Friday, October 15, 2010

Business Idea of the Week: The Crowdsourced Bookstore

Business ideas are everywhere. They're like water. If you're a smart person who understands business and pays attention to the world, you will see opportunities constantly. Most of the time there will be dozens of people all having the same brilliant ideas. What actually counts is execution. To prove it, I'm throwing out a totally viable idea each week. 

This week:

The Crowdsourced Bookstore

Look. I love books. I like the experience of a good book, its weight, its ability to dig more deeply into a subject or story than I could ever sit still for online. But I don't like bookstores. I live in Portland, home to the world's largest bookstore, Powell's City of Books. Here I am, wandering through a giant city-block multi-story monstrosity, where I can find virtually any book ever written, and all I can think about is how overwhelmed I am by the sheer range of options I have. I know that most of the books I can choose from are going to suck, and I have no way to know which I'm likely to enjoy, much less want to tell everyone I know about. I can hardly even make up my mind which subject to browse. And the big box stores are even worse, with their slavish devotion to the new and popular, throwing out on display every book I am most likely to revile, with that rare gem of a book among them. The book in the store I'm most likely to enjoy is in the stacks, and yet I have no way to find it amid the tens of thousands of books that just don't appeal to me, because they were chosen for their appeal to the mass consumer market. Or if I go to a Wal-Mart or an airport kiosk, all I have is worthless popular crap, 2010 edition, aimed at an audience with an IQ of exactly 100. 

So what we need is a vastly smaller bookstore, where every title is selected as a standout winner, a book that's likely to blow your mind, as only a great book can. The best on every topic that matters, the smartest, the best-written. Curated stores, not warehouses. Trader Joe's, not Safeway. A place with just a couple thousand titles. Something oriented to the increasing demographic of intelligent young creatives who probably spend too much time on the internet. Now, how do you select which titles? Crowdsource it! 

See, one thing that the crowd is good at is sifting through vast amounts of information, and pulling out the most interesting stuff. Assign the categories, limit your available slots, and let the obsessive-compulsive book-loving internet people of the world figure out what exactly you should sell. It'll work.

Here's the benefits: 
You can sell used books. The book is on the list, or it's not. Because there are so many fewer new titles each month, you will have less to manage.

You can buy in bulk. If you have enough stores using your list, you can negotiate better prices from publishers, particularly since you will be able to lead the industry in reducing the number of remaindered books. 

You have less overhead. Fewer employees, smaller space, all without sacrificing sales overly much.

Higher sales. At a Trader Joe's, I'm likely to give almost anything that looks interesting a try, and more things look interesting, because I'm in their target demographic, and because the quality is consistently high. If I'm at Safeway, I'm gonna go through and pick what I know I'll enjoy. Probably there's all sorts of stuff there I've never thought about buying, but which I'd enjoy, but the shopping experience itself is so dismal, and the possibility of disappointment is so high that I'm not branching out. This is why a Trader Joe's can pull the sort of sales volume you'd normally associate with a store four to eight times its size. 

A better shopping experience. If you're running a bookstore larger than just a kiosk, you can suddenly afford to have the space for each book to face front, for each book to be featured with a little review posted below the book, perhaps with a QR code so you can use your phone to instantly look up all sorts of information about the book. By not only having fewer titles, but placing a high value on each title being truly exceptional, you have a higher likelihood of employees having read and being able to recommend most of the books in the store.

You can start it up with a website and an Amazon affiliate account. The minimum viable product is very low. Prove that it works, and you can start opening stores in no time. You may even be able to get some significant investment capital to expand throughout the country.

You don't have to be limited by the small number of choices on the shelves. With the size and cost of print-on-demand services dropping every year, you can radically expand your product offerings, allowing you to meet the needs of most anyone who comes through the door in just a couple hours.

You can stand your ground against the rising tide of e-books. In the future, more and more of the ephemeral popular entertainment reading that characterizes most book sales today will be headed to the handheld screen, endangering the entire business model of the big box bookstores, even as economic contraction threatens the buying power of the American people. Yet few would argue that books will disappear; instead, they will increasingly become fetish objects, the sort of expensive, weighty and emotional treasures that people will want to keep forever, to talk about, to share with friends. This model caters specifically to that sort of book buyer.

In competing with other small curated bookstores, you have less risk that your curator will be making too many idiosyncratic decisions that hamper sales.

But there are downsides, as well. For one, this model does nothing to help with new author discovery, and will likely contribute to the problem. A list of books like this is inherently open, meaning that even if you could control its contents, you can't prevent other bookstores from making use of your list, whether copying your business model or just using it as in-store marketing to highlight certain books on their shelves. And because you're crowdsourcing your inventory list, the more successful you are, the more generic and mainstream your list is likely to become over time. For that reason, I'd want to put in restrictions on how frequently many categories go up for review, and choose locations and marketing efforts that support the preservation of the target demographic, while maximizing buy-in.

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