Adam Smith and the Romance Business Model

Lincoln-Memorial-2My first several jobs in Washington, DC, involved working for companies who lived off of federal contracts. When I went to law school, I focused on “procurement law,” or the business of spending the taxpayers’ money on competitive contracts. “Full and open competition guarantees the best value for the taxpayer!” was the accepted wisdom handed down for the entire 200+ years of federal history.

competition-people1 (1)What I saw of full and open competition was that it encouraged cutting corners on quality, selective gouging on price (and the next time around the government would gouge the contractors), or bidding ridiculously low prices just to keep the work, and a goofy bid evaluation system that was by turns wired for the contractor of the agency’s choice, or so arcane in its demands, nobody could make heads or tails of it. Full and open competition, after two centuries of relentless fine tuning, was a wreck, from what I saw.

rwa-logoFast forward to my present endeavor as a romance author. At any given conference of romance writers, I’m likely to hear the following Starfleet Directives, “You will never hurt your career by helping another author.” Or, “A rising tide lifts all boats.” Or, “Tap into the power of the cooperative bundle.”

cat and dog twoA significant aspect of many author’s success is that the author community (especially the indie author community) exploits the information loop to its maximum extent. If somebody invents a better mousetrap–for marketing, pricing, formatting, negotiating–word goes out real time. If somebody steps on a mousetrap (I did when I spent big bucks to produce my own audio novellas), we feel obligated to report that too. The ethic is one of support and information sharing. The result is a business community that adapts at lightning speed, works at the very edge of innovation, and has up to minute information with which to make decisions.

Adam-Smith-The-Wealth-of-NationsBefore his death, Adam Smith, author of “The Wealth of Nations,” saw that his economic theories, considered the basis for capitalism, were also used to justify slavery, hoarding by the wealthy in times of famine, price gouging, product adulteration, and other shameful market tactics. In later life, he heavily qualified and recanted a lot of what we take for economic gospel.

I see the romance authors’ community operating from a sense of abundance, trust and mutual support (with a very few mushy apples, admittedly), and I contrast that with “full and open competition.” I know which one feels like the best long term bet for me and my readers. And yet, I have to wonder if there’s something special about romance authors that we work best running counter to prevailing market culture. Could a predominantly male group work the way we do? If altruistic cooperation is such a solid approach in a highly uncertain and volatile industry, why aren’t more organizations using it?

cat sleeps on top of dogSomebody with a much firmer grasp of economics than I ever hope to have ought to look at the romance authors’ community, and figure out why it works so well. I think Adam Smith, at least as an older gent, would have liked hanging out with us, and approved of our results.

Where do you come down in the discussion of cooperation and competition? Do you cooperate at home, but compete at work? At school? Neither?

To one commenter, I’ll send a $25 American Express gift card.

 

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72 comments on “Adam Smith and the Romance Business Model

  1. 1
    Jennifer says:

    As a baker who tries to source as many ingredients locally as is possible (and affordable), I definitely come down on the side of cooperation. I’m happy to talk up other producers who provide good ingredients and food, especially when I use their products, and I’m happy to give a shout-out to local businesses who promote that same spirit of cooperation. We can’t do it alone, and we can definitely learn a lot from each other.

    I’ve also found that a little competition in the markets where I sell has not necessarily been a bad thing. Most bakers have their own niches, and if I find a fellow baker has something that’s really good — something I can’t or don’t make — I’m happy to tell people to support that person, too, by buying their cookies or what have you. I know I can’t do everything, and if someone else has something I myself would enjoy eating, I see no reason NOT to give them their due.

    I’m especially lucky that one of my fellow bakers will sometimes help promote my bread when she caters an event — and will even consider buying in bulk when we both need something. And she’s a great person for bouncing recipe ideas off each other!

    • 1.1

      Interesting, Jennifer, but I don’t hear a mention of competition there, I hear instead “specialization.” Romance writers do that endlessly, to the point most readers can tell which of their keeper authors they’re reading after a paragraph or two, even if the genre and trope are the same.

      Now I’m hungry for fresh bread with organic butter…

  2. 2
    MzKara says:

    Maybe the difference is as Romance authors, you all have to rely on each other because there’s so much criticism and misunderstanding about your work and its value. Even though you may not love another author’s writing, you can certainly appreciate the struggle of being a writer in general and a romance author in particular. You all have a vested interest in seeing the genre succeed and be taken seriously as a craft. It makes sense to me that you all support one another. I can’t say that I’ve ever really seen or heard too many romance authors tearing down each other’s work.

    Having seen the effects of bid processes in several industries, I can say that competition doesn’t always yield the best end result. The most aggressive or slick sakes pitch might win but that doesn’t mean it’s the best value for the money. I tend to prefer collaboration over competition. We each bring our best and end up better than what we could’ve achieved alone.

    • 2.1

      Mz, I know some authors are sensitive to, or have been the subject of, a lot of romance bashing, but I simply don’t hear it. We’re told our readers took to e-readers in droves to be preserved from having to read “those books” in public, but I haven’t heard that from the readers. Instead I hear that e-readers save them from buying more shelves, killing trees, or having to lug four books everywhere.

      And yet, you might be right. It might be we cooperate because we do have a sense of working in opposition to the larger literary community.

  3. 3
    Susan Gorman says:

    I enjoy being part of a team and working with people.

    Last Fall, I took a fabulous course at work called Peer Power. The course is based on the book Peer Power by Cynthia Clay and Ray Olitt. The book provides real solutions to work place situations and strategies to deal with those folks that don’t play well in the sandbox. I like the coaching, mentoring and developing aspects of my job and strive to play nicely with others. This class has had an important positive impact on me both at home and at work.

    At home, I feel that I have taken on the role of mediator between my DD and DH. They do not communicate well because they are two very impatient souls.

    Showing dogs is a very competitive hobby. No one ever tells you that your dog is handsome, pretty or perfect. In the past 15 years, I have heard a lot of unkind and unnecessary comments. The lack of support in the dog show community surprises me. Is it such a big deal to offer a kind word to a new club member? To say something nice about another dog in the ring? I will continue to show in conformation because I enjoy it –it’s a hobby to me– and I have a beautiful dog to show.

    I am enjoying the supportive community of the obedience community. Taking rally classes has been very enjoyable for my adventurous Celeste, quiet, thoughtful Greg and myself. The thereof us are much more self confident. Maybe, a supportive environment works best for me? And I can help others going forward?

    • 3.1

      A link for the book Sue mentions:

      http://www.amazon.com/Peer-Power-Transforming-Workplace-Relationships-ebook/dp/B0078XBZ42/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1406482006&sr=1-1&keywords=peer+power

      Which looks like one of the many initiatives that takes conflict management science and applies it to every day situations. I bet a lot of it struck you as common sense, too, Sue.

      As for the dog shows… that surprises me. Among the horse people (I know mostly dressage and eventers), there’s so much luck associated with who wins, that nobody seems to get a very swelled head for long. We’ve all had the sure thing turn up lame on show day, seen the champ take a bad spill that put them out for the rest of the season, and pulled the judge who hates gray ponies.

      Then too, we just plain love our horses. If my horse gets Lyme disease, the other competitors grieve with me, and pass along anything they know that might help.

      I’d probably not last long in those dog clubs, but I hope you do. I’m convinced that what happens among the humans on show day ends up landing on the show animals, and not one of them asked to be in that arena. Ever.

      • 3.1.1
        Susan Gorman says:

        Grace– Much of what was in the course work was common sense…it’s amazing that common sense is not applied to all forms of conflict resolution!

        I show the dogs in the Spring and Summer at outdoor shows. Celeste enjoys tracking because it’s outside and we are barreling through the woods having fun. Am thinking Greg might like tracking, too.

        I have some great friends in my Club who are very supportive. it’s the few poor sports who try to spoil it…you know?

        I think There’s a time and place to be competitive….:)

  4. 4
    Mary Doherty says:

    I am not in the work force anymore and when I was this isn’t something I had to deal with. I do completely agree with you post though. I also have to say that I think most Americans think our government is a wreck. One of the things I love most about romance books is how willing author are to help each other and how loyal the readers are to the romance genre.

    • 4.1

      This is one of the reasons I like talking to cab drivers in big cities. They’re often recent immigrants, and their perspective on “how bad it is here” is refreshing. They love that we even have the freedom to gripe about our government, much less vote regularly to change it, write letters to the newspaper about it, or even run for office ourselves.

      I think the blueprint is fairly sound, and it’s up to us to keep it working…. easier said than done!

  5. 5
    Lisa Hutson says:

    I am not a writer. But it is always fabulous to read words like yours. I see a lot of other writers say exactly the same thing. Every Tuesday, you will see writers ”advertising” for other writers whose books are coming out that day! You see writers talk about older books they love. Its abundant. These supportive women.
    As a reader, I can tell you, it will only make me want to read more of them when they pump up and encourage other writers. Its only a positive thing!!

    • 5.1

      Agree, Lisa, and this approach comes down to today’s authors from the Nora Roberts, and Bertrice Smalls and other romance pioneers. Help each other, encourage each other, look out for each other….

      The sci-fi, thriller, mystery and other genres are apparently not like us. I was surprised to learn that those writers will come to the romance community to learn both trade and craft… because they can’t learn it among themselves? Huh?

      But holy Ned, of another baker said to me, “You have GOT to try Jenn’s bread. You can taste the love in every bite.” THAT would be one heck of an endorsement, and create both trust in the endorsing baker, and sales for Jenn.

      Seems pretty simple to me.

  6. 6
    Michelle K says:

    I will cooperate with my hubby, but I think I compete everywhere else, at work and with other family. My parents raised us to be competers.

    I do think it’s wonderful how many authors tout each other’s books. That always strikes me when when I see tweets and posts praising someone else’s new release.

    • 6.1

      I wonder why your parents raised you to be “competers,” and whether it took equally with all of your siblings.

      One of my early bosses lamented about me, “You lack a killer instinct.” I don’t think that’s so. I think if roused to attack, I’m afraid my killer instinct won’t know where to stop, and I’ll annihilate when I only meant to chastise or establish my own safety.

      Am I afraid to compete? Possibly.

  7. 7
    Barbara Elness says:

    I’m competitive, but mostly with myself. I want to do better today than I did yesterday, if I make a mistake, I want to learn from that and not make it again. I am the same at home and at work, more cooperation than competition. I think a lot more gets done at work if we cooperate, and I’m lucky to work in that sort of environment. I’m very happy to see that sense of cooperation in the romance community. Even though I’m not a writer, I consider myself part of that community and I love to see authors and readers recommending good books to each other, helping debut authors get exposure, and supporting new work.

    • 7.1

      Barbara, I think a lot of the cooperative spirit comes from the readers. I’ve never written a book in less than seven weeks, but many readers can finish that book in seven hours.

      What are my readers supposed to do? Sit on a toadstool and wait weeks or even months for the next book to come out? As a reader, I never did. I found other authors whom I loved just as much, and read them in seven hours flat TOO.

  8. 8
    Maria says:

    I will never be a one who competes, except with myself! I work in a public library, free to everyone (kind of) and I find competing causes friction. The very nature of my work is cooperation so that’s my style. And, at home in a marriage, cooperation is key.

    • 8.1

      If librarians get competitive, we’re in trouble. I consider libraries the communal literacy safety net, and that’s a resource too precious to squabble over.

  9. 9
    bn100 says:

    cooperate both places

  10. 10
    Mary T says:

    I am personally all about cooperation – in my work and personal life. I’m retired now, but during my work life I was fortunate enough to only be involved in the friendliest of competition. Perhaps this was because I had a job rather than a career. I was mostly happy in the workplace and with my co-workers. Good thing too, since I spent more time with them than just about anyone else.

    During the last 10 years or so, we had to undergo a lot of team building exercises and classes to learn anew things we already knew how to do anyway.

    If you make it to 50 or 55 years of age and you don’t know how to play well with others, you are probably way past due for your heart attack or stroke.

  11. 11
    Catherine says:

    When I first became aware that depression was to be my long term companion, I felt the need to compete with healthier people – to show I could still work full-time, volunteer a lot, have a full social life and continue as if nothing had changed. Needless to say, this was not a successful approach! Now I ask for help, take breaks when needed and generally work within my new world instead of trying to do ‘what I think I should.’ I have discovered more unity with people – both with those who have depression and those who don’t – and a greater capacity to be happy within the depression (sounds contradictory, but isn’t) since making that change.

    Sesame Street had it right all along. Cooperation is where it’s at. πŸ˜‰

    • 11.1

      Catherine, depression is one of life’s rotten, unfair, stinkin’ low cards. It has afflicted my daughter from time to time, and other people I love. We’re getting better at spotting it and treating it but to me, you’re a heroine for even admitting it plagues you.

      I was just pondering how to dedicate my next book. You’ve solved that problem for me!

      • 11.1.1
        Catherine says:

        Thank you for your kindnesses to me. Your novels and your efforts to connect with readers through social media have been an anchor for me this year! Now I’m excited to check out dedications and see if I can figure out which one… πŸ˜‰

  12. 12
    catslady says:

    I’ve never put money and power first and that seems to be what rules the world now. And I don’t think men think the same as women and diversity and cooperation ought to be the rule of the land. I worked in the business world and hated how it ran. I was taught to work hard and success will come – nope, didn’t find that to be true at all. I may not have a lot but I like myself as a person which is more important in the end. And, unfortunately, I think as long as the world is run by the rich and powerful (predominantly old white men) we will never succeed as a people.

  13. 13
    Ona says:

    Well, I know which is more fun. I had a sociology prof say that, on average, women take losing far more to heart and at the same time are far less satisfied with winning than men are. We hate to lose more and like to win less than they do. That pretty much tallies with my experience. Competition makes me uncomfortable and tends to bring out the more unseemly parts of my personality (selfishness, vanity, insecurity). But I do enjoy a cooperative enterprise, especially when I can see how my work helps others to succeed–that’s work worth doing!

    • 13.1

      Ona, I can go all over the place with that observation: Are men then set up to get killed in stupid, male-population reducing wars, because they mind losing more and like winning more? Are wars supposed to be started by men and stopped by women (LIBERIA, LYSISTRATA). How much of the observed gender preferences are social and how much are biological, and in cultures practicing polyandry, are the tendencies at all reversed?

      Or is the business of raising babies so important, that those of us entrusted with the start of it must be wired for cooperation, for the sake of the species?

      Much to think about!

  14. 14
    Sabrina says:

    I’m not a competitor.

    I share information/ideas when I get it and I expect the same in return. At work, this is what teachers do. We are autonomous, but we all know what everyone else. And if we don’t, we’ll just flat out ask.

    And I may spend a large part of my evenings in a place that seems competitive, but really and truly the only competition is you against you. Yeah, you maybe chasing someone else because they are stronger or faster but they want you to make that chase because it makes them work harder also (and if you catch them they’ll be chasing you now). And they will cheer you on the entire time.

    • 14.1

      I think that’s more than half the magic of CrossFit. Not only is the science more appropriate for a lot of metabolisms, but that spirit of community, and self-empowerment within community, is hearbalm, pure and simple. If the physical fitness didn’t hook you, the spirit would.

      • 14.1.1
        Sabrina says:

        That is it exactly!! Without the community CrossFit is nothing. The “motto” at our gym is “more family than family.”

  15. 15
    Gigi Morgan says:

    It doesn’t matter what I’m involved in, my goal is always to be helpful. I enjoy really doing things and creating results or improvements. My experience with the romance community has been a mixed bag and it’s taken a lot of work to find writers that I admire and trust to help me on my path. Hint, hint -_^

    • 15.1

      Gigi, I’ve seen some mushy apples too, but on the whole, the community dis-empowers them. I also think the supportiveness on the fringes of any community will be stronger than at the center, and the indie absolutely have that knocked. It’s amazing, and I don’t know why the sociologists aren’t all over it.

  16. 16
    Glenda says:

    At home it is all about cooperation. At work there is a little bit of competition but mostly cooperation. I work at a family owned pet supply store. There are several stores and we have a friendly competition between stores with monthly sales items and when we have donation drives — we all try harder to get more food and treats donated to local shelters. Most of the employees at our store work together to help the store and don’t care so much about individual sales numbers, hence the cooperation.

    • 16.1

      And yet, a lot of major corporations–IBM, Ross Perot’s EDS–made their mark in sales by putting everyone on commission, and adhering to strict quotas.

      I’d rather work at your pet store.

      • 16.1.1
        Glenda says:

        That is one of the main reasons I chose Not to return to a corporate job when I went back to work after the kids got older. I know I am incredibly blessed to have a husband who makes enough for me to have a lower paying job. πŸ™‚

  17. 17
    Molly R. Moody says:

    Well I don’t really compete anywhere anymore since I no longer work and my cooperation is somewhat limited since I live alone. I do, however, assist my daughter by watching her children whenever she needs. I try to make sure she knows when my appointments are so she can schedule hers on a different day.

    • 17.1

      If we can’t cooperate with family over the child care tasks, everybody loses. I know they’d be up a very dry creek without you Molly, and that your encouragement to your author pals also means a lot (says one of your author pals).

  18. 18
    Annie says:

    Interesting post, but what strikes me is that you are talking about authors and not publishers. While artists certainly can be and are competitive, my unscientific opinion is that participating in a cutthroat business model is not only uncongenial for writers but would also be counterproductive. Artists are nurtured by other artists and thrive on community, in spite of the image we may have of the solitary writer laboring away in her garret. Why else would there be artists communities and organizations such as RWA? Writers were readers first. Most of us who are passionate about reading have spent our lives telling friends, β€œyou would love this novel, poem, or biography.” It seems counterintuitive to think becoming a writer would make someone a less passionate promoter of good writing.

    I suspect that publishers are much more competitive than the authors whose books they commission. I’ve read a number of stories about bidding wars, and I assume that an editor who has her hand on a fabulous new manuscript isn’t chatting it up (or at least isn’t naming names) to her colleague at another publishing house.

    I am an editor at an academic publisher, and I have been fairly successful without being competitive. I try to be the kind of editor an author will want to work with, and I have a ton of respect for editors at other presses. When I started out, other editors (all women) were enormously generous in giving me advice. I have tried to do the same. I don’t think it’s possible to divorce gender from the question. What you say about the writers of other genres coming to romance sites to hone their craft doesn’t surprise me. Many of those genres are dominated by men. Perhaps someone needs to point out that romance is by far the biggest money-maker and gently suggest that there might be a connection to how the authors embrace community and cooperation. There’s a chicken and the egg question in here somewhere. Are the writers of romance novels naturally more cooperative or are writers who understand the importance of cooperation and compromise naturally drawn to a topic that requires an understanding how crucial those qualities are to relationships?

    I am not ashamed of reading romance novels, but I have to confess that I am one of the people who embraced e-readers because the readers and writers of romance are often judged harshly. Romance, unlike genres such as science fiction or mystery, still lacks respect. I know a lot of academics who read romance novels, but many keep this to themselves. That’s changing as so much of the academic criticism on romance, some of which I have commissioned, makes it clear that sexism is at the root of this. A genre primarily written and read by women is easily dismissed and ridiculed. And everyone knows that unlike violence or politics, love is not a serious subject, being as how romantic love is not an important part of the human condition or anything. As most everyone now knows, Eloisa James has another life as a Shakespeare scholar. She didn’t β€œout” herself as a romance novelist until after she got tenure. I don’t judge her for that at all. She had every reason to be concerned that her career would suffer due to the ignorant attitudes of many scholars.

    • 18.1

      What a thoughtful, insightful comment.

      First, I think commercial publishing has very little acquaintance with cut-throat business (which is why Amazon–more of a mail order warehouse than publishing model–has caught them flat-footed, and bewilders them so). When my books have gone to auction, my agents makes some phone calls, the editors look over the MS, they make offers, some wrangling ensues, and eventually, we shake hands the deal we like the most.

      Weeks later, a contract document appears. It never occurs to anybody that in those weeks, I might be back-dooring a better deal, but in many industries, that’s exactly what happens

      Another example: Before most agents negotiate an option deal (with the house you’re already writing for), they ask the editor for sales figures, and those figures are turned over without a question. Even if those figures prove the author is earning out within a week of publication, the editor would never withhold the data

      With respect to the university environment…my dad was a college professor for all of my formative years and I grew up in a college town. Seems to me the university likes to think of itself, historically, as the bastion of truth standing in opposition to the dogma of the church and power-mongering of the state. In fact the university environment is prey to both dogma (I am the professor, so you are dumb and I am smart) and power mongering (peer review system, anyone?).

      I think it takes a brave women to march to her own drummer in that environment, and I commend you for being one of them.

  19. 19
    Anne Egger says:

    I work at a non-profit, so that doesn’t really apply to me.
    My girlfriends and I try to help people out. If someone is starting their own business we try to support it. Covered dishes are always good and sharing good books.

  20. 20
    kassia says:

    I am impressed at the Romance Business Model~ Wow… I am so proud of my fellow women~~~ makes me want to read more and support this model!
    The only reason I don’t tell people I read too many romance novels … they would call intervention for me… I read a lot!!!! I always did since I was really young!
    Maybe the reason why it works for romance authors is that they KNOW that in fact they are a very optmistic bunch!!! Look at the impossibilities they write about it… I love it!!!!

    I don’t like competition for the sake of competition. I used to work in human services and when we had to work with contractors/vendors for any kind of goods we tended to go the the state vendors because of price and most time it did sacrifice quality. But money was always a factor that made the deal ‘good’ specially because it was non profit… a contradiction??

    I love to hear of new ideas and new things that appear because of people that took the time to come together, dared to dream and think something different and totally outside the box. Maybe its a ‘healthy competition’ that brings together the best?

  21. 21
    gamistress66 says:

    i’ve always believed that it’s a small world & what goes around comes around are cliches for a very good reason. also memories can be very long.

  22. 22
    Doreen Knight says:

    Having been a British civil servant a lot of my working life, I can tell you it’s just the same over here!

    As to co-operating versus competing, dare I suggest that women have always got by through co-operation? Look at tribal cultures where the women sit around sharing the tasks of food preparation, child care etc. Whereas men compete (I know, generalization). And as women predominate in the romance genre, perhaps we are different from other genres.

  23. 23
    Brittany says:

    I am a pretty competitive person however I cooperate with everyone. I am a pretty easy going but I always love a good challenge.

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