As told to John Brant

At some point in their lives, every liberal-arts major dreams about opening a neighborhood bookstore. The store sells a ton of books and, just as important, serves as a focus and catalyst for a community of passionate readers. Michael Powell has lived that dream. Powell's Books has become internationally famous both for its quantity--the flagship store in Portland, Oreg., occupies an entire city block and offers more than a million titles--and quality. Local booklovers, and visitors from around the world, flock to Powell's (and to find current bestsellers, rare first editions, technical manuals, out-of-print cult classics, and everything else in print. For all his love of the written word, however, Michael Powell remains an entrepreneur at heart. His heart, he insists, is undivided.

When I opened my first used-book store in l970 I was a grad student in political science at the University of Chicago. I had no business background; my only work experience had been as a commercial fisherman. My dad used to say that a fisherman made money only if his net was in the water. After I was in business for a while, he paid me a compliment. "I can see why you're good at this. Your net is always in the water."

If you say, "I want to have a great neighborhood bookstore," I think you're starting off on the wrong foot. I think you ought to say, "I want to exercise my passion for books by having a very successful neighborhood business."

I went into business by borrowing $3,000--some of the money came from Saul Bellow, who was teaching at Chicago. I spent $1,000 on a vacation and put $2,000 into an inventory of used books. We had 1,000 square feet. We built the shelves ourselves. I was able to quickly repay the $3,000. We kept increasing the inventory, expanding the space, taking on employees. At a lot of points I could have stopped and said this is my comfort level. But I liked to buy books too much. Then once I had the inventory, I had to figure out a way to market it.

My father came and worked for me that summer. He loved it and decided to open a used-book store back home in Portland, which he did in 1971. Gill's was the big new-book store in town those days. My father would watch people come into his store carrying these Gill's bags. And my father would wonder, "Why couldn't they buy that new book from me?" So he started stocking new books right alongside the used ones, which, at the time, I thought was a terrible idea. But he turned out to be absolutely, brilliantly correct.

In 1979, I decided to move to Portland and join my father's business. The lease on the store was up and the day after I flew out here I found a new space. Real estate was still affordable in downtown Portland then. We had a big store, dealing in used and new books, staffed by passionate book people, where a customer could find a title that was rare or out-of-print. When people came to sell us their used books they would be treated professionally and paid a fair price. It became a self-fulfilling cycle. People sold us books, we got bigger, they sold us more books, and so on.

It's tempting to be arrogant in the book business, to tell a customer, "I know better than you what you ought to be reading. There are only 2,500 books that amount to anything, and therefore that's the number I'll stock." That's the slippery road to hell. The way out is to keep asking yourself, am I doing as much as I can to find my audience, to do the right thing by books? I'd sell a book to the devil in hope of his reading it. That way of thinking supports your passion, builds your business, and gets the author's voice out. My goal is to give an author a second and third and fourth chance. I want to marry that author up to some reader somewhere.

We do a lot of business with Amazon. Amazon has been a good partner for us. I had a sit-down meeting with Jeff Bezos when he started his company and talked to him about how we could work together. They took some of our growth away in new books, but we just refocused on used books and kept charging ahead.

It's fun to think of ways to do things with books and not accept the notion that nobody wants them. One day a few years ago I'm in the warehouse and I watch a book go out, a 20-year-old textbook. I mean an ugly European history textbook, Salvation Army material of the worst sort. And yet here's somebody paying 20 bucks for the book. Instead of just dismissing it as good luck, I asked, what does this tell me? It tells me that there's a deeper market for textbooks than I thought, even for older editions. At the time we weren't selling textbooks, just wholesaling them out to textbook dealers. I put a stop to that. We put textbooks on our online catalog, and they just caught fire.

It's exciting to be a facilitator in the movement of intellectual property, to help deliver an author's voice from one community to another. I always said that this would be a successful company when we could sell a Danish book to a reader in South Africa without the book ever coming to the U.S. Why would you ship a book from Denmark to South Africa via Portland? Why not deliver the text directly from Denmark to South Africa on broadband technology?

Anything Peter Drucker wrote I would read, but I won't read any other business book. I think most business books respond to people's sense of urgency to do it today. The truth is there's no shortcut. You've got to be able to manage employees, understand the finances, and you certainly have to understand your product. There's no way to fake that.

We've probably been half saved and half cursed by the fact that none of us here are business school graduates. That isn't a virtue in and of itself, but if you can bring a kind of liberal-arts, social science view of the world to business, there's a lot of value in that. Because the only people I see who ever make it are the ones who find the cracks. Somebody who tries to go head-to-head with Borders or Barnes & Noble better have very deep pockets. But if you can find the thing they're not doing, or not doing well, then you have an opportunity.