business models


In my work with nonfiction authors (and in my experience as a reader), I’m noticing that the function of nonfiction books is changing. From the perspective of a reader looking for expertise in solving a problem or in just gaining knowledge, there are so many information options out there now that – for me, at least – the nonfiction how-to book is beginning to take on a more discrete role than just an emblem of expertise.

Entrepreneurism is exploding right now. Many experts are not just writing books, but building businesses around their expertise, with full-service interactive websites, seminars, webinars, workbooks, and coaching opportunities. Experts/authors and readers have more direct contact with each other than ever before. Which is fantastic. But it also means the book is a relatively distant and static way for readers and authors to communicate. So what are readers looking for in a book?

Put simply, when a reader reads your book, it’s their first, small investment in establishing a relationship with you. I’ll put it personally: when I buy a how-to nonfiction book, it means I’ve seen it recommended by someone I trust (this could be an impersonal, trusted curation source or a personal friend). It means I’ve been to your website and I see that you really do have a depth of experience in the topic – and – this is key – you have a number of deeper-access offerings by which I can get more of your expertise. You have other, more personal ways to interact with you and keep the conversation and the learning going. The book is not the end (establishing your expertise) but the beginning (establishing a relationship). (It may seem ironic that we’re all craving relationships more and more now that our relationships are becoming more digitized, but it’s a very logical result. But that’s a topic for another post.)

Even more, I believe what readers want from books is some way of knowing that the author cares about them and about solving their real problems. And alth0ugh the book does function as a way for authors to build trust with their readers, the real proof of trustworthiness is accessibility.

The takeaway from this is that readers aren’t necessarily looking for the author/expert with the most impressive expertise, but simply expertise that meets certain standards of excellence. And perhaps the most important standard of excellence they’re looking for – the one that has the most weight – is service. Not just robotic or same-for-everyone service, but personal service. In other words, a relationship.

The book is often the first tangible investment in a business relationship a reader/prospect can make. Authors who understand this and have a clear path of accessibility and continuing the conversation beyond the book would certainly be more appealing to me than someone who has the highest awards in the field but remains aloof and self-satisfied in her own expertise.

Readers don’t just want the book anymore. They want the author.

Mike Shatzkin, very trusted source on how new media is affecting old publishing, just alerted us to one zinger of a headline: full-time novelist Barry Eisler has turned down a $500,000 contract from a traditional publisher in order to self-publish. It now makes transparent economic sense for (some) writers to develop their own publishing capacity (see the lengthy but crucial conversation between Eisler and noted self-publishing author Joe Konrath here). As most of us have already known, this development also makes clear that those who produce content (ideas and stories), not those who polish the delivery mechanism, own the true value.

This is all the more true for thought-leading businesses - now is the time to develop your own publishing capacity. The business model of publishing as a separate industry just doesn’t make economic sense for large businesses who have already developed their own niche market through their services and their web presence. The more directly accessible your content is to your tribe, the more they will buy it. (Smaller and/or less known individuals and businesses still benefit greatly from traditional publishing’s reach and expertise because they don’t have it themselves. But with even small effort applied to leveraging new media, this will change sooner than we think.) Very soon there won’t be a large divide between blog posts and books – it will just be one flowing continuum, where people will click on their choice of media – digital or print - to read your content of varying lengths. Those who have their own media arm are well on the way – adding book publishing capacity will only get easier and easier. Why not own that capacity yourself?

The recent virtual communication advances have enabled so many threshold moments, but one very important one is the transformation of publishing from industry to capacity. Because it just doesn’t take as much machinery and capital and labor to produce and disseminate content, publishing is now much like accounting, or marketing, or IT, or graphic design – a streamlined capacity that still requires expertise, but in a lithe and loose way - so that publishing experts will need to connect to another industry besides “publishing.” Even though this will require some scary reshuffling, I think this is tremendously exciting, because business needs publishing much more than it realizes to meet the goal primary to most businesses today: establishing trust. And the new publishing technologies available today have the capacity to further trust far more than mass media publishing ever could.

A few nights ago, I finally watched Guns, Germs, and Steel, a National Geographic docmentary based on the Pulitzer Prize-winning book of the same name by Jared Diamond. I was already familiar with the specific content of his proposal, which had disseminated far and wide in the last 15 years or so since the book had been written - that the people groups who controlled guns, germs, and steel went on to rule the world. But I didn’t realize that this documentary was also really about return on investment, and how efficiency begets innovation which begets further efficiency. People groups living in geographies where they could spend less energy on survival (food was more nutritious and/or more easily stored and prepared, for example) had more time and energy to spend on developing innovative technologies, such as agriculture, steel, medicines, and so on. A greater return on investment from energy spent on survival, continually invested, yields compounding interest.

A straightforward concept, and one I couldn’t help but apply to what’s happening in the publishing industry. With the communication technologies now available, we get a much better ROI on energy spent producing and disseminating content, which means publishing can now be a mobile capacity for an industry rather than a whole industry itself. It just doesn’t require that much mechanical effort anymore. This leaves us all more energy not only to invest in the quality of our ideas (i.e., have time to think & talk about our ideas to yield greater insight), but also in what the ancient Greeks called rhetoric. Both are vital for businesses who value establishing trust with their customers.

The study of rhetoric flourished before the printing press – when communication was mostly oral and immediate. Today rhetoric usually implies empty words, a connotation probably likely even in ancient times, as rhetoric has nothing to do with the truth of the content, but how well it’s expressed. Assuming that we have something truly valuable to express to our audience (why else would you go to all this effort?), the classic rhetorical triangle provides for much richer impact than much of what passes for even transformative communication today, which is usually just the quickening pulse of insight. The three vital aspects of communication, according to classical rhetorical studies, consist of logos (logical expression), pathos (connection with your audience), and ethos (the communicator’s character).

So although more energy can be invested in the quality of composition (and it likely should), the words you use are only one third of the equation of effective communication. What communication technologies have done is return the possibilities of both pathos and ethos to written communication – qualities previously only possible with oral communication. With print media, a huge, impenetrable layer of machinery stood between the audience’s ability to discern an author’s ethos (character), as well as the author’s capacity for true pathos (connection with his audience), effectively removing both from the rhetorical equation. The remaining leg of logos limped along for a while, but the author’s inability to connect directly with her audience inevitably led to a split between those who produced content and those who consumed it – and the dehumanization of both.

Here’s my layperson’s view, of two communication vehicles: marketing and publishing. Twentieth-century marketing experts tended to view “the public” en masse as pavlovian consumers, whose base desires could be easily molded by the right message and thus exploited to profit the business – which in turn dehumanized the marketers as they viewed people as merely means to monetary profit. (Viewing people as less than human always dehumanizes – the public only would have been dehumanized insofar as they held a similar view of themselves or the marketers, which may have also been true.) In publishing, the same split between producers and consumers of content created a literary elite, quick to differentiate from and demean the mass public, as if writers are always smarter than readers.

Now that anyone can produce content as well as consume it, that false division has been obliterated – for the better. I admit I have a lot of patience for the flurry of social media today – writers and readers, businesses and customers, have been blindly dependent on each other and had never even met. (Customers discovered businesses were not a bunch of nameless men in suits, but real people with likes and dislikes, some of whom actually loved what they did for a living.) Now we can talk to each other anytime and anyplace – of course we’re a little manic right now. That will settle. But when it does, the capacity for constant connection will remain – and we’ll discover who each other really is. And whether we really want to maintain the relationship.

Which is why businesses desperately need the capacity of publishing – not the mass print, hobbling leg of logos alone, but people who know how important pathos and ethos are to rich, transformative, relationship-building communication that will yield yet another layer of compounding return on investment – best embodied currently in the concept of co-creation. Books and blogs and studies and conversations are popping up everywhere about how crowds are smarter than even the smartest individuals – and these social communication technologies are enabling like-minded crowds to find each other and talk about common passions and ideas that are bigger than anyone’s ego or career or reputation.

Developing your business’s publishing capacity – really, your business’s rhetorical capacity - will be how your business will establish authentic trust with your customers – if your business really is trustworthy and honestly cares about worthwhile, valuable pursuits (more than just a profit, and more than just chasing customer whims). Social communication tools don’t create ethos or pathos – they just reveal what’s already there. Just like rhetoric doesn’t create valuable insight. So this is the time for a deep examination of our value propositions - do we really produce something good for real people? Or are we still doing business in the mass media age? Can we express that value proposition in terms of a concept or pursuit larger than ourselves or even our customers? If your business is centered around creating value beyond the financial, and you’re able to communicate that value and leverage like-minded collaborators in that pursuit, you were made for this moment.

After reading Michael Porter and Mark Kramer’s “Creating Shared Value” in HBR this month, at first I was a little confused as to why they were introducing this term “shared value” as if it were new. After all, customer relationship management (or customer strategy) has been focused on customer needs for a long time, and listening to and responding well to customer needs certainly produces shared value for both company (in terms of profits, both long term and short term) and customer (in terms of getting what they really want/need). [Not all customer strategy businesses are value-driven, but when I talk about CRM below I'll be referring to those who value customers in a holistic way and not just as a means to corporate profit.] And corporate social responsibility (CSR) and/or business social impact aren’t new ideas either. These adjacent (but not congruent) concepts are inherent in what for me was the key sentence of the article: “Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face.” In fact, many CSR bloggers are bristling at the implication that Porter’s term “shared value” is somehow different or better than the true aims of CSR: doing well by doing good (see here), and that what’s good for society is good for business (and here). Is shared value just true CSR rebranded? After all, the article seems to advocate moving traditional CSR efforts from the periphery to the very strategic center of businesses. But at the same time, Michael Porter clarified in an online comment, “I would caution against the idea that creating shared value replaces past management thinking. Instead, it is additive. Let us not create a false dichotomy between shared value and the core economic principles of competition, but harness the connection.” This likely helped more company-centric practitioners breathe a sigh of relief – and helped clarify one deep difference between these three concepts.

Although customer strategy (CRM), corporate social responsibility, and shared value all pursue the creation of value through businesses acting as businesses, the difference seems to be in who defines value in the first place. In (value-driven) customer strategy, the customer defines the good and the valuable. In corporate social responsibility, the government and civil society define the good and the valuable. And according to the shared value perspective, the company defines the good and valuable, through its business proposition, strategy, and end results. They may get input from stakeholders and the community at large, but ultimately, if the business really is acting as a business, it will decide what creates value and what it will pursue – and its results will speak for themselves.

Should this bother us? Not necessarily. Seeing that a shared value perspective puts the company back in the driver’s seat of defining value may reassure some of its detractors. I still think all these terms and perspectives are trying to get at the same general result: creating long-term value for customers and for the world as a whole, and leveraging the competitive thrust of business to do good. But for shared value, CSR, and CRM practitioners to self-identify as pursuing the same end and begin pursuing specific results together (which will need to happen for a true business revolution), I don’t think it’s a matter of branding, or who owns what term, or even logistics per se. No one person came up with this idea, and the current concept of shared value depends greatly on similar-minded practitioners in earlier contexts (particularly customer strategy folks, in my opinion). For shared value, CSR, and customer strategy companies to collaborate meaningfully, we will have to bring this hidden philosophical issue to the forefront and openly debate it. Even if we all agree that we’re primarily seeking “results,” we need to pinpoint who defines value in the first place to even know what results we’re seeking.

If you’re like me, you’ve probably heard a lot about how freelancing is becoming the fastest growing business sector – that as software and business processes are moving to the cloud, so is hiring (see this Christian Science Monitor article qualifying our impressions of freelance growth). 

This got me thinking about the freelance business model in general. Now that the cloud has unhinged us from the office, should free-agent hiring be the new business model? Companies can handpick talent for specific projects, talent collaborates, and then when the project’s done, said talent looks for the next project that makes the most of their particular skills. Surely this is much more efficient – less overhead for the company in paying employee taxes and benefits, and more enjoyment for the worker as he or she handpicks the work?

Being an independent contractor has certainly been a boon for me and my family. But although freelancing definitely has its benefits for certain contexts, I don’t think it’s the new ideal business model across the board. Here’s why:

1. Efficiency. Although freelancing may seem more efficient for the firm and the independent contractor, the independent contractor doesn’t just do project work, as every solopreneur knows. Once you own your business, YOU are the HR department, the marketing department, the accounting department, and the CEO. Some people enjoy this small-scale variety and being in charge of each aspect, and the independence is worth it. But certainly the corporate model, with its economy of scale, gets work done more efficiently in a measurable sense. And worldwide commerce benefits from this efficiency.

2. Many people prefer the camaraderie of a company. As the CSM article pointed out, freelancing has surged recently because more people are out of a job and need to find some way to make ends meet. If those jobs opened up tomorrow, many would likely choose to return.

That said, here’s why freelancing has been the best choice for me:

1. It’s good for our family. We have two sons, ages 5 and 7, whom we want to raise well. And we’re pretty convinced that having plenty of direct parental contact is needed for children to grow up feeling secure, loved, and capable of being independent when the time comes. Working at home allows me to do that. But that said – one parent raising children while the other is absent at work isn’t necessarily the ideal either. Which leads me to #2…

2. It’s a temporary solution to a larger societal problem regarding “work” and gender. If one parent stays at home with the kids and the other works at an office full-time, for example, and the stay-at-home parent is ambitious at all,  this will lead to a lot of resentment, either open or hidden. (Can you tell I’ve been there, done that?) I believe that men and women work best together because they were made to do so – and this isn’t undermined just by the “separate spheres for men and women” ideal of 19th century romanticism (of which remnants still remain in American culture), but also by the separate spheres of work and home. Both professionally and personally, in my experience, men’s gifts are activated best when with other women, and vice versa. Moms parent best when they parent with dads; women work best when they work with men; women lead best when they lead with men – when men and women value each other equally, of course. And vice versa all around. To return to the original point: until society moves more fully away from “work and home as separate spheres,” freelancing provides some creative solutions in the meantime. My husband and I nurture several income-producing streams from home, which allows us to parent together more, work together more, and make a larger contribution to the world alongside others. Frankly, it’s been the only way to invest in all our disparate interests!

Before the Industrial Revolution in the U.S., work and home were joined in one economy in the form of the family homestead. But it was hard work! The Industrial Revolution created a higher standard of living – through the separation of work and home. And at the beginning, a new cultural romantic ideal of women at home and men at work helped everyone accept this split more easily. But it didn’t last long. Certainly when women began joining men in this now-separate sphere of “work,” women finally got back some feelings of empowerment and achievement, but for parents, emptying the home of women AND men hasn’t been the ideal solution either. Child labor laws mean we can’t send the children to work too! Surely a better solution is to integrate work and home more so that those who are parents of young children – a very temporary time – can be home together more often. Otherwise children will always inherently be a burden – their needs will always be competing against the office’s needs. Our identities as parent and careerperson will always be competing, instead of complementary. And in the day-to-day stress, we’ll forget that children, the potential adults in our care, will grow up to become working adults and will shape the future of the world. Companies who strive to create long-term value care about how children are raised - not just in terms of current employee morale, but in terms of their economic future: children are the future work force. How did your childhood and quality of home life impact your adult life? Doing their part in helping their employees raise children well is simply an investment in their long-term assets.

The ability to work remotely through virtual communication can help us reintroduce sustainability into our business models. Successful corporations – usually appearing on “the best places to work” lists – are already finding creative ways to integrate employees’ personal and work lives. But for the rest of us, in the meantime, freelancing provides yet another healthy alternative.

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