A recent article claimed that “60% of Fortune 1000 companies will be out of business in just next 10 years“. I’ve been following up some of the points its author makes. Here’s an excerpt.
We are witnessing more disruption in human history over next 10-20 years than what we have seen in the last 20,000 years. [The] prediction is that 60% of Fortune 1000 companies will be out of business in just next 10 years.
. . .
KEY actionable and insights for every business are:
1. Organisations built for the 20th Century are destined for failure. Organisations built for efficiency and predictability will fail. They are unable to think and grow exponentially but are predicated on linear growth models. We all come from scarcity mindsets where as the world is moving rapidly to abundance. Ability to rapidly iterate, learn and execute will be required. Today’s 18 year old has the ability to approach the same problem very differently and successfully.
2. People from completely outside the business will end up disrupting these businesses (Zerodha, Alipay did it to broking businesses without any background). Exponential is when you can deliver price-performance which is 10x better – not 20-50% better. There are several areas and technologies where price-performance is doubling every 12-18 months (Moore’s law from Intel days).
3. Everything which is information based will priced at or move quickly to ZERO. They call this “democratisation” of information … Entrepreneurs will have to work on alternative revenue streams. Huge implications for all businesses … Move towards building platforms rather than products. (Google, Apple are platforms whereas Blackberry, Yahoo etc were products).
4. Everything is moving to a Service/Subscription model from a Sales model. Rolls Royce has moved to this model for their aircraft engines! They no longer sell engines. They charge for hourly use and provide analytics on actual usage to optimise for their clients. (My monthly subscription for various services just continue to add up.)
4. Large organisations cannot change and do not have the time to change. (if you are working for these organisations then this is your warning, get out).
There’s more at the link. Thought-provoking reading.
This has many implications for independent authors. We can see the truth of the article’s observations in the state of the publishing industry. For example, look at what’s happening to library sales:
- Tor Scales Back Library E-book Lending as Part of Test
- Penguin Random House Changes Library E-book Lending Terms
Those changes aren’t happening because publishers want to offer libraries a better deal. No: they’re happening because publishers are trying desperately to shut off all lower-revenue avenues, and find new ways to increase their revenues. They’ve identified libraries as a financial liability, rather than an asset, and are moving to change that, whether the libraries want it or not – fine words to the contrary notwithstanding. They aren’t in the charity business. They want money, and they’re going to extract it by any and every means possible. They want to change library sales from being a loss leader (from their perspective) to a revenue stream.
We also see this in the impact of Amazon’s Kindle Unlimited (KU) subscription lending library service on the revenue streams of small presses. (See point 4 above.) More and more of the latter are withdrawing their books from KU, because they can’t afford the relatively low revenues earned from “borrows” compared to the greater amount they earn from sales. Some are trying to “go wide”, selling their books on as many platforms as possible to make up the shortfall. Others are setting up their own distribution facilities, urging their established reader base to buy directly from their own Web site. I know this is succeeding in a few cases, but in others it seems to be riding for a fall. We’ll have to wait and see how it turns out in the longer term. Basically, success or failure of a “subscription model” offering will depend on how many subscribers (i.e. fans) one has. If one doesn’t have enough, the return on sales will be too small to support one’s “writing habit”.
In essence, we have to stop looking at each book as an income generator, and start thinking about multiple income streams. Very few authors, indie or otherwise, make a living out of their writing. Most of us have to have a “day job” as well. I think we need to look at our writing as a series of small “day jobs”. Writing a book alone won’t be sufficient; we need to leverage that fan base into more income opportunities. Some are already common. Others will have to become so. Examples:
- Open some sort of support account (e.g. Patreon, etc.) where your serious fans can support you over and above buying your books. It may be a small, slow start, but it’s something on which one can build.
- Consider podcasting. It’s a growing trend, and it can be a money-maker if it’s handled correctly.
- A tip jar on your blog or social media account can be a useful way for fans to offer support.
- Consider offering appearances in your work to your fans. They can have their names used for a character, and pay for the privilege (anything from a few dollars for a very minor character, appearing once, to a higher price for a major character with more “face time”). This will probably only work if you’re an established writer, of course – it needs that sort of fan base.
- Try to widen the circle of your output. Write articles for online publications (yes, Mad Genius Club qualifies!); offer to write articles for professional journals in your field(s) of expertise; consider collaborating with others to produce seminars or discussion panels; participate in conventions and other gatherings of fans, and offer to speak at them; and generally increase your visibility to current and potential fans. The more who know about you, the more likely they are to think about buying your books.
- Use your non-writing talents to boost your writing. Can you paint or draw? How about producing book covers, or fan art, or something like that? Are you a good editor? If so, why not offer editing services to other independent authors? Are you familiar with any particular aspect of self-publishing? Then why not offer your (paid) services to novices wanting to get into that field? You may not make much, but every penny helps – and it’s another revenue stream.
- Above all, think outside the box. Don’t just go for conventional solutions to the marketing problem. Read and re-read the article with which I began this piece. Find new ways to market yourself and your writing. Read as widely as you can about those who are successfully doing so, and emulate them. Become part of information sharing networks like Mad Genius Club, The Passive Voice, KBoards, and so on.
Those who can’t adapt, won’t survive. Don’t be among them!
I really hate subscription services. I want to just buy it and have it on my computer. Same with cloud storage. Great for automatic backups, not going to happen for working.
Alternate money making schemes? Maybe I could sell “One book rights” to authors who want to write in my worlds? I dunno.
But if Amazon ever died, I’d be scrambling to go wide, and very very glad I don’t have contracts with a trad publisher.
I like subscription services. I use them for books by authors unknown to me, because a very high percentage of those books get walled. If I like the book, I buy it.
I’m think more of subscriptions for software. I don’t want to pay an annual fee for my word processor program. Or the art program I use to make covers.
Oh, right! I do try to avoid software subscriptions.
The software “subscriptions” are essentially rent, and the same rent-vs-own dynamic applies as it does to a car or housing. Rent is dead money, buying is an investment.
With software since the 1980s its been a little different, because new versions with big changes in capability used to come annually or sometimes faster. But to take the example of art software you gave, Photoshop hasn’t had anything radically new for years. You bought it five years ago, the only changes are security.
I pay the Microsoft Tax for Office and Win 10. I will pay the “rent” on anything I absolutely must have to get the work done, but I would prefer to buy.
Therefore, this guy with his service/subscription model is pushing against something very strong. Software, I want to -buy- it. Then its mine and I don’t have to worry about it. Reload from CD if necessary. (Ghod I’m so OLD! ~:D)
The electric scooter thing is a great example. Rent a scooter for an hour to get you around town, great idea. Abandon it on the sidewalk when you’re done, great idea. Rental scooter for your daily commute? Not a great idea. Because you NEED for a scooter to be close to you every single day, twice a day. You NEED it to get you home, or at least for it to die close to another scooter. But because of phenomena like maintenance failures, clustering and rush-hour, the chances of there being a scooter when you need one is not 100%. Probably under 50%, IMHO.
Rental scooters are great for tourists or casual users having a lark. For commuting, or in case something bad might happen, you need your -own- scooter.
RollsRoyce rented engine, great if your aircraft needs to be in the air all the time, like an airliner. For a business jet that is for commuting or is on stand-by for urgent need, not a great deal.
Same argument with rented welding gas bottles. Use it all the time, renting is good. Use it once a year but you need it to be there, renting is bad.
I agree with him about large organizations though. They won’t change, and they actively sift out and fire anyone who might try to make them.
“Photoshop hasn’t had anything new for years”
Haven’t used content-aware fill recently, have you? it has vastly improved.
I don’t use Photoshop myself, I know someone who does. Point was, how many major functionality upgrades happened in the last 5 years? One? Two? Many?
Would the program you bought 5 years ago still be functional in the present environment, or did those upgrades change the game too much? I’m thinking probably not, but willing to stand corrected in this particular case.
I use Gimp, because A) hardly ever use it and B) free. It’s “good enough” for my purposes. I paid money for Rhino 3D because the free ones didn’t work for me and Rhino did.
The answer is, actually, ‘many’. If i was a heavy Photoshop user instead of largely using it to paint textures, yes, there would be features added in the last 5 years that would have fundamentally changed how i worked with it. Also, there are things Adobe is working on that will change it even more…. Once again, i point to ‘content-aware fill’ but there is a lot of features like ‘font matching’ and integration of the stock libraries etc that even thought I won’t use it are used by a lot of users. I can also point to new features added to illustrator in the last 5 years, and Premiere, etc… without going to the various 3d applications i own. I’d rather be paying a monthly fee than an annual support plus upgrades anyway, which is the other model in the pro software end.
If you need it for your job, then by all means, rent it. But all I need is to slap Title and Author in the right font on a stock photo. Once or twice a month. If subscription is all that’s available, I’ll look elsewhere.
Traditionally, libraries were always a revenue stream, small but more reliable than bookstores. Libraries tend to buy a lot more of a publisher’s range than any individual person, and publishers encouraged this by promoting library levies and school library budget increases.
But when the EU started this bizarre library royalty tax, and when librarians in the US started being more critical of what they bought, all of a sudden we see used bookstores being attacked, and then libraries derided as loss leaders.
B as in B, S as in S.
The publishers are desperate for cash. They did not jump on ebooks and ebook lending early enough, and they put out too many books nobody wanted to read. And now they want libraries to replace billions of dollars of lost revenue that they refused to make, so they jack up their prices.
If you read the old issues of the Bookman, or today’s Publishers’ Weekly, the magazines and their ads were mostly directed toward librarians acquiring stuff for public collections. That is not a loss leader.
“Everything which is information based will priced at or move quickly to ZERO.”
Does that mean he thinks all books will be free in the future? That seems rather far-fetched.
I think he’s talking about things like company conference call guidance and other sorts of free-but-hard-to-get information.
Like tee-times. I know of a guy who makes a handsome living buying up in-demand tee-times at golf courses and selling them on-line. He’s the clearing house for golf in his area. The information he has is “free,” which is what club has a slot open at 2pm Tuesday within X miles of Toronto city hall.
The best part for him is that golf clubs pay him to be part of the service. He gets money from two directions.
Books, movies, music are intellectual property. They might be offered on an advertising based income, but somebody somewhere is paying for it. Because ultimately nobody works for free.
Right now we have people like the Huffington Post running a business model where they don’t pay for the content they run. I expect that’s not going to last much longer. You can’t eat name recognition.
Same with Kindle KU. It takes months to write and edit a book. That’s $15/hr for a 40 hour week, times three months. If the writer doesn’t make ~$8,000 or more for his book that took 3 months to write, he’s better off flipping burgers. That’s the hard end that “information wants to be free” is pushing up against. Nothing is ever free.
okay, so your friend’s information is not free, which is in direct contravention to #3.
The tee-time information is free to him and free on his web site. Any club will tell you that for nothing. The -tee-time- is what you pay for.
The golf clubs pay him for the advertising that having their tee-times listed represents, and because now there are no phone calls to hire employees to answer. They sell the tee-time to him at a discount, because they got their money already.
He buys tee-times “in bulk” from all the clubs and sells them at a premium.
He’s leveraging the free information to make a package worth paying money for.
oh okay, now i understand… he’s using freely available information to buy and resell a commodity.
I buy .99 first books from new authors using money given to me by Amazon for taking regular shipping instead of 2 day Prime shipping. 🙂 And I have Amazon Prime for Grand Tour tv show.
If I like the books and they are in paper I usually rebuy the book in paper and the following books in paper.
Of course some authors are very slow in getting the following books in paper. 😦
That’s because us unknown types have very few paper sales. It’s not worth even taking a couple of days to reformat the manuscript and extend the cover.
And being unknown is probably why I like KULL. People will try an unknown for free, and then if they like the first taste, gobble down everything the writer has put out.
Pam that was a gentle poke at Peter due to various real problems his last two Cochrane’s Company books haven’t been put paper yet!
The thought of libraries being pressured to reduce their e-book offerings is depressing. Already it is getting difficult to find authors and books on Overdrive that were readily available for checkout a couple of years ago. It is especially aggravating when the missing book is the middle volume of a trilogy, for example.
For those of us on limited incomes, the library and subscription services like KU are the only way we can afford to indulge our voracious reading habits.
I logged my reading last year – 220 books. Maybe 10% were from KU, the rest from the library. I suscribed to KU when Amazon offered 2 years for $6/mo. At $10/mo I would have to think really hard about it. The only e-books I have “bought” were a couple of Kindle free offers, and several of Sarah’s books during her recent sale.
Say an average fiction e-book sells for $4. l simply cannot afford $880 a year to buy books. Especially books that I might read only once. I think KU is a great idea – access to indie authors whose works will never show up in my library, for which the author is paid at least something if I read the whole thing. Without KU, I would be unable to read any of the MGC authors unless I spotted a free book offer – and you don’t get any royalties at all from those.
I would even consider buying a public library subscription if it was a reasonable cost, to maintain access to traditionally published works. Hookam’s Subscription Library in Regency London seems to have done okay with this idea. 😉
I’m here to poke holes in some theories…
First, don’t touch Patreon with a ten foot pole. They will kick you off if they find you guilty of badthink, and their CEO recently admitted that their business model was unsustainable. (Somehow, they can’t manage to act as a scheduled payment processor on $25 million a year) Quite frankly, Peter, you, Sarah, and most of the other regular contributors on MGC are the exact people they would convict of badthink and deplatform based on something you said somewhere else…
As far as #3 in the study goes: Nope, not buying it for a minute. There is always going to be proprietary information, information that someone knows from experience, and information that has to be dug and researched for even by people with experience in the field. I have had to recently perform educated guesses as to the potential performance of a particular system configuration for a particular purpose for someone. I was able to do it because I have information on my system and information in my brain that you cannot ‘just google it’. I’ve also been paid to research and compile information that was publicly available in order for it to be assembled into a cohesive whole that the client could just look at directly. (the joke of “$15 for hitting the spot, $485 for knowing where the spot is” comes to mind.) The complete democratization of information is a pipe dream… the information on how to design a CPU and how the processes necessary to create one being publicly available does not mean that I can design a new CPU to compete with Intel just by googling the necessary information.
#1, 2 and the second 4 which i guess should be 5: Most of the companies that are going to die are already dead we’re just waiting for them to stop moving. A lot of the disruption has already happened, technically, but we’re just waiting for the dinosaur’s hindbrain to figure out that the brain in the head has stopped working.
Anyone who talks about a “post-scarcity” or “abundance” is a quack.
They’re wishing away human nature as an assumption,
Heck, the basic definition of economics is “the use of limited means to best attain unlimited wants”.
True. If post-scarcity were possible, we would be talking when it happened.
Not all over the world. But in the US, it is legally required, if you want to run a homeless shelter, for you to provide amenities that kings and queens and emperors did without three centuries ago. When charity cases live better than royalty, either you are post-scarcity or the word has no meaning.
Someone here mentioned that spaceships were the most expensive covers. Since I (foolishly) bought a 3D printer, I’m going to try to learn to model spaceships. Render them for your cover and get a plastic model!
This week will be my first attempt…