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Comment by Duff | Hacker News Reader

Another great example of how finance mumbo-jumbo destroys industries.

So the publishing industry's balance sheet looks better because they carry no inventory. How is the publishing balance sheet going to look when the industry implodes?

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It is not obvious to me that it has to.

Books are technically obsolete, but there are still plenty of cases -- stundents going to exams, book that depend on exact layout, etc -- where ebooks are no substitute.

An the skills in marketing, layout, editing, etc that the publishers have build up over the years are as needed now as they have ever been.

The only way the publishers will fail is if they don't adapt.

And even then, people are still selling horse drawn buggies (http://www.buggy.com/ -- warning early 90 design) on the internet.

> there are still plenty of cases -- students going to exams, book that depend on exact layout, etc -- where ebooks are no substitute.

Quite. Does anyone yet make an ereader that can safely and sanely be used in the bath?

Put it in a freezer grade zip-lock bag. Works fine with buttons to turn pages. Not as sure about touch screens.

As jolhoeft remarked, sealing the e-reader in a plastic bag will do in a pinch. You can't (comfortably) do this with a bound volume. How exactly is this a point in favor of dead trees?

I worry less about water damage to my Kindle than I worry about water damage to physical books, even without any sort of protective covering. If I spill coffee on my Kindle, I simply wipe it off. If I spill coffee on a bound volume of paper, I consider it to be "ruined." My Kindle has demonstrated far greater fortitude than paper in weathering spills.

>"Another great example of how finance mumbo-jumbo destroys industries."

Finance, the art of getting capital to where it can be utilized most efficiently, has created vast, vast, vast amounts of wealth, everywhere it is practiced. Destroys industries? Please. It has created and bolstered more industry than anything you can name. It's the reason you own a car and a house. Finance is not a bad word.

You overstate your case. Finance is capital allocation not capital creation, car companies could just as easily operate by directly leasing the cars they made vs using 3rd party's to finance the transaction. Finance increases the market for things beyond who can directly afford them which drives up prices, see home housing markets around the world. However, on net it's still generally considered a good thing.

>"car companies could just as easily operate by directly leasing the cars"

...which is finance. So why don't they do that, if it's just as easy? And where does the money come from to front the cost of building the car that is to be leased? Because the lessee won't cover the cost for quite some time. Yep, finance.

I realize there's a populist movement, especially among the younger crowds that frequent the interwebs, that influences people to hate everything Wall Street. But I don't think people realize what a fascinating and, more importantly fundamental, role finance has played in history. Present day Silicon Valley does not exist without it. It does, in fact, create capital.

It does, in fact, create capital. No, it allocates capital. VC's don't directly create capital they take money from investors, take their cut, invest the rest and then you get Silicon Valley. It might seem like a semantic argument, but what your suggesting would be the same thing as arguing that Walmart manufactures TV's. They are involved in the process, but a lot of bad policy shows up when people confuse bank balances with actual capital.

PS: 'So why don't they do that, if it's just as easy?'

A lot of car companies do that ex: http://www.hondafinancialservices.com/. Whenever they advertise 0% interest that's the car company handling the loan. However, car companies often resell these loans to third party's to get their capital back. There is a lot of capital out there that's looking for safe investments and repackaged loans fit the bill.

>" It might seem like a semantic argument"

I guess it is semantics:

http://en.wikipedia.org/wiki/Financial_capital

Maybe "finance" was the wrong word.

Whatever you want to call the worship of ratios like "return on equity" without an understanding of the business, that practice is dumb and destroys companies that actually create value.

Dell is a great example -- be a computer manufacturer that owns almost no assets related to the business. Their Taiwanese suppliers like Asus are laughing their way to the bank as the Dell management patted themselves on the back for improving some ratios.

One data point, but I heard from Brad Feld that when writing Do More Faster he found the publisher to be really good at taking a Word doc and converting it into a book (and all the editing that goes into that). He found them to be pretty much useless when it came to actually marketing a book. That probably explains why he's self-publishing his upcoming series.

It seems to me publishers will have to figure out either how to get better at marketing or evolve into low-cost specialty printers.

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