Business Model Innovation Hub
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Wiley
I'm just off a 1h+ call with a senior editor at Wiley, the publisher. They are interested in publishing the book... It would indeed be interesting because they could give #bmgen a much better global distribution (which is our huge headache). It could bring our book to a new level - even if we would certainly earn little per copy.
He is going to pitch the book internally next Tuesday and show it to his sales team on Thursday.
Also, they don't really like the fact that it's a four color book (too costly for them). They'd like to sell the book at 24.- USD, which would be really, really attractive to readers!!!! For the first year the editor would expect about 25k to 50k in sales, which is really good.
One of our strategies was indeed to pursue the "guerrilla path" until we get to a certain level - that would give us more negotiating power...
What would you do? And with which conditions?
He is going to pitch the book internally next Tuesday and show it to his sales team on Thursday.
Also, they don't really like the fact that it's a four color book (too costly for them). They'd like to sell the book at 24.- USD, which would be really, really attractive to readers!!!! For the first year the editor would expect about 25k to 50k in sales, which is really good.
One of our strategies was indeed to pursue the "guerrilla path" until we get to a certain level - that would give us more negotiating power...
What would you do? And with which conditions?
Replies to This Discussion
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Permalink Reply by Norbert Herman on -
Alex, I would not take this offer of a low price on the book if I had my base objectives covered, i.e. I was getting what I needed to get out of the book financially and the sales were increasing at a descent pace towards my long term objectives.
My opinion is that the BMI idea would get a lot more publicity if the Hub conversation on the topic would open up to the global community and a repository of work products and ideas was created in a similar way to the open source world of software with the book to be used as a guide. This type of initiative might prove far more beneficial to what I assume to be the objectives for the book. Price is a peculiar topic, but in comparison to the other books in this space which focus on businesses larger than a "1 person hot dog stand operation", people either spend $50 or they dont. No doubt these are probability factors, but in short, its all about what effort needs to be concentrated where and how the brand could be diluted along the way due to price which happens to artificially communicates a lot about a product's value - as sad an issue as it is real.
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Permalink Reply by Juan Marquez on -
Hi Alex. I think it’s a great opportunity. In some way it’s similar to movie industry: you have a gala premier in the most exclusive theaters, after you go for commercial theaters at a lower price, after you go for DVD format for rental and for sale, finally you go to TV Channels paid by advertising. Try to retain the IP rights or at least a good stake of it.
Best regards,
Juan F Marquez
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Permalink Reply by Dave Crowther on -
Alex,
1. Enjoy your richly deserved week-end.
2. Having raised VC I know exactly what it feels like to "lose" time to strategic wrangling with partners who are injecting money and reach but by definition don't have the same long-term strategic objectives. Everything costs more and takes longer ... even allowing for the fact that we know it costs more and takes longer. The negotiations with a publisher (and hopefully many more than just Wiley) will be a significant disruption in your life. You hold the option to have those discussions at any point. Is now when you want them? And are you prepared for the handcuffs that will be applied re treatment of IP and future other publishing?
3. What is the impact on PR? At the moment it is a wonderful case study of a new business model and successful open innovation. That is newsworthy. Does the story become less valuable when it is "just another business book"?
My provocation: be bold and use the situation to your advantage:
Decide exactly what terms you want, what treatment of IP, etc and employ an agent to hold an auction on that basis among the publishers. Challenge them on their business model of inertia that 1:1 negotation is the optimal way to generate value. It may be for them, but is it for you?
And make this a newsworthy event. It'll generate even more interest for you, but also because it is newsworthy it will create more value for the winning publisher (if they meet your criteria).
I am also intrigued by Wiley's price point. I've spoken with around 100 people now who have had their hands on a copy. Having seen it they are not at all price sensitive and, indeed, are pleased that it is reassuringly expensive and priced differently because it affirms their perception that they are smart, radical thinkers and can perceive the difference between price and value.
Keep the book priced according to its value, not by decades of inertia inherited from harder to use business books.
One final thought. At some point you'll need to consider how many copies you'll sell. Why not use this site (or the next iteration!) as a prediction market? Tap into the collective intelligence of the Hubbers to produce a more accurate prediction than Wiley to help you maximise your value.
And enjoy holding an option today that clearly has value.
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Permalink Reply by Claudio D'Ipolitto on -
Dear hubbers, dear Alex,
After reading all our suggestions and analysis above and imagining how much time, dedication and previous experience their reflect, it occurred me some questions I would like to share with you:
HOW MUCH DOES VALUE THIS COLLECTIVE INTELLIGENCE NEURAL NETWORK, ALEX HAS CREATED AND KEEP ANIMATING AND CHALLENGING?
WHICH OTHER CREATIVE ENDEAVORS CAN OUR "2.0 TEAM" COPE WITH?
HOW MANY PEOPLE IS NEEDED TO CHANGE HISTORY (OR SOME ASPECT OF IT)?
... ... :) ... ... just thinking ...
Kind Regards,
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Permalink Reply by Arnold Wytenburg on -
Hi Alex,
Since distribution is the key to a successful book, this is a path well worth pursuing. But why not approach other publishers as well? If Wiley is interested, there are likley others that would consider publishing the book. Ultimately, you could end up with a much better deal.
Cheers, Arnold
PS. Last fall, I used the book and the approach in a 'living lab' course that I teach at the University of Toronto on entrepreneurship in the software industry - the results were stunning!
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Permalink Reply by Colin Pons on -
Hi Alex,
For a physical book a deal with a traditional publihing firm may work well to ditribute the book. I would be an absolute disappointment if 'we' lost full color and the visuals of the book.
Since the book is about busines models my suggestion would be to:
- interest a traditional publishing firm (such as Wiley, Harvard Business Press) in a 'stripped' down version (addressing the US$20-US$30 market. But retain the right to self-publish the current two versions (and later editions). and the rights to e-book.
- publish the two current edition (perhaps use the Hub members to lessen the workload some)
- start publishing an e-book form for purchase on Amazon and other websites
This would allow increased sales as well maintain ownership and deluxe editions. Increased sales come from the lower priced item and, hopefully, the electronic version.
BR
Colin
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Permalink Reply by Leonard Belanger on -
Congratulations Alex!
I agree with Dave, Arnold and others in that this is a great opportunity to elicit offers from other publishers. The exercise will definitely generate additional awareness for the book and add to its appeal ... further testimony to the success of its underlying innovative business model. Also, with other publishing offers to consider, there would likely be more negotiating room with Wiley.
I also think that Mike and other hubbers raise compelling points about maintaining pubilicity and design control to the degree that it's possible. I would hope that a couple more offers on the table would at least give you greater bargaining power on publicity & design, as well as on the book's price.
Undoubtedly, price is a sensitive issue. Perceptions about the book's quality will vary based on its price and by geographical location. In response to the mass distribution objective, probably a basic' version (in the US $20-$30 range as Colin and few others suggested) offers a reasonable price point, However, we can all appreciate the quality that is perceived by a higher price point, just like the feedback that Dave speaks about above,
Different price points make sense if the intention is to go forward with different types/qualities of editions. Otherwise, perhaps the magic 'price' lies somewhere between the low-high price points seen so far.
As you pointed out Alex, there are a number of aspects that you intend to review, like determining your short to medium term objectives about future editions, greater generation of consulting leads with a broader mass distribution, etc!
In the meantime, I'm glad to hear that you and your wife were able to get away this weekend. It's nice to see that you're managing to take some well-deserved downtime to appreciate your accomplishment!
Regards,
Len
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Permalink Reply by Alex Osterwalder on -
It is wonderful to see how you came out in force to help us with our decision. I deeply appreciate! Your comments have been very helpful to draw a better picture and make a better decision. Your comments together with the experience of our editor, Tim Clark, have helped us define a path to move ahead.
Two questions have been at the center of our reflections regarding a potential collaboration with a publisher or continuing to self-publish:
- In which business are we in?
- Can a publisher help us leverage our business model?
What business are we in?
The answer to the first question is that we are in the business of creating useful concepts and applicable tools to help business people with their business model questions. That's exactly what we tried to achieve with Business Model Generation. And the independence from a publishing house helped us do it the way we thought was right (no publishing house would have agreed to a landscape, 4-color, visual business book upfront).
However, after finalizing the book we spent too much time with trouble-shooting printing and distribution logistics - without ever getting it completely right. A classic issue of problematic business model implementation. The switch to Amazon.com for distribution (our initially planned strategy) proved to be a step in the right direction, but is insufficient to reach a global audience correctly.
Hence, we spent a lot of energy to manage printing and distribution, which is a job that others can get done better and more efficiently. Liberating ourselves from this would allow us to focus on our core business again. That said, I do think the self-publishing route was the right strategy to start with. It allowed us to create the type of book we imagined, in an open fashion, based on a community, and in a guerrilla fashion. It also allowed us to create the success we needed to develop a better negotiating position with publishing houses. They would have never even considered our book - now Wiley is knocking on our door.
How can a publisher leverage our business model?
The answer to the second question is clearly yes. A publisher can bring Business Model Generation to a global audience more efficiently - something we could never achieve in the same way and only with a lot of effort - not an effort corresponding to our core business. A publisher would help extend the reach of our ideas and help grow the business model community.
Also, for every print-run we launch we need to mobilize substantial capital - money that is not available for the business we are really in: content creation. Printing 10'000 books one print-run at a time also means that we carry the whole inventory risk - something that is definitely not ideal.
The conclusion is that a publishing house would be a perfect manufacturing and distribution partner that could leverage what we already created: a very special business strategy and innovation book.
Negotiating a deal
There are many valuable points that were made in this discussion thread, that we will take with us into negotiations:
- Copyright of the content remains with authors (normal procedure)
- Keep the 4-color deluxe version and possibly make compromises on the portable version (e.g. monochrome rather than color))
- Negotiate a reasonable advance on royalties
- Negotiate a royalty scheme starting at 15% and increasing with the number of sales
To be continued...
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Permalink Reply by Daniel Pandza on -
Sorry for the late post... I totally agree with your decision... focus on your core and don't get sucked down in context work just in order to protect your ego...
The only thing worth adding is that you might want to verify in which countries the publisher would publish the book... For smaller market places you might want to keep other alternatives open... Negotiate also translation work (Spanish would be very useful for us down here in Mexico and other Latin American countries, and German might help you in Europe) in order to speed up international distribution.
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Permalink Reply by John Smith on -
http://www.twliterary.com/audio/Book_Proposal_Bootcamp.mp3
I think there's a BIG difference between a publisher helping with logistics and them helping with the advertising. You've already done the most difficult part of publishing.
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Permalink Reply by David Edwards on -
I'm sorry I don't go with all this chatter about publishing companies and whether you should go with them or not. Surely we can take the high ground here. IF Wiley also publish books that complement the Canvas and can help the audience collectively provide better environments for providing innovation in using business models then go with Wiley. The book is NOT the definative publication for business.
You don't gain stature by one-offs. Get known for innovation and creativity. This is not a sprint (unless this is the only book you have within you). I (naively) thought that we were a bunch of individuals that can make a change. Alex this is no the first normative model that deals with business and will not be the last. Surely this was more about a movement ( a different movement) that could make a difference. Collectively we can create more books, more software, more papers, more methodologies that will make a difference. Capitalize on the book by all means but it is written and now we should move on using this simply as a base ( a good referential base - it does not include lot of the work you had in your thesis) for what we can do next. This is not about whether Wiley should publish or not (can you make more money than with Amazon - if yes then do so). For most of us this is more about using our collective knowledge to make a difference.
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Permalink Reply by Alex Osterwalder on
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Nobody every said it's the "definitive publication for business" :-D That would be more than a touch of arrogance :-D It's a nice start to build on: To create other methods, software, etc.
On the topic of publishers: The advantage of working without a publisher was that we could make an innovative book - I would tend to take the moral high ground for that. Publishers are not very creative when it comes to book formats etc... They don't take risks. Now it is time to move on, though - as I outlined in my post above. Publishers do know how to bring a book to market...
After all the broader goal is to create better tools as a business model innovation community - not to distribute one book ;-)
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