Earlier this month William Lynch, the Barnes & Noble CEO responsible for pushing the company's failing Nook business, resigned. Since then, the general consensus in the publishing world was that while the nation's largest bookseller may yet survive, Lynch took the company off course. Now, in a lengthy piece in Bloomberg Businessweek, Susan Berfield paints Lynch as a man who ran the company like a tech start-up, and didn't care about the print side, Barnes & Noble's bread and butter.
“He is exceptionally smart and optimistic to a fault. He drank too much digital Kool-Aid,” says Michael Norris, a senior analyst at Simba Information. Many people at Barnes & Noble worried about Amazon killing the bookstore; it sometimes seemed as if Lynch wanted to do it himself. He was a Silicon Valley dreamer in charge of a bookstore chain.
Perhaps nothing demonstrates this better than an interview Lynch gave just before Thanksgiving last year. Lynch Appearing on Bloomberg TV, Lynch was asked what book book —as in, printed book—he was reading at the time. “I don’t really read physical books that much anymore, I like to read digitally" he said. "My wife is reading a lot of physical books," he added.
It's not surprise that Lynch was more of a tech guy. His past experience included co-founding Gifts.com and serving as general manager of e-commerce at Palm. And that might be what appealed to Barnes & Noble. The Nook was still in the works, and they were probably hoping to change their previously horrible track record with modern technology.
In the 1990s it was focused on beating Borders and didn’t set up its website until 1997, a full two years after Amazon.com went live. It introduced a primitive e-reader too early, in 2001 (on Sept. 11, to make things worse). After Amazon introduced the Kindle in 2007, Barnes & Noble needed someone to take control of its destiny and hired Lynch to do just that.
Lynch, however, got a little too into the tech side of things. He split his time between the books side of things in New York and the tech side in Silicon Valley.
“The company became kind of schizophrenic,” says Jack Perry, who runs the publishing consulting firm 38Enso and who has been watching the bookseller closely. “The people in New York didn’t know what was going on in Silicon Valley, and the people in Silicon Valley didn’t care what was going on in New York.”
Lynch, as head of the entire company, was nevertheless one of the Silicon Valley people. He’d never worked in traditional retailing and didn’t pay enough attention to how he could use the bookstores to enhance his digital strategy—and vice versa.
In the long run, Lynch's pro-reader stance hurt the company's e-reader business more than the brick and mortar sales. Despite all the optimism Lynch displayed, the Nook business suffered a $475 million operating loss in fiscal year 2013, which is why Lynch became persona non grata in the halls of Barnes & Noble. Berfield notes that "The company Lynch leaves behind is perhaps wiser and certainly poorer." We'll see where the bookstore with the green awning goes from here.