The Business Rusch: Fear Itself

Kristine Kathryn Rusch

Not making it to Los Angeles last week set off a little fear bomb inside of me.  (For those of you who don’t know what happened on our way to LA, here’s the link.) Instead of focusing on what had gone right—we got Dean out of the heat where he could heal, and a possible serious (hospitalization) crisis got averted—I’ve been focusing on what ifs.  What if we had continued on the drive? What if I hadn’t noticed how the heat was affecting Dean? What if, what if, what if….

Sometimes this kind of rumination is good.  In fact, I think using hindsight to figure out what went wrong is an excellent way to learn.  I wrote a post on hindsight for the Freelancer’s Guide.  But at a certain point, you have to stop ruminating and start moving forward.

I’m doing that, but forward is forcing the issue since I’m planning for another trip.  I’m heading to Germany in ten days for research and a convention.  Along with Greg Bear, I’ll be the guest of honor at Elstercon in Leipzig, a trip I’ve looked forward to for months.  I’ll be blogging about it here if the computer connections are as good as everyone says, and I’m looking forward to that too, sharing the research and the sites, as well as the convention itself.  (If the computer connections aren’t good, I’ll upload everything when I get back.)

But trying to let go of an aborted trip before I head on another one has made for a bizarre loop.  First thing I did when I got home was check the weather in Leipzig, even though Dean won’t be coming with me.

I thought this fear loop was just another Kris pathology until yesterday.  I watched the news, talked to some friends going through a crisis, read a few blogs, and got some interesting e-mails.

Behind every conversation I had, everything I read, everything I heard?  Fear.

Fear is particularly prevalent in publishing right now because the future of the field is uncertain.  Even people who understand how to read tea leaves are having trouble predicting the future.  It’s in such a constant state of flux—almost daily—that people are terrified because they don’t know how to behave.  Suddenly all the rules of what’s right and what’s wrong have gone out the window, and it’s left us with a complete unknown.

Add to that the economic uncertainty.  Unemployment is still about 10% in the U.S. (which doesn’t count the underemployed or those who have given up, weird as that may be), and the good economic numbers that came out in June and July are being revised downward.  The televised newscasts, from the networks to the talking heads on cable, are paying more attention to fringe elements of all sides of the political spectrum than they are to the day-to-day stories that have an impact on our daily lives.

(Televised news, which needs to make a profit, has always done this.  It’s just gotten worse in the past few years because of…you guessed it…the economic situation. Ad revenues are down, so everyone is slashing budgets left and right.  And the expensive items in news department budgets are often hard news, which people have trouble watching, versus entertainment news which is codified gossip.  As much as we all decry gossip, we all strain a little to hear it.)

The net effect of all of this, however, adds to the uncertainty about the future and adds to the fear factor.  Unemployment is so high that most of us know someone who is struggling financially—and by that I don’t mean they’re unable to buy the latest iPhone.  I mean they’re in danger of losing their house (or they already have); they can’t pay their medical bills; or they’re unable to feed their families.

Mixed into yesterday’s celebritainment news was the fact that President Obama has done what every president before him has: He’s redecorated the Oval Office (using campaign funds, not tax dollars, as every news cast was careful to point out).  Around the new rug in the Oval Office are famous quotes, including arguably the most famous words Franklin Delano Roosevelt ever uttered: “The only thing we have to fear is fear itself.”

Let’s look at that statement for a moment, so we share a context.  Roosevelt spoke those words on March 4, 1933, as part of his first inaugural address.  At the time, more than a quarter of the workforce was unemployed.  Twenty percent of New York school children were malnourished.  In mining country, some estimates put the number of malnourished—or starving—children at 90%.  People who still had work had their hours reduced and their paychecks slashed.

Historian Jeff Shesol calls the Roosevelt of March 1933 “a light in the darkness.” Shesol writes in Supreme Power: Franklin Roosevelt vs. The Supreme Court (W.W. Norton, 2010), “By the clarity of [Roosevelt’s] words, his voice, and his purpose, he transformed the national mood even before he left the inaugural podium.”

This is important, because up until that point, the nation felt as if it were drowning—and, honestly, it was.  Mired in debt and loss, hopelessness seemed both natural and normal.  But the problem with hopelessness is that it paralyzes, and becomes part of an endless loop.

After Roosevelt spoke that famous quote, he entered into what is now called the Hundred Days, the first months of his presidency, where he proceeded to do more than any president before him.  Many of the laws that passed in those days got challenged and overturned in court (the subject of Shesol’s book), but at least it felt like Roosevelt was doing something, which was more than it seemed like his predecessor had done.

If Roosevelt had spoken those words and then done nothing, people would not have remembered them.  In fact, after his first inaugural, the “fear itself” quote was not the one the press and the country remembered.  Only in hindsight did those words become the central take-away from that momentous speech.  Part of the reason?  A man who himself could have gotten mired in fear and self-pity instead rose out of his bed after polio left him paralyzed to become President of the United States.  When Roosevelt said that fear was destructive, he wasn’t just speaking a platitude.  He was speaking from experience.

The other problem with fear is that it’s catching.  If one person is fearful, everyone else wonders if they should be as well.  Some of this is pure biology.  Fear saves lives by getting us out of difficult situations. But we no longer live in the wild.  We don’t—and can’t—run from every threat.

Fear is an easy emotion.  That’s why fear mongers thrive in difficult times.  It’s easier to decry something and look at it with a jaundiced eye than it is to examine that something—or to make changes.

I was raised by parents who were afraid of everything.  When I was in the first grade, my father—who had taken a huge career risk—failed miserably and publicly, to the point where he almost unhireable in his own profession (not because of his abilities, but because of his outspokenness).  He saw that moment as a failure that defined him, and gave up.

My mother was afraid of most everything—and understandably so.  An orphaned child in the Depression, shuttled from relative to relative, my mother never trusted anything or anyone, and firmly believed that good times would not last.  Instead of looking for opportunities, my parents saw failure lurking around every corner.

They weren’t always that way.  As younger people, they balanced each other—my father being the optimist of the two of them.  (My siblings, who are between 16 and 20 years older than me, had parents so different that it was almost as if they were raised by two people I never met.)

I was a sensitive child, and I spent most of my childhood terrified of everything.  I also remember vividly when I decided I’d had enough.  I was in junior high, and the thing that scared me the most was talking in front of class.  I wanted to be the best student in school, which meant I had to do a lot of talking without shaking.  So I signed up for the forensics (public speaking) team.  I told my teacher, Mr. Hodnick, that I was so terrified, I thought I’d die.  He promised me I would learn how to control that terror.

He did not promise me the fear would go away.  Only that I would learn how to control it.  And I did.

I still get terrified when I step in front of a crowd.  But I’ve survived it for nearly forty years now.  I know I can survive one more talk in front of one more group.

And it is the memory of that preteen me that often gets me through my fear.  If that geeky little girl could learn how to talk so well in front of groups that she went on to win speaking competition after speaking competition, then I can honor her by facing any fears that I have.

It’s not about getting rid of the fear.  Nor is it about getting rid of the situation that causes the fear.  It’s about managing the fear.

And how do we do that?

I have no idea what the experts recommend.  I only know what works for me.

First, I have to figure out what’s causing the fear.  Sometimes it’s a loop, a memory, like the one from the LA trip last week.  That, I think, was also a reaction—I couldn’t be afraid during the trip back, so I waited until the incident was over to feel the emotions involved.

Most often, though what causes the fear is uncertainty.  And there is clearly plenty of that right now.  Not only is the economy uncertain, but people’s lives are as well.  Not just people who are unemployed, but people who are employed have no idea whether or not they’ll have jobs in six months.

Add to that the rapid technological change, which isn’t just hitting publishing, but most of the arts, as well as many other industries.  Suddenly we as a people can’t picture our futures.  That’s both unsettling and terrifying.  If you can’t see where you’re going, how do you know if you’re on the right path?

The short answer is, simply, you don’t know.

But what most of us forget is this: We never really know.  We have no idea if what we’re doing from day to day is right, is useful, or is even important.  There’s a line in Matt Kearney’s song, “Closer to Love,” that strikes me every single time I hear it:  We’re all one phone call from our knees.  It’s a pessimistic view of the world, but a true one.  We all have had that phone call which completely changed our world, changed it in an instant.

If we lived in fear of that moment, we would never get anything done.  So mostly, we ignore it, and we forget it might happen.  We proceed as if we can predict our futures when, in fact, we can’t.

Still, we want to, just so that we have the illusion of control.

Once I’ve figured out what’s causing the fear, I try to get myself out of it.  If the fear’s a loop, I usually can. But if—as is more common—the fear comes from uncertainty, I do what I learned in junior high.

I run through scenarios.

I start with the worst-case scenario. I actually imagine what would happen if everything I feared would go wrong did go wrong.  Then I figure out if I can live with that.  As a kid in junior high, I realized what I was most afraid of in public speaking was already happening: terminal public embarrassment, combined with blushing, stammering, and self-humiliation.  Since I was already experiencing that, I risked nothing by joining the forensic team.

But other worst-case scenarios aren’t as easily solved.  On the upcoming German trip, I fly out of the U.S. on September 11^th.  That date reminds us all of what can go wrong.  If I’m on a plane that includes a terrorist bent on destruction—well, I hope I acquit myself as well as the passengers did on the flight over Pennsylvania.

But a lot of my friends flew on September 11, 2001, and they did not die.  Instead, they got stranded somewhere that was not home.  Just like all those tourists in Europe when the Icelandic volcano blew this spring.  That’s a worst-case I can plan for.  I can have money set aside for just that emergency.  Dean will be staying home, so he can help stateside if something were to happen.

Worst case doesn’t look as bad as it did before the planning.

Once I have the worst-case scenario and how I can live with it, I then work my way to the second worst-case, and the third, and the fourth.  I used to stop when I reached the neutral scenario—the one I expected.  However, I learned over the years to plan for the best-case scenario as well, because that can blindside you as well.

Particularly in business.  Dean and I did not plan for the best-case scenario when we started Pulphouse Publishing.  We figured best-case would take care of itself.  Instead, best-case—in which we sold all of our product the first time out—became another worst-case. We didn’t have enough funding in place to handle the production of our initial print run.  We just figured it was a pipe dream and wouldn’t happen.

The true downfall of that company happened at that moment, because we were always behind financially, and we never had a chance to catch up.  Now I’ve learned to look at the best-case as well, and try to predict what surprises lurk there.

Of course, you can’t predict everything.  And even with guessing, you’re often wrong.  But the nice thing about predicting scenarios is that it keeps you nimble, so that when something does go differently than expected, you can flow with it instead of bemoan the surprise.

Finally, the last thing I do to get rid of fear is a reality check.  I look at where I’m sitting and what I’m doing.

When FDR gave his speech in 1933, unemployment was at 25%.  That meant that 75% of all Americans were employed in one way or another.  I’m sure they were terrified too. They had lost hours and wages; banks were closing left and right, often wiping out savings; and people were rightly worried.  But most of them had enough work to pay the bills or to feed their families.

The uptick in mood that Roosevelt inspired brought an energy to the country.  It didn’t get the country out of the Great Depression.  In fact, if anyone had told FDR in 1933 that the Depression would continue for nearly another ten years, he wouldn’t have believed it.  He probably would have been appalled that it wasn’t his programs that got the country out of the Depression, but a devastating war that pulled the economy out of disaster.

Still, historians agree that FDR’s attitude, his change of pace, his willingness to move forward, helped the country survive those challenging years.  Historians disagree as to how much that attitude changed things.  But they know that the United States of mid-1933 was a different country than the U.S. of 1932, a less fearful country, one that believed in its own abilities again.

You can’t run a small business if you’re constantly afraid.  You’ll make mistake after mistake, because you’re always seeing threats instead of opportunities.  Even in the darkest times, opportunities exist.  Especially in the dark times.  It just takes someone with courage to seize those opportunities.

If you let fear control you, you won’t even try.  If you acknowledge your fear and figure out how to use it, as I learned in junior high, you can step into your own future.

Is it easy? Hell, no.  It’s a constant struggle.  If it weren’t a struggle, I would have solved the fear issue at the age of 13.  Instead, I’m obsessing about a trip to a country where I don’t speak the language (well), and where I’ll be expected—of all things—to talk in public.

Imagine me telling my thirteen-year-old self that.  She would have been appalled, surprised, and pleased. Yes, pleased.  Because she would have assumed she would eventually conquer her fear.

But I never did conquer that public-speaking fear.  I’ve just learned how to step past it.  I know it’s there, an ever-present companion.  I just know that fear is only debilitating when I allow it to be.

I started this column during my morning writing session.  I always follow that session with a run, lunch, and some errands.  As I left for my run, I realized just writing some words on the subject of fear made me feel better.  On my run, I realized I haven’t been breathing deeply this past week.  Breathing deeply calms. That’s one of the reasons meditation works.

I do a  lot of thinking while I exercise and today was no different.  The perspective I got—that I was obsessing about the past, and not really looking at where I am and what great opportunities I have—set the fear aside completely.

Yeah, I have other issues.  And I could easily substitute a new fear for those fears mentioned above.  As I said earlier in this column, fear is an easy default emotion.

But I’d rather enjoy life.  I’ve got a great month ahead.  So I’m looking forward—and reminding myself (yet again) that the only thing I have to fear…is fear itself.

I’m starting into the second month of the new column.  I’ve gotten some questions that I’ll be answering in future columns, and more ideas than I know what to do with.  But since my first business blog column, the donations have dropped off entirely.  Just as with the Freelancer’s Guide, I do need a few dollars to pay me for my time writing this blog every week.  Thanks for reading—and as always, feel free to share this column with others, so long as you acknowledge the source.

“The Business Rusch: Fear Itself” copyright 2010 by Kristine Kathryn Rusch.

I’m finishing my third huge project in as many weeks (with the time out for the aborted trip to LA) and have lost track of posting on my website.  As a result I’m a bit behind.  So  here are two things for your enjoyment.

First, a new Notes From the Buffer Zone column on the Grantville Gazette website about the changing times for readers and writers.  You can find that here.

Then I’m lucky enough to have the cover story in a new magazine out of England called Spectra.  It launches as an e-magazine this week, so you should be able to get it anywhere, electronically of course.

Here’s the lovely cover, based on my story, “Songbirds.”

You can download a free sample of the story here. So…enjoy.

The Business Rusch: The Nook Inspiration

Kristine Kathryn Rusch

I had planned to write this week’s blog on the trip to Los Angeles.  (See why I’m not in Los Angeles here.)  Instead, I’m sitting in my office, fending off a very needy cat who couldn’t even handle the 36 hours we were gone.  I shudder to think what she would have done if we had been gone for the full week we had planned on.

Before I left, I figured the trip would inspire the column.  If I took true inspiration from the actual trip, I’d write about insurance or planning for emergencies.  Of course, I dealt with both topics in the Freelancer’s Guide already.  I could also write about a usually reliable chain restaurant that we nearly stopped at, until we saw that this particular restaurant was so dingy and dirty, you couldn’t see in the windows.  Only the signs that had come directly from the home office were bright or fresh or inviting; everything else, from the hours sign to the name of the restaurant itself was faded and/or damaged.  The access road next to the restaurant had been dug up, and the mall beside it was dying.  Everything about that place screamed “fending off bankruptcy,” so of course, we drove on, to a restaurant that looked a lot more inviting.

Sad as that was—and it does haunt me, so I suspect it’ll appear in a story or blog later—I’d rather talk about the only other notable business experience on our very short trip.

On our way down, before the heat got to Dean, we stopped at a Barnes & Noble in Medford, Oregon.  I’m not sure how B&N ranks its stores, but I would consider this a small B&N.  You could stand in the main doorway and see every section of the store.

It was Monday afternoon, sunny and hot outside, cool inside.  Surprisingly, to me at least, the store was crammed with people of all ages (including, on one side of the store, a querulous elderly woman complaining that her daughter was walking so fast there was no time to look at books and, on the other side of the store, a querulous eight-year-old girl complaining that her mother was walking so fast there was no time to look at books).  A big display announcing the Nook, B&N’s new e-reader, stood a yard inside the main doorway, where the new books rack usually is.  The display was actually a booth with a gigantic sign behind it.  The booth had sides that were about shoulder high for me, with Nooks on them.  The front, though, was a table, and on it were Nooks that customers could touch.

An employee stood behind the booth, demonstrating the Nook for anyone who wanted to know how the machine worked. Sitting near him was a professorial type who was reading a Nook.  Whether or not Professor Nook was an employee is anyone’s guess, but he sure looked comfortable.

The impressive thing to me, and I do mean impressive, is that the line in front of the booth was three deep and four across for the entire time I was in the store.  I was there for at least thirty minutes.  The line remained, although individual people shuffled in and out.  These people weren’t browsing. They were interested and thinking about buying an ereader. They just weren’t sure which ereader they wanted.

I figure that at least sixty people had gone near the booth during that half an hour, most of whom asked questions.  At the checkout, I asked if this was normal. The employee there told me that there was always someone looking at the Nook, even at the deadest hours of the day.  And then she told me to come to one of their Saturday demonstrations—an actual Nook seminar—to really see a crowd.  I forgot to ask how many Nooks they sold at these events, but to be honest, I wasn’t interested in that number as much as I was interested in the interest.  For some reason, I didn’t realize that ereaders were catching on in quite this way.

I know the statistics.  Ebook sales have grown exponentially this year.  They went from less than one percent of the market to seven to ten percent (depending on which source you read).  While the growth is astonishing, seven to ten percent of the market means that 90-93% of all book sales are still paper copies.

The growth is continuing at an astonishing rate.  Most experts believe that ebooks will be a quarter of the market by the end of 2012, and half of the entire book market in 2015.  No one is saying that paper books will go away.  Personally, I think paper book sales will increase if you look at the actual number of books sold rather than the percentage of books sold, and briefly, here’s why.

Bound books have existed for thousands of years.  Mass-produced bound books have existed since Gutenberg.  Readers know and love the form.  If you love a book and must own it forever, you buy the paper version, because you know you’ll be able to read it, in that format, fifty years from now.

We don’t know what form digital books will take ten years from now, let alone fifty years from now.  I don’t base this prognosis on the idea on any book model; I base it on the music model.

Since the invention of the phonograph, people have been able to own music performed by someone not in the room.  The advent of recorded sound must have felt to the people at the time the way that the advent of the written word felt to people who had only heard stories told orally.  Suddenly something precious could be preserved.

But music preservation formats have changed.  In the late teens or early twenties, my grandfather bought my grandmother a phonograph (which we kids played with [carefully] whenever we went to her house).  She kept all the records—thick unwieldy things that wouldn’t play on my parents’ expensive stereo.

In my lifetime, recorded music went through several forms: the 78 rpm record (that’s revolutions per minute for those of you who have always wondered [and look at me, explaining something every kid knew, back in the dark ages]), the 45 rpm, the 33 rpm, the 8-track tape, the cassette tape, the CD, and now the MP3 digital download (which I greatly prefer).  In other words, ways to access recorded music have existed for more than a century, but those ways have always changed.  I know people who rebought their entire record collection when they went from vinyl to CD and are buying enough hardware to store their digital library (okay, that second part includes me).

None of this happened with the book. The book has been stable since Gutenberg.  Yes, there have been additional formats—the trade paper format, the mass market format—but they were still words, printed in ink, on paper, bound in some kind of material.

That kind of stability breeds faith.  If you love a book that you read digitally, you will buy the bound version so that you will always have a copy in a reliable format.

That makes it sound like bound book sales will go down.  But they won’t, because readership will increase as access increases.

Right now, only a small percentage of books get sold in actual bookstores.  Because I’m tired and a bit cranky from the long (and rather stressful) drive, I’m not going to look up the actual number.  But it’s surprisingly small.  Most people get their books while buying something else—groceries, diapers, newspapers.  The bulk of all books sold sell from places like grocery stores and Wal-Mart, not from Barnes & Noble.

Put that fact together with these two facts:  75% of all teenagers have cell phones.  Smart cell phones, like the iPhone, have several reading applications.  On my iPhone alone, I have three e-reading apps: Stanza, Kindle, and Borders.  I’d have more, but I keep forgetting to download the app.

Other statistics have shown that people who have fiction available on their smart phones read more books than they did before they carried a smart phone.  They now read like I do: in line at the bank, in the movie theater before the lights go down, as they wait for friends to meet them at a restaurant.  The only difference is this: I used to carry a book with me everywhere.  Most people didn’t.  Now I carry several books with me in my phone, and so do they.  When they get a minute, they read.  They no longer need designated reading time.

As more and more people read more and more books, the number of books sold will increase dramatically.  I know that I buy more books now that I own a Kindle than I did before—and I bought more than most people before.

Why am I buying more? Access.  In the past, if I read a review of a book that sounded interesting, I had to remember two things: I had to remember to write down the title and author, and I had to remember to bring that paper with me to the bookstore when I visited.  Since I might not remember the paper right away, I might miss my chance to buy that book in the store because a bookstore can only carry so much stock.  (See Dean’s blog on books as produce [which was my analogy before he stole it.])

When Amazon.com came into being, I still had to make the transition from the review source to looking up the book on Amazon and maybe ordering it or maybe not.

Now that I own a Kindle, I read the review (often on my Kindle), then click onto the bookstore, find the book (if it exists as an ebook), and download the free sample.  I don’t read the sample immediately, but when I do, I often download the entire book.  Or I go to my computer at that moment, and order the bound copy.  (The difference for me is this: I make margin notes in almost every nonfiction book I read, so I prefer a hardcopy.  I don’t like the notation system on the Kindle or the other ereaders that I’ve seen.  So I order bound copies of nonfiction, but generally order ebook versions of fiction.)

I am buying more books because I remember that I wanted to read them.  Anecdotal evidence shows that I’m not alone in this.  There’s another phenomenon that statistics are beginning to bear out, and again, anecdotal evidence shows that it skews young:  People who buy ebooks will often buy two copies of the same book for themselves—one bound copy as well as the ebook copy.  Sometimes they buy the bound book to have a permanent copy on the shelf, and sometimes they buy the bound book to read at home, and have the ebook copy to read on their phone or their ereader.

Also, statistics have shown that the number of people who read books grows each year, and has done so since the GI Bill in 1946.  Yes, I know, there was that one stupid Census “study” a few years ago that showed reading had decreased, but if you actually looked in the guts of the study, you realize that some “statistician” (and that’s in quotes because no real statistician would ever do this) looked at a decline in reading in 1000 households and extrapolated that data to show that reading declined in all of America.  For those of you who don’t understand statistics, let me simply say that 1000 households is so insignificant that it is closer to zero than it is to a recognizable percentage of the U.S. population.  In other words, it’s not something you can viably extrapolate over millions and millions of people.

So, if more and more people are reading, and they have greater access to books, then book sales will increase dramatically.  For the next ten years or so, books will be a significant growth industry.  But we will lose a lot of major publishing imprints and a lot of established publishing businesses. Why? See last week’s post, Fighting The Last War.  Most of established publishing doesn’t understand the upcoming change.  Many of those who do understand the change don’t know how to change their business model to capitalize on that change.

So smaller, more nimble companies will take advantage of the change.

For those of us who read, these changes will make no difference to our reading habits. We’ll still buy books for ourselves and friends. We’ll still discuss them and enjoy them and think about them.

For those of us who write, these changes will either be enriching or devastating depending on the way we view the world, how quickly we change, and whether or not we’re capable of adapting.  A lot of writers will see little or no change at all because they’ll continue to function in the old model—which will remain viable.

What most people don’t understand is that books aren’t changing, reading isn’t changing, and writing isn’t changing. But the delivery systems are changing.

Not very long ago, it used to be hard to get a book from writer to reader.  A writer could self-publish a book, at the cost of thousands of dollars, but still she wouldn’t be able to get the book into more than a few bookstores (if any).  Publishers put the book in physical form, then gave that form to their sales force. The sales force sold the book to actual distribution companies as well as to bookstores.  The distribution companies also sold to bookstores. But the distribution companies also sold to grocery stores and Wal-Mart and truck stops and all those off-market places, the places where people buy the most books.

The system was and is unwieldy.  Books are the only product that I know of where the producer takes all of the risk.  Unsold books can be returned to the publisher for full credit.  This returns system, instituted in the Great Depression to help bookstores stay alive, now costs the book industry millions of dollars.  For every book purchased, another book gets produced—and destroyed.  So built into the price of the book you buy is the price of an identical book that no one will read.

The returns were part of the business model, just like the difficulty of getting books into the distribution system was part of the model, just like the difficulty of getting new books noticed was part of the model.

With the personal computer, anyone could publish a book on their website, but that book would be hard to read.  Many people didn’t like to read an entire novel on their P.C.  No matter how hard innovators tried to change this, it didn’t work.

Then the ereader came along. The Kindle makes ereading easy. From the look of the other ereaders I’ve seen reading seems easy on those devices as well.

Ereaders are changing the distribution system.  Anyone can upload a novel to Kindle, and theoretically get to thousands if not millions of readers.  Same with other ebook devices.

The music industry went through the same distribution change with the advent of iTunes and other MP3 stores.  Now savvy musicians simultaneously release their new music in multiple formats—MP3, CD, and vinyl, as well as cassettes.  And the industry has changed accordingly.

In August, Taylor Swift’s latest single got leaked on the internet weeks ahead of the scheduled launch.  In the past, her music label would have sued the leaker (if he could be found) and any site that played the song.

Now all that the label did was scramble to officially release the song two weeks earlier than planned, so that people who heard it could buy an official copy.  The single leapt to Number One on iTunes within 36 hours.  Yet that excited Swift less than hearing the song played on the radio—the old-fashioned way of letting people know that the song exists.  The scheduled launch of the entire album is weeks away, but the new distribution systems make parts of it already available, which only seems to build excitement.

Such changes will—and are—happening in publishing now.  Things change by the week.  Some of those changes will occur in businesses other than publishing companies and writers.  The big distributors—Ingrams and Baker & Taylor, for example—will have to adjust to changes I can’t yet foresee.  Bookstores will need to scramble to become relevant.  They’ll need to find new ways to get readers into the stores to buy the books there.

I think Barnes & Noble is on the right track here with the Nook.  B&N offers Nook exclusives that you can only download when you’re in an actual store.  I’m sure that they’ll come up with other promotions as well, things that will keep the readers packed into the brick-and-mortar store at five o’clock on a hot Monday afternoon.

I am inspired by all these changes.  I knew about them before I left home on the aborted LA trip, but some of them didn’t sink in until I saw that constantly changing line of interested buyers at B&N in a small, relatively blue collar Oregon city late Monday afternoon.

This is an exciting new world for all of us touched by books.  If we can only keep up with the changes….

My business blog is one of those changes for me.  I would never have imagined doing this a year ago, and yet I enjoy writing each entry.  If I inspire you or make you think, click the donate button or make a comment.  I love hearing from you guys.  Topic suggestions always welcome.

“The Business Rusch: The Nook Inspiration” copyright 2010 by Kristine Kathryn Rusch.

Right now, I should be in Los Angeles for the Writers of the Future event.  As of yesterday, I was still scheduled to be there.  Yesterday morning, Dean and I were in Red Bluff, California.  We’d spent the night there, and planned to drive the rest of the way.

Dean’s body and the 105 degree heat–at 11 a.m.–changed that.

Dean’s had problems with heat sensitivity as long as I’ve known him, and he’s had heat stroke several times, the last in 2008.  Until this trip.  I had hoped to avoid it by avoiding the airlines and long sits on the tarmac in badly air-conditioned planes, a slow drive down to LA in a well air-conditioned car, and then a stay in LA in a lovely air-conditioned hotel.  But the extreme heat proved too much for him.  He had all the signs of heat stroke yesterday morning, so I turned us around, headed to the coast (where it was somewhat cooler), and drove us home.

He’s recovering this morning.  He will be fine.  (Yes, he’s seen a doctor. Two in fact. One in CA, ours here.)  But we won’t be in Los Angeles this weekend.

So apologies to the fine folks at Writers of the Future.  Apologies to the winners of WoTF because we won’t be able to meet you this trip. Apologies to the Pasadena Borders for missing the big signing.  And apologies to anyone who planned to see us this week.  We’re missing all of you, but we are sitting in 60 degree temperatures on the Oregon Coast.  Much better for my heat-sensitive husband.

The Business Rusch: Fighting The Last War

Kristine Kathryn Rusch

Military historians have a saying:  Generals usually fight the last war.

What this means is simple: the generals running a new war make plans based on the previous war.  The concept actually makes sense.  Generals usually had a lower rank in the previous war.  They watched comrades die senselessly due to mistakes that should never have been made in the first place, and the generals vow to never make the same mistake as the leaders of the last war.

The problem is that as the generals are looking backwards, furiously defending themselves and their soldiers against the mistakes of the past,  the new war goes on around them.  The new war has its own priorities, its own set of problems, and its own mistakes. Often those mistakes result from fighting the last war.

How does all of this square with the concept of learning from your mistakes?  In the Freelancer’s Survival Guide, I constantly told you that my philosophy is to never make the same mistake twice.  It sounds like, from the military history perspective, the generals are attempting the same thing.

And they are. They’re making new mistakes, but often these generals miss the bigger picture—they miss that this war is different from the last. That’s where a visionary leader comes in.  The visionary leader can see the differences between this war and the last, and often knows what to do about those differences.

The problem is that visionary leaders and stable organizations, like the military, don’t mesh well.

In the comments for last week’s post, writer Carolyn Nicita attached a link to an article on The Daily Beast titled “Why I Fired Steve Jobs.” The article is interesting, although not nearly as dishy as I had hoped (so sue me; I like to read business gossip).  When looked at from a purely managerial perspective, John Sculley had no choice but to fire Jobs.  Jobs was arrogant, difficult, out of control, and refused to respect authority.  He was also brilliant and visionary.

A caveat here: I’m making assumptions based on my 25 year-old knowledge of the problem and the very short article Carolyn sent.  I do not want the comments section of my blog to turn into a religious discussion—no Apple versus Microsoft arguments, please, and no pro- or anti-Steve Jobs junk.  I’m going to use this article as a jumping-off point.  If some of the things I list below did indeed happen and I am unaware of it, pretend they didn’t happen for the sake of argument.

What is clear from the article is that Sculley didn’t see Jobs’s value to the company.  Instead, Sculley saw Jobs as a difficult employee, getting in the way of the smooth operation of the organization.  Had Sculley seen Jobs as a valuable employee, Sculley would have done everything he could to keep that difficult employee.  Sculley would have given Jobs warnings, talkings-to, sent him to those weird socialization classes that businesses offer.  Sculley might have taken the extreme step of assigning a handler, just to keep Jobs in line.

With the benefit of hindsight, Sculley’s move is boneheaded.  From the things Sculley knew at the time, the decision made perfect sense.

What did Sculley know at the time? He knew how to manage.  He came from Pepsi, where he had saved the company with a brilliant marketing campaign.  He was brought to Apple for the express purpose of taking those Pepsi skills and applying them to a company that couldn’t seem to get traction.

In other words, Sculley was hired to fight the last war in a brand new company.  And wow—surprise, surprise—it didn’t really work.

As one of the commenters after the article pointed out, Jobs has often said, “Management tends to be about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.”

Unfortunately, leaders can only inspire so long.  At some point, they need managers to help them get the troops to actually do the work.

Dean Wesley Smith and I learned this lesson the hard way at Pulphouse Publishing.  We’re both visionary.  We suck at people management.  I’m a little better than Dean if you look at it from one perspective: I don’t yell in the office.  I’m worse than Dean if you look at it from all other perspectives: I expect everyone to get the job done and to leave me alone.  At least Dean follows up.

We both knew we had this failing.  We hit a point in the business where we needed a competent business manager to take us to the next level.  We had a good manager for a small company, but we needed someone on a much larger scale, with the ability to run an international corporation.  Unfortunately, the people we knew who could do this would have to be hired away from some other company—and we couldn’t afford that salary.  Heck, we couldn’t afford to hire a head hunter to look for someone who might fit the bill.

Many small companies get stuck in this place.  Even more react like Apple—they hire someone unsuited, because they’re fighting the last war.  They think they know what they need based on what happened before, but in reality they have no idea what the future will bring.

The solution I always wanted for Pulphouse, one we could never achieve, was the one depicted in the movie Big.  Tom Hanks’s 13-year-old boy, magically grown up, got a job at a toy company where they gave him his own office, let him play with toys, and come up with “ah, cool!” ideas.  Then the company, without question, would implement the ideas.

If all businesses worked like that—the true visionaries in their offices, playing with their toys, while the managers implemented the ideas efficiently and accurately—no company would ever fail.

Of course, I can’t think of a single company that works like that.  Not even Apple, no matter how much the press wants us to think so.

Most of us run small businesses and we scramble to keep our heads above water.  We often don’t have time to think about the last war let alone the current war.  We’re trying to make our rent and get through the day.  We reflexively fight the last war, because it takes little thought.  We analyze the mistakes we made, figure out how not to repeat them, then  move on.

But what we really need to do is lift our heads up as often as possible and look at the world around us.  We need to realize that the war going on around us is a new war.  We have to see with clear eyes whenever we look.

I know that’s hard.  Most people can’t see what’s going on around them—or if they can see it, they don’t understand it.  People can’t just have an understanding of the past and a knowledge of the present.

They also need to be able to extrapolate into the future.  The if-this-goes-on thinking that most good science fiction writers have needs to exist in business as well.  It’s this kind of thinking that puts “visionary” into the business world.

Not every person can be a visionary.  Some far-sighted people hire visionaries, not to develop  product, but to understand what kind of product is needed.  And the visionary has to understand the industry.  Futurist seminars are good to explore the overall culture, but would they  have helped Sculley with Jobs? No.  Hardly anyone saw the direction the tech industry would take in the ten years between 1985 and 1995.  Those who did see it often didn’t know how to capitalize on it.

As you can tell, I’m thinking about this a lot right now as my industry—the publishing industry—changes. The changes occur almost daily, and are sweeping in scope.  What will happen in the future? I don’t know.

I do know that Big Publishers are still fighting the last war—looking at e-books as an annoyance that could get in the way of their profits, rather than seeing how to profit from them.  It would be easy for me, as a writer, to do the same.  Instead, when I received the opportunity to put my entire backlist into e-books, I jumped at the  chance.

Will it benefit me? I hope so.  Will it matter ten years from now? I hope so.  Will I look visionary twenty years from now? I hope so.

But do I know? Of course not.  Anymore than I understood the importance of blogging 18 months ago. But I am willing to be flexible.

What disturbs me the most about this “fighting the last war” phenomenon is that it doesn’t just happen in the military or in business, but in other areas as well. As I listen to stockbrokers and economists talk about fighting inflation, I’m acutely aware of the fact that the average interest rate on a 30-year-fixed mortgage in 1981 was about 17%.  The average interest rate on a 30-year-fixed mortgage today is about 5%.  The problem, at the moment, isn’t inflation.  The problem is that the United States has lost its manufacturing base.  We don’t make anything in this country any longer.  Our economy is based on consumers spending dollars rather than Americans making product that we are selling to ourselves and overseas.

But are the people in charge of our financial system discussing this? Behind closed doors, I hope.  But I doubt it.  The economists and stockbrokers, the heads of the various Federal Reserve Banks, are all discussing inflation, as if it were a greater threat to our economy than joblessness is.  And that’s simply myopic.

Those of us who run small businesses have created something.  We’ve created a store or a law firm, music or artwork, buildings or building materials.  We understand the difficulties of inflation—borrowing money becomes difficult, for one thing. But no one can borrow money right now anyway.  All the big banks and lending firms are waiting for the other economic shoe to drop.  So inflation—to those of us who run small businesses—is somewhat irrelevant.  In fact, those of us with money in the bank would like to see interest rates rise a little.  Then we would make money on the money we have in reserve.

That’s just an example of the last war having an impact on all of us.  As I stare down the new face of publishing, I try to analyze my own attitudes.  Am I looking at it from an old-fashioned, out-of-date position, or am I using the past to understand the present? Am I dreaming of a better future while ignoring the signs of upcoming disaster? Am I being realistic?

Unfortunately, in the terms of future predictions, only time will tell.  The problem with being human is that we cannot know the future.  (Sometimes, I would argue, we don’t know the past either.)  We have to make educated guesses on where the future will go, and what it will bring.  Those guesses should be based on knowledge without fear, on not making the same mistakes but on being unafraid of making new ones.

And honestly, that’s a tall order.

Not all of us can do it.  But those of us who can will thrive in the changing environments we face, instead of being tossed around by events.

Running a business isn’t easy, no matter what the business.  In fact, it’s fraught with all kinds of perils.  Never make the same mistake twice.  But remember that fighting the last war is a common business mistake.  When you’re reviewing the past, make sure it doesn’t hold you—and that the war you’re fighting happens to be the one you’re in the middle of now, not the one you survived in the past.

Thanks for all the great letters and comments last week supporting the new column/blog.  I’m going to keep the donate button here.  If you feel so inclined, leave me a dollar or two to carry me to the next installment.

“The Business Rusch: “Fighting The Last War” copyright 2010 by Kristine Kathryn Rusch.