An Interview with Mark Coker from Smashwords.com

Thursday, 15 October 2009 18:08

Interviews - interviews

An Interview with Smashwords Founder, Mark Coker


* What lead you to form Smashwords?

A few years ago, my wife - a former reporter for Soap Opera Weekly magazine - and I wrote Boob Tube, a novel that explores the dark side of Hollywood celebrity through the eyes of the cast and crew of a fictional soap opera.  Despite two years of representation from Dystel & Goderich, we were unable to sell the book to any of the major commercial women’s fiction publishers.  Editors told our agent, Jim McCarthy, they questioned the commercial potential of such a book. Previous titles targeted at soap opera fans had produced mixed results.  You can imagine how frustrated and disappointed we were, after having spent thousands of hours researching, writing and revising our book, only to be denied the opportunity to reach our audience.

Jim suggested we try self-publishing.  He told us about one client of his who met with similar rejection.  The author then self-published, sold several thousand copies within a year, and then went back to Jim.  With the commercial market proven for the title, Jim sold their book a week.

I decided to take his suggestion several steps further.  While I respect the need for publishers to vet titles for commercial potential, there’s something inherently broken about a system that rejects titles through this narrow lens.  What about brilliant long tail works with potential audiences of only 100 or 500?  The publishing industry can’t support these.  Publishers also cannot accurately predict which titles will become huge hits, and which will flop, so they routinely overlook great works.

For the last couple centuries, publishers have controlled the means of book production and distribution.  This is too much power concentrated in the hands of too few people whose business interests don’t always align with the interests of authors and readers.

Since I come from Silicon Valley, and we’re raised from birth to believe technology can solve virtually any challenge, I decided to tackle the publishing problem. 

I envisioned a free online publishing platform that would allow any author, anywhere in the world, to publish their work online in seconds.  We’d eliminate the gatekeepers and let the readers decide the value of the author’s work.  Such as system would hold the author fully accountable for the quality.  If the author was too lazy or incompetent to invest the necessary effort to produce a quality book, their book would quickly disappear into irrelevance, as it should.  If their book was truly a work of value, they’d have a fair shot at connecting with a readership.

This is what we created with Smashwords.  It’s an ebook publishing and distribution platform for the world’s authors and publishers.  We launched May 2008 with support for self-published authors.  In May 2009, we expanded our platform to support publishers.  In the last few weeks we took our first steps toward becoming a full service ebook distributor with deals with Barnes & Noble and Sony.

* How did the BN.com and Sony eReader deals come about? Who else are you targeting?  Who would be the big fish?

Both relationships were the result of others in the industry contacting me and saying, “hey, you need to talk with my contact at XYZ.”

I think both B&N and Sony view Smashwords as an efficient onramp to obtain ebooks from independent publishers and self-published authors. 

Our relationship with Sony goes one step further.  We’re one of two publishing platform providers that help power their Sony Publisher Portal, which makes it easy for any small publisher, anywhere in the world, to quickly distribute their titles into the eBook Store from Sony.

We may announce additional partnerships in the next few months.


* What do you think publishers are doing wrong right now that has allowed you to succeed?

That’s a huge question.  A few of the wounds are self-inflicted, but most are due to larger macro changes in the media marketplace.

I have tremendous respect for people in publishing, and the value publishers provide.  Publishers take enormous risks on every author they publish.  They’re like Silicon Valley venture capitalists.  They invest their money, talent and connections to commercialize authors and their books.  If publishers invest well, they and the author earn a good return, and it’s a win/win for everyone.

The biggest problems facing publishing today distill down to competition, economics and a broken supply chain.

On the competitive front, we’ve experienced an explosion of media content over the last 20 years, all vying for ever-shrinking slices of the consumer attention.  Consumers today have unlimited media choices, and many of these choices are lower cost and more easily consumed than books.

On the economics front, if you look at the statistics from Association of American Publishers over the last seven years and adjust for inflation, book publishing is no longer a growth business.  If publishers can’t earn good profits, they’re forced to scale back their investments on authors, marketing and acquisitions.  This creates a negative, self-reinforcing cycle of decay.  It also means many authors have fewer publishing opportunities; will receive less marketing support; and will go out of print sooner.

On the supply chain front, the current model of consignment bookselling is broken.  Publishers bear all the risk of book production, printing and distribution, and then retailers can ship the books back for a full refund.  Book retailers are suffering too at the hands of Amazon as well as declining readership, and this in turn places greater pressure on publishers.  I heard some publishers faced huge returns after the economy fell off a cliff in late 2008 as retailers scrambled to raise cash.

At Smashwords, our mission is to help publishers and authors leverage the power of digital books to overcome some of the challenges I outlined above.  We’re not a panacea, and our “success” is far from certain, though I’m confident we’re on the right track to create new publishing models that work for authors, publishers, retailers and readers.

* Now that authors have Smashwords, why would they need a traditional publisher anymore?

Publishers still have a bright future if they play their cards correctly. 

If you assume 95 percent of all book sales are still print, then a traditional publisher is the most effective route for gaining widespread distribution in brick and mortar bookstores, and will remain so for as long as physical bookstores remain relevant, and let’s hope they do.

Print book distribution is one strength of publishers that few indie authors can replicate on their own.  For this reason, publishers should pray for the health of brick and mortar bookstores. 

If physical bookstores become less of a factor in book sales, or go the way of Tower Records, it’ll hurt publishers disproportionately.  After all, low cost print on demand services already offer indie authors distribution to online retailers.

For ebooks, publishers can still provide great value in terms of acquiring and cultivating talented authors.  On the distribution side, however, publishers no longer control access to the channel.  We provide authors access to distribution at no cost.

A few weeks ago I spoke with one successful author who was considering selling print rights for his next book to a large publisher, because the publisher can get him great placement at the front of bookstores.  However, he’s considering retaining digital rights for himself since he can distribute through Smashwords and retain 85 percent of the net for himself.  Whether publishers will allow such a decoupling remains to be seen.


* When will ebooks become the true norm for consumers, where at least 50% of the books people buy are ebooks and 50% are traditional?

The ebook market today is growing faster than most people realize.  The latest July data from AAP/IDPF indicates ebooks accounted for only one percent of all book sales in the US, yet they’re only capturing data from a small subset of publishers.  Other consumer-focused surveys are indicating five percent is more accurate.  Amazon just reported that for books they sell in both print and Kindle editions, 48 percent of sales are going to the Kindle.  That’s amazing. 

I think ebooks could cross the 50 percent threshold within five years, and certainly within ten.  Things are developing faster than even the most optimistic ebook proponents thought possible. 


* So, an author/publisher has their book on Smashwords, then what? What can they do to influence people to buy it?

Book marketing has always been about word of mouth.  Although reading is a solitary activity, readers love talking about books.  The books in a reader’s library - both physical and virtual - are a form of social expression and personal identity.  If you can get readers to integrate your book into their social identity, the word-of-mouth engine can self-perpetuate.  If your book is truly great, once you find your right readers they become the word of mouth ambassadors to more readers.

I wrote a free ebook called the Smashwords Book Marketing Guide to provide authors and publishers tips on how they can leverage Smashwords and social media marketing to promote their books.  I update it frequently as Smashwords authors share new tips with me.

Beyond that, ebook authors can consider retaining the paid services of professional marketers.  I urge them to invest judiciously, however, because ebooks are still such a small slice of the publishing pie it’s nearly impossible for most authors to recoup marketing investments based on ebook sales alone.  Ebook authors should also publish in print, and then promote both formats via their marketing campaigns.  

* What are your specific goals for the company now?

Our mission is to serve as the ebook distribution infrastructure for the world’s authors and publishers.  The ebook supply chain today is nascent and still evolving.  I see an opportunity for Smashwords to help build a more efficient ebook supply chain that works to the benefit of authors, publishers, retailers and readers.



* Can you give us any hints on pending deals and new developments coming from Smashwords?

We have over 220 development initiatives on our roadmap ranging from trivial service enhancements to major projects, and that’s just on the platform side.

One of the advantages of running a scrappy startup is we’re forced to constantly reevaluate our priorities so we’re focusing resources on what matters most.  Two high level questions guide our decision making:  1.  How can we make publishing at Smashwords faster and easier?  2.  How can we create new opportunities for our authors and publishers to connect with readers?  Given these priorities, you can expect to see more improvements to our publishing and distribution platform, and more distribution deals.

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