on eBooks & Optimizing for eBooks. Publishers have to sabotage ebooks to ensure their paper book sales don’t die out. So, you get strange things like delayed releases and crazy prices. You also get a total neglect of ebook marketing, ebook polish and quality, and other factors like social marketing. You are free. You can focus on all the things that are needed. Think of it as Entity A running a hotel and on the side running a Bed & Breakfast. However, it doesn’t really want to run the Bed & Breakfast and that shows through in lots of ways. You, on the other hand, are in LOVE with your Bed & Breakfast and take joy in making your Bed & Breakfast excellent in every way.
  9. Incorporating Customer Feedback & Strengthening Customer Relationships. This is different from 4. A Deeper Connection to Readers. There, you were showing your human side and using Likability and Familiarity to create a bond. Here, you are showing you genuinely care about their reading experience and strengthening it. It’s akin to deepening a friendship by taking a road trip together.
Note: We’ll use a lot of principles of influence throughout. We don’t mean it in a sleazy ‘magical and revolutionary’ sort of way. We really mean it. Now you’re one to one with your readers so only integrity and genuinely caring will work. If you don’t really care for readers then work with Publishers so that you can hide that disadvantage.

We have to use influence because our competitors (Publishers, Platforms) are, and because they have way too many unfair advantages.

Indie Authors’ Competitive Disadvantages

Eliminating some of these is important, especially the first.
  1. Lack of Quality Control, Lack of Curation. Would it be crazy to suggest that the Kindle Owners’ Lending Library and 5-days-free offers were attempts to dilute the march of the best indie authors? Perhaps. Perhaps truth is stranger than fiction. This (lack of quality control, lack of curation) is the single biggest competitive disadvantage for indie authors. There’s no curation and that suggests that all indie author titles are garbage.
  2. Too Much Supply. This is a competitive disadvantage in the sense that it makes it hard for indie authors to make money. However, the workaround is to use Free and $1 for Marketing and then sell the rest of your books at higher prices.
  3. No Awareness amongst Readers. This is the second biggest disadvantage. How do you let readers know you exist? There are various choices – Free as Marketing, Cheap as Marketing, buy advertising, build your own channels. Unfortunately, all of these require hard work and they require authors to venture into uncomfortable territory – marketing, sales, pre-sales.
  4. No Marketing Channels that Authors own themselves. This has to be fixed. If this isn’t fixed then there’s no point to what you are doing. You want a strong, PERMANENT channel to your readers. Which you own COMPLETELY – 100%. Not a Facebook or Twitter account. None of that nonsense. Your OWN blog (with a custom domain you own 100%) and your own email newsletter.
  5. No Money. This is a tough one. How do you market? polish? write? … if you don’t have the money to buy services and time. I don’t have an answer.
  6. Lack of Brand and Branding. I think indie authors should just skip this and focus on building their marketing channels and building real relationships with their readers and with their 1,000 true fans.
  7. Lack of Market Intelligence. This is a really hard one. The only way to gain this is to sell books. You can try to buy it, but it’s expensive and doesn’t work as well. It helps to create Author Master Minds. However, how do you find 5 to 10 other indie authors who are focused and willing to put aside all their brainwashing?
  8. Lack of Belief. Nothing works except you being ready to stop being a serf.
  9. Lack of Guile. This is really tough. Guile requires a few things that aren’t easy to acquire – street smarts, experience, a variable moral compass. This isn’t necessary but it helps.
  10. No Customer Relationships or Intent to Build Them. This is key. You can do well without customer relationships. However, these (customer relationships) are literally the foundation on which you build a sustainable career. If you aren’t willing to do this perhaps you should consider another line of work or sign up with a Publisher.
These are very big disadvantages. There’s no denying that. The good thing is that the advantages are bigger, and that most of these disadvantages can be neutralized or circumvented.

Creating Sustainable Competitive Advantages

There’s one key thing to understand -
  1. A competitive advantage will let you win. A single competitive advantage could be enough to win the battle. An example is pricing – Pricing your book at $1 is powerful enough that it, alone, can allow indie authors to destroy Publishers in book sales.
  2. To keep winning, you need sustainable competitive advantages. With a sustainable competitive advantage, you can win the war. Example: A relationship you build with your readers. Publishers and Authors build brands but most of them don’t really put effort into building relationships. Authors are happy to let Publishers handle all communication. Publishers are happy to let booksellers handle all interaction. Any indie author who actively engages with her/his readers will create a sustainable competitive advantage. If all other things are equal, we choose the product from the person/company we like and are familiar with.
Cialdini’s points on Liking and Familiarity are key. There’s the brand recognition aspect and there’s the personal human aspect. The Human aspect wins every single time.

What Sustainable Competitive Advantages can Indie Authors build?
  1. $1 to $3 books. If Indie Authors stick with prices that most Publishers can’t survive on, and which most other indie authors won’t go with, for strange reasons like ‘believing my unproven work is worth $10′, they can create one sustainable competitive advantage.
  2. Their own channels to readers. Email lists. Blogs. Social Network connections. While every published author depends on Publishers. While most indie authors do nothing or depend on advertising. You can build your own channels that you control yourself. If you’ve sold 250,000 books and release a new one – Guess which readers are the most likely to buy your new book. Well, you better create channels to them and for them. Even releasing an app which has one book free and then updates readers about your other books isn’t extreme. Why? Because when you release new books, you can send a message to the App and to your readers. You can reach all of them quickly and for free.
  3. A Human Connection and Relationship. If a reader likes your book and then gets to interact with you – That greatly increases the chances that reader will buy one or more of your other books. You now have the opportunity to do virtual book signings and tours and meet lots and lots of your readers. It would be laziness and stupidity not to. The 1,000 true fans are the most important – If you can’t meet the rest, at least build connections with these 1,000 true fans.
  4. Speed & Optimized Processes. Build up processes and tools and procedures so that you can do things faster and better than anyone else. If you can whittle down things so that a book takes you 6 months to release, and most Publishers and Authors take 2 years, then you can release 4 books in the time they release 1. They simply can’t compete.
  5. A Large Portfolio. The single biggest sustainable advantage you have is a large portfolio of books. Why? Each book feeds each other. You can create a Book Network. The minute you hit 5-6 books (and not books in a single series) you’ll see serious network effects. If a reader likes your book, and you have only 1 book, then you’re finished. If, on the other hand, you have 21 books, then you might see 1 or 2 or even 20 more purchases from that reader.
  6. Marketing Skills and Channels. This is similar to 2. All the channels you build while doing marketing are channels to readers. They are also channels to market your new books. This is why it’s important to build channels you control completely or are run by honest people. Facebook changed the rules so that now you can reach only a fraction of your followers, unless you pay for a ‘sponsored post’. Lesson: Build up your blog and email lists. Build your own little Pottermore or your own free apps.
  7. Book Quality. You are nimble and focused on delivering the absolute best reading experience. That means you can take your book from 80/100 to 95/100 in quality and polish. Most Publishers simply can’t afford to get beyond 90/100. Most indie authors never get beyond 75/100. Get all/most your books to 95/100 in polish – You’ll have an advantage that no one else can match.
  8. Optimizing for eBooks and Constantly Improving. If you start running in ebooks – learn strategies, polish, learn marketing, learn how ebooks work. Well, you’ll gain a strong advantage. Now, if you keep running and keep improving, everyone else can never catch up. Plus you’ll need comparatively less time and effort to keep improving, while the ones trailing you have to put in 3-4 times more work and effort.
There are other sustainable competitive advantages indie authors can build up. The sustainable part is most important – It has to be something you control and which no one else can take away. It has to be something that can’t be duplicated easily. There will also be sustainable competitive advantages that are UNIQUE to who YOU are. Figure those out.

The key thing to remember is that very, very few people have competitive advantages in ebooks and even fewer have sustainable ones. If you start now and focus, you can get way ahead of the field. It might seem ludicrous to suggest that you could build stronger marketing channels than even Amazon and B&N and Publishers. However, this is exactly what some smart authors and companies are doing – and a few of them will succeed (some have already succeeded).

The very things that were strengths for the Publishers and Platforms are turning into liabilities. You get to start afresh without having to guard any existing assets. It’s a huge advantage. Perhaps the biggest if leveraged right.

Destroying the sustainability of Competitive Advantages Publishers and Published Authors have

This is a touchy subject. The serfs (indie authors and us readers) aren’t supposed to question the God-given right of Publishers and Published Authors. Perhaps the Platforms, once they have more power, will feel they have special status too.

However, we aren’t in medieval Europe. It’s time to fight fire with fire.

What are Publishers striking at – The Quality Perception of Indie Books. Strike back. Publishers spend 90% of their effort on paper books. They then make low-quality ebook versions and sell them for outrageous prices.

Tell readers the truth – Your ebook versions get 100% of your time and effort. They aren’t treated like third-class citizens. They aren’t delayed. They aren’t overpriced. They aren’t sacrificed at the altar of paper book sales.

What are Platforms doing – giving subtle marketing and awareness advantages to their own titles and to high-priced books. They don’t even have the courage to be open about their attempts. The Platforms use small meaningless influence tactics that Cialdini would probably laugh at. Even Sheep (literal sheep, with wool and stuff) wouldn’t fall for that weak stuff. Note: That’s why it isn’t working. That’s why low priced books are still taking over.
Beat them on price and quality. There are already 21 books at $1 in the Top 100. All you have to do is deliver quality. The $1 price does the rest.

$1 and $0 are so Powerful they should be Illegal

$1 is magical – It’s marketing. It reduces friction. It increases sales. It gets readers willing to buy all your books, instead of just a few.
Notice how indie authors who gambled on $1 and $3 saw lots and lots of their books hit the top of the charts.

John Locke and Amanda Hocking had, at times, 3 of the Top 10 titles in the Kindle Store. Including #1. Why would that happen? Because the books were ALL cheap. Very little friction. That’s the power of $1.

$1 can destroy every single handicap and algorithm tweak the Platforms throw at it.

Free? Free is even more powerful.

Guess what Publishers and Platforms can’t afford – $0 and $1. Even Amazon got scared of $0 and ran away from free kindle book promotions. It’s hiding the Top 100 Free Books list now.

As an Indie Author, you aren’t scared. You can use $0 as powerful marketing. Then you can use $1 to get readers more invested. Then $3 to make a decent amount of money.

All of the Competitive Advantages Publishers and Platforms have are Unsustainable

That’s just the truth. Every single advantage they have is based on a world that has already gone. A world where there were gates and there were all-powerful gatekeepers.

There is no Gate, Neo.

Now Publishers and Platforms are using weak freshman year psychology and illusions and fancy words to pretend they still have power.

Just strip away the illusions.

There’s not a single competitive advantage Publishers have that is sustainable.

The only two sustainable advantages Platforms have are ‘Curation’ and ‘Convenience’. All it takes is one intelligent algorithm – whether crowd-sourced or silicon-sourced. That’s all. Those two advantages will be gone. Note: The stores aren’t very good at curation. They aren’t even really trying.

If you can’t wait for algorithms or crowds, then just build your own channels and speak to readers directly. They would like that.

The bottom line is – We’re in a completely different world. All the competitive advantages Publishers and Platforms have are unsustainable. All the real sustainable competitive advantages are ones that Indie Authors can build better than Publishers or Platforms – because they have no baggage and no existing paper book markets to protect. Indie Authors have nothing to lose and everything to gain. They have no old mindsets they have been trained in, unless they are exceptionally attached to past patterns (which makes no sense – you weren’t even getting published, why believe in that ancient world). The entire world of books and publishing is changing and the wolves have been let loose. I don’t see any way that Publishers and Platforms can fight them all off. Now it’s just a question of which wave of wolves tears out the throats of Publishers. How many waves after that before the Platforms are reduced to enablers instead of gatekeepers.


  1. Thank you, thank you, thank you, Travis for re-blogging this. I am printing it, binding it and marking "Bible" on the front in big black marker!

    Patrica A. Knight

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