Last year, I self-published an ebook on the lessons I learnt while running a startup. There were two main motives in writing that book:
I wanted to record the lessons I learnt for posterity
I hoped to help people learn from my success and failures
I chose to self-publish the book because I enjoy the idea of independence and self-sufficiency. It helped me develop skills like working on a big project under a self-imposed deadline. I also used my freshly learnt designing skills to create the book cover. Overall, it was a great personal growth experience.
The book's minimum price was set as 0, but you could choose to Pay What You Want (PWYW). Money was never my primary concern and I believed that keeping it PWYW would make it accessible to more people.
Below you'll find some interesting data from the sales and the key insights I derive from them. Please note that my book was available on Amazon Kindle Store as well at a fixed price of INR 190. The numbers below do not take that into account.
1. Overall Sales
Total Downloads - 269 (INR 8413)
Paid - 34, Free - 235
Avg. Sale Value (paid only) - INR 247
Avg. Sale Value (all) - INR 31
Key Insights
13% of the people who downloaded the book, chose to pay for it. If we are to go by The Pareto Principle (20-80 rule), this is to be expected. Although, it could be argued that in creative industries, the ratio of people who pay is much lesser.
The avg. sale value (paid only) is quite high. If I were to set a fixed price for the book, I would have set it much lower.
2. Downloads as a function of time
Click on the image to view an enlarged version
Key Insights
The two public announcements drove the most amount of paid sales
Free Downloads were a constant occurrence (probably driven by word of mouth and randomness)
Most downloads happened in a burst together. These could be attributed to the promotional activities I undertook - like publishing a sample chapter in a digital magazine
Pre-Orders accounted for only 18% of total downloads but 44% of the total revenue
3. Frequency of Sale Values
Key Insights
Minimum and Maximum amounts paid - INR 10 and INR 1001
Most common amount paid - INR 100
Interesting amounts - INR 101, 501, 1001 (I guess people chose this amount thinking that they are paying for a good cause)
What would be THE optimum price to MAXIMIZE revenue?
If I were to go back in the past, and instead of giving it away for PWYW, I wanted to assign a price to it, what should that number have been to maximise profit?
I'll save you the number crunching, this is what I derived from the data:
Best Price - INR 200
2nd Best Price (if I go higher) - INR 300
2nd Best Price (if I go lower) - INR 99
And of course, I'd make less money in either of these cases than what I did with PWYW. The assumption carried here is that anyone who is buying for say INR x, would also buy the book for INR x-y, where both x and y are positive numbers.
Philosophical MUSINGS ON PWYW
There used to be a hep cafe near where I lived. Although, in all honesty, it was less of a cafe and more of a place where people came to hang out, meet new people and discuss ideas. Among its regulars, it was the hub of cultural activities - poetry jam sessions, movie nights, book readings, gay pride events. It didn't serve much food - Tea and maybe some Momos.
There was no specified price to the items you bought. You could pay whatever you wanted. The cafe was surviving solely on the generosity of its patrons. Sadly, it shut down. It needed to raise a certain amount of money to pay the annual rent, but it could not.
The point of this story is that PWYW is a romantic idea which should work perfectly in an ideal world where we pay for a certain experience in proportion to the amount of value we stand to gain from it.
An Ideal Transaction: Amount we are ready to pay for an experience/commodity ∝ Value we gain from it
Unfortunately, that is not always the case. We often pay more for a disproportionately low value experience and become miserly for high value products. But, why do we do this when clearly it's a suboptimal strategy to live a high quality life?
The answer I believe is our unconscious biases:
1. Overvaluing a tangible commodity for its superficial nature - Think expensive clothing, eating out at that new fancy restaurant, or the shiny new gadget. I do not mean to discount the immediate value of any of those things. Nor do I mean to suggest that we buy only cheap stuff. Heck, I love a nice fancy meal once in a while myself. But, like on a hedonic treadmill, the more we engage in them, the lesser pleasure we derive each time. So having coffee in a good cafe once a fortnight gives more value than a daily visit.
Furthermore, the value given by products of this nature is often fleeting. Often, our perceived expected value of the experience is less than the actual value. (Example: The movie 'Deadpool'. I am going to go out on a limb and say that I derived more pleasure from the expectation of the awesomeness of the movie than the final product itself).
Expected Value (EV) > Actual Value (AV)
This is in part due to the subtle FOMO (fear of missing out) induced by peer pressure we face when everyone around is talking about it. The perceived value automatically becomes much higher than the AV.
2. Undervaluing an intangible benefit/experience - Think a good book, a music album which you'd play over and over again, software, a functional yet expensive piece of household accessory that is going to make your life exponentially better (an ergonomic chair, a standing desk, etc.) We forget that, in the long run, the value we get from these things is so much more than the cost we put into it. The over and over usage of their functionalities pays itself off and then some. In these cases:
EV < AV
I speculate that the reason we harbor biases against paying for such cases could be due to our latent (or in some cases, pronounced) desire to feel validated for our choices. We don't get that validation from buying an original copy of a software or a better chair for our back or buying an album. No one commends an item for its functional superiority, it is quite often the decorative qualities that attract attention. In fact, you could even be ridiculed for overspending or paying for something that could be pirated for free. But, if we recognize that this particular item is going to inspire us to be a better version of ourselves, the issue of cost would become much smaller.
Secondly, maybe the constant desire of novelty via external stimuli causes us to spend our budgets on EV>AV cases. So, we still torrent stuff which we could have acquired in an overarching package (e.g. at Netflix, Apple Music, Kindle Unlimited), costing less than one decent meal in a restaurant. But, we fail to understand that this is an insatiable desire - there will always be a new pub to try.
Coming back to PWYW, there are some positives of the concept. The freedom to choose how much you think something is worth makes your product accessible to so many more people. Think all those bands whose music we pirated and would now happily pay for one of their concerts. The question then becomes, how to make a living out of it.
With PWYW, there are always 3 categories of people:
Free loaders / hoarders - It is a gross generalization on my part, but most of these folks who don't pay are much less likely to actually consume your art. At my last company, Musicfellas, there were customers who downloaded only the albums which were PWYW for 0 bucks. I seriously doubt if any of them ever got played.
The Nice Guys - They are driven by a righteous sense of how an interaction with an artist in the modern world should look like. They pay an average amount and feel content with supporting the artists. You could expect them to listen/read/watch your work with a decent level of interest.
The 1000 True Fans - Below is a quote straight from the article linked here. These are the people who will be the highest payers and your most generous patrons. They will write back to you giving detailed, insightful feedback on your work.
A True Fan is defined as someone who will purchase anything and everything you produce. They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They can’t wait till you issue your next work. They are true fans.
So, the answer to making a living out of PWYW format could be to build and engage with this community of 1000 true fans. I would love to hear success stories around you which hold true to this rule.
Philosophical musings on Self-Publishing
The numbers for my book, as you can see, aren't great. Even though people liked the book, the number of people to whom it has reached is quite less. I could ascertain a few possible reasons:
My book was crappy
My marketing strategy was crappy
Both of the above
Both the book and marketing strategy were average
This is the nature of self-publishing
I am confident enough to discount #1 and thus #3. There was praise from my friends and strangers alike. But, that is not what convinced me. There were two instances which gave me confidence in my work. Both times, after a few rounds of drinks, a friend grabbed my kindle to check out the book, and they put it down only after finishing it.
I am pretty sure #2 was the major reason. Although I don't completely discount #4. The major motivation behind writing the book was to push myself to complete a big project. Promoting it wasn't much of a priority. I did do something about it but it was executed half assedly.
On #5, this is a reality but with a caveat. Most of the success stories of today who have made self-publishing work for themselves have one thing in common. They all ventured into independence and self-publishing with already having their 1000 true fans(think Nine Inch Nails, Amanda Palmer). This is not to say that artists with virgin fan bases do not exist. But, intuitively, I would say they are a minority among the self-publishing success stories. I would love to be proven wrong, so hit me up with examples.
This is a genuine problem with self-publishing a piece of art. I saw this happening with our artists at Musicfellas and now first hand myself. Some of those musicians had really good music but just couldn’t let many people know about them. A possible way could be to, if possible, launch yourself with a major publishing house/art gallery/music label etc. In this vast mass of new content everyday, it has become a monstrous task to get yourself known - more so because artists cringe at the thought of self promotion. The seasoned biggies can take the burden of promotion off of your shoulders. And later, if you crave for independence, you could break away after a hit under your belt and take your fans with you.
End Notes
If you ask me whether I would choose self publishing again, I would probably say that not this time but maybe the next. Where PWYW is concerned, I haven't lost faith in that. As a consumer, I support creators on Kickstarter and Patreon where they allow me to choose my contribution amount. Not only do I get a high quality product, I also feel good about myself having made a small change in a creator's life - a win-win for both parties. I would highly recommend you to try it.
When I was read the final version of this post, I felt that it could come across as self-righteous to some. If that's the case, I assure you it was not my intention. It's just that this topic excites me a lot and I sometimes overdo myself. In any case, I would love to hear what you have to say on this. Leave a comment below or drop me an email at mj {at} mayankja.in
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