Are eReader companies and readers talking in different languages?

The Kindle represents a bridge, and a compromise, between kindle owners and Amazon. Pretty much any eReader does.

An eReader company creates an eReader that combines qualities it thinks readers would like (great for reading, simple to use), with qualities that it would like itself (a closed system that guarantees ebook revenue, features that benefit it).

Consider the example of Folders and Custom Screensavers.

Amazon vs Customers on Folders and Custom Screensavers

Consider the conversation around Folders.

  1. Amazon says – Everything is in the Cloud. Why do you need Folders? Just keep a few books on your Kindle.
  2. Kindle owners say – We want all our books on our Kindles. We want an entire library on the Kindle. It makes us feel richer than Kings (stealing this from a past comment).
  3. After two years, Amazon finally gives in and adds Folders. Except the way it adds it, Folders is more like a one-level folder arrangement. Amazon says – Here you go. Your Folders which you shouldn’t really be needing. We added some twists like syncing Folders across Kindles, one book in multiple folders, and books going into the Folders they were in automatically.
  4. Kindle owners say – Thanks. Where are the multi-level folders? Why don’t these work like Folders on Windows, or any other program?

From Amazon’s perspective it saved Kindle owners from confusion for 2 years, and then when they still wouldn’t understand, it added a very good, simple Folders feature. From the perspective of Kindle owners, Amazon took two years to add a basic feature, and then left out the biggest organizational tool i.e. multi-level folders.

The communication is even more disjointed with custom screensavers –

  1. Amazon says – Look, isn’t this nice. The greatest authors. As screensavers on your Kindle.
  2. Kindle owners say – Yes, that’s all well and good. However, for some strange reason, I’d rather look at my kids and grandkids than at Harriet Beecher Stowe. Gazing at the love of my life gives me more joy than wondering why James Joyce is so despondent. 
  3. Amazon says – It’s not a big deal.
  4. Kindle owners say – Yes, it is. Get it done so I can put my own photos as screensavers.

There are multiple hacks out there which let you put custom screensavers on your Kindle. Customers want this feature so badly they’re risking their warranty, going out and making the effort to learn all this technical stuff, and hacking their Kindles.

It’s really difficult for eReader companies to get things right

There’s this interesting conundrum –

  1. Readers can’t tell eReader companies what to make. At some level, they aren’t 100% sure themselves. 
  2. When readers get a finished product, then they’re very good at knowing what they like, and what they don’t like. Also, they’re great at telling eReader companies what else they’d like.
  3. eReader companies have a bunch of goals that clash with readers’ goals. Openness vs eBook Revenue. Profit Vs Value for Money. Simplicity that can Scale Vs Lots of personalization.
  4. eReader companies must have a product out to get good feedback, but they run the risk of releasing something readers don’t like.
  5. There’s a very high cost involved in making changes – hardware changes have to wait till the next release, software changes are very costly.

Because of 5. the ideal model (release quickly, get feedback, iterate and release again, repeat until you get close to perfect) is out of reach.

Because of 3. eReader companies can’t do everything customers are asking them to.

However, there are problems beyond that. Lots of features, including some that are very easy to add, aren’t getting done because eReader companies aren’t talking in the language of their customers.

Should eReader companies and readers carve out their domains of control?

 Perhaps we need eReader companies to just tell readers –

  1. We aren’t going to add a feature that kills eBook revenue. So no library books, no ePub, and no free sharing or reselling. For us to continue to invest money in making eReaders, these features have to be ruled out.
  2. Here are the areas where we can make improvements – features for reading, device design, support features, wireless services. Now, what would you like?

Then readers could pick out the things they like. eReader companies would still have to anticipate things customers would like, and come up with innovations. However, they would have a very good list of basic features customers want, that they could use as their starting point.

If you consider the Nook 1 – It’s feature set was like a list of Kindle owners’ most requested features.

  1. Custom Screensavers.
  2. Memory Card.
  3. Replaceable Battery.
  4. PDF support.
  5. Library Books.
  6. eBook Lending.
  7. ePub support.

If B&N can figure out what the top Kindle owner pain-points are, why can’t Amazon. The only thing on that list Amazon has added is PDF support, and it’s going to add lending soon.

Of course, B&N is guilty of making big mistakes itself. It went so much into ‘beating Amazon’ mode that it forgot its first aim was to cater to readers. It tried to create a new ‘LCD touchscreen+eInk screen’ paradigm, and failed miserably.

It’s also made a huge mess of how it implements ePub, and has killed portability for books bought from Nook Store.

Sony, B&N, and Amazon are all guilty of not really listening to what customers are saying, and pushing too much of what they think customers will like. For the 1st version of a product this makes sense, as customers haven’t played around with a device enough to know exactly what they want. However, now, we have more than enough customer feedback. It’s time to prioritize that over everything else.

Sony’s third generation eReaders not having wireless is a good example. Did Sony just ask existing Sony Reader owners, and play into a confirmation bias? Or did they actually check with 50,000 potential eReader buyers, and figure out that only 10% were interested in wireless downloads?

The latter is perfectly acceptable. The former would be a rather myopic approach.

In the end Customers control everything

eReader companies could suggest a compromise, and cater more to eReader owners without compromising ebook revenue. However, they must realize that the ones doing the buying, of both eReaders and eBooks, are customers.

Customers have total control – If they decide they want an eReader that supports library books, then the eReader supporting library books wins.

At first, we’ll see companies playing up a compromise. Then, we’ll see companies start giving customers more and more control. Finally, we’ll get companies that make EXACTLY what customers ask for. Those companies are going to destroy every other eReader company – perhaps not within a few years, definitely within 5 to 10 years.

There’s more than enough money in selling eReaders – A pure eReader company, which doesn’t give two hoots about ebook revenue, could do very well, and might even become dominant.

Will customers choose a pure eReader company over eReader-eBook-Platform ecosystems?

It’s a tough question to approach –

  1. A best of breed eReader maker will easily beat the restricted eReaders that are being sold currently.
  2. A best of breed ebook store might be able to beat the restricted ebook stores.
  3. There’s a big danger of lowering quality, and introducing complications, when you take an eReader and an eBook store from different companies.
  4. There’s the danger of lowering quality, and the possibility that someone makes more profit than you, if you let anyone do anything with your eReader.
  5. If an ebook store sells to everyone, but doesn’t have a guaranteed slot and a guaranteed channel, it might lose out to the default in-house option.

However, it’s a gamble worth taking.

If a company really does approach it from the perspective of making exactly the eReader that readers/customers are asking for – It’s bound to beat the current eReaders, which make compromises to preserve ebook revenue.

Where it would be at a disadvantage, is that it couldn’t subsidize eReader costs with the promise of future eBook revenue, it couldn’t leverage economies of scale, and it wouldn’t have the branding and brand association of existing eReaders.

Despite all that, an eReader company that listens to what readers are asking for, and talks to them in their language, would have a very good shot at tearing off a big chunk of the eReader market.

What if an eReader company forgot ebook revenue exists?

The Kindle is a device that, according to Mr. Bezos, makes no compromises when it comes to reading. You could argue that Nook 1 and Sony Reader also take a decent shot at that goal – an uncompromised reading experience.

However, it would be naive to buy that glorious sounding marketing line.

The Top 3 eReaders have two separate goals

All three of the top eReaders are actually aiming for two very separate goals –

  1. Making the eReader with the best reading experience.
  2. Making the eReader that’s best at locking-in customers and the accompanying eBook revenue stream.

Sony does the worst job of the three while Kindle and Nook both do a much better job.

A combined eReader and eBook Store has several advantages

Right off the bat we should point out that there are several advantages to having an in-built store –

  1. Convenience. Easily the biggest benefit. 
  2. User knows where to start and has a stable primary/back-up option for buying books.
  3. The store and the ebooks sold in it can take advantage of the device fully.
  4. A consistent buying and reading experience. 
  5. Quality control of books, book formatting, and the shopping experience.

So it’s definitely a good thing to have that integrated store.

The problem starts when eReader makers move into ‘preserve eBook revenue’ mode.

Trying to protect eBook revenue causes quite a few problems

Here are a few of the issues that come up –

  1. The eReader starts blocking out other ebook stores. This might be good for the eReader company but reduces the eReader’s usefulness for users. 
  2. The eReader starts making it hard to get free books from other sources and from the library. All 3 eReaders are guilty of this to varying degrees – the Kindle by not supporting Library Books and Nook and Sony Reader by making it a complicated process to load library books.
  3. eBooks from the default book store are tied to the device and not usable on other eReaders. Both Kindle and Nook do this – Nook by adding a password on top of Adobe DRM.
  4. The focus of the eReader UI is on the default store and eggs users towards buying. This is hard to explain other than in terms of what the defaults are and what things are easiest to do on the device. Basically, the power of the default is used to make the in-built store prominent and the path of least resistance on the eReader is to buy books.
  5. It’s not easy to add your own content and organize it. Nook goes as far as to put it into a separate section.
  6. Browsers are severely limited.
  7. There are very strong controls over what is allowed on the device. Ex: Even though B&N uses Android for Nook Color it has its own separate App Store. Kindle doesn’t allow generic book readers in its App Store.

If you look at all these things – they tie back to one single underlying motivation. They are all driven by the eReader companies’ desire to lock up ebook revenue.

So … do we really expect companies to give up all that ebook revenue?

Actually, yes.

We aren’t talking about being rational – We just want an eReader that’s perfect

The rational thing to do would be to make a very good eReader that also locks up ebook revenue.

If you think about it all progress is dependent on irrational people. People who care enough about making the absolute perfect eReader to throw away the super-lucrative eBook revenue stream.

We want an eReader maker that’s fixated on making the perfect eReader. One that says –

  1. Once users buy our eReader we have a natural advantage. We control what options our users have. 
  2. If we allow library books and the Kindle App and the Nook App we lose 50% of sales.
  3. However, our users are 20% happier and the eReader is 20% more perfect. That 20% is more important than 50% of ebook sales.

No rational company is ever going to throw away 50% of ebook revenue just to make a better eReader. Yet, that is exactly what’s needed to push eReaders and eBooks forward.

A company that throws its eReader wide open would be forced to improve faster

If a company were to throw its eReader wide open it would be faced with a thrillingly dangerous task –

  1. It has to improve its eReader a lot faster because other eReaders are locking in customers. If it doesn’t keep increasing the gap between it and other eReaders it’ll go extinct.
  2. It has to improve its eBook store a lot faster or give it up entirely. If it doesn’t improve its eBook store fast enough, the competing options (which are freely available) will overwhelm its own store.
  3. It has to create quality and excellence based lock-ins. In addition to improvements in the eReader and eBook store it has to figure out ways to improve the user experience so that even without lock-in users stick with the eReader. It could be trivial things like custom screensavers or intricate things like a new design paradigm.

It might not survive since it might not be able to improve enough, or improve fast enough, to fight off competing eReaders with lock-in and in-built ebook stores. However, if it does survive it would be so much better than eReaders focused on locking in ebook revenue that it would take over the eReader market.

If it fails, it might still be able to push its competitors to improve rapidly and in significant ways. Which brings us to an interesting thought.

What we really need is an eReader company that forsakes ebook revenue completely

We need an eReader company that decides to focus on making the very best eReader. One that completely disregards ebook revenue and goes all-out with its eReader.

It seems an irrational, risky strategy. However, eReaders are going to be a billions of dollars a year business. Companies that go with eReaders that lock-in eBook revenue might be able to put up a real fight in the beginning by using future ebook revenue to subsidize eReaders. However, they can’t keep it up for long.

They’ll have to start making their eReaders more open to fight a totally open eReader and that will cut into their ability to subsidize eReaders.

An eReader that’s 1,000% focused on being a great eReader and completely disregards ebook revenue would have a shot. It’s a pity both Kindle and Nook are wedded to ebook sales. It leaves only Sony which is unlikely to take this route.

Kindle 3, quality, and time

Two things about the Kindle 3 have been trapezing through my head and this post is the only way to tie them together –

  1. Amazon spent 3 years before the release of the Kindle working on it and it’s been 2.75 years since it was released. This is courtesy the Charlie Rose show with Amazon’s CEO.  That’s nearly 6 years and Kindle 3 is the outcome of all that effort.
  2. Someone at Pixar mentioned in an article that ‘Pixar movies don’t get finished they just get released’.

Is there a relationship between time and thought put into a product and its quality? Is the Kindle 3 an example of that?

Let’s start with the first.

Are Quality of a Product and Time taken to produce it interwoven?

Outliers and Talent is Overrated and other books talk a lot about how it takes 10,000 hours of deliberate practice to master a skill and become an expert. They also say that this usually takes a period of 10 years. What about applying that expert skill set (perhaps along with dozens or even hundreds of other people’s expert skill sets) to produce a masterpiece?

How long does it take to produce a masterpiece? Is it of the order of 10,000 hours or 10 years (just like mastering a skill)?

If we look around us we get a very interesting range of timelines –

  1. You could argue that a master shoemaker like Jimmy Choo is able to produce a masterpiece in a few days. However, which of those masterpieces is going to last for centuries and how long did that particular idea germinate in his mind?  
  2. What about authors – How long does it take an author to create a masterpiece? Is thinking about the book included or do we just include the writing?
  3. Look at the Kindle 3 and you get the feeling the 10 year time-line seems about right – It does seem Kindle 3 is 60% of the way to perfection. 
  4. If we believe Steve Jobs’ claim that he conceived of the iPad and iPhone in 2000 (he says he thought of the iPad before the iPhone) we’re looking at iPhone 4 as the 4th release and the culmination of 10 years of thought and work. The iPad, even in its first release, probably represents quite a few years of work – You could also argue that all the work on the iPhone transferred over.  
  5. With the Internet there is a sense of it taking just a few years to create a great product. Is that true? If so, where are the great products? You could argue Google and Craigslist and Wikipedia are masterpieces – Well, they weren’t exactly quick hits. They’re amongst the few Internet productions that are near masterpiece quality in impact.
  6. How long does it take to make a great movie? Do we include the script? Do we include time taken to write the book if it’s based on a book?
  7. What about sports? If we watch a performance and consider it one of the greatest ever (let’s say Roger Bannister breaking the 4 minute mile mark) do we count just those 3 minutes and 59.4 seconds or do we also count all the training put into it.  

The one thing we notice is that, except for the shoe-making example, masterpieces seem to be taking multiple years to produce – usually 5 to 10. You could argue that even with shoemaking a truly innovative design or breakthrough probably takes multiple years to conceive and develop.

Are the Kindle and the Nook on their way to being masterpieces?

There are things about the Nook and Sony Reader that drive users mad – for the Nook it’s the awkward LCD touchscreen and for the Sony it’s the lack of thought into how the touchscreen is used. Perhaps these are just manifestations of less effort and time being put in.

It’s quite likely that with time and effort Nook and Sony Reader will rival the level of polish of some of the products that you would consider masterpieces (and for the record don’t think Kindle 3 is there yet).

Take the Nook – It’s probably 1.5 years to 2 years worth of effort. There will obviously be far more bugs and usability issues than with the Kindle 3 which represents 6 years of effort. However, it’s done a pretty good job of rivaling the Kindle. If B&N keeps pouring effort and time into it the Nook may very well be one of the two or three eReaders that survive the eReader wars.

That brings us to the Kindle and, in particular, to the Kindle 3.

How close is Kindle 3 to being a masterpiece?

There are a few things that make you feel it’s really close –

  1. The improved eInk screen.
  2. The size and battery life.
  3. The price of the Kindle WiFi.
  4. The infrastructure. You could argue that WhisperNet is a year or two away from being something of undiluted beauty.
  5. The Kindle Store. The Store actually seems a little behind – perhaps halfway to where it needs to be. However, every other store is still learning to walk so the Kindle Store seems vastly better in comparison.
  6. The family sharing feature – You have to admit it’s a super useful feature. 
  7. The Text to speech feature and the Voice Guide.

There are definitely a lot of signs that Kindle 3 has a shot at achieving perfection and that it might do so in the next 2 to 5 years.

There are also some clear signs that it’s not there yet –

  1. There’s still no writing aspect. To make things worse Kindle 3 doesn’t have a row of number keys. If we’re going to replace paper with Kindle we need to be able to write on the Kindle.
  2. It’s dependent on eInk (the company). Which means no color and no touch. Perhaps Qualcomm Mirasol will solve this problem.   
  3. There’s too much of a tendency to do bit releases. Whether its PDF support or accessibility you get the feeling Amazon prefers to release experimental features and then build on them. Not sure if this gets in the way of quality or whether it helps by providing quicker feedback.  

There are lots of other small signs that we aren’t there yet. You could argue that the price could be a little lower and while it’s unfair given how recently we were at $299 it’s valid from a long-term perspective.

What could stop Kindle from becoming a masterpiece? Could another eReader beat it and get there first?

In a way Kindle 3 illustrates both that the Kindle is likely to get to perfection first and that it isn’t yet a done deal.

Kindle might not be the first eReader to reach this imaginary ‘masterpiece’ designation because it’s dependent on eInk and copying takes far less time than conceiving and creating a completely new product. Look at the first Nook – It took almost every single Kindle pain point and incorporated it in. That along with the dual screen design allowed Nook to be a worthy challenger. At any given time a Kindle, for example the current Kindle 3, has only a 6-9 month window before all the best ideas are copied and replicated and a solid competitor shows up.

If the competitor is also using its own strengths i.e. library books, ePub, etc. then it becomes easier for it to make up for the additional time and effort put into the Kindle. Fundamentally, the need to keep Kindle ebook revenue intact slows down the Kindle’s progress towards perfection. At some point of time the Kindle will have to let go of the ebook revenue stream if it really wants to create the absolutely perfect eReader (let go = let readers decide).

The two ways Kindle could miss

At the moment there isn’t anything that could stop the Kindle from becoming a masterpiece except the death of dedicated eReaders. Since that’s looking less and less likely we can look forward to seeing some truly exceptional eReaders in the future.

There’s another risk – It is possible that the Kindle gets 90% of the way there and then another eReader copies most of the good, adds in the few missing features (that Amazon won’t add since it wants to preserve its ebook revenue stream), and hits perfection before the Kindle does.

It’ll be interesting to see what Amazon decides if it’s faced with that decision – Would it give up the ebook revenue stream to ensure its the first perfect eReader? Would it hang on to ebook revenue and find another way to reach perfection? Would it value its two profitable revenue streams more than making the Kindle perfect?

You could look at the Kindle 3 and see it as a sign the Kindle is well on its way to being a masterpiece. However, the ending of the story hasn’t yet been written.