I'm not a fan of shooting ideas in the head, because we usually know less about those ideas than the people executing it, but at the same time we don't suffer from the "curse of knowledge" which gives us the right of being skeptical.
This week John Cook wrote about Paperspine, a new Issaquah-based company that defines itself as "Netflix for Books". This morning on my daily routine reading blogs I found on ReadWrite/Web another company doing exactly the same thing: BookSwim.
I was already going to write why I don't think Paperspine will work and now that I know they have a competitor I think the odds of success (for both) are even less.
These are some of the arguments:
1) Pet food: Remember the Bubble 1.0 when a lot of startup thought was super smart to sell 50lb dog food and 10lb cat litter over the mail. A DVD weighs like letter, while a book weighs about hundreds of letters.
2) Time commitment: The time commitment to a book might go from several days to many months, while the time commitment to a DVD is capped at 2 hours (maybe 3). For me to think that I'll watch 2-3 DVDs per month and pay Netflix $9 is fairly reasonable. Now, paying $15/month for a book service, I must really be convinced that I'll read at least 1.5 books/month over the curse of my subscription. What about months that I'm busy? Or on vacation?
3) Book worms vs. Non-worms: I see there are two types of people. Those that read lots of books (non-technical) and those that don't. I read lots of technical books (about 30-40 per year), but very few fictions. The people that don't read that many (which is the majority) won't use the service. The people that read a lot, already figure out a cost effective way of doing that, like using the library, half-price books, sharing between friends or spending lots of time inside a B&N.
There has been dozens of startups fighting to be the official "Office Online", or a part of it, like "Online spreadsheets", "Online Word Processor", "Online Presentation", etc.
Finally, I'm convinced that Microsoft will dominate the online market the same way it dominates the offline market.
I came to that conclusion after thinking about technology leap that people need to take to transition from one product to the next. Going from Word for DOS to Word for Windows was a natural transition. The same way it is each new version of Office. You continue to use the keyboard and mouse, you click on the shortcut on the Start menu, an empty document shows you and you start typing.
The leap from Offline to Online is not that small. There are many different steps, like opening the browser and going to a link, signing in, etc. Then, there are the perception aspects, like you don't own that document, that it's not safe, etc.
The moment Microsoft releases an extension for Word that allows you to store documents online as well as offline (like Sharepoint for the rest of us), it will start an inevitable trend of dominating that space. That is such a short leap for a user to make because he still has his Word icon to click, and is just a matter of having a synchronization service to seamlessly look like the document is local and a backup/version is online.
From that, Microsoft can provide it's own web-based Word if people want to do some basic editing on the go, and then the product gets better and better until it's good enough to be used without the offline version.
One big mistake startups make, IMHO, is to think that the world moves at a much faster pace than it really does. It'll take a decade for online document editing to have 50% market share of all document editing. Yet, a lot of startups assume that Microsoft will lose Office domination in 3 years because they are not going online. Hey, I have friends running Office 2000 and they are quite happy.
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January, 2008
