In the beginning of years, when the Internet was so new and all, and the Web Domains were just beginning to work for Man, there was a Dot-Com Idea, and he lived in the middle of a Howling Desert of Dial-up, most ‘scruciating idle; and when anybody spoke to him he said “e-commerce!” Just “e-commerce!” and no more.
Remember the dot-com bubble?
In the late 90s online business models mostly centered around offering web-based services or translating existing businesses to the web, in part or in whole. The bubble happened because tech-hungry investors saw internet-business as the next emerging market force and created a lot of demand for stock in companies whose names began with “e-” or ended in “.com”, but those investors generally didn’t understand the technology du jour and didn’t grasp that internet-based business was, in large part, pioneering a new business model. When stock prices collapsed most of the “dot-com” companies did too.
A few digital companies began during the dot-com boom and survived its bust – Amazon, eBay, and Google are obvious examples.
Amazon and eBay are textbook cases of physical businesses turned virtual. Amazon is just an online department store. eBay is just an online auction house + flea market. They succeeded in beating out early competition through old-fashioned business tactics – (1) being early to a new market, (2) becoming household names (brand recognition), (3) appealing to the average consumer with convenient, easy-to-use websites (analogous to store layout + location).
Google was, arguably, the first major company to succeed using the new business model of the internet. Their strategy went like this:
(1) Offer an effective much-needed service (search engine) for free. Yes, there was a time before Google when the best search engines were paid subscription services!
(2) Have a really simple landing page and results page so that it doesn’t take forever to load for dial-up users (the vast majority of internet users were on dial-up until the 2000s). This set Google apart from popular “web portal” style companies like AOL and Yahoo.
(3) Get really popular and make all your money from advertising – BUT keep your advertising unobtrusive and make sure it never gets in the way of smoothly delivering your primary product (which remains free), so your users stay loyal.
Interestingly, this business model is basically just a permutation of the one that magazines and newspapers have been following for years. Most aren’t free, but the subscription fees and per-issue prices are pretty minimal compared to the cost of actually running and publishing a periodical. Print periodicals are drying up only because online advertising is less expensive and its results are more easily measured than print advertising.
“If you’re good at something, never do it for free,” said Heath Ledger’s Joker in The Dark Knight.
“Consumers don’t value products they don’t pay for,” is one school of thought (that holds particularly strongly in Japan, by the way).
But the internet business model of today, particularly for us DSP folks, is precisely the opposite.
Depending on your product and its distribution channels, free might be a great way to get discovered or it might be a great way to get buried. Products that need a brief time investment from your audience, like comic strips or music or poems – generally anything that’s short or serialized – works well free. If your audience has to invest time in your product to get rewarded by it, charging them money can be a better option.
Regardless of the purchase price, early on in your DSP career, just like those newspapers I mentioned you’re not going to earn back in sales anything close to what it cost you to create the product – and you shouldn’t try to.
Wait, what? I shouldn’t try to make in sales money what it costs me to make my product?
No, you shouldn’t. Your job is not to chase sales. Your job is to create an audience.
Here is Wootton’s First Principle of Digital Self-Publishing:
First Build Reputation. Then Earn Revenue.
Expanded, the First Principle goes like this – if you actively build reputation, you passively earn revenue. Conversely, if you pursue revenue directly, you erode your reputation indirectly and end up with neither.
Make your brand – your story, your series title, your main character, your pen name – discoverable. Make it enticing. Make it exciting. Make it contagious. Worry about your reputation and revenue will come. Worry about revenue and your reputation will leave. This paradox is critical to keeping your focus where it should be – on the excellence of your product, and on the quality of your online presence.
“Look,” you might be thinking, “this sounds great, but the bills are due when they’re due. I can’t just sink all this time and effort and money into a creative project and not get paid for it!”
No, you can’t. So don’t quit your day job.
Publishing, whether traditional or DSP, is not – and never has been – a get-rich-quick scheme. It’s not even a make-a-living-quick scheme. There is not one single example of an “overnight success” first-time author. None. IN ALL HISTORY. Even the very few debut books that rocketed to early fame had thousands of dollars and tens of thousands of hours and several years of time sunk into their creation and release before that book showed up in stores. If there’s ever an overnight-success DSP debut, it will only happen because of some early celebrity endorsement – someone with an already-established reputation who can “lend” their audience to that un-established first-time author.
It doesn’t matter how good your book is. It could be the best book ever written. It’s still not going to take off in time to pay next month’s rent. Books sell because of word-of-mouth recommendations. Word-of-mouth takes time. So don’t have a fast-investment-turnaround expectation of your DSP projects. Don’t ask more from your creations sooner than they can deliver. You’re in this for the long haul.
Your biggest investment into your DSP project – the one that, if you were paying yourself by the hour and tabulating all your business expenses greatest-to-least would easily top the spreadsheet – is time. And that’s the investment you should be looking to recoup from your audience. You should be trying to earn their time. If you earn their time, they will happily pay you money.
Think about it: you’ve spent a lot of time with your project – planning it, creating it, revising it, and publicizing it. You want your audience to spend a lot of time with it too. You want them to actually read what you’ve written, start to finish. You want them to speculate about your project when they’re away from it, wonder about it when they’re at work or in the car. You want it to capture their imaginations and find its way into their conversations. You want them coming back again and again to your website to see what you’re doing next.
If your brand – your story, series, characters, or author persona – can do that, you win. You succeed. Maybe not today, maybe not tomorrow, maybe not this year. But as times goes on you’ll slowly but surely attract an audience that keeps coming back for more. You’ll have an audience that trusts what you create to be worth the money and, more importantly, the time it takes to find out what happens next. You’ll have an audience willing to stake their personal reputations on recommending your next book, sight unseen, to their friends.
So build reputation. Let revenue worry about itself.
That’s Principle #1.