American Airlines magazine recently profiled RethinkBooks’ BookShout! Social Reading Platform in their inflight magazine American Way. Read the article here.

Any kid who has ever been in a fight can tell you that it’s not wise to go blow-for-blow with a bigger, stronger bully.  If a scuffle is inevitable, then a sneak attack, a quick kick to the groin, or some other surprise will yield better results.  Just standing your ground will inevitably result in a beating.  You have to change the rules of engagement to give yourself a chance of survival.

Barnes & Noble (B&N) would benefit from being reminded of this right now.  They appear to be standing up against Amazon and attempting to fight them on neutral ground.  Not a good idea.

Barnes & Noble has some notable strengths, but trying to match Amazon’s spending power or mimicking their technology strategy aren’t two of them.  The $300M investment from Microsoft is nice, but it is pocket change for Amazon who will gladly challenge B&N in a price war.  The DOJ ruling, no matter how it turns out, will not give B&N the upper hand.  At best, it will only buy them more time.

Barnes & Noble needs to change their strategy.  They need to see themselves as a book ecosystem, not just a retailer.

What does that mean?  Instead of developing hardware, software, a proprietary bookstore, and managing physical locations, they should focus on two things—books and connecting people around books.  Apple developed the groundwork for this model when it created its App and Developer ecosystem.  Instead of developing all the games, tools, and software themselves, they let others plug into their robust distribution network and innovate for them.  Now they have 650,000 apps which have been downloaded an unfathomable 30 billion times by users.

Barnes & Noble could do the same thing.  They could let any developer, independent bookstore, or college dropout, plug into their bookstore and help them sell books.  They could entice technology minds to create other reading apps, powered by the B&N bookstore.  They could let innovators create book derivatives and additional revenue streams across the new digital platforms.  The power of mobile, social, group buying and a number of other things could be unlocked almost overnight.  Most importantly, the risk would be distributed across all these experiments and B&N could focus on just one (or two) things.

Amazon wants to own and control the whole book ecosystem.  So let them try.  Barnes & Noble should take the opposite approach of facilitating the interactions across the ecosystem but letting all the parties—the readers, publishers, authors, and agents—control their own brands.  It would yield them a much more favorable outcome.   

BookExpo America (BEA), the trade publishing’s industry-wide gathering, just finished in New York City.  I’ve heard a number of people say it was smashing success.  Really?!  On what grounds?  The fact that the DOJ didn’t march in and start handcuffing publishers?  Or the fact that there wasn’t a steel-caged death match between Amazon executives and the Big 6?

Don’t get me wrong, I believe there were some good conversations at BEA.  But I think we are being a little too generous with praise.  We are not even in the first inning of this digital disruption, and we need to have hard conversations and move aggressively. 

With that in mind, here are a few changes I’d implement if I ran BEA (or had any say in it whatsoever).  These are in no particular order:

  1.  I’d intermix the big publishers and technology companies on the same main floor.  Digital is not coming; it’s here.  And we need to start exploring, experimenting and celebrating technology companies focused on books and book derivatives.   Don’t hide them on the far edges.  Make them front and center and let everyone know—the publishers, authors, and agents alike—we are embracing it.
  2. Give everyone WIFI access.  And then let publishing employees know as they enter that no one should ever receive an automatic “out of office” reply email.  Those who do this will be publicly flogged at high noon in front of the Javits Center.  BEA is work, not vacation.  In the new world, you have to be able to do both.
  3. Invite successful tech innovators to speak.  Ask Steve Case how he built AOL when the internet was still in its infancy.  Ask Tony Hsieh how he built Zappos when hundreds of shoe outlets, including Amazon, already existed.  Ask any prominent music executive to speak about what they would have done differently pre or post Napster.  These principles can be mapped over to the publishing industry.
  4. Limit the number of physical books that a publisher can give away.  Start giving away digital copies.  Not only is it good for business from both a cost and logistical standpoint, but the hallways will also stop looking like the lost luggage center of LaGuardia.
  5. Use BEA for recruiting.  Give away x-number of passes to bright students, entrepreneurs, and thinkers so that they can roam the floor and interact with the industry.  They will see the world from an unbiased perspective and often have radical ideas.  It’s important to hang a question mark on things that have for too long ended with a period.

I could go on, but you get the point.  Things need to change, and BEA can be the tip of the sword.   If you have additional ideas on how we can continually get better, add your thoughts on the BEA Facebook page HERE (for the record, I have no affiliation to BEA or their Facebook page.  I just care deeply about publishing.)

What about Amazon?  This is the first question that anyone in or around publishing asks when discussing a new idea.  So let’s talk about it….

Amazon is by far the 300-pound gorilla in the book business.  They started in books, and their CEO, Jeff Bezos, has a passion for this space.  They have successfully navigated from being just a physical book seller to one of the largest retailers in the world, selling flat-screen TVs, Angry Birds plush toys, and a myriad of other things you don’t need but want with your Prime free two-day shipping.  The Kindle was revolutionary as the first digital reader that users actually liked and used (sorry Sony).  And whether most people know it or not, their foot print continues to grow with strong cloud based services, a New York City publishing house, print on demand, and various other digital initiatives that feed back into the mothership.  

Which brings me to my point. 

Amazon is doing a lot.  In fact, they are doing too much.  They can’t focus just on books because they are trying to compete with Netflix on movies, Apple on music, and states on territorial rights and taxes.  They may be selling a million Kindles a month, but the new Kindle Fire isn’t without its problems.  It has one-tap security purchase issues, some of the buttons are too easily and accidentally pushable, and the scroll-through-the-bookshelf interface is as weak as my grandma’s bladder.  In other words, there are opportunities.  Publishers and tech-savvy publishing companies should ask the question, “What about Amazon?”, but they should be focusing on those things that Amazon doesn’t and won’t do well.  What about book discovery?  Collaborative social reading?  Geo-location coupons and events using digital in physical stores?  Crowd and professional curation of new material?  Repositioning and promotion of backlists?  I could go on, but you get the point.

Amazon is a leader and will be one for many years to come.  But the fate of publishing is not in their hands.  It is in the hands of those wiling to think and act innovative enough to recognize opportunity and deliver tools and services that readers will desire in the new digital world.

Plano-based startup Rethink Books just raised $2 million in its first round of venture capital funding to launch its first two products, which promise to take e-reading to a new level.

The company, run by a team of tech veterans in Dallas and San Francisco, builds social apps for e-readers..

Read the rest at the Dallas Morning News.

Rethink Books has just shared with us news that it has closed a $2 million Series A round led by Ambassador Technologies. The Dallas-based Rethink Books will use the funding for product development of apps including FirstChapters, its eBook discovery and purchase platform, and to cultivate relationships with publishing partners.

Read the rest on Techcrunch.

Surfers often refer to sharks as “the men in the grey suits.”  You see, surfers don’t want to cause panic among their buddies who are floating unaware and exposed in open waters, so they’ve come up with this coy expression.  It’s designed to downplay the fact that a deadly flesh-eating creature is swimming only a few feet away from your board.  Screaming “shark” makes a person want to spring to action.  Saying “the men in the grey suits are here” allows everyone to continue with business as usual.

Surfers refer to them as “the men in the grey suits”, but publishers refer to them “our friends in Seattle.”

Ironically, both groups are handling it the same way.  “Keep calm, there is nothing to fear, no need to panic.” is a mantra that is repeated over and over again in publishing circles.  Of course, nothing could be further from the truth.  We all know “our friends in Seattle” have great technology, great distribution, lots of cash to burn, and deals for all the content.  Now is not the time to continue with business as usual.  It’s the time to spring into action and start innovating.

The music industry didn’t scream “shark” until a messy-haired kid brought it to its knees.  Nokia didn’t scream “shark” until a small Cupertino computer company had a flourishing iDea. Blockbuster didn’t scream “shark” because it was certain that there was nothing to fear.  

“The men in the grey suits” are here.  What are you going to do?