Getting on the Same Page

"It ended with lawyers."

That's how Ted Nace describes his first book deal, a "death of a thousand cuts" that culminated when his publisher, Microsoft Press, decided to change his book's title, "The Software Author's Handbook," to "Programming for Profit" at the last minute. Nace fought back by pulling the plug; his book never went to press. David Korten's story isn't much better. McGraw-Hill removed his first book, Bureaucracy and the Poor, from shelves after just six months. "They'd promised they'd promote the book worldwide and keep it in print," Korten recalls. "Even things that were clearly printed in the contract they ignored." (Both publishers declined to comment.)  

Such is life in the traditional publishing industry, where authors have little, if any, say in how their work is edited, printed, distributed, and marketed. In part, that's because most big houses such as Simon & Schuster, HarperCollins, or Penguin Putnam pay authors a cash advance, often taking ownership of the product before page one has even been written. But even that's no guarantee of success. A book by the average author--that is, the average author who manages to find an agent and land a deal--sells just 11,800 copies, according to the Book Industry Study Group, a nonprofit research organization, and RR Bowker, a provider of bibliographic information. More often than not, the book heralded as the next Good to Great or Harry Potter becomes just another example of pulped fiction. "What's to say about publishing today?" laments Adrian Zackheim, publisher at Portfolio, Penguin's business imprint. "The tale of woe is more woeful. There are horror stories everywhere."

Zackheim is talking about an industry where $28.6 billion in 2004 revenues was split among 195,000 books. That's just $146,667 per book. Factor in the cost of acquiring, editing, manufacturing, marketing, and shipping each title, and publishing begins to look like the inverse of Vegas: a place where the house usually loses.

And then there's Berrett-Koehler, a small 13-year-old San Francisco-based publisher with a radically different approach. By turning the experience into a collaborative model that brings together the author, the editor, outside reviewers, and even readers, Berrett-Koehler has established itself as a house authors call home. "A lot of publishers treat authors like nuisances," says Steve Piersanti, BK's founder and president. "We treat them like partners." That's the case with Nace and Korten, both of whom eventually found success--and creative satisfaction--with Berrett-Koehler. "It's like having your own professional in-house support staff," Korten says.

The results--smarter books and better sales--speak for themselves. Last year, BK's revenue grew 25%, to $7 million, and is projected to grow another 50% in 2005. The average BK author sells some 15,000 copies, 27% more than the industry average. "BK epitomizes what . . . smaller, focused publishers of the present and future can and should be doing," says Michael Cader, founder and editor of "Publishers Lunch," a daily newsletter that covers the publishing industry.

Although Berrett-Koehler is still a small company, with a catalog of just 30 titles and 250 authors, it has attracted such big-name writers as Ken Blanchard, the prolific consultant behind the One Minute Manager series, and management don Henry Mintzberg. "The big houses . . . basically give a book a six-week look, then they move on," says Blanchard, who has published five books with BK. "Steve is always asking what we can do to keep it going. It's win-win."

Average revenue per book [publishing industry]: $146,667
Average revenue per book [Berrett-Koehler]: $220,000

Much of BK's approach is a reaction to Piersanti's personal experiences. He started his career in 1977 as a copy editor for Jossey-Bass, an imprint of John Wiley & Sons, and became president 13 years later. What he saw on the way up upset him. Across the industry, he says, authors, suppliers, and employees "were treated like they didn't matter." Ordered to lay off eight staff members in 1992 despite the fact that sales and profits were up 22% and 42%, respectively, Piersanti refused. He was given less than an hour to leave the building.

Within days of Piersanti's firing, suppliers, investors, and printers were offering lines of credit and encouraging him to start his own publishing house. Established authors stepped forward with book projects even though Piersanti had no staff or press. He took them up on it, and Berrett-Koehler, named to sound bookish but really a mix of random family names, was born.