Thursday, December 13, 2007

Real Estate Finance & Investments: a Self-Publishing Story

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Self-publishing. Usually a bad idea, although there are some notable successes. (Rich Dad Poor Dad started out that way.) The main problems with self-publishing are these:

1) Undiversified income stream. Publishing is a hard enough business to survive in, but at least professional publishers don't put all their eggs in one basket. If one book fails, perhaps another one will succeed. Self-publishers don't get that luxury.

2) Lack of publishing expertise. If you don't know how to typeset a book or design a book, you have two choices: figure it out as best you can, or pay someone else. Either choice is a fraught one for a self-publisher. The first choice often leaves a self-publisher with an ugly, unprofessional-looking book; the latter choice brings with it the likelihood that the publisher will be overcharged by service providers. This goes double for pricing printing. A publisher can really lose his or her shirt at the printer's--it is, after all, likely to be the single largest expense. Oh, and does a self publisher know what an ISBN is, or how to get one?

3) Lack of channels. Book distributors often handle self-publishers, but it is usually a long hard trip before a self-publisher realizes there is such a thing as a book distributor, much less how to contact them and choose between them. Without a book distributor, getting your book in front of potential readers will be especially tricky, if not downright impossible.

All this is a prelude to a surprising discovery I made. One of my textbooks this semester, Real Estate Finance & Investments by Peter Linneman, was self-published! This strikes me as an amazingly weird thing--I have never heard of a self-published textbook.

Most textbooks are published by large corporations like McGraw Hill, Pearson, and Cengage (formerly Thomson Learning). (These companies also have valuable business information businesses as well--or had. Thomson sold off Thomson Learning, which has recently bought Houghton-Mifflin.) I kind of recoil at the way textbooks are handled--they are so expensive, and new editions obliterate the secondary markets. Then again, certain people sometimes buy supercheap Indian editions of textbooks for less than a tenth of what the US publisher charges. I've heard. In any case, I also admire these companies for leveraging knowledge and information. While they have been around for a long time, and seem to be in kind of a horse-and-buggy industry, they also seem very much pushing into the future with a specific kind of product--continuously updated knowledge, often delivered electronically.

But one thing about university textbooks is that they are boring. Lord, are they dull. Personality-free. Occasionally a glimmer of wry-ness, quickly tamped down. Another thing--they are expensive. Slick paper, duotone or color, often with CD-ROMS.

Linneman's book is relatively modest. It is a hardcover, but beyond that, he makes no concessions to fashion. Likewise, you can tell no editor smoothed out his writing, which is very personal and opinionated (without sacrificing the step-by-step explanatory function of a textbook).

I wonder why he self-published? Did McGraw-Hill or Pearson read his manuscript and say--this cannot stand! We will have no human beings writing our textbooks! Good day to you, sir! How did he decide to self-publish? He is a professor at Wharton, so he was unlikely to make the simple business errors that most self-publishers initially make. At the very least, he must have known that there was a lot he didn't know about publishing when he started. How did he set up relations with wholesalers? With his printer?

He must have been reasonably successful--this is the 2nd edition. And in a way, he is like a miniature McGraw-Hill--he is a provider of business information, through his professorship and through his newsletter.

If you want to read a pretty accessible but non-trivial book about real estate finance, I think you can't go wrong with this one.

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