Someone on LinkedIn recently posed this question, in essence. The question this person actually asked was whether you'd hurt your chances of being picked up by a traditional publisher, if you self-published.
I have (ahem) a few opinions on this matter. I say the answer is no.
Here's what I had to say in my somewhat non-responsive response (with a correction and some parenthetical thoughts in brackets):
I can think of a few examples of self-published fiction authors who've found traditional publishers (not always big publishers, but that's not necessarily a bad thing).
K.j.a. Wishnia (who self-published a mystery that got an Edgar nomination, which was almost withdrawn until a traditional publisher signed him)
Brunonia Barry (her novel "The Lace Reader" became a bestseller)
M.J. Rose (not familiar with her work, but she started out self-published)
Seth Harwood (author of "Jack Wakes Up"--initially self-published, but the book's under contract with a small press now) [Oops, that's not right. It was with a small press, but got picked up by Random House.]
Seth is a particularly interesting example. He has been called an author-preneur. I wrote about Seth recently on my blog Writing for Hire [yeah, this one :)].
In my opinion, writing is like any other business. If you create a good product (i.e., a good, well-written story), promote, market and sell it, and keep an eye out for opportunities, you can eventually build a viable readership. These days it's much easier to do this through e-book publishing. However, with print-on-demand technology, it's achievable with print books, too. In addition, social networking is a very powerful marketing tool. And you can sell your work on your Web site.
The problem with most authors is that all they see are the negatives. They're so used to gauging their worth by the opinions of an insular few within the publishing industry, rather than readers, that they fail to see the possibilities of achieving success without the industry's stamp of approval. [That's right. I'm going balls out on this one.] Yet it's readers who are their customers--not publishers or agents. Publishers and agents provide value, but they aren't the ultimate consumer.
If you have worked hard on your craft and produced a good book, I believe you can achieve success based entirely on sound business principles. I'm not saying you'll necessarily hit the bestseller list, but I think it's possible to make a living as a writer with this philosophy.
Again, I'm not saying that publishers or agents have no value. Clearly, they do. The question is, what value do they [as in, publishers] give in exchange for getting a license to your rights?
These are the kinds of questions any business person should be thinking about before entering a licensing contract for their product with anyone. And a book is, ultimately, a product.
I don't think I necessarily answered your question, but I hope these thoughts are helpful.
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