The Real Secret Of Kindle's Success

Most attribute the runaway success of Amazon's Kindle to the E Ink technology that makes it so readable. But if that were true, why didn't Sony's Librie, which used the same technology and was launched three years earlier in the vibrant Japanese book market, succeed?

The true explanation of the Kindle's triumph is something far less obvious--the behind-the-screen elements that make up a product's backstory. Kindle got those elements right; Sony didn't. Although backstory elements are easy to overlook, the same pattern pops up in one demand story after another: It's what you don't see that counts.

In 2003, Yoshitaki Ukita, the vaunted designer of Sony's Discman, developed a prototype e-reader that read like ink on paper, not electronic dots on a screen. He showed it to Japanese publishers with bravado: "One day, millions of people will read everything you publish on a device like this one. It holds up to 500 books at a time, and weighs 300 grams. This is the future."

They couldn't disagree, especially with innovative Sony behind it. They promised access to their publishing libraries, and even investment. But they set a trap--each of the leading publishers would give Sony access to 1,000 titles. A thousand titles may sounds like a lot, but it's just a drop in the bucket. What good is an e-reader that provides access to only a sliver of books in print? However sublime the reading experience, the Librie suffered from the Curse of the Incomplete Product.

Jeff Bezos first saw the Librie being demonstrated by E Ink at a conference in 2004. "Uh-oh," he said, "This is a machine that could destroy my business." He ordered 30 Libries for his staffers to play with. Soon he was talking to E Ink about building his own e-reader, a bizarre hardware project for an online bookseller to tackle. Bezos assigned his right-hand man, Steve Kessel, to set up Lab 126 in Silicon Valley, far from Amazon's Seattle headquarters, to make it real.

When Amazon released the Kindle, it had a wireless connection, a step up from Sony's USB connection. But its real advantage was an unmatched catalog of e-books for sale. Bezos had developed working relationships with every major publisher, and through Amazon's "Search Inside the Book" amassed experience with digitizing texts. On launch day, Amazon had 88,000 e-books available for download--more than four times the number Sony offered. Anyone with an Amazon account could buy an e-book with one click. Most were priced at $10, a significant discount from the cost of a trade paperback or a new hardcover. Beyond this, Amazon already had a relationship with 65 million online shoppers. Shoppers in Connect, Sony's online store, soon found themselves in a ghost town.

Look at the Kindle, and you don't see the wireless connection, the relationships between Amazon and the publishers, the vast online bookstore, or the personalized book recommendations. But all these backstory elements dramatically enhance the e-reader experience, making Kindle magnetic in a way the Librie never was. The first production run of Kindles sold out within five-and-a-half hours.

Amazon moved outside its comfort zone to design a hardware device, which was Sony's forte. But Amazon leveraged its comfort zone to build a complete solution for the user. As a result, Kindle's sales outstrip Sony's readers by three to one. E Ink made the e-reader a reality. Behind-the-screen deals--the backstory--made Kindle a winner.

Adrian Slywotzky is a partner at the global management consulting firm Oliver Wyman and a best-selling author. This article is based on material from his new book, Demand: Creating What People Love Before They Know They Want It (Crown Business), to be released on October 4, 2011. Follow the Demand blog at www.demandthebook.com.

[Image: Flickr user Annie Mole]

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5 Comments

  • ChristopherDMitchell

    I was at first skeptical of the Kindle, but now am a huge proponent and evangelist. I think Amazon has just begun to tap the potential of this marvelous device. Chris Mitchell, Chicagoland @CDMitchell

  • Andrew Norris

    It says most people attribute the success to the E ink technology, but most experts do not!  It is pretty obvious that Sony's system had the same quality of display.  

    I think even here you have missed the real stand out reason. Which is that Amazon has the ability (and used it) to advertise to millions of book readers. Ones already into technology as they use their site. Advertising the kindle directly, AND the fact the kindle was basically better with wireless etc, and it's pretty much a no brainer. Show me an expert that could not work that out and I would be pretty much surprised. You will have to do better than this to get a good comment out of me for sure! 

  • David Kaiser, PhD

    It all comes back to thinking about the customer and what they want: they want lots of books, that's amazon's forte. I can have a bestseller in ten minutes if I drive to my bookstore to get it, but Amazon has access to all sorts of stuff my local guy would have to order, if they could get at all, plus that recommendation engine, and they were willing to take risks. Bravo to them. Raspberries to the booksellers that only gave Sony 1000 titles. 

    David Kaiser, PhD
    Executive Coach
    www.DarkMatterConsulting.com

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  • Andrea Newell

    It is certainly the supporting elements that make or break products - just look at the iPad and Android/Windows competitors. I confess that I bought an Android tablet to try (Samsung) and although it's attractive, all the different versions of Android and their limitations on what apps work on them is annoying, plus the apps themselves lack quality in many instances. The iPad dominates because they, too, have all the supporting elements like the app store, a solid product and a strong OS. I have a Kindle, but I read most of my books on other platforms, although I keep it for back up. Interesting article.