This is a headline from The New York Times on May 6, 2011: “Publishers Make a Plan: A ‘One Stop’ Book Site.”
This is a headline from The Wall Street Journal on January 6, 2015: “Book Publishers Sell Bookish Site.”
Bookish was the name of the book portal announced in 2011 and launched in 2014 by three big publishers as the industry’s answer to Amazon. It was doomed from the beginning.
What went wrong? Lots.
Their intentions were understandable. The big publishers were sick and tired of giving up customer data, book pricing and consumer clout to Amazon.
They were also making little progress with their solo digital ventures. From the 2011 Times article: “Publishers have spent a lot of time and money building their own company Web sites with fresh information on their books and authors. The trouble is, very few book buyers visit them.”
Bookish did not debut that summer as promised; it launched two years later.
While seemingly simple in scope, building a public portal was more gnarly than industry insiders figured. The folks involved were smart, dedicated and savvy at publishing books and finding bestselling authors, but they were not tech companies and knew nothing whatsoever about building a consumer brand.
While seemingly simple in scope, building a public portal was more gnarly than industry insiders figured.
They had always distributed their books through bookstores, which attracted the customers — and then through online giants like Amazon, Barnes & Noble and Apple, which eventually controlled the consumer experience.
Plus, their hubris about owning the inventory (is this beginning to sound familiar?) blinded them to other dimensions to this consumer game of chess, not checkers.
There are clear parallels in real estate. Brokers are not consumer-facing companies; their agents as independent contractors control the leads, and hence the customer. Now, like Amazon and Barnes & Noble, Zillow and realtor.com have stepped in and share the consumer experience with individual agents.
Even in the old value chain, the brokers made attempts to insert themselves between consumers and their agents — but they failed, time and time again.
Unlocking those relationships requires four things: mounds of money, a sophisticated management team, timing and flawless execution.
Bookish delivered on the first: The three publishers raised $20 million overnight.
They stumbled on execution, timing and finding the right team. This was not really surprising, considering the founding companies had no experience starting a tech unicorn.
Consider also that this initiative was a reaction by the book industry, and the timing was too late. Amazon’s brand and lead were untouchable, and the Seattle giant was pouring all of its profits back into extending its lead. In the end, the $20 million was nowhere near the commitment needed to compete. And the publishers soon realized that reorganizing a value chain — even a new one — is all but impossible.
The airline industry is another example. Again, airlines controlled the inventory but not the customer; travel agencies did.
The airline initiative was also a reaction, in this case to Expedia (another Rich Barton company).
Orbitz was the airline industry’s answer to the rise of online travel agencies such as Expedia and Travelocity, as well as a solution to lower airline distribution costs.
The outcome? Orbitz got traction, went public, but faltered over the years and sold this year to … who else? Expedia.
Real estate has a similar tale. The National Association of Realtors helped get realtor.com off the ground early in the Internet cycle and was on track to control the online real estate destiny. But controlling an ambitious tech management team and a venture-backed-then-publicly-traded company proved more complicated than the Realtor trade group was qualified to handle.
Stung by scandal, realtor.com fell into a tech coma and was sold last year to News Corp.
In the end, inventory control means nothing. Timing is everything, money is central and execution is critical. And even then, losing control of the venture (if successful) is inevitable — and then what is the industry left with?
From the cheap seats, my message to brokers would be: Give up on the front end of creating another portal and invest in the back end, which should include transaction management, automated closings and seamless touch points for a more efficient process for both agents and consumers. Eliminate the paperwork, centralize the communication, create a mobile closing, push for common data storage and access and give shared tools to the consumer and the agent.
Onward!