Menu

The worst investment you could make

150-4hww coverFor many people, the life I live is fascinating. I travel the world, enjoy my work but don't do too much of it, and have amazing adventures in places that others only dream of going to. I'm healthy, energetic, usually cheerful, and have a lot of insights that they want to share. My public persona (which is not completely accurate) is the person that many people want to be, and they like to live vicariously through me.

So naturally, it's not unusal to hear people tell me I should write a book.

And after giving it a lot of thought, I have concluded that yes, I will write a book. But I will only write it when enough people pay me in advance to actually spend the time and energy (and money) that it requires. You see, after doing a lot of research, I have concluded that writing a book is just about the most stupid waste of time and money imaginable!

Writing a book is a classic case of what I call "the entrepreneur delusion." I see this all the time, people working for months or years on something that nobody is going to buy - because they're in love with their own idea and ignoring the realities of the market. They look at the Harry Potter books, or Facebook, or electric lightbulbs and say "one day, everyone in the world will have this thing I am creating if I just keep working on it." After all, JK Rowling endured poverty for years before being successful. Mark Zuckerberg had to quit college, just like Bill Gates and Steve Jobs, and Edison is quoted as having discovered 800 ways NOT to make a lightbulb before he got it right. Nobody ever looks at the graveyard.

200BayeuxCemeteryI got the idea of the graveyard from Nassim Taleb. He talks about how the hero comes home from the war and inspires the next generation to volunteer to go and fight. The volunteers have seen the guy who was successful, but they haven't seen the graves of the many unremembered soldiers that lost the game. For every hero, there is a hundred or a thousand others that regret ever saying "I'll do it." They all believed they were going to be the hero, but most of them were wrong.

I did a lot of digging to find statistics about authors, books, time and money. Here's what I found:

JK Rowling worked for six years to create the first of her Harry Potter books, and was promptly rejected by all the publishers who saw it. Six years investment wasted? Or proof that if you keep pushing eventually you will find someone to believe in you?

In 1996 there were approximately 100,000 new titles published in English. How many of them went on to become wildly successful? Most of them sank without trace. In fact, most new books have an initial print run of 500 copies, and only sell one or two thousand throughout their life. The chance of being the next Harry Potter, in 1996, was one on a hundred thousand.

The experts didn't know which of those 100,000 books was going to be a winner either. All the industry insiders said that kids wouldn't read Harry Potter, they said it was too long. Did JK Rowling really know something the experts didn't? Or was she just lucky? Eventually, a small publisher agreed to buy her idea, because his eight year old daughter happened to pick up the manuscript and told him she liked it. So he printed a thousand copies, not a million. The demand for the book was a total surprise to everyone. Again, did JK Rowling know something that nobody else did, or was she just lucky?

ape

In 2006, there were approximately twice as many new books published, due to the rise in self-publishing. Your chance of being the surprise best-seller is half what it was ten years before: one in two hundred thousand. What possible reason do you have for believing that anybody wants to buy your book?

As if that's not bad enough, the total number of actual books sold has fallen and continues to fall. So in addition to increased competition between titles, the total amount of money in the pot has also decreased.

Of course, it's not all bad news. The rise of self-publishing means that not only can you get your book into print without being chosen by a big company, and it can be more profitable to self-publish too. And let's be honest, do you really think that only one book in a hundred thousand is going to be great? The reality is that publishers choose the one that best fits their portfolio, so even if you have a great book it may still be rejected because they already have something else it competes with. If you self-publish, you at least have a chance of success, right?

Hmmm, maybe not. Consider that the five biggest publishers between them control about half of the total market. If you don't get chosen by one of them, you are in competition with their massive marketing operations and budgets.

The twenty biggest publishers between them control about ninety percent of the market. If you don't get a deal with one of them, then it's going to be a huge uphill battle. Selfpublishers only account for about ten percent of the total market. And guess how many of those there are!

When you publish a book, you should apply for an International Standard Book Number, or ISBN. ISBNs are issued to publishers, so when you self-publish, you are added to the list. According to the ISBN records, there are 85,000 publishers in the USA alone. (20% of these are in California!) These are the little guys like you, competing over ten percent of the market while the big boys take most of the money.

Here's a little tidbit for you: Of the 17000 titles published via iUniverse (print on demand service) only eighty four of them sold more than five hundred copies. That's 16914 very disappointed authors! How do you know whether you will be one of them?

If you're considering going the eBook route, consider that although this was a boom industry until recently, sales have fallen off sharply in 2013. Part of the reason is that many self-published eBooks are very poor quality. If you want people to buy it, you have to get the quality right, but it's potentially a pretty appealing business to be in if you are good at marketing yourself.

robert kiyosakiWhen I tell this stuff to people, they usually reply that it doesn't cost anything to write a book. So there is no potential loss. But I've never heard anyone say that if they have been involved with book production. Time is money, in fact it's more precious than money because you only have a fixed amount of it, no matter what you do. (You will probably only live 70-80 years)

Six years of unemployment and poverty, a la JK Rowling, is probably a bit extreme. The average investment in new books is 475 hours to write, and a further 531 hours to produce a fiction title. For non-fiction, it's a bit more, 725 hours plus 550 hours. So let's call it a minimum of a thousand hours of your life to create a book that in all probability will never sell. That's two hours a day, five days a week, which is all you can hope for if you have a job as well, fifty weeks a year, for two years. Say goodbye to your friends and hobbies, your book is the only thing you will have time for for two full years before you discover that nobody wants to buy it.

So there you have it, a thousand hours of investment, almost zero chance of ever making a sale, a pretty terrible investment. If you have some story you desperately want to tell, not for the money, then start a blog and plan to turn it into a book one day. If you want the validation of being a print author, go for it. But if you want to give me advice about how to invest my time and energy, please do make sure we're on the same page first!