Power of passion
I never planned to create the world’s largest distributor of self-published eBooks, but here I am a serendipitous accident.
My story starts with my parents. My mom was a sociology major actively involved in UC Berkeley’s free speech movement. My dad was an electrical engineering student with a passion for problem solving. After graduation, my dad got a job at IBM, where he and some other engineers invented the magnetic stripes that now appear on the backs of credit cards.
Later, my dad quit his job after being promoted to a managerial position. He wanted to invent things, not manage people. Then money became tight for our family. If I wanted to go to a movie, I had to earn the money myself.
We lived in the Santa Cruz [Calif.] mountains near several Christmas Tree farms. So, each year I harvested mistletoe from the oak trees, packaged it in a cute baggie with a candy cane and a printed story of mistletoe’s mythology and sold it alongside the highway for 50 cents a bag to the thousands of people coming up from the valley to buy Christmas trees.
I was the odd kid in high school who read The Wall Street Journal, Forbes and Fortune for fun. I was fascinated by what differentiated successful from failed companies and I wanted to pick stocks that would go up. At age 16 (I'm 51 now), I opened my brokerage account at Charles Schwab.
With penny-pinching on my dad’s mind, he was irritated when my siblings left lights on. So, he invented a light switch with a third position that would turn the light off after a period of time; and he enlisted us kids to assemble them at the dinner table, soldering irons in hand.
When other parents were pressuring their kids to prepare for college, my parents told me to pursue whatever made me happy. If I wanted to become a ditch digger, that was fine by them.
I applied to UC Berkeley and put myself through college, working almost continuously throughout school and summer and receiving about $2,000 in government loans each year. I worked as a janitor, a vacuum cleaner salesman, a Dominoes delivery driver, a forklift operator, a shoplifting security officer at grocery stores and as the manager of a 127-resident student housing co-op.
At the co-op, I solicited residents to contribute poems, articles, drawings, gossip or anything else creative to a monthly newspaper and I got local businesses to sponsor it with ads and coupons. The enterprise made money for the co-op. Little did I know, I'd someday go into the publishing business!
During the summer preceding my sophomore year, I enrolled in a marketing class at a local junior college just for fun. I remember learning how when instant cake mixes flopped when first invented and marketed in the 1950s or '60s, the companies discovered housewives feared their mothers-in-law would frown upon them for not baking their cakes from scratch. So, marketers ran ads showing the wife delivering the Betty Crocker cake to the smiling husband and the mother-in-law standing behind her smiling approvingly. Sales took off.
The class sparked another interest in my sophomore year, I decided to apply for and was accepted into Berkley’s two-year undergraduate business program.
Marketing, finance and economics were interesting to me, and even calculus was kind of fun. One of my favorite classes was on distribution. Who knew I'd become a distributor some day? But the best part of business school was being surrounded by super-smart people. It forced me to raise my game.
In the meantime, my dad sold his light switch-timer company and started a new business. He wrote an e-mail program called PC-Telepost and, on a lark, printed up business cards for me with the title VP of Marketing and Sales.Because I realized our target audience read computer trade magazines to decide which software to buy, I started contacting editors and asking if they'd like to write about our software. I remember Russ Lockwood, an editor at Personal Computing Magazine, who asked me to send him a press kit.
"What's a press kit?" I said. He said is has product brochures and a press release. "What's a press release?" I said. He told me.
Little did I know, I was learning public relations. Soon, we were getting free coverage and selling a few thousand dollars’ worth of software each month.
Three years after graduating from UC Berkeley in '88, I got a temp job at IBM on an assembly line building mainframe hard-disk drives. While there, I learned Carnegie Mellon accepted me into its MBA program in entrepreneurship, but I was having so much fun at IBM that I deferred a year.
A month or two later, IBM laid me off and I got a job at one of the largest Silicon Valley PR firms for a whopping starting salary of only $23,000. And what do you know, my first client was a hard disk drive company! Having worked on the assembly line, I already knew the terminology.
After almost two years, I opened my own PR agency, Dovetail Public Relations. Over 15 years, we represented dozens of Silicon Valley startups and large publicly traded companies, including Sun Microsystems, McAfee and even IBM.
I remember pinching myself and thinking how amazing it was that here I was, a 20-something year-old, giving strategic communications advice to the CEOs of major companies, setting up press interviews and acting as their company spokesperson.
During my work for McAfee, the new CEO asked me to listen in on his first earnings conference call with investors. I was so impressed by what I learned that I started asking to listen in on the earnings calls of other companies I was invested in. But one refused, saying the calls were for large Wall Street investors only.
I soon learned about 90 percent of publicly traded companies had similar policies. So, I sold my stock in that company, took my $120,000 profits and started a company called BestCalls.com that would publish an online directory of earnings conference call schedules and access information for the few companies that welcomed individual investors.
Within a week of launching, nearly 10,000 investors signed up. The next week, I lobbied the Securities and Exchange Commission for assistance, spoke with commissioner Laura Unger (who'd later go on to become chairwoman of the SEC) and several of her staff.
Six months later, the SEC proposed Regulation Fair Disclosure, which required public companies to disclose material information to all investors at the same time. Within the span of a few months, we went from a world where 90 percent of public companies were excluding small investors to 90 percent including them. I sold BestCalls in 2003 and returned to Dovetail full time.
The story of my latest company, Smashwords, started the next year when I met Lesleyann, my wife-to-be. She had just quit her career as a reporter for Soap Opera Weekly Magazine and told me hilarious stories about soap actors. I suggested she write a book. She suggested we write it together. I said “yes” and took a sabbatical from the PR agency.
Three years later, we had Boob Tube. But our top tier New York literary agency, after two years of trying, was unable sell the book. Apparently, prior books targeting soap opera fans sold poorly.
As I thought about our failure, I realized we were not alone. When I thought of books that might have gone on to become cultural classics but would die with the author, unpublished, I imagined the horrible loss to humanity. I believe if your book has the potential to bring a smile to a single reader, then your book has a right to be published. It’s a matter of free speech! It should go without saying that my radical Utopian view was not shared by publishers.
I got a crazy idea: What if someone could create a free publishing service that would allow any writer to self-publish an eBook? And what if I could create this company?
In '08, I founded Smashwords, a free eBook publishing and distribution service. We’ve helped more than 100,000 writers become published authors in the last eight years. These authors—some once rejected by traditional publishers—have published more than 400,000 eBooks. A large number of the eBooks have become international bestsellers.
Today, it’s not uncommon for me to meet writers who tearfully thank me for helping them realize their dream. I always tell the author that I simply provided the tools.
My experiences have taught me the best opportunities often lie in plain sight but are invisible to the vast majority of people. Most people don’t see opportunities because they’re blinded by the status quo or paralyzed by the fear of failure.
Failure illuminates problems and problems represent opportunities to apply passion to create a new solution. Each of my companies has been the serendipitous byproduct of a failure, a problem and a passion.
The secret to success in any venture is to sprint in the direction of your dreams where there are unexpected opportunities you alone are uniquely qualified to address for the benefit of all humanity.
After all, isn’t that what life is all about, to leave the world better than you found it?