I wrote a book, “Fall in Love with the Problem, Not the Solution-A Handbook for Entrepreneurs”, sharing my know-how of building unicorns, and I’ve built two so far.
For me, writing the book was about fulfilling my destiny. While I’m an entrepreneur with a dozen startups, I’m also a teacher. I feel equally rewarded when I build stuff myself or guide someone else to build it. In the book, I share unique knowledge I learned over the years as an entrepreneur.
Throughout the journey of writing, publishing, marketing and promoting the book, I’ve learned that both the market and the journey are somewhat similar to building a startup.
Publishers and Venture Capitalists: Understanding Their Role in Your Journey
Many people have an idea for a startup, or equally for writing a book. Only a few of them will make the leapfrog to actually do something about their idea. Even fewer will start a company, or write a book, and of them, even fewer will get the company funded or their book published.
Publishers are somewhat similar to Venture capitalists. They take some of the financial risks and enjoy a major part of the financial rewards. Here again, the numbers look the same. One out of a thousand startups will become a unicorn, and one out of a thousand books will sell a million copies or more.
One of the chapters in my book describes the fund raising process. While building a startup is a roller coaster journey, fund raising is a roller coaster in the dark, you don’t even know what’s coming. It is an entirely different ball game.
And that’s how it goes: A Venture capital partner is likely to meet 100-200 companies per year and invest in one or two. One percent, that’s it. Even then, not all of them are going to succeed. I’ve learned this both the hard way and with the reconfirmation of a veteran who told me, “In order for us to invest, we need to have the conviction that your company is going to be a unicorn, and while we want you to be successful, we are not going to do a lot for it to happen, unless we see the traction that you are getting closer to the path of being such. In particular, we get excited when other investors want to invest.”
Books are the same. A publisher will get many proposals and eventually choose few. The ratio might be slightly different than 1% or 2%, but at the end of the day, most books will not be published, and the majority of the startups will not be funded.
To build a successful startup, the entrepreneurs do nearly all the heavy lifting, figuring out product-market fit, business model, and growth and building everything. The role of the VC is to provide fuel for the journey, which is the money. Occasionally, you will run into an investor who will do above and beyond and will roll up their sleeves and help you to become successful. If you are building a startup and expect your investors to do the heavy lifting for you, you will be sorely disappointed. If you get an investor like that, then you’re lucky – the same with publishers and I was lucky with some of my investors and with some of my publishers.
The Odds of Success: Unicorn Startups vs. Bestselling Books
Out of 1,000 startups only about 150 will be funded, out of 1,000 books about the same ratio will get published.
Of those that get funded, one will become a unicorn, and one book will be sold in millions.
Many startups will eventually fail, and many books will not even become profitable. A bunch of startups will make nice returns on the investment and the same with books, a bunch of them will be sold in nice numbers.
Artists are the same. Very few will become financially successful. I would guess one out of a thousand, and another single digit percentage wise will make a living, and the rest – will have a different day job.
Authors are like artists, becoming one is a mission and not a career choice. It originates from a desire to share your “something” – vision, philosophy, experience, mission, wisdom, or talent. Few would think, “I’m going to write a book and make money out of it.” Most would think, “I have something special that I would like to share, it is primarily my choice of self-expression.”
Understanding – each side, the publisher and the author, their role, and the odds involved, will help in setting up the expectations when those two meet.
Authors, you should know that it is a 1/1000 market. Publishers, you should tell that to authors.
The article was first published on Publishers Weekly magazine on October 2024