As told to Bill Crawford
Scott Klososky, started putting computers together in high school and has spent the last thirty years in the technology business. He founded a number of successful internet companies, including Webcasts.com, Paragraph (a Soviet/American Joint Venture), and Alkami, an online banking platform. A popular speaker, Klososky is the author of several technology books, including Manager’s Guide to Social Media (Briefcase Books Series) and The Velocity Manifesto: Harnessing Technology, Vision, and Culture to Future-Proof Your Organization. He also collaborated with H.R. Haldeman, Richard M. Nixon’s chief of staff, on the New York Times bestselling book, The Haldeman Diaries. Klososky spoke with Publishing Perspectives about his latest venture, crowdscribed.com and the future of publishing and the crowd.
Crowd funding for content creation is getting traction pretty fast, and it’s going to start getting traction a lot faster, especially when it comes to creating books. I don’t think it’s a fad, and I don’t think it’s going away. More and more people are going to use the technique of posting creative ideas and providing ways for people to invest in their ideas.
Crowd funding has pushed way beyond CDs and Indie movies to all phases of creative endeavor. Just recently, I got a note from a friend of mine who has a juggling and comedy act in Vegas. He just got a new time slot at a big casino, which is great, but they gave him an empty stage. He needed $10,000 to purchase a cool backdrop, but he couldn’t afford to pay for one out of his own pocket. So he crowd funded it. He started the process one morning and by noon he had raised $4,000. It didn’t take him long at all to raise $10,000 for his new show.
Kickstarter, of course is the poster child for crowd funding, but a lot of new services are starting up. My friend in Vegas for example, used a widget that he could embed in his email to solicit funds from the website Chipin.com. He sent the email out to his fans and Voila! It was like magic.
I started Crowdscribed.com as vehicle for authors to crowd fund and crowd source their projects. We are working to develop two crowd funding models, a public model and a private model. As part of the public model, we are going to have authors post their projects on the site. Visitors to the site will be able to vote on the project, thumbs up or thumbs down. This will give authors the chance to test market their projects before committing to full production. If the crowd likes the project, the book will likely do well.
We are going to enable voters to subscribe to the project they are voting for. In return for their paid subscription of say one dollar, they will get the e-book version of the project before non-subscribers.
If 5,000 people subscribe to the book at say a dollar a piece, that is five grand that you’ve got to help fund the creation of the book. It is in some ways it’s an advance from the crowd. We are developing a lot of other crowd funding technologies for our public model that we are pretty excited about.
Our private crowd funding model will include a wide variety of options, including crowd funding through networks of interest and investor groups, as well as allowing the crowd to buy books, or perhaps entire series of books, in advance. We will also assist the authors to crowd source various components of the book publishing process.
We hope to avoid some of the problems that have arisen with Kickstarter. There is an increasing number of creative folks who have used Kickstarter to crowd fund projects that don’t happen. Some of the worst offenders are the folks who raised $10 million to produce a watch controlled by the Android operating system [the Pebble]. It was supposed to be out this month, but they’ve already come back and said it’s going to be late. People are beginning to wonder if some Kickstarter creatives are actually just out to steal money. That’s one of the big problems with crowd funding.
With Crowdscribed, we are going to try to avoid that problem by providing guarantees to the funders. I believe that until you provide some sort of money-back guarantee, you will not be able to develop the trust between the creative and the investor that is needed for successful crowd funding.
Our model for crowd funding books is exciting because it’s very different from the standard publishing model. In the past, you had two extremes. Either the author paid for all of the publication costs, or the publisher covered all the costs. At Crowdscribed, we are working on a third option, a syndicated book. A syndicated book falls between the two funding extremes. An author might invest a little bit of money in it, a publisher might invest a little bit of money in it, and members of the crowd could also invest money in it. Movie creatives raise funds through syndication all the time, and it’s fun to see book publishing going the same way.
Actually, syndication has a pretty illustrious history in the publishing industry. London publisher Jacob Tonson funded the first illustrated edition of Milton’s Paradise Lost with a syndicate of five hundred subscribers. In the eighteenth century, English publishers printed the names of subscribers in the books they helped fund. Status seeking subscribers actually competed to be involved in the hottest publishing projects so that their names would appear next to the Duchess of York, Jane Austen, Edmund Burke and other big shots..
When American publishers in the 1820s turned down the opportunity to publish his water colors, John James Audubon raised the equivalent of $2 million from subscriptions, art sales, lectures and even the sale of furs to publish his celebrated Birds of America. If crowd funding was good enough for Audubon, it’s definitely good enough for us.