The First Competitors

You can create an innovative breakthrough, but you can’t own it forever. Eventually, competitors come out of the woodwork, challenging you with similar or sometimes advanced versions of the very innovation you crafted. For Amazon, the first major competition came from an old rival, a company that Amazon was used to competing with in books. But it was a company that, back then, would have seemed most unlikely to make a tech-product marvel. Yet in November 2009, that’s exactly what it did.

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Los Angeles is all sunshine and short sleeves. It’s still got a 1960s design, like it was influenced by The Jetsons, but with more palm trees and fewer spaceships. It’s got atomic roadside diners and terrific tangled, spangled freeway sprawl. It’s got the best mom-and-pop taco shacks in the most unlikely of places, like wedged between Laundromats and exotic pet stores in strip malls.

I’m at one of those strip malls on a long layover from a flight, visiting a Barnes & Noble store. I’ve been sitting here for a few hours watching people. I’ve been watching the kiosk where a saleslady named Bettina is showing off Barnes & Noble’s new Nook e-reader. A few people come every now and then to look at these Nooks. More often than not, people come up to ask her where the bathroom is or what time the store closes, like she works the information booth. The Nooks aren’t exactly selling like hotcakes.

I go over to her and show an interest in the Nook. To torment her a little, I keep calling it a Kindle. “What can these Kindles do?” I ask. She laughs, explains, and walks me through a demo. I tell her that it would be nice if some sort of sticker on books inside the store would show if they’re available on the Nook. Something on the print book’s front cover, right there on the retail shelves. It’s the sort of thing that Barnes & Noble can do but Amazon can’t because it doesn’t have a physical presence.

After a few minutes, some sweatered, grandmotherly looking men come over to look at the Nook, and so does a woman with so many facial piercings that she’d probably set off a metal detector. I slowly drift away.

I love real-world retail. It connects you right to your customers, without the web as a nameless, anonymizing barrier. Bookselling as we know it emerged at the end of the Roman Republic, around 50 BC, at a time before publishers existed. Retailers would contract directly with scribes, copyists, and authors. Then they’d create lists of books for sale and post them for customers to see outside their stores on Rome’s winding side streets. Bookselling as we know it grew more complex with the proliferation of separate roles for authors and publishers and retailers, as well as the advent of copyright and of securing rights for publication, and the explosion of mail-order and online commerce.

Though I’ve worked in online retail for two decades, I still never get tired of looking at bookstores. I’m a bookstore tourist whose first vacation priority on arriving in a new city is to check out the local independent bookstores. And I have a special place in my heart for Barnes & Noble, the biggest of the retail bookstores.

They’re sharp on the ebooks side, as well. Out of all the retailers who sell dedicated e-readers, they’re the most innovative. They were the first to release new book-reading features and to innovate on the hardware side. They were the first to have touch-sensitive eInk screens. They innovated digital book lending for swapping books between friends. Heck, if you’re in one of their stores, you can read any Nook book for free for an hour or so. They totally get the social experience of books in the way that it crosses over from the real world to the digital.

They can innovate so fast because they’re not burdened with their own R&D group. Instead, they use a company called Inventec, a sort of hired gun in the world of R&D. It’s a kind of Lab126 that hires itself out to the highest bidder. By outsourcing the nuts and bolts of their product development, Barnes & Noble can focus on innovation.

Their Nooks are downright futuristic too. When I first got my own Nook, I was just as perplexed as everyone because it had a big eInk screen for reading and a thin color screen at the bottom for navigation. The day I opened my Nook for the first time, I was sprawled out on my living room floor like a child opening a birthday present. (Okay, a birthday present I had bought for myself.) The Nook’s dual screen is clever and innovative, even if it is neurocognitively jarring. (When you get confused by all the screens you have to navigate, that can take you out of the reading experience.)

One of the reasons that Barnes & Noble makes such innovative devices is because they don’t have to worry about building their own operating system, unlike Apple and Amazon. Those two companies are slowed down by the boatloads of engineers who tweak and tune and build an operating system from scratch. Barnes & Noble simply uses Google’s free Android operating system, which lets the retailer put its engineers on other projects to make e-reading even better.

Barnes & Noble is innovative with the software as well as hardware. For example, the Nook was the first e-reader with a game platform. So you have to give credit to every engineer and director at Barnes & Noble for what they’ve done.

Even more so, what they did with interactive children’s ebooks threw the publishing industry for a loop. For the first time, you could actually play with an ebook. You could touch an elephant to hear it bellow, or you could become a character in the book. And it’s not hard to extrapolate from interactive children’s books to interactive books for adults or readers of any age.

If you ask me, though, in spite of such interactivity, ebooks aren’t ready yet for children. I think a children’s book should be sacred and sensual, an inviting canvas for the imagination that can be colored in with crayons. For children, words are already puzzles. They’re strange glyphs that children need to decode as they yearn with outstretched fingers for fluency in their language and to grow up into readers. Games can be distractions from that process.

Most publishers agree, and I think they’re right to move slowly on children’s ebooks, because being a digital native may have long-term consequences related to learning how to read. We’re in danger of rushing a whole generation of children into something unplanned and unexpected.

And while I like the occasional TV show, I still look back at my childhood with some resentment because the television was often my babysitter. I was raised by Buck Rogers and Oscar the Grouch and geriatric game-show hosts like Bob Barker. And I can still quote the price of Cocoa Puffs from the 1980s, thanks to The Price Is Right. Digital books, like television and other media, are best meant for those Pandoras who’ve already opened their boxes and know what demons to expect inside.

That said, I applaud the Nook team for inventing interactive ebooks. It was a bold, innovative move. And one that Apple and then Amazon were soon to copy. Likewise, when Nook introduced ebook lending, the other retailers were swift to add that feature.

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Ebook innovation is a game of cat and mouse. Unfortunately, one of the drawbacks of this game is that it becomes all-consuming—and innovation becomes harder to do when you’re trying to keep up with competition. When Apple launched a tablet, Amazon had to follow suit, even though it undoubtedly had other features on the drawing board, innovations that wouldn’t be launched until at least one other retailer had launched them.

I think some competition is healthy, because it forces an evolutionary Darwinism of features: if a feature is successful, it will be copied. But untested features languish in unread business requirement documents, and resources that would have gone into building those features get redirected into keeping up with the Joneses.

Amazon is winning the ebook revolution, but it may lose the war. Competitors like Barnes & Noble and Apple have successfully blurred the lines and proven that they can provide a great media experience, so Amazon’s brand matters less in the eyes of readers now. Any tactical advantage Amazon has is primarily related to its deep ties with publishers, ties that are much deeper than those of other retailers, except maybe Barnes & Noble.

The revolution started with one clunky, four-hundred-dollar device with four shades of gray that could only hold a hundred books, but the war is about all media now, about the convergence of books and audio and video. The war is on as different retailers compete for your attention. Books were once hugely popular, but they have been relegated to a small slice of the media pie. And though book media is still a billion-dollar industry, it’s becoming outranked by TV and movies and audio and video games in per capita media consumption.

A 2010 Nielsen survey of American households showed that books account for only 3 percent of an average family’s monthly discretionary spending, while music accounts for 5 percent, video games 9 percent, and videos a whopping 29 percent. There’s no room for niche players to succeed at just selling books, which is why the digital retailers are getting into the game with all kinds of media. And now that ebook content is being sold at commodity prices, the true differentiator will ultimately be in the reading experience itself.

The winner of this war won’t be decided by generals with scale models of battleships and airplanes and tanks on a simulated table. No, it will be decided by designers, by user-interface artists, by people who connect to the humanistic spirit that flourished in the Renaissance as print books gained in popularity. The Renaissance saw the rise of readable fonts, innovations in binding and page layout, and the placement of illustrations. And typographers always experiment, whether with the more lavish encrustations of the Art Nouveau period or the German grid style that emerged in modern times.

In the end, design matters.

Spend a weekend in Los Angeles, and then spend a weekend in Seattle, and ask yourself which city you’d rather live in. Seattle started out as a logging town and as a gateway to further riches in the Yukon. Its roots are founded on the exploitation of resources, as if there’s an infinite supply of trees to chop or gold to mine. Historically, Seattle is a city that has drawn hard-core, hard-boiled businesspeople. That’s why you see the likes of Microsoft and Amazon and Boeing around Seattle. Frankly, it wasn’t the most auspicious place to start a venture that would revolutionize books.

Places like New York and Los Angeles are still rooted in the arts. New York has theater and publishing and advertising, and L.A. was founded on Hollywood, the movies. You don’t get that artistic sensibility in Seattle, and you can tell by looking at the current Kindle and all the knockoffs that copy its design. Bullish as I am about ebooks, something is missing, and this flaw is perpetuated by the fact that all the e-readers are made in Silicon Valley. Apple, Amazon, and Barnes & Noble all have designers in Silicon Valley because that’s where the technical talent is. But what you don’t get with this technical talent is an artistic, book-oriented design.

As consumers and readers, we’re not dummies. We don’t want an impoverished reading experience. We don’t want a cracked plastic case and a blurry screen—which, sadly, is what many e-readers offered, especially in the boom years between 2007 and 2012 when everyone seemed to be trying to sell a budget e-reader. For good or for bad, we define ourselves in many ways by the gadgets we use and the clothes we wear. We don’t want to surround ourselves with cheap products. Nobody really aspires to that. We also don’t want to pay for a diamond-encrusted e-reader. We don’t need bling; we just need to feel like the design speaks to us.

That’s the genius of print book covers. There’s a reason why print book covers evolved to a highly specialized, soulful art form. They add very little to the cost of a book, and yet they make reading a vibrant, colorful experience. When you think back to a book you’ve read, you’ll often remember the cover before you remember any words or ideas. As designers re-embrace the original strengths of print books, I think we’ll see more book-oriented themes in future e-readers.

Eventually, the line between print and digital will blur and finally vanish. Ebooks borrow from print books now, in terms of their design metaphors. They copy bookmarks and annotations, as well as the concepts of turning the page and of page numbers themselves—even though page numbers don’t even make sense in an ebook.

What’s a page number? What’s a page, if you can dynamically change the font size or the font? What’s a page, if you have a game embedded in the book and the game spans many levels? These design metaphors are yesteryear bolt-ons from physical to digital. But there’s an opportunity to reinvent the digital reading experience while keeping the best parts of print.

Companies with more humanistic sensibilities than Amazon will win the e-reader war by making the experience more human, more engaging. Children’s ebooks should be playful and adult ebooks thoughtful, soulful, or entertaining. Companies should create opportunities for interesting, unexpected experiences to happen. Perhaps digital insects scuttle across the page if you’ve had the book open for too long without turning the page. Perhaps in a thriller, as you read the ebook, you’re startled by the unexpected sound of a gunshot when you turn the page to a crucial passage. Though this can’t easily be done in hardware, you can create an engaging experience in software and make it soulful instead of awful.

Let’s face it: there’s still something emotionally bereft about a Nook or a Kindle. Perhaps over time the industrial design will become more human, more like the “illustrated primer” described in Neal Stephenson’s The Diamond Age. Or like the book Penny used in the Inspector Gadget TV series, a digital book with actual pages that could be turned. Better design will be part of the rebirth of reading. But to get there, we must be as ready to innovate in design and soul as we are in technology and cost.

The company that does this best is Apple. They blew away everyone’s preconceptions about e-readers when they launched the iPad.

The iPad story is a great one, but I wasn’t a part of it. I didn’t have to put in the grueling hours or countless meetings on product development. It’s one of those stories that we get to read and enjoy. One of those stories where you say that the author did an amazing job. And Steve Jobs did.

Apple understands a lot, including great product design. The iPad is a multifunction device, unlike other e-readers that are dedicated to reading. Dedicated e-readers are as sharp as steak knives in doing what they’re supposed to do, which is let you read books. The iPad is more like a Swiss Army knife—it can cut the steak and uncork a wine bottle, and there’s even a toothpick to use when you’re done eating! It’s got it all.

Sure, it’s got its flaws. For example, there’s the headache the iPad gives you when you try to read in direct sunlight, since it doesn’t have a nonreflective eInk screen. But overall, Apple did an amazing job in creating a product that actually feels like a book. The iPad has the same heft as a book. It’s got the same-sized screen as the average printed book, and it’s as responsive as a book when you turn the page. You don’t have to wait half a second like you do with eInk readers. It’s truly, as Apple is fond of saying, a magical device. A device consumers love.

That should be no surprise, because as one of America’s favorite companies, Apple has some of the most famous lovemarks of all.

A “lovemark” is the concept that a brand isn’t enough. That brands are dead and products are commodities, so to make a product succeed, it needs the love that comes with fads and the respect that comes with established brands. If you’ve got this love and respect, you’ve got a lovemark—something that combines intimacy and mystery and sensuality.

A great example of a lovemark is the Swiss Army knife. Every time you open it, you find a new tool or screwdriver or spoon or toothpick or who knows what inside, prompting surprise and delight and gratification. It’s gratifying in the same way the Kindle was when it first came out. With a Kindle, you could download a book in less than sixty seconds. (It still stuns me today that you can do that.) Even the name “Kindle” connotes something mysterious. What’s more intimate than the experience of curling up with a book to read? Amazon got a lot right with the Kindle that made it into a lovemark.

And what’s even more amazing is that Amazon created a lovemark by focusing on the product, not the ad campaign.

The first round of Kindle commercials emphasized the lovemark, imaginatively making books come alive, in a way that was at once amateurish and approachable. But later commercials have seen a return to Amazon’s retail roots. In one, a man and a woman are sitting by a pool in Las Vegas. He’s reading a print book and she’s reading a digital book on her Kindle, and she cheerfully explains what the Kindle does and how it’s cheaper than a pair of designer sunglasses, pulling no punches when it comes to commoditizing the Kindle. There’s no lovemarking here.

Such commercials treat Kindles as mere commodities with price points that serve utilitarian needs. Admittedly, it’s the kind of commercial you expect from a wholesale retailer of goods, but it’s not the kind of commercial that speaks to the soulful, mysterious aspect of books themselves. I suspect this disparity turns some would-be consumers away from Kindle.

Barnes & Noble’s commercials for the Nook, on the other hand, are intimate and sensuous. One follows a beautiful little girl through childhood and adolescence and adulthood, and you get into her mind as she reads. The commercial stays true to the way that reading simultaneously transports you to new places and comforts you where you are now. At the same time, the commercial factually communicates that the Nook is an e-reader with a wireless connection and all sorts of content available—something the original Kindle commercials never quite conveyed.

The Nook is an under-appreciated genius of a lovemark. The team at Barnes & Noble got a lot right with the Nook, and from a lovemark perspective, I think they created a more intimate product than any other dedicated e-reader. The rubber back behind the Nook is soft and pliable—not hard metal like the later Kindles—making it sensual and intimate. Barnes & Noble also recreated the engraved faces of famous authors from their stores and used them as Nook screensavers. It’s brilliant, not just because it makes reading more intimate, but also because it solidifies the Barnes & Noble brand itself.

And I admit that I love Barnes & Noble and other physical bookstores. An hour spent browsing a bookstore is a day well spent.

It’s hard to love Amazon, though. Not the way we love Apple or a bookstore. At best, you respect Amazon for its obsession to detail, for its cheap prices, and for how it achieves the promised arrival dates for its products. You may not love Amazon, but you trust it as a brand. It’s sort of like the Post Office. It’s hard to love the Post Office, but you never worry much about whether your package will arrive. Although mishaps happen, the Post Office has a great track record.

So for Amazon to launch the Kindle was like the Post Office launching a new e-letter product, a clipboard-sized plastic gadget with a screen on which you can read your letters. You trust Amazon as much as you trust the Post Office, and you absolutely want to read content as soon as it’s available. The devices save you trips to the mailbox or the bookstore, and they’re excellent adjuncts to your leisure time or business reading. But nobody ever declares themselves a Post Office fanboy and rushes to “unbox” the latest book of stamps.

I should explain that a fanboy is a person who’s so smitten by a brand that he’s often the first in line to buy the brand’s newest gadget. A fanboy will often rush home to film the “unboxing” of his new gadget. If you’ve never heard of unboxing, which is the process of unwrapping a new tech gadget while filming it, I encourage you to search this word on YouTube and watch any of the hundreds of thousands of results.

Unboxing is a new voyeuristic phenomenon that’s erotic and technical at the same time. It’s tech pornography. It’s as if we desire total carnal knowledge of our consumer electronics goods. The sheer number of unboxing videos on gadget websites and YouTube is a testament to how obsessed we are.

The fanboys and gadgeteers of our culture are starved for sexy e-readers.

We’re a culture that fetishizes technology, and the way people film the unboxing of gadgets is similar to how people ogle lingerie models on the fashion runway every year. How long will it be before we start running new product launches like fashion shows, displaying the new electronic goods on runways with sultry music, paparazzi snapping photos, and the CEO or vice president reduced to someone shilling the product like it’s next season’s lingerie, a one-handed appreciation of Silicon Valley’s newest creation?

There’s an economics term for this called commodity fetishism. We fetishize a commodity by assuming it’s worth more than the sum of its parts. For example, the money we use is worth less than advertised, because it costs mere pennies to make a dollar bill. Beanie Babies at their peak were likewise more expensive than their pure manufacturing value. Consumers perceived that the stuffed animals had higher value, so they rocketed into the status of collectibles, like Cabbage Patch Kids.

The idea of commodity fetishism was created by the wooly-bearded economists of the nineteenth century, making it all the more amazing that they came up with this idea in the age of the horse and buggy. It’s still surprisingly relevant now, surfacing as what I would call a techno-commodity fetish that whips people on every year to buy the latest and greatest gadgets.

You can see the techno-commodity fetish in action every time there’s a new iPhone. Lines spiral around the blocks near AT&T and Apple stores, and fanboys wait in line for days to be first on their blocks to get the new device. Marketers are savvy to this and play it up. That’s why companies like Apple will pre-announce a new iPad: so they can take pre-orders weeks in advance of the new device’s availability and drum up demand and, at the same time, very practically let the assembly lines crank out the last of the old devices, using up all the last parts.

By all accounts, this techno-commodity fetish is thriving, judging by the number of gadgets released every year. Barnes & Noble and Apple may have been among the first of Amazon’s competitors, but they’re not the only ones. In fact, by the start of 2013, there were forty-five eInk-based e-readers for sale, and too many tablets and smartphones to count, all with ebook support. Thanks to booksellers like Amazon and Barnes & Noble, we now enjoy instant on-demand ebooks, which to me is still something fantastic and futuristic, part The Jetsons and part The Diamond Age.

Bookmark: Book Browsing

The ability to browse for books by their covers and flip through them from front to back before buying is also fading with the ebook revolution. It’s sad, but it’s a consequence of the way independent bookstores and even major bookstores are faltering and closing their stores.

But browsing through a bookstore is slow—just as slow, in fact, for ebooks as for print books. Whether you’re walking down an aisle at your local bookstore or clicking through different categories and subcategories of content on Amazon.com, it’s time-consuming.

A better approach than browsing might be something like a Foursquare for bookshelves, so people could become the self-appointed librarians or mayors of a given stack of books and provide recommendations for good books in their section. They could not only function as experts at their local bookstore, but also operate on a regional or national scale. To provide an incentive for good recommendations, an element of competition could be added, with the mayor-librarians defending their turf from would-be challengers.

Imagine checking in once you’ve read a book on a given topic and developing subject area expertise on something more productive than the microbrews served at the local bar during happy hour. Maybe I’m a tad bookish, but I think an ebook-infused Foursquare would be an interesting idea for a startup. You’d check in every time you read a given ebook and gradually rise in stature within the domain of your expertise in a measurable, uncontestable way. On finishing a book—ka-ching!—you’d score points on this online social system. And if I’ve learned anything from social media, it’s that we like to get rewards. They motivate us, especially when our reputation is at stake.

I can especially see this socialization of learning happening now that encyclopedias and other top-down sources of authority have been tossed in the Dumpster in favor of crowd-sourced information like Wikipedia, and as sites like Goodreads and Amazon’s own Shelfari democratize book recommendations. But social reading is still relatively new.

Do you trust the recommendations of people online who you’ve never met? If so, have you discovered a great book through any of these sites? Or better—because we are social, after all—have you met any really interesting people through using these sites? I’d like to hear your story, because let’s be honest: you’re never going to have an enjoyable chat with Amazon’s or Apple’s book recommendation software!

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