Three Reasons Why Bookish Will Fail and Three Reasons Why It Won’t
Last night, the long-anticipated, much-delayed Bookish.com finally launched. It took two years and three CEOs, but the big-publisher-backed venture (Hachette, Penguin, Simon & Schuster) is up and running.
After playing around with the new, touted recommendation engine and reading some of the editorial content that Bookish is hanging its hat on (team of seven editors!), the question on my mind is, will it work? Will people go to Bookish and either buy books or go from Bookish to buying books on Amazon or Barnes & Noble or elsewhere*?
After all the hoopla and the data science and the sleek design (the site does look pretty good), the site needs to make money if it’s to be around this time next year. Bookish has an uphill battle ahead of it: Stiff, entrenched competition; no dedicated e-reading device; no iOS reading app for two weeks and no desktop or browser-based app on the roadmap; and all the challenges a new, consumer-oriented businesses faces (branding, marketing, running a new operation, running cash-negative, deciding which investments to make, etc.).
That said, trends point to a move away from physical retail toward online retail and more people are reading ebooks. The company has solid backing and support from savvy tech professionals at major publishers. And the rise of ebooks can only help an ebook retailer, right?
* Bookish title pages offer deep links to other book retail sites. The company says this is part of its overall strategy to help people find books and expand the reading market — not necessarily sell books.
Here are three reasons I think Bookish will fail (and, after, three why I think it will succeed):
1. Competition. Amazon, Barnes & Noble, Apple and others are simply too strong and entrenched among book buyers and they are protecting their positions aggressively. Amazon does it with low prices, exclusive content, an ebook lending library and a suite of offerings (Prime, Prime Instant Video) that entice consumers to only shop there. Barnes & Noble uses similar strategies and supports its online retail business with its physical shops. Apple simply has the iPad; they all have devices, in fact, that push readers in their direction.
Bookish has said that it’s not going to play the price game. It will have exclusive content, but likely much less of it than the others. At this point, It offers consumers little unique beyond what it considers a better ebook discovery engine and editorial content.
2. E-commerce acuity. To me, there are two instructive 2012 e-commerce success stories: Amazon.com and Fab.com. Amazon grew its business to over $60 billion in 2012 and it did so by relentlessly pushing its buyers toward and down purchase funnels — with email, social media, on-site promotions, sales, customized recommendations…basically every trick in the book. Fab.com ballooned to over $200 million in sales in 2012 through merchandising and a great user experience. It only carries products that are hard or impossible to find elsewhere and its users love its sleek design, smooth interface and ultra-competent customer service. (Every time I ask a Fab shopper why she likes the site, the first thing she says is, “I love the design.”)
Bookish is an attractive but sparse site. It doesn’t push its users toward purchase or new products nearly as aggressively as Amazon, instead using its real estate on an airy, easy-to-look-at design. It’s the kind of decision that might win industry (Web industry) recognition but not sell a lot of stuff. And in terms of merchandising, the site will have a few exclusive items, but most of what you will be able to buy in it will be available elsewhere (often cheaper: See No. 1).
3. New start-up disease. Launching a new business and making it successful is incredibly hard. There are so many hurdles to overcome. First, a start-up has to deliver quality goods or services to its clients while keeping costs low enough to turn a profit. That’s the basic part but it’s a lot harder than it sounds. In the case of Bookish, this mean helping users learn about books, discover books and buy books and then charge them appropriately and deliver the goods in a reasonable period of time. Second, the new business has to attract and retain new customers. Talk to any established business to learn how hard this is. And, last, there is the pressure of time. Few if any start-ups have unlimited capital to invest in their success. Many of them run out of money and are unable to secure new investment before they go under.
Less than 24 hours into its existence, Bookish is already facing criticism from early users for its recommendation engine, some kinks that are inevitable in new sites (and often plague established sites) as well as some of the things we pointed out above (retail strategy, for instance). (Here’s a good summary of complaints.)
Obviously, the leadership at Bookish has detailed plans to execute on its mission, attract and retain new customers and do it all before the company runs out of money — but often with new businesses, it doesn’t work out. Most new businesses fail.
That said, Bookish could very well succeed, and here’s why I think it might:
1. Big-six backing. Bookish is backed by three huge companies with pretty deep pockets: Hachette (owned by Hachette Livre), Penguin (owned by Pearson and soon to be merged with Random House) and Simon & Schuster (owned by CBS). How excited are these companies to sink more money into the book retail space? It’s anyone’s guess, but strong ties to leading companies can offer many advantages:
— Availability of talent: The very capable chief digital officers of each of those publishers have had a hand in helping get Bookish off the ground. They have likely helped recruit Bookish employees and advised on details of the site and the business. (Read profiles of Hachette’s Maja Thomas, Penguin’s Molly Barton, and Simon & Schuster’s Ellie Hirschhorn.)
— Exclusive content: Bookish executives told me last week that it would use its ties to large publishers to get exclusive content for them to sell, an advantage, they said, other book retailers won’t have.
— Quality by association: While those three publishers don’t have strong consumer brands, they have strong brands within publishing and that means two important things: first, that other publishers and vendors will be interested in working with Bookish and won’t have to be introduced to the company’s existence — they will know about it; and, second, that those heavy readers inside the trade will be using Bookish, at least initially to fiddle around and give Bookish valuable user feedback and, perhaps, become customers.
2. The rise of tablets. One major disadvantage that Bookish — or any start-up ebook retailer — faces is that its competitors offer dedicated e-reading devices that make it very easy and attractive for readers to buy ebooks from only them. That said, e-readers are on the wane and tablets are rising. If Bookish can attract users through the Web and encourage them to buy ebooks, they will download EPUB files that can be read basically anywhere — especially on the Bookish Android and iOS apps (the latter coming soon). More people are reading on tablets (iPads, mostly) and they’re reading on whatever platform suits them at the time. The company won’t necessarily need a dedicated e-reading device to succeed and that looks like it’s becoming increasingly true.
3. The rise of e-commerce and e-reading. In 2012, e-commerce approached 6% of all U.S. retail. Sounds like a little, but the U.S. retail industry is a multi-trillion dollar business. And e-commerce continues to grow. And e-reading, too, is on the rise, with nearly a quarter of all U.S. adults now reading ebooks (and more than half of all kids). Bookish is a new ebook seller, putting it at the nexus of e-commerce and ebooks. These rising tides could lift it to profitability.
Between you, me and the lamppost (something my dad always used to say), I am rooting for Bookish — as I am rooting for all the companies I cover to find success. I think it has a good a chance as any new business to succeed. Problem is, it’s really hard to launch a new business.