It's almost a philosophical riddle: Do sales drive the best-seller list, or do best-sellers get all the sales because buyers see them on the list? As much as we'd like to believe that the crowd picks the best books, a strong presence in retail locations—front-of-store positioning and tempting discounts—still counts a great deal in determining how well a title sells. Nonetheless, authors are in it for the glory, and the visibility and bragging rights of being a "best-seller" retains the glamour of years past.

In the old days, the New York Times best-seller list meant everything. But it doesn't come out until weeks after the sales take place, and it only updates on Sunday. Today's author needs a better, faster sounding board. And she's found it in Amazon's (AMZN) unblinking sales rank, the 24-hour barometer of book sales. Indeed, it's a rare author with self-control who, as soon as the book is published, doesn't obsessively check the list these days, which is updated every hour.

Yet for all that, few people understand how the Amazon list works or its relative importance in the publishing industry. Amazon's method of ranking books remains something of a black box with the fancy word algorithm used to describe it.

Let's look at an extreme version of what a writer can be today. The best writers take an active, entrepreneurial role in their book sales. Publishing is filled with success stories that began as self-publishing miracles. Many of those are novels, but let me introduce you to a friend of mine, Andy Kessler, who did it in nonfiction.

Andy's a bit of an annoying guy. He's got that gene that just won't let him take anything at face value. So when he's presented with a challenge like publishing a book, he just keeps picking it apart until he feels he can do it better.

That worked to his advantage in the 1990s when he moved to the Bay Area and opened a hedge fund that invested in early stage technology companies: real engineering-geek stuff like chipsets and drivers. Andy did well as an investor. He did so well during the tech boom from 1998 to 2000 that he found himself with plenty of free time for writing afterward. In 2002, when Wall Street was getting pilloried in the press, he realized he had worked with some of the most notorious names from the dot-com bubble, like Mary Meeker, Frank Quattrone, Henry Blodget, and Jack Grubman (remember him?).