The merge of Two Giants!

First, Their Backstories

InD: Okay, before we get started we need to get a little bit of background. Let’s start with you, Mark. What was the inspiration for you to originally create Smashwords?
MC: My wife and I wrote a novel titled "Boob Tube”. It’s a satire of the daytime soap opera industry. My wife is a former reporter for Soap Opera Weekly magazine. We were repped by a top literary agency for two years, yet our agent received nothing but rejections. Publishers were reluctant to take a chance on it since prior novels targeting soap opera fans had not sold well.
The experience opened my eyes to the struggles of hundreds of thousands of unpublished authors around the world just like us who faced the same challenge. I thought, “This is wrong. Books are more valuable than money. You can't measure a book’s value to readers on its perceived commercial potential.”
Publishers don't even know which books are going to sell well. They make their best guess and throw spaghetti against the wall and see what sticks. Readers decide what sells.
So, I thought, wouldn’t it be cool if there was some service or publisher who could say, “Yes, I will take a chance on you – I will publish you.” to every author in the world.   And then I decided I could start that company.  That was the genesis for Smashwords.
We launched Smashwords in 2008 as a free ebook self-publishing platform. You had to upload the book as a Microsoft Word document, then we would convert it into multiple ebook formats and the readers could buy them from the Smashwords Store.
In that first year, our books were not selling very well. No one knew what the Smashwords Store was. It just wasn’t a recognized name.  In 2009, we decided to start distributing our ebooks to the large ebook stores.
At the time, there was no distributor who could serve self-published authors.  The big retailers didn’t have a way to accommodate those authors individually, but they did know how to work with distributors. We were the first to open Barnes & Noble, the Sony ebook store, and various library platforms, such as Overdrive, to self-published ebooks.
In the early years, we were all about banging down doors and opening up distribution.  We negotiated the same favorable terms as had traditional publishers. We wanted to level the playing field.
InD: And it did in a huge way! Okay Kris, what was your inspiration for Draft2Digital? How did it come about?
KA: Well, that came about because a friend of mine, who is an author, tried the traditional route, very similar to Mark's story, and we came upon Smashwords as a self-publishing option, but we felt the technical challenges were very steep. A mutual friend, who I went to school with, is a developer who wrote some software to streamline aspects in creating an ebook, and he felt his software was much easier to use than anything else out there.
So, we thought we would be able to package that software as self-serve and make it easier for any author in the world to get their books into a digital format and distributed.
My background is all in IT stuff. I’m a computer guy all the way around, so he asked me if I was interested in starting a business with him. We spent about 6 to 8 months with the three of us working in the evening trying to get something created. We all had full-time jobs and kids, wives, so ultimately nothing much was getting done.
But by 2012, we had saved up enough money to build out the web interface with all the business processes, then created a relationship with retailers and built all of that around the formatting software that really turns a Word document into an ebook, something that Mark and his team had shown was possible, we just took a different approach than they did.
MC: They made what we had created, easier.

So, What Prompted the Merger?

InD: So, were you two competitors?
KA: We were. We were direct competitors.
InD: So Mark, you started it, and Kris, you saw where Mark wasn't doing quite as well as you thought it could be, and tried to make it better, which resulted with both of you in the same situation, competing with each other?
KA: I think that is a fair characterization.
InD: What did Mark have that you don't have, that inspired you to want to merge?
KA: That is a great question. In addition to their 150,000 authors and 600,000 books, they have a solid retail storefront where the readers were already going to buy books. It’s an author-friendly store.  D2D didn't have that and I never really wanted to make our own storefront because that’s a different business model.
InD: Mark, what about you? What did Kris have that you wanted? Because it sounds like he has the same thing you do.
MC: That is a really big question. There were multiple things. Let’s backup a little bit…

Read the entire fun and informative interview in the June 2022 issue of InD'Tale magazine.

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