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Comment by Amygaz | Hacker News Reader

I find the analogy to VCs interesting. In term of investing your own money (as in investing in a fund), I have seen graphs showing that VCs have a pretty bad ROI, if not the worst This is partly attributed to highly subjective decisions from a small number of like-minded individuals, which often end up in poor and mostly misapplied metrics. (I don't want this to be the debate, this is just something I have seen reported many times, and at least once on HN not too long ago, and most people seemed to agree with that, so lets assume that VCs are not a very sound way to invest your retirement money).

Is the same true for Publishers? Could make a comparison using data about this $15B revenue vs how much was spent?

Moreover, the best ROI for VC funded anything, seems to be an exit IPO. What would be the equivalent of an "IPO" for authors? A movie?

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"Is the same true for Publishers? Could make a comparison using data about this $15B revenue vs how much was spent?"

Good question. I have no idea ;-)

I guess it might not even matter. If what you're interested in is the best way to get more good books into the world rather than make the most money. From my experiences the folk in the publishing industry I've met are more interested in the former than the latter.

The issue I was trying to highlight though is that many people seem to ignore the "invest" part of what publishers do and see them as just people who print books. The publishers advance + the publisher/agent network are an investment. And with new authors an especially risky investment.

"Moreover, the best ROI for VC funded anything, seems to be an exit IPO. What would be the equivalent of an "IPO" for authors? A movie?"

I'm guessing getting a Terry Pratchett or a J. K. Rowling. That combination of talent and public zeitgeist that produces wads of cash.

Alas, you can't gamble your company on getting a Terry Pratchett or J. J. Rowling -- or a Dan Brown. Those folks come along once a decade in the worldwide English language market. The overwhelming majority of works of English language fiction sell less than 100,000 copies (hardcover, ebook, and paperback, across the North American, and UK/Commonwealth markets, and in translation); indeed, many sell fewer than 10,000 copies.

Most folks have no idea how micro-targeted a niche business publishing is. The goal of a large publisher is to find a lot of these small fry and hope one or two of them will break through and make the big time; just one such author can float the rest of the midlist at a publisher for many years, raising the chance of another huge bestseller coming along.

Actually, looking at the size of investment with individual authors, I guess folk accelerator/seed folk like YC would be a better analogy than the average VC firm.... but I'm really pushing the analogy too far.

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