Year in Reading 2020 – Antkind

Given the amount of time spent indoors or in relative seclusion, over the past few days I’ve been reflecting on the past year has been the time I’ve spent reading, and the books that have provided companionship over the course of the year.

These books do not reflect the totality of my reading for the year, but the books that have stuck with me, and some brief impressions of each.

I began this blog more than a decade ago exploring the nature of creative genius through the eyes of a college-aged student. If you allowed me to pontificate on my views on creative genius, informed by the books and movies I particularly admired at the time (David Foster Wallace, Dyostoyevsky, Kirosawa, Fellini, etc.), I believe that my response would have alluded to a belief in a god-given or supernatural ability to create plot, imagery, or language eluding those of us left to appreciate / marvel their work.

Charlie Kaufman was another of these ‘auteurs’ whose genius defied explanation. At that age, my brain latched onto Kaufman’s screenplays/movies like Adaptation, Being John Malkovich, and Synecdoche, New York (the last of which elicited a frenzied two-hour post-theatre dazed walk through a snowy State College, PA), and the type of mind that could produce such profound meaning through their art.

As I’ve gotten older, my perspective on creative genius has changed considerably. These days, I’m much more likely to cite the importance of iteration, collaboration, and effort to ‘manufacture’ genius, much more so than the image of the epiphany-induced solitary figure plugging away at a keyboard / typewriter / notepad/canvas.

My impressions reading Kaufman’s Antkind are almost certainly informed by this perspective, making me less referential to the author and thereby deferential to the art itself, and more open to examining it on its own merits rather than the mind behind it. To be sure, Antkind represents a continued fidelity to what makes Charlie Kaufman completely unique – an intimate, unfiltered first-person narrative experience touching on ego, masculinity, sexuality, art, and related topics that have a tendency to pass through one’s mind but few of us allow to escape our brains and make its way onto the page. For fans of Charlie Kaufman curious to see how his craft translated to a book, Antkind certainly checks all the boxes of what makes something unmistakably his.

Antkind, by Charlie Kaufman (*Random House* 2020)

Over 700 pages Antkind manages to explore crevices of Kaufman’s mind and ideas that would likely never fit into a 2-hour (or 3-hour!) movie, either due to their perversity (clown fetishism, sexual submission or a satirical stance towards race, gender, and other liberal norms that would subject him to pillory if not hidden within the pages of a book that most people won’t read) or impossibility of being portrayed due to the extent of the surrealist imagination.

In fact, Antkind’s plot actively thumbs its nose at ideas of film and film’s self-importance: the main character, B. Rosenberger is a nebbish film critic and academic whose expertise is movies that are unwatchable (Kaufman often self-referentially refers to his own films in this category), extremely obscure (mostly made up, though I never checked), or both, and whose opinions about films are confined to little-/unknown journals seemingly publishing these analyses out of sympathy, and the book’s plot centers around a several-months-long animated film that so perfectly captures the essence of art and the meaning of life that our intrepid hero spends the rest of the book trying to bring it to broader light. Through numerous twists and turns, all of which blur the lines between taking place in a dreamscape or in Kaufman’s imagined world, we follow Rosenberger’s descent into depravity, poverty, and insanity.

Antkind carries forward a concept most explicitly explored in Synecdoche, New York but present in all of Kaufman’s films – a blurring between one’s art and one’s life, reality and surreality, imagination and real life. The book is darkly comic, chock full of satirical but incisive cultural commentary on the state of our (pre-pandemic) world, full of witty references and allusions, most of which were likely lost on me.

If this sounds unnecessarily intense or overly absurd for a piece of escapist fiction, then you’re probably best skipping Antkind. However, for anyone curious to see how Kaufman’s work translates to the written page, you’re sure to be in for a maddening, surreal, intellectual experience.

On the Simon & Schuster Acquisition by Penguin Random House

No, this isn’t another post coming out against the Simon & Schuster and Penguin Random House mega-consolidation.

Over the past 48 hours, we’ve seen interest groups ranging from authors to agents to booksellers all coming out against the merger, citing its to-come impact on author/agent leverage in negotiation, diversity (and breadth) of opinions being published, and the acceleration of the ongoing ‘blockbuster’-driven culture at publishing houses.

Yes, these are all valid concerns, having been deeply lived over the previous decade’s publishing industry consolidation–beginning with the original mega-merger of Penguin (previously owned by UK education conglomerate Pearson) and Random House (owned by German media conglomerate Bertelsmann) in 2011, followed by comparatively smaller acquisitions of Perseus Books by Hachette (owned by French media conglomerate Lagardere) and Harlequin by HarperCollins (owned by American media conglomerate News Corp), among others. I’m also not going to use this forum to support the broader trend of corporate consolidation and monopoly activity by the large tech companies.

However, I do want to offer a slightly different perspective on this deal, hopefully broaden the conversation on why this deal was inevitable, and where we may go from here.

Simon & Schuster is part of the American media conglomerate ViacomCBS (itself the result of a recent merger), the parent company of CBS, Showtime, Nickelodeon, MTV, Comedy Central, BET, Paramount Pictures, Pluto TV and up until yesterday, Simon & Schuster. National Amusements, a corporate vehicle held by the billionaire Redstone family, holds majority voting rights (70%!) in all strategic decisions made by the company.

CBS and the Redstone family have been fending off distracting overtures for the past ten years due to the declining mental acuity of patriarch Sumner Redstone, and CBS’ lagging performance relative to its competitors. After numerous court battles and activist inquiries, Sumner Redstone was removed as Executive Chairman of CBS in 2016, and the succession-related maneuvering left his daughter, Shari Redstone, off the Board. From 2016 to 2019, Shari Redstone sought to regain her power within the company, publically pushing for a merger with Viacom. In 2019, the ViacomCBS was finalized, and Shari Redstone became the Executive Chairman of the newly-combined entity.

One of the first actions taken following the successful execution of a large scale merger is a refocusing of the combined entity’s corporate strategy—a vision of how the sum-of-parts will collectively surpass the previously separate entities. Involved in this process is a reassessment of the assets held by each entity, and a reconciliation of these assets against this new corporate strategy and identity, oftentimes followed by the shedding of these ‘non-core’ assets. In the case of ViacomCBS, the executive team sought to mirror the strategy seen across the media and cable industries in the face of declining cable subscription revenue: a streaming subscription product marrying the company’s television and film libraries.

Left on the outs in this process was Simon and Schuster: a comparatively small (~$800M p/y revenue), yet profitable (~15% operating profit margin) entity in a stable-to-declining industry that doesn’t inspire excitement from the public markets (unlike the sexy prospect of yet another streaming subscription). The decision to sell S&S and reinvest the proceeds in beefing up ViacomCBS’ direct-to-consumer product was a purely rational one, met with nearly-unanimous approval by the public markets and ViacomCBS’ shareholders. The intended sale was announced, and the stage was set for an auction by S&S’ suitors.

At the risk of sounding non-creative, there were only ever two categories of buyers that ever made sense for S&S: financial buyers (i.e., private equity firms) or rival publishing companies (in pursuit of market share and synergies). A management buy-out, while technically possible, never seemed like a likely prospect, as trends in the publishing industry in the face of Amazon’s continued domination (yes, more on them later) is more consolidation and partnership, not more independence.

In the case of a private equity buyer, the investment playbook would be to find profit ‘efficiencies’ wherever possible (everything from free books to employee printing [editors print a lot] to paper quality in the books themselves), and then repackage the newly slimmed-down entity for sale (and a healthy return) a couple years down the line. While support functions like finance, distribution, and IT would be kept in this scenario, the new ‘S&S’ would be significantly hollowed out (goodbye employee perks), with no shortage of gripes by the notoriously vocal editorial and broader publishing community.

In contrast to a private equity buyer, a rival publishing house seems like a much more attractive home for S&S. Unlike the cost efficiencies that would be sought out by PE buyers, the publishing house merger looks a lot more like the ‘strategic’ merger/acquisition playbook, albeit with more leeway to preserve the ‘creative’ identity of the publishing house. Before you scoff, remember that the acquisition is predicated on the ability to maintain (and ideally grow) the sales of the company, while making the company more cost effective through consolidation of back office efforts and personnel (finance, IT, legal) and giving the combined publisher greater negotiating leverage against its suppliers (paper and printing companies) and retailers (namely Amazon). The intent in design is to avoid causing any disruption to the sales-side of the company — ensure that editors continue to place bets on a steady stream of books, and benefit from the downstream benefits.

Given the potential upside of gaining scale by combining Simon & Schuster with another established publishing house, the incumbent publishers could justifiably assign a much higher bid value to the assets of S&S than a financial buyer. Unsurprisingly, this led to a bidding war between the non-S&S ‘Big 5’ publishing houses. As reported by the Financial Times, Bertelsmann-held Penguin Random House, the largest of the trade book publishers and the one with the most experience acquiring and integrating publishing companies (thereby justifying an even higher level of synergies) beat out French conglomerate Vivendi (partial shareholders of Hachette parent company Lagardere) and Murdoch’s News Corp (owners of HarperCollins) for the prized possession. Not only did PRH offer the highest price, but they also included a ‘break-up’ fee in the event of antitrust-related concerns, providing ViacomCBS financial assurance that they would be well compensated even in the worst of circumstances.

A third possible scenario would be an acquisition by Amazon itself, looking to beef up its own publishing arm, which it has been quietly expanding over time on all fronts (at least quiet in comparison to the rest of Amazon’s activity): building up editorial talent, acquiring the rights to mega-author Dean Koontz and others, and aggressively bidding on audiobook rights through its Audible arm. I won’t go further down the rabbit hole of this scenario, but you can imagine that the Amazon corporate development team at least kicked the tires on this, but opted against shelling out valuable deploy-able capital that could be spent on conquering the world in much larger markets.

It’s hard to believe that I went this far into my writing without mentioning Amazon, who is very much central to this situation and the ongoing acquisition-driven thesis by Penguin Random House. In what’s become an obvious statement and an ongoing inevitability, Amazon continues to capture share of the retail book marketplace – both in physical books, where they’re able to price their books far below any indie or big box competitor (the most recent example being President Obama’s A Promised Land, the blockbuster book of the year, currently selling for $23.96 on Amazon despite retailing for $45), not to mention e-books, where the Kindle is the only viable e-reader aside from the iPad after B&N threw the towel in on the Nook, and audiobooks, where Audible has leveraged its ‘subscription’/credit model and free month enticement to own this space as well.

Every few years, Amazon and the publishing companies undergo intense negotiations to renew their retailer agreements. In each agreement, Amazon seeks to retain a greater share of the retailer/publisher split, colloquially a 50/50 split for physical books but in recent negotiations a smaller and smaller share going to the publisher. Publishers have little recourse against Amazon’s weighty asks: as we’ve seen in recent negotiations, Amazon has proved willing to exert its weighty influence on the consumer in its negotiations, even pulling publisher inventory from its site, or slowing down its arrival to consumers to prove its point. While ultimately an accommodation is reached, and the publishing companies are able to tout Amazon’s ‘co-investment’ in improving its logistics or metadata infrastructure, the reality of each contract renewal is a ‘give’ on the split between publisher and Amazon, ideally tied to a longer-term (3+ year) agreement that prolongs the next painful renegotiation.

While the publishing companies have managed to remain profitable in the wake of this ongoing margin squeeze, it has done so at the expense of the things being lamented in the wake of the PRH/S&S tie-up: a more staid, corporate culture and a paring back of creative risk-taking. In the publishing industry, this takes the shape of more obvious, ‘safer’ acquisitions (mega deals to celebrity-attached memoirs, established authors with existing audiences, and small bets elsewhere), and away from less non-obviously commercial projects or other ambitious projects unlikely to recoup their advance / financial investment (see my article on the parallels between venture capital and publishing).

Make no mistake: Amazon is the primary culprit of the recent squeeze seen in the publishing industry, and everything else is a symptom. The onslaught of criticism from publishing industry players in the wake of the S&S and PRH tie-up creates an enemy out of the publishers while distracting consumers away from the realities facing the industry, caused by Amazon.

Penguin Random House’s acquisition of S&S is a rational course of action driven by both parties facing pressure to continue to identify growth and profit opportunities while facing significant pressure from industry trends and Amazon’s dominance. The tie-up will give PRH further muscle in future negotiations with Amazon, who will be increasingly hard-pressed to remove the combined entity’s publishing list (making up ~30-40% of all trade publishing, and an even larger proportion of bestsellers) from its site altogether, an action that would create backlash from consumers and invite scrutiny from antitrust officials and legislators alike, an unneeded distraction for a company focused on significantly bigger fish.

For those concerned about the fusion’s impact on booksellers, keep in mind that acquisition or not, it continues to be in the publishers’ best interest to keep Barnes & Noble, Waterstones, and the independent bookstores thriving as a bulwark against Amazon’s bookselling might. Yes, it may result in more ‘co-op’ bestseller displays dominated by the books of the two publishers and less bookshelf space for independent publishers, but by no means should it be considered a death knell for booksellers.

Another common concern associated with the acquisition is an expectation of the consolidation bringing on further silencing of controversial or contentious voices. In the book publishing industry, Simon & Schuster has become well-known for publishing popular American conservative voices including Sean Hannity, Glenn Beck, Tucker Carlson, Mark Levin, and most disastrously, the ill-fated book deal to Milo Yiannopoulos. During the Trump presidency, S&S became infamous for its willingness to publish Trump-related tell-alls of all stripes, including Bob Woodward’s Fear, John Bolton’s The Room Where it Happened, and Mary Trump’s Too Much and Never Enough. Comparatively, Penguin Random House mostly opted out of the bidding war for individuals in Trump’s orbit, leading some to presume that a S&S under PRH would be pressured to reduce its publication of controversial American conservative voices.

However, Penguin Random House’s acquisition of S&S represents an admission of failure in strategy on their part to not pursue the Trump-related books. Any substantial shift in S&S’ strategy in the wake of a PRH acquisition would harm its value, and if anything and given the need for the imprints of combined entity to differentiate themselves, I’d expect even more controversial books to come from S&S’ conservative imprints (though I’d be hard pressed to see Trump opting to compete with Obama’s publisher, even if Random House was the 1987 publisher of his first ghostwritten memoir, The Art of the Deal.)

To reiterate and in conclusion, my goal here isn’t to bless this acquisition or dismiss much of the justified concern associated with the deal, but to add some nuance and context to landscape-shifting deal in an industry that I hold dear. In Washington Post book critic Ron Charles’ editorial ‘Penguin Random House buying Simon & Schuster. That’s bad for readers’, he cites the idea of publishers entering into collective bargaining against Amazon as an option, which is a promising idea. Another potential salvation for the publishers is antitrust action taken against the big tech companies, though Amazon seems like a less imminent culprit than Google or Facebook.

Unless Amazon is curbed in some meaningful way or consumers en masse decide to change their book buying habits in favor of more expensive online retailers (Bookshop being a worthy cause) or in-person (which even pre-Covid, would reverse a decade+ trend of e-commerce buying), the book publishing industry will continue to face lagging growth and related pressures that drive consolidation such as the PRH / S&S deal.

Some thoughts on disrupting (game) publishing

As a follow-up to my previous post on the Value of Publishing, I wanted to type up some quick follow-on thoughts on potential disruptions in publishing, and current barriers-to-entry for would-be ‘disrupters’.

While my last post focused on book publishing, I’m going to focus my thinking on another form of publishing: video game publishing. While the end-product and investment required to produce a video game is very different than a book, I think there are concepts-in-common that are interesting to explore.

Historically, game developers worked with game publishers for access to their product manufacturing capabilities and large physical distribution network. Publishers leveraged their economies of scale to produce the the discs/cartridges and game packaging, and then sell these games into stores like (once upon a time) Micro Center, CompUSA, etc. in the PC gaming world, and Wal-Mart, Target, ToysR’Us, and Gamestop/EB Games for consoles.

For a long time, this warped the power dynamics in the gaming industry – the folks who managed the relationships with the big-box retailers had significant leverage over the developers, who could make the greatest game known to man, but have limited impact without access to the consumers to play these games.

When Valve’s Steam unintentionally created a digital distribution platform, it began a process of shifting the power dynamics of the PC gaming industry away from publishers and into the hands of developers, who now could leverage the power of Steam to directly deliver their games into the hands of content-starved gamers in exchange for a 30% royalty paid out to Steam. Suddenly ‘indie’ games like Super Meat Boy and Braid (both featured prominently in the documentary Indie Game: The Movie) became a phenomena, creating thousands of aspiring indie game developers and massive windfalls for the (successful) developers and Steam.

Despite Steam’s first agreement with third-party publishers in 2005, the rise of crowdfunding platforms like Kickstarter and Patreon, and the growing successes of indie games like Shovel Knight, Stardew Valley, Undertale, and others, game publishers remain a powerful player in the ecosystem.

Using these successes as ‘case studies’ provides a glimpse into the continued relevance of publishers and the value they provide:

As seen in the examples above, aspiring developers oftentimes pursue their own games as a labor of love, either as a part-time project or after splitting from a more established publisher in pursuit of indie dreams.

Unlike writing, which oftentimes requires little more than time and access to a word processor and your local library, game development is a massive undertaking which oftentimes requires funds to finance the game’s art and design, animation, music, and polish / quality control. While a single superhuman or a small, dedicated team could produce a game over a 2-3 year span, developers oftentimes farm out some portions of the development process to contractors or freelancers, who are highly in demand, and command compensation.

The most successful Kickstarters, such the recently-released Shenmue 3 or Cyan’s Obduction rely on the loyalty of a rabid fanbase familiar with previous games created by the team. Without an established audience, normally borne of a track record of successful past games, using crowdfunding like Kickstarter to finance a relatively expensive game that may take excess of 3 years to reach the funder’s hands seems like an unlikely strategy.

And while there are plenty of examples of developers bootstrapping their own games until they reach a level of polish suitable for players, these games still required expensive “ports” or “localizations” to consoles (Nintendo / Playstation / XBox) to reach the broader gamer audience, many of whom preferred the comfort of their couch and controller to desk and mouse/keyboard.

The need for capital to sustainably finance game’s development is the first (and major) hurdle in disrupting the game publishing space.

The recent entrance of Epic (buoyed by cash flows from their megahit Fortnite) adds another interesting option to the funding picture, both through their Epic MegaGrants (which offers royalty-free access to their Unreal game development engine and funding for games in exchange for a period-defined distribution exclusivity), as well as their eponymous Epic Store, which offers game developers a 88% cut of their games, enticing game developers to eschew Steam’s massive player audience for a larger margin share.

Another interesting new player is Discord, a deceptively simple chat, messaging, and community management app that has created a way for game developers to sell their games within the application to their established communities.

Increasingly however, first-party platforms like Playstation’s Sony Interactive Studios and Microsoft’s XBox Game Studios have become hyper acquisitive of small, medium, and large developers, most famously acquiring Minecraft for $2.5B in 2014, and even more recently continuing to snap up smaller publishers like Microsoft’s recent acquisition of Obsidian. In addition, third-party publishers continue to partner with game developers to produce and distribute both small budget and more ambitious games. Take-Two’s Private Division imprint provides a glimpse into the potential future of game publishers as incubators of talent.

Other considerations for foregoing publishing beyond mere capital draw other parallels to book publishing – the expertise and economies of scale that come from specialization in other game production-related processes like art & design, animation, tracking bugs and broader quality control, and the previously mentioned “localization” process. In each of these respective areas, game publishers boast access to experienced talent who will work across their portfolio of games in exchange for a fixed salary. And while it is possible to find contractors/freelancers who can partner with you on these aspects of the process, the talented ones are likely to be highly in demand, and certainly not cheap.

Lastly (for now), another aspect of the game publisher process that continues to drive value for developers is marketing & publicity. This past weekend, I attended my first PAX gaming convention, PAX East 2020. There, and in satellite events related to PAX, hundreds of booths of game developers were vying for the limited attention of the gaming public through showy booths, free merchandise and giveaways, and polished demos of their games.

The vast power of the more established publishers was on display, most notably via Private Division’s massive booth at PAX East for its primer upcoming title, Disintegration (developed by V1 Interactive, a studio founded by the co-creator of the Halo universe).

It is certainly possible to build a grassroots movement around a game, but in the crowded current landscape this increasingly means actively promoting your game and cultivating communities across platforms like Twitch, Discord, YouTube, Twitter, blogs, and game journalists, all at once. One example is a game called Midnight Ghost Hunt, which was prominently featured in the Discord Game Booth at PAX after catalyzing an impressive audience for their game on Discord and drawing the attention of the management there.

However, this more often requires access to game industry veterans with established connections to the communities and catalyzers that drive game success, which (again) don’t come cheaply, if for a price at all.

All of the above creates a difficult environment for unknown game developers to go at it (completely) alone, especially without access to capital and industry connections.

What is the value of publishing?

Disruption is a word thrown around business school campuses with abandon – the ability to disintermediate established business models in favor of a less costly or more efficient new model, oftentimes leveraging technology in place of more-costly physical or human infrastructure (considering I’m ¼ through business school, you be the judge of whether I’ve wasted the $50,000 spent so far.)

Given my background in the book publishing industry, and the relative disinterest I’ve experienced from MBA recruiters, I continue to spend a lot of time thinking about the publishing industry (in books and increasingly video games), and opportunities for potential disruption or innovation in one of the world’s oldest businesses.

While some may decry books’ antiquated ‘delivery’ method and are familiar with the annual obituary to reading and our attention spans, books have proven remarkably resilient, continuing to serve a massive place in the national and international news cycle and imagination, while maintaining a perception of high value ($30+ hardcover, $15+ paperback) in a world where:

Local newspapers continue to fail
Movie theaters have stopped their inexorable rise in prices
Music has undergone a profound (though stabilizing) shift
Podcasts have struggled to find a business model

Inspired by several recent conversations, the thought-provoking podcast by A16Z on the future of readers, writers, and creators, and Anne Trubek’s excellent Notes from a Small Press newsletter, I thought I would type up my thoughts on the value of book publishers, and try and explain why writers choose to work with publishers.

For simplicity’s sake, I will mostly speak to the benefits to writers, though these benefits are often symbiotic:

Audience

Publishers provide authors with an audience for their ideas and stories to be shared with the world.

While exposure can be developed over time online via Twitter, Instagram, blogs, etc., most writers view writing as their full-time job, as opposed to strategizing, cultivating, and maintaining a social media presence and audience.

Recently, this has begun to cut the other way: having an established audience / social media presence (xx followers) becomes an asset when pitching your book to agents / publishers: it provides a ‘floor’ of potential book buyers and preorders (as opposed to starting with 0, in the case of a previously ‘unknown’ author). Ultimately, this means less effort and creativity required for the marketing and publicity group of the publisher, who are contending with increasingly smaller book coverage and limited attention spans.

Expertise, or Comparative Advantage

Along these lines, working with a publisher allows the writer to focus on developing the best content possible, while the publisher is able to leverage its developed expertise in all of the non-writing aspects of books.

On a publishers’ payroll is an army (sometimes a squadron or squad) of folks dedicated to the success your book, including (but not limited to):

Editing (in many cases a hugely effort-intensive exercise)
Art and design (covers, photos, fonts, etc.)
Production (all the details to get a book print- or e-reader-ready)
Printing
Sales (getting your book into the major bookstores, indies, and online)
Distribution (ensuring that your book stays in the major book stores, indies, and online)
Marketing & Publicity (organizing publicity / book tours, sending out to authors / influencers, scheduling interviews and media coverage, etc.)
Royalties (making sure you get paid)
Etc., etc.

While it is possible to either do all of the above yourself, or outsource portions of it to freelancers (out of your own pocket), working with a publisher reflects a writer’s trust in the publisher’s ability to take a manuscript or idea and turn it into a book.

Capital

Most writers have day jobs to supplement their income, reflecting the reality that most writers do not make money from their talent and passion for writing. Even authors talented enough to enter our contemporary ‘canon’ oftentimes toiled in day jobs to subsidize their desire to write.

However, writers are fortunate enough to sell a book to a publisher will receive an ‘advance’ payment prior to the publication of their book. While the size of this advance can vary dramatically (see my post Publishing as Venture Capital for more here), and is normally received in portions (normally either ⅓ at signing, ⅓ at submission, and ⅓ at publication, or ¼ including a paperback release), a book advance oftentimes represents funds that the author will use as subsistence in the years that they spend writing, researching, re-writing, fact checking, etc. their books.

In the realm of self-publishing and at (some) smaller presses, an advance is normally eschewed in favor of a flat royalty payment of each copy sold at publication. While some would argue that this scheme allows for much more creative control (I recently heard from a game developer that “the longer you wait to get money, the more creative control you have”), an advance-based system minimizes the risk borne by the author.

Just to expand on this a bit, imagine that a writer receives a $100,000 advance on a book proposal they’ve submitted, with a ⅓ payout scheme. Upon signing the contract, the author will receive a check for $33,000-after-taxes prior to having submitted or publishing a word, with no give-backs (except in extreme circumstances publishers never request advance $ back). While the reality is that this amount, especially split across several years prior to submission, represents an extremely low-income salary in the US, the alternative must be considered as well: receiving $0 prior to publication, self-financing the entirety of your book project (read: editing, art, production, distribution, publicity, etc.), and then hoping that the royalties received by copies sold will collectively make up the $100,000 advance plus value-added costs borne by a publisher.

Using back-of-envelope and generous numbers, a $20 physical book with a 55% royalty (assuming a 60% royalty [the amount the author keeps] less 5% cost of production [generous], and no distribution fees), an author will need to sell approximately 9,000 copies of their book just to reach the $100,000 advance level above. Assuming the average internet user has ~650 social ties, and they all buy a copy of your book, this still means selling your book to 8,350 strangers. Whether this sounds daunting to you or not is probably a good bellwether of whether you need a publisher!

Keep in mind that the advance paid by a publisher is an estimate of the amount of copies that the editor/publisher believes you’re able to sell, rather than free money. But rather than having to sell books out of the back of your car, or shill your book online or at talks, there’s a well-oiled book distribution system already in-place to support you through this process.

As previously mentioned, a previously established audience or track record may be able to circumvent the traditional publishing process through the process of crowdfunding, but again, this requires a significant number of people (depending on average donation size) giving you money 1-2-3 years before they see any physical (or digital) product in exchange for their hard-earned dollars.

Credibility

For an author seeking to demonstrate their expertise in a subject, there is still no better artifact than a book to demonstrate one’s competence, and monetize their research and original findings or point-of-view.

Within the writer community (especially in fiction), a publishing deal with a reputable publisher also acts as a signalling mechanism–this person should be taken seriously as an author. While there are earlier gatekeepers such as MFAs (see here a fascinating argument on the tradeoffs seen between diversity and the mainstream MFA path-to-publishing) and book agents that serve as earlier hurdles, in many circles a published book (or books) allows one to justify calling themselves an ‘author’ or ‘writer’ in a professional bio or resume, rather than someone who writes.

Books oftentimes allow authors to leverage their developed domain expertise into further employment opportunities, such as speaking engagements, professorships, consulting gigs, etc.

Curation

Similarly on the writer side, in a world where the internet provides us with instant access to infinite information, finding a book written on a topic gives the reader a comprehensive or definitive history of an event or subject. Even the most technologically literate folks out there (save maybe Vitalik Buterin) continue to rely on books to learn and engage with new ideas, and use bookstore browsing as a way to exercise and indulge their curious mind.

While Amazon has managed to take the previously limited shelf space of a bookstore and replace it with a practically unlimited number of books available at the reader’s fingertips, more than 7 out of 10 internet users fail to make it past the 2nd page of search results on an Google query, reflecting our limited desire to consume large amounts of information, and the potential limits of Amazon’s ‘limitless’ bookstore.

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I will continue to expand on this in more depth soon, and delve into the economics behind a book in the traditional publishing industry.

Thinking about design, and a redesign

I’ve been meaning to redesign this blog for several months. The blog design has remained unchanged since I relaunched it in early 2018.

The initial aesthetic and design was somewhat arbitrarily chosen – I knew I wanted something clean, minimalist, and designed for longform reading, but I can’t say that I gave much more thought to it. I always considered the initial design to be a 1.0 version of an evolving project, but the words themselves (and frankly, not blogging) took precedence over a focus on intentional design.

Like many, I came into my design consciousness through the work of Jony Ive and Steve Jobs, initially as an unwitting user of early Macintosh products through multiple iPod generations, the iPhone, the Apple Store and the greater Apple aesthetic revolution. Reading Walter Isaacson’s biography of Jobs unlocked my understanding of the intention and importance behind these product’s designs.

College was my first attempt at dabbling in hands-on design, where I volunteered to produce an academic journal that a couple friends and I had founded. Playing around in Adobe Indesign opened my eyes to a world of choices that I had previously considered arbitrary or unconscious—margins, placements, breaks, typeface—a seemingly limitless series of choices striving towards greater readability an aesthetic enjoyment on the part of the reader (discounting self-satisfaction by the designer).

I’ve long admired the world of design, almost entirely from a distance. Today, the closest I get to engagement with design is thumbing through the design section of a bookstore, a long linger in the modern art section of a museum, or through the discipline of design thinking, an adaptation to the designer’s mentality retrofitted to the worlds of business, policy, and other seemingly unrelated domains, as popularized by Stanford’s d.school and the consulting firm IDEO. (Recommended: Steven Johnson’s recent profile of Stanford’s d.school, which goes a level deeper than the typical fawning appreciation.) Interacting with design often feels like hearing a Romance language – I recognize the essential building blocks, but it feels entirely ungraspable and beyond me.

Even today, reading the brief blurb on the typeface chosen for a book (normally located on the back page) mostly alludes me.

An example from a recent read: Working, by Robert Caro:

A NOTE ON THE TYPE

This book was set in Janson, a typeface named for the Dutchman Anton Janson, but is actually the work of Nicholas Kis (1650-1702). The type is an excellent example of the influential and study Dutch types that prevailed in England up to the time Williams Caslon (1692-1766) developed his own incomparable designs from them.

Composed by North Market Street Graphics, Lancaster, Pennsylvania

Printed and bound by Berryville Graphics, Berryville, Virginia

Designed by Cassandra J. Pappas

My reaction to the above is a recognition of the deep labor of love and appreciation for the history and painstaking design process and its predecessors in practice. But candidly, it reads like a secret code written for the initiated, people with cool glasses frames and well composed outfits, rather than the broader public engaging with Robert Caro’s words.

A serendipitous series of blog posts reawakened my long-dormant blog redesign project. Several weeks ago, designer Frank Chimero announced that he would be redesigning his own blog, in an open and ongoing process via his own blog. For long-running followers of my blog, I initially became acquainted with the work and writing of Frank Chimero in October 2018 via his viral posts MVP Soundsystem and Modest Guide to Productivity.

In Frank’s first few posts, he explored ideas around what he hoped to convey and express via his site, using high-level concepts, feelings, and adjectives that he proceeded to boil down into tangible characteristics of his website’s design. For someone unacquainted with the design process, following his process and creative train of thought has been a revelation.

Frank’s blog posts also motivated me to expand my inquiry into design (certainly an impulse towards inaction, but nonetheless) via his book, The Shape of Design. The book reads as a philosophical treatise on design, a manifesto that delves into his motivations and ultimate purpose behind design, rather than a step-by-step guide through the design process. It’s highly applicable and inspiring.

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Chimero’s redesign process and book both emphasize the importance of bringing intention to one’s projects rather than immediately digging in: the need to start with Why.

Per Chimero: “Why is usually neglected, because How is more easily framed”

Therefore, Why do I have a blog?

The Why (WIP):

I want to inject more creativity into my life
I want to explore outside of the defined parameters of my day-to-day, with more permanence than a text or email thread
I want a “portfolio,” a means to be discovered and a portal into my thinking and interests

Only after establishing and grasping the Why does the What and How come into play. leads to objectives: What am I hoping to accomplish with my blog?

The What (WIP):

A notebook for my thoughts, mostly in-progress
A diary of expression and discovery
A place to explore and be creative

Inspired by Frank (who was initially inspired by another designer’s redesign pursuits), I’m going to try and catalog my wholly-unprofessional attempt at redesigning my own site over the course of a series of blog posts, now that the table (and my intentions) are set. Meta, no?

“Hunting for Heartbreak”

Happy 2020.

I spend a substantial amount of time on email (despite resolutions otherwise) or Linkedin reaching out to folks that I find inspiring or interesting.

I’ve had this habit for a long time, borne of a feeling that reaching out to the right person, and catching them at the right serendipitous moment, might lead to some unknowable opportunity, or a kernel of wisdom based on their own success / experience that would provide immediate clarity and a path forward.

I’ve had varying degrees of success cold-reaching out to people. A small portion respond, gracious and appreciative of my interest, but unsure what to do with me and my humble inquiries. However, a large portion of my emails sit dormant in the inbox of busy people inundated with similar emails from equally passionate people.

My rate of success has improved ever-so-slightly since beginning at Harvard Business School (HBS) in August, although I’ve mostly self-selected HBS or MBA alumni as subjects of my reach-out, counting on feelings of obligation / service towards their alma mater/degree, or empathy towards me as a younger version of themselves: chasing opportunity, ambition, and the unknown.

This routine was thrown completely on its head in late 2018, when I opened my inbox to see an email from Shawn Askinosie, author of the memoir-cum-business book Meaningful Work (pretty darn great title) and purveyor of ethically-sourced, service-minded, and transparently-operated Askinosie Chocolate.

The week prior, I had written a capsule review of Meaningful Work on this site, and Shawn reached out to thank me for reading and sharing my thoughts on the book. I seized the opportunity to strike a correspondence with Shawn, asking questions about direct trade (I was exploring the coffee business at the time while in Brazil), and general advice about life and work.

Several months later, I shared with Shawn the news of my admission to Harvard Business School. Given the privilege of being accepted to one of the world’s top business schools, and the time and space to think about the next stage of my professional life, I asked Shawn: how should I think about prioritizing and balancing what’s important to me with what the world needs, and how I’ll feel fulfillment, or at least contentment with the path I’m on.

Shawn’s response was as follows:

“remember that some misery is part of the life we lead. I know you’ve seen my TEDx, but I talk about that very thing. Misery and heartbreak. You want a life in which you go hunting for heartbreak. Ouch.”

I’ve now sat on Shawn’s email for several months. At some innate level, I deeply understood what Shawn was getting at, but found it too abstract and intangible for me at that stage, time, and place.

Early in the experience, HBS students are inundated with the messaging that anything is possible, that simply by being accepted and sitting amongst your 900-person cohort that you’ve gained entree to a society of high-achievers, and that HBS is the place to unleash your ambition onto the world. Even the early curriculum spans the worlds of sport, medicine, industry, and science, inviting students to opine and insert their opinions on these diverse pursuits, as if any and all are possible simply by virtue of membership.

Sitting one semester into my experience, with the physical and mental distance of a long winter break and the need to begin taking action towards an eventual post-MBA career, Shawn’s advice has returned.

But rather than returning as words, it’s surprisingly manifested itself physically – the feeling of heartbreak. At the risk of sounding dramatic, as I’ve begun “putting myself out there” – reaching out, applying for opportunities, and asking for work in pursuit of next steps in my career and stage of my life, I’ve felt deep pangs of disappointment mixed with uncertainty and unknown. While I don’t know if this is ‘heartbreak’ exactly, it certainly feels as if it comes from the same place.

Rather than running from this feeling, I’ve taken Shawn’s words to heart – that a life spent chasing heartbreak (and feeling it often) is an indicator that I’m on the right path. As much as the heartbreak and related emotions are difficult, I recognize that this means that I’ve bypassed insecurity and leaned into my self-confidence in the pursuit of heartbreak. Deep down, I feel as if I’m going for it.

One of the key insights that I’ve felt in my first semester at Harvard Business School was in a leadership and organizational behavior class. The professor/researcher explained that individuals with an achievement-orientation tend to externalize their day-to-day success as a series of ups-and-downs – feeling especially low in moments of disappointment or discontent, and very high in (momentary) success and goal-reaching. The conclusion of the academic study was that this psychology should be avoided, and changed to a more even-keeled mindset, a constant feeling of “6/7” in lieu of alternating “1/2″ and “9/10” on a scale from 1 to 10.

By all means, the last few months have been plenty of “1/2” days, with a few “9/10″s sprinkled in. How to achieve this contentment and ongoing growth mindset, while chasing heartbreak, is the next stage of my journey, what I hope to work towards in my coming semester, and beyond.

Thoughts on working and work

Work will be a major part of my life over the next several decades, and is likely to consume a great deal of my mental energy and time.

The older I get, the more I recognize the luxury of being able to spend one’s time as I please, with whom and on what I care to pursue.

As a result, being intentional about the work I pursue, and some of the skills, perspectives, and qualities that I hope to build during my working hours, is worth contemplating in some detail.

What follows are some (point-in-time) thoughts on what I see as the most important aspects of my working life and career.

Principles to lead with

I’ve tried boiling down the key principles behind how I hope to lead in the following bullet points. I’ve tried to elaborate a bit on each as well below, though the goal is for each of these phrases to exist on its own:

Humanity – Seek to unite around a common humanity, and work towards deeply understanding those around me via this lens of humanity, while inviting others to gain a similar understanding of myself.

Dignity – Treat those around me with a base level of dignity and respect regardless of hierarchy, division, or potential dissension, and ensure that those around me feel a strong sense of self worth.

Curiosity – Work in the direction of my curiosity — continue to seek out the challenging and uncomfortable in the pursuit of learning and growth.

Community – Commit to bettering the environment that I work and live in by leaving it a better place than the one I entered, and build community whenever and however possible.

Humility – Internalize the role of luck in all outcomes, and recognize that any success or failure is most often not the result of any one person’s efforts (or even effort at all).

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Humanity:

Human connection must be a central part of my day-to-day working life. I believe that each person has a unique set of experiences and a perspective to draw on, and that actively seeking out engagement with people on a constant basis is crucial to my engagement and happiness (read: success) in my work.

Each of us exist in our own personal realities as individuals, with complicated histories, aspirations, and home-lives to juggle. By trying to conform individuals to a single work-culture, or maintain a concrete set of expectations, I believe it is very easy to lose sight of the complex, psyche-driven motivators behind why we choose to work in the first place. However, by trying to deeply engage with one another, by trying to better understand these “realities,” I believe a trust can be formed, leading to more honest and productive relationships. Work should always be centered around the human being, rather than around arbitrary financial, production or other performance indicators.

I believe that humanity is at the center of idea-generation, iteration, and improvement. I have personally experience instances where ideas that live in my head for weeks and seem perfect in the comfy confines of my brain can immediately be exposed as shallow or (potentially) worthy when subject to the judgment and input of a fellow human being. Human interaction – with people of all types – must be embraced and actively sought out, sometimes at the expense of cheaper technological solutions. I believe that this ultimately stands to the benefit of my thinking, perspective, and appreciation for the world around me.

Dignity:

In business, I believe it is very easy to allow for ego to seep into one’s psyche, causing harm to relationships and warping one’s perspective on reality. In the absence of true break-through, innovation, or altruism in work, a net worth or an annual take-home figure can easily take the place of self-worth. As a result, fluctuations in financial success become fluctuations in personal happiness, and feelings towards others can be overtaken by transactional relationships or others’ net worth.

I believe that developing a strong sense of my own self-worth, while seeking to build that sense of self-worth in others, is a crucial component to my happiness and success at work. Divisions created by competitive relationships or arbitrary hierarchies exist to create distance between human beings, and detract from self-worth. As a leader and in my work-life, I hope to help instill a sense of dignity and self-worth in all of those around me, and ensure that they feel secure in their position at work to express themselves and not feel constrained by horizontal, vertical or other organizational splits.

I also believe that I have the most to gain from being around those who feel, see, and think differently than I do. Surrounding myself with a group of individuals with a similar set of experiences only stands to reinforce my currently held beliefs, and stands in the way of growth and evolution, as a person and professional. As a result, I believe that it is important to work even harder to ensure the dignity with those who I deeply disagree with, to create environments conducive to the difficult but constructive conversations that come from difference.

Curiosity:

I strongly believe that learning in its many forms must be at the center of my work. The uncomfortable and sometimes-painful growth that comes from learning something new has compounding effects on my ability to create solutions and identify problems. Evading this growth must be avoided at all costs, despite the relative comforts and ease that comes from a predictable routine and work-life.

An analogy that I come back to often regarding curiosity and learning and its role in my work is the difference between the Google and GMail. I am a habitual GMail user, and oftentimes begin my day at the top of my inbox, allowing the latest receipts and information to take up my brain and define my next steps. While there is value in being responsive and aware of the latest information, I strongly believe that this creates a false prioritization, and prevents the real learning and curiosity that I hope to integrate into my work-life. I hope to strive to treat my days similar to the blank page, or the Google Search Bar – defining my own priorities in pursuit of this curiosity and continued growth.

I believe it is important to continually reevaluate the intellectual fulfillment that comes from work, and try to redefine what this growth and curiosity means in the context of work on a regular basis.

Community:

As working adults, I’ve been mentored, taught, supported, and “made” by those around me – my community. It is important for me to recognize this and commit to providing the same (and more) that my community has given me to my community in the future. It is important to me to feel a deep connection and communal sense of ownership to the place that I choose to work – to pledge to make the workplace (and surrounding community) a better place than the one I initially found (even if from “nothing” to “something”).

A sense of rootlessness and a lack of connection to my community / environment where I spend my time makes me feel empty and unfulfilled. On the other hand, actively seeking out opportunities to provide service to my community – to mentor, to help others find meaning and purpose in their work, and to work towards making the immediate environment around me a better place helps create meaning, and helps to expand my perspective beyond my immediate self and my (mostly) trivial problems. Amidst the noise of our day-to-day work lives, maintaining this commitment to my community helps to remind me what’s truly important.

Humility:

There is no way to feel fulfilled and content in one’s work without a strong sense of humility. Defining success as a byproduct of one’s output in work or life discounts the massive role of chance and luck in any outcome, good or bad. In addition, tying back this success to the result of the efforts of any one person discounts the input and impact of all of the individuals in the past and present who have contributed in some way to support me. There is no way to experience success alone – we are all byproducts of those around us, and I believe in living and working in full appreciation of that fact.

I feel strongly that leaning into this humility is crucial to helping to ensure that my time is spent in the pursuit of a fundamental good, rather than the need to keep up appearances (in my mind or others’). Returning to my own imperfections, and maintaining perspective on my own insignificance will help steer my work and goals.

Some other thoughts on work and life

Money:

As much as I would prefer to exclude money from this conversation, the inescapable fact for me is that I don’t believe I would work if not for want of money. Or, at least, that there are much more engaging / important ways to spend my time that (our current, American) society doesn’t necessarily value enough to make them worthy of a living wage, so they are left to the especially privileged / altruistic / selfless or monk-like among us.

The unfortunate reality is that to support myself, and eventually to support a partner and family and achieve much of what I want from my life, some sufficient and predictable compensation is required to provide for basic necessities (food, shelter, healthcare, transportation, etc.) as well as other important expenses (education, travel, etc.).

Reading between the above lines should make clear that I’m not necessarily after some sort of windfall salary or certain number to justify my existence or define my success. However, at a certain point the opportunity cost of justifying one’s time working must be commensurate (with some discounting for other factors) to a salary one might receive “in the market.”

Feeling sufficiently valued in the form of reward (i.e., compensation) is a vapid, but unfortunately necessary aspect of work to maintain psychological wellbeing and continue to feel motivated to continue to pursue a level of excellence in a defined line of work.

Non-Work

I believe it is important to create a line in the sand, to delineate between one’s working life from non-working life..

As much as I hope to seek validation, meaning, learning, and reward from work, I recognize that there is much to be gained in life that is likely to have very little to do with work. Being an active and involved father, husband, and participating member of my community and broader family, as well as continued intellectual pursuits and the practice giving back more broadly, are all important values that serve no direct purpose to my work. However, to truly commit to these overarching goals, time and space need to be created and maintained by establishing firm boundaries between “work” and “non-work.”

In an idealized and imagined future, this division takes the form of set working and non-working hours with minimal exception – to be able to “unplug” both literally and figuratively from the issues and anxieties of the workplace. Without defining the set hours, my assumption would be this would take the form of nights and weekends, with some set weeks of vacation, though of course this balance would wax-and-wane over time, and should be constantly reevaluated and updated to reflect the respective states of work- and non-work.

To maintain an invigorated and energetic approach to work, I believe this division is crucial. Beyond a healthy working life, making sure that dedicated times are set aside for reflection and reappraisal of aspects of this document will ultimately create better business outcomes that are well-considered and made in full consideration of the various tradeoffs, opportunity costs, and choices that come from making difficult decisions in high-stakes contexts.

Unfortunately, maintaining a distance (mental and physical) between work and non-work life is usually the first thing to be sacrificed in the pursuit of [more, better, and sustaining] at work. Hopefully, by putting my commitment to “non-work” front and center, I can continually remind myself of its importance to me, and allow me to be frank with myself when I’m failing in my commitment to this balance.

What I’ve Learned Chatting Across the Gaming Industry

One of the primary efforts that I’ve undertaken since beginning at Harvard Business School in the Fall is exploring a potential industry ‘pivot’ into the world of video games.

For better or worse, my initial impulse when seeking to learn something new is to cast a broad net and seek out people with informed and experience-driven perspectives. A separate blog post should probably explore the efficacy of immediately throwing the onus and responsibility of teaching onto others, as opposed to other approaches (such as research, or “doing’’ by working on projects / efforts in the space), but I’ve been lucky enough to have 10+ conversations with individuals working across the industry (game publishers, live streaming, start-ups serving the industry, etc.).

What follows are my initial and point-in-time takeaways from these conversations:

Publishers are ‘kingmakers’ – they are at the proverbial ‘top of the food chain’ and have the keys to the kingdom

Major (i.e., AAA) game publishers like Activision Blizzard, EA, and Take-Two sit at the most precarious position in the gaming value chain – they invest years of development and tens-of-millions of dollars to release games, which then become subject to the critical eye of millions of game consumers. Like film studios, game publishers invest millions of dollars in marketing and advertising associated with their games, including traditional forms of media (tv adverts, billboards/bus ads, online ads) and newer, ‘native’ forms of advertising such as paying major live-streaming personalities on Twitch and YouTube to play their games.

However, unlike film studios, whose releases are consumed once and in a single sitting, game publishers compete for a gamer’s time-share in a competitive environment that includes both new and older games. And while both films and games have historically make the majority of their proceeds in the first few weeks of release, as gaming has increasingly shifted online, publishers have sought out sustained engagement over a longer period of time, releasing game improvements (“patches”), or episodic or additional Downloadable content (DLC) to keep gamers engaged and interested in their games. For example, whereas EA Sports franchises like Madden have been traditionally repackaged and repurchased on an annual basis (Madden 18, 19, etc.), games like Tekken 7 now sells “Season Passes” that extend the lifetime of these games. Another mechanism to increase engagement with these games is via competitions, otherwise known as “eSports” (more ink to be spilled on eSports in forthcoming paragraphs).

Behind the millions of dollars invested in these games’ respective intellectual property are mostly publicly traded corporations ($TTWO, $ATVI, $EA) that are beholden to the quarterly financial performance expectations of their shareholders. As a result, these companies are fiercely protective of their intellectual property and other rights associated with their games. Wherever possible, they seek to maximize the financial return of their intellectual property by owning every step of the gaming value chain, including distribution (using walled PC distribution platforms such as EA Origin, Activision’s Battle.net, Epic Games Store, etc.) and the eSports / tournament ecosystem (Fortnite World Cup, League of Legends World Championship, Overwatch League, etc.)

One notable exception to this is Valve, who were the initial innovators of the publisher/distributor combination via the Steam Store. Valve’s key competitive games, Counter-Strike: Global Offensive and DOTA 2, have been more open to co-sponsoring / producing tournaments than their direct competitors, as Counter-Strike ‘majors’ have been organized by organizations like ESL, ELEAGUE, Dream Hack, and Major League Gaming (since acquired by Activision Blizzard in 2016). However, this may be more of a coincidence than a strategy as the esports ecosystem has continued to grow and evolve.

While enterprising entrepreneurs and faithful fans continue to dedicate time and effort innovating and creating modifications to their games (“mods”), a general assumption is that as whenever dollars become involved, the game publishers immediate seek out a cut of the proceeds, and are not afraid of being litigious if they deem necessary.

Are ESports a Revenue Driver or Cost Center, or is it too early to tell?

Building on the topic of eSports, it is undeniable that eSports represent a major development in the gaming industry, a massive shift from the traditionally conceived basement gaming sessions or LAN parties. World championships of competitive multiplayer games have sold out arenas like Madison Square Garden, and garnered tens of thousands of eyeballs on livestreaming platforms like Twitch. Whereas young people have traditionally gravitated towards traditional athletes and sports, today’s young people are increasingly interested in watching games and gaming competitions, both online and in-person.

Behind this growth are predominantly young male consumers, with a large majority under-18 and a smaller portion within the advertiser-desired 18-34 year old demographic. As a result, there continues to be an open question whether this growth can translate to profits in the form of significant advertiser revenues, in-person event sales (more below), and additional game purchases and brand engagement, or simply another marketing line-item for these mega game properties.

One can easily argue is the consumers who have grown up will continue to engage with eSports as they mature and their purchasing power increases. However, whether the currently envisioned eSports business model is the lasting one, or whether it’s simply too early to tell, remains to be seen.

One compelling parallel drawn in a conversation was to the UFC/MMA – whereas initial advertising supporters of the UFC were ‘fringe’ companies (and many still exist), mainstream advertisers seeking 18-34 male consumers like Bud Light, Harley Davidson, and Boost Mobile count themselves among the UFC’s biggest advertisers.

2020 will be a pivotal year for defining the future of eSports

The answers to some of these questions could be answered as soon as next year, as next year the Overwatch and Call of Duty Leagues, both run by Activision Blizzard, will begin a home/away game system akin to a traditional sports league.

While the first two seasons of the Overwatch League were held at Blizzard Arena, a 450-seat ‘stadium’ in Burbank, California, the third season of the Overwatch League will take place in 20 locations across the world, with teams in China (4), South Korea (1) and Europe (1), as well as North America (15) across four divisions and two conferences. Aside from the logistical complications of an international travel schedule and coordinating logistics for live events in 20 stadiums around the world, Activision Blizzard’s home/away game move is a clear statement that they believe that the future of eSports looks dramatically similar to traditional sports: local franchises owned by individuals, world championships coordinated by leagues, etc etc.

A quote from the (former) Overwatch League’s Commissioner during the announcement helps explain a bit more of their motivation behind the home/away system (emphasis added mine):

“It’s really taking a page out of traditional sports scheduling. This isn’t just an important step for the Overwatch League; it’s an important step for esports. . . . You look at the esports club model where everyone is playing in a central studio or online, the business model is global sponsorships, there’s some competition there, and then monetizing content through YouTube and Twitch and other platforms. But if you look at the way teams drive revenue in traditional sports, it’s because they have a venue. They can sell tickets, VIP experiences and boxes and all of those things — concessions, parking, merchandise and local sponsorships — which to date have had no reason to invest in esports.”

There’s been significant skepticism among some of the individuals I’ve spoken with regarding the home/away system, and whether this is a shortsighted attempt to monetize the League in lieu of a longer-term strategy to create something different that what’s come before it. Overwatch ‘franchises’ were initially sold for $20 million, and have since grown to between $35 million and $60 million during the league’s most recent round of expansion, sold to traditional sports franchise owners like Robert Kraft, Comcast Spectacor, and Stan Kroenke, and a newer concept, venture-backed eSports teams, all of whom are looking to recoup their significant investment in these franchises. Whether or not consumers will have any affinity to their local franchises, which were created in other leagues during the age of local media distribution (as opposed to today’s globalized, OTT media streaming environment), is a huge question mark. In a world where Barcelona, Real Madrid, and Manchester United rely heavily on a global fanbase that has never stepped foot in Spain or Great Britain, I believe this doubt is justified.

If franchises are unable to sell out their local areas and monetize these live events as expected in the inaugural 2020 season, I wouldn’t be surprised to see a ‘down round’ in team valuations, which could have significant impact on the viability of the Overwatch League and Activision Blizzard’s desire to continue investing in the product, raising the question (again), of whether eSports is a profit driver or cost center.

Review – Thinking in Bets

The world of professional gambling is a relatively closed-off world. This makes intuitive sense, given the secretive and oftentimes fleeting “edges” of gamblers, and their desire to continue to capitalize on the undereducated play of nonprofessional gamblers, where many gamblers make outsized returns.

One of the most widely known professional gamblers (before the recent reign of Jeopardy all-timer James Holzhauer) is the sports gambler Haralabob Voulgaris, a frequent and always-entertaining guest of Bill Simmons’ podcast. Haralabob’s insights into professional basketball, where he focused his energy and capital, were oftentimes counterintuitive, controversial, or against commonly-held wisdom, and were always entertaining. Unfortunately, to the detriment of the layman basketball media consumer, Mark Cuban, owner of the Dallas Mavericks, caught wind of Haralabob’s talent and hired him to become Dallas’ Director of Quantitative Research and Development.

Both Holzhauer and Voulgaris, and their abilities to snuff out edges and arbitrages working within established systems, demonstrated that there is much to be learned from the world of professional gambling. Another example is Ed Thorp, author of the blackjack card-counting book Beat the Dealer, who after being banned from the Vegas casinos turned his attentions to the stock markets, writing a follow-up book entitled Beat the Market (the stories of which are covered entertaining detail in his autobiography, A Man for All Markets). Regardless, the stereotypes of professional gamblers mob-connected sharks dropping millions on an inside tip or gut feeling has certainly matured considerably in recent years (though I’m sure these folks still exist).

Annie Duke’s Thinking in Bets is a business book that draws on Duke’s (seemingly controversial) time as a professional poker player, a profession that she took on following in the footsteps of her brother, professional player Howard Lederer, after failing to publish a dissertation in cognitive psychology. Duke’s book draws equally on both of her former lives, as well as from her most recent one — as a corporate consultant, “decision strategist” and speaker.

thinking_in_bets Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts, by Annie Duke (Portfolio Penguin 2018)

Thinking in Bets pulls liberally from the works of acclaimed economists, behavioral economists, psychologists, and sociologists like Daniel Kahneman, Dan Ariely, Michael Mauboussin, and Robert K. Merton, compiling some of their career-defining research with entertaining anecdotes from her adventures as a professional poker player surrounded by compulsive gamblers. These stories often times felt too few and far between, and would’ve been welcomed.

In lieu of more gambling examples, Duke draws on wellworn anecdotes from the world of sports, as well as from her newfound role as a corporate advisor, to help illustrate her points and presumably illicit recall from readers. These several-page-long level-setting explanations take away from Duke’s unique vantage point and attraction as a gambler-turned-writer. Reading this book, I wish that Duke elaborated more on the worlds of wagering and oddsmaking to complement her explanations of probability-based thinking and seeking out objectivity (termed “truthfulness” by Duke). While the subjectmatter of Thinking in Bets is worthwhile, it would be better served with some lighter treatment when she’s not diving deep into the published research.

One approach that Duke refers to as a common practice of professional poker players to avoid “resulting” (or incorporating the outcome of the event into one’s analysis of the approach / strategy / decision-making) is to analyze a poker player’s handling of a particular hand of poker, while never divulging the result itself, so as to avoid any biases that would naturally bias the evaluators. More parallels like this to the world of professional gambling, or even callbacks to famous hands from her poker-playing career or poker history, would only serve to drive her point home further.

A common critique that I find in “pop” social science books like Duke’s is a tendency to overload the book with every relevant study that could add to the author’s argument, and hope that the sum total of these studies with lead to the reader’s assent to the book’s broader premise. Each individual study normally provides interesting insights that could be potentially actionable if explained and explored in depth, but the barrage found in most books results in each individual conclusion becoming lost in the process and not actionable. While Duke doesn’t shy away from loading the reader up on studies, she helpfully pulls back to offer the reader helpful and actionable processes, while ceding that our brains are natural purveyors of these biases and deficits, and that there’s no use in trying to attempt to rewire our mental makeup entirely. Rather, like the most successful gamblers and learners, Duke explains the benefit of choosing one’s spots and seeing compound benefits from implementing small changes to one’s habits and routines.

Thinking in Bets is a useful book on cognitive psychology with some elements pulled from the world of gambling. However, Duke’s work found me wishing to return to the work of Nassim Taleb, especially his most recent book, Skin in the Game (reviewed here). For those looking to dive deeper into the world of gambling, the life of writer-turned-gambler Maria Konnikova comes to mind (book forthcoming?), as well as author Colson Whitehead’s The Noble Hustle.

Review – Cosmopolitanism

(Edit: Coincidentally, Tyler Cowen posted a wide-ranging conversation with Appiah this week as part of his Conversations with Tyler podcast series, which touches on Cosmopolitanism and Appiah’s broader biography and career. Highly recommended!)

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Given the ongoing resurgence of nationalism that has taken hold of societies across the world, Kwame Anthony Appiah’s Cosmopolitanism (published in 2006) can either be considered to have aged terribly or only become more relevant. No matter where you sit, It’s hard to not see Appiah’s text as prescient and worthy of consideration.

Cosmopolitanism: Ethics in a World of Strangers, by Kwame Anthony Appiah (Norton 2006)

Cosmopolitanism is a concept that was born as a critique to the catch-all and supposed inevitability of globalization, and addresses our individual responsibilities when engaging with the world around us. Unlike globalization, where all values, countries, and cultures converge into a single entity based on our increased exposure and exchange, cosmopolitanism sees our increased engagement with the rest of the world leading to a developed familiarity with the similarities and differences between our societies, leading to increased understanding, compassion, and fraternity with peoples across the world.

Appiah’s arguments, while laden with examples of his native Ghana and other places from around the world, are still grounded in the reason-based appeals that separates philosophy from other, daresay more approachable disciplines, which makes the book a bit of a slog to get through.

However, in just under 200 pages Appiah addresses a wide range of issues that impact modern cultural exchange, such as the repatriation of museum artifacts, the practice of circumcision, and the existence of cultural imperialism (arguing that Hollywood and western culture does not have the pervasive impact its critics claim). More broadly, Appiah argues that making value judgments on local customs shouldn’t be examined as the ignorant versus the uninformed, explaining that cultures tend to imbue their own ethics and worldview on the media they consume (a recent example of this can be seen in Chinese consumption of American blockbusters, and vice versa via the recent Chinese blockbuster The Wandering Earth.)

The book briefly touches on the concept of “counter-cosmopolitans,” which he cites Osama Bin Laden and al-Zawahiri’s Al Qaeda, and their desire to see a strict adherence to their version of Sharia law, a theme that has only become more pronounced via the establishment of the ISIS caliphate.

Cosmopolitanism is definitely a worthy read for those of us looking for an affirmation of our curiosity about the world around us and further our openness to experiences that fall outside of our own, as well as people looking to explore the ethics around this cultural exchange further.