What Would Google Do_ - Jeff Jarvis [37]
Bezos is not building a stuff company. I believe he is building a knowledge company. No one knows more about what identifiable individuals buy than Amazon—not even Wal-Mart (to them, we are mostly a mass) or the credit card company (they can’t necessarily see what products we buy at the grocery store). Amazon knows what we bought, when we bought it, and what else we bought with it. It can try out sales pitches to see which work best. It knows enough to predict what we might want so it can entice us to buy it. It has captured millions of reviews and ratings of every imaginable product from people who have bought and used them: a more valuable repository of consumer reports, I’d say, than Consumer Reports itself. No one knows more about the stuff we buy than Bezos. Handling stuff becomes a small price to pay to become so smart.
Amazon is positioned perfectly for the transition to digital content delivery. It is selling and delivering books to PCs and its Kindle e-book reader. It is selling movies direct to our TV sets. It is selling music downloads. Amazon has built a strong position in content thanks to innovations ranging from reviews to searching inside books to automated recommendations. By reflex, many of us go to Amazon to check out products before we buy them. That is Amazon’s brand and value, as much as the stuff it sells.
Bezos built a digital knowledge and service empire. Just as fast-food joints make more money selling Coke than cheeseburgers and some retail chains have built more value in real estate than merchandise sales, Bezos doesn’t really make his money pushing atoms. Like Google, he creates value by getting smart and building bits.
Are you limited by your stuff? If a magazine publisher no longer thinks of itself as a magazine company and if a bookstore can build a knowledge company, then ask what you can be. Where is your true value? I’ll bet it’s not in the atoms you move around. It’s in what you know or how you serve or how you can anticipate needs, isn’t it?
Middlemen are doomed
Nobody likes a middleman. Well, except for my very nice literary agent. When she read in the proposal for this book that middlemen were doomed, she protested: “But that’s me, Jeff.” Sorry to say, yes. When she sold the book to the publisher, you could say that she sold her own professional obit.
Then again, she did make the sale. Without her—and her relationship with publishers—my proposal wouldn’t have gotten into three houses, which led to an auction that raised the price (boy, was that fun). Even though my agent charges a higher commission than a real-estate agent (much higher), she increased my advance by more than the amount of the commission she was paid. Her agency also provides editorial, legal, and marketing advice. My agent made the marketplace more efficient and added value for me. She also makes the business more efficient for publishers, sifting through an abundance of book ideas and writers.
When I went to work as an online executive at a media conglomerate in the 1990s, I was delighted that I would get to work with a book publisher as it went online. But my boss warned me that I shouldn’t get too excited. He explained that a publisher doesn’t have direct relationships with readers (bookstores do) or even with talent (agents do). Publishing, he said, is a distribution business. Publishers, too, are middlemen.
Today, technology and the internet have fostered new self-publishing