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Screen grab from smalldemons.com

California-based Internet entrepreneur Valla Vakili had a vision.

"I wanted to do something that caters to pathological obsession," he announced at a recent high-tech conference. He said he wanted to monetize "perversion" by "mainstreaming" it. And as a result of his efforts in that cause, he has emerged as the latest white knight riding to the rescue of a beleaguered book industry.

The Oxford-educated Vakili modestly prefers to be known as the industry's "partner in promoting the discoverability of books." And his presence at the London Book Fair this week was accordingly businesslike, with international publishers lining up to accept his invitation to partner with Small Demons, an Internet start-up that both sides to the deal hope will soon cause a widespread outbreak of pathological obsession – with books.

Hope for the project is evident in the raft of publishers that have agreed to share content with the start-up, propelled by the enthusiasm of early adopters, reviewers and Internet socialites.

More elusive is an easy explanation of what it is. "It took years before I was able to communicate it in a way that made sense to anybody," Vakili admits.

Like so many other Internet sensations, would-be and real, Small Demons provides answers to questions that nobody ever thought of asking. A growing electronic index that aims to tag and cross-reference the occurrence of almost every person, place and thing mentioned in almost every "narrative" book ever written, it won't just tell you what type of car James Bond drove in which novel, it will tell you the name of every other fictional and many real characters who drove the same types of cars, visited the same cities or seduced similar spies.

As disjointed factoids culled automatically from thousands of sources pile up, stripped of their original contexts, they form a "Storyverse," according to Small Demons: "A place where details touch, overlap and lead you further."

Navigating the Storyverse becomes a game – an obsessive one, if all goes according to plan – that no writer ever anticipated. The honourable exception, according to Vakili, would be Jorge Luis Borges, whose story Tlön Uqbar Orbus Tertius describes a minutely constructed fictional universe infiltrating and taking over the "real" one. "The history of the universe is the handwriting produced by a minor god in order to communicate with a demon," Borges wrote.

Thus the name of a new website and a business plan, to boot. "The fictional world is more real than we think, and the real world is more fictional," Vakili said. "And the difference between the two of them is less than we think." That, he added, "is the organizing principle of our company."

The eagerness of publishers to enter Small Demon's trippy Storyverse reflects the immediate crisis facing their trade: the death of bookstores and the concomitant end of browsing. So far, neither social media nor e-store algorithms ("customers like you also bought …") have proved able to recreate the serendipity that once helped sell so many physical books. Publishers love Small Demons because it opens new avenues of "discoverability," according to Vakili.

"When you move from storefronts to digital discovery, it's much harder to find things unless they're tagged well or else they're connected to people's interest," he added. "And those are two things we do a lot of."

"Small Demons is particularly interesting as it works on a micro level of discoverability," said Alison Cairns, online manager at Vancouver-based D&M Publishers, an early partner. D&M is hoping Fraser Nixon's novel The Man Who Killed will find some action there because of its Prohibition-era setting and the appearance of such well-known figures as Babe Ruth and Houdini in its pages.

"Anyone interested by these things might stumble across the book while engaging with Small Demons and be hooked enough to make a purchase," Cairns said. "It's early days, but the project is promising and we're excited to be part of it."

Another possibility is that the books themselves will become mere scaffolding for construction of the Storyverse – a potentially very rough beast with a suspiciously anti-intellectual outlook and demonstrated habit of chewing delicately wrought art to bits.

And courting obsessives can be dangerous, as Small Demons discovered when it agreed to strip out and cross-reference all the people, places and things mentioned in David Foster Wallace's massive Infinite Jest – "one of the most highly requested books and one of highest searched-for terms on the site," according to Vakili. The automated process that works well with lesser tomes broke down, he said, requiring "a lot of fine tuning," i.e. manual input from staff recruited on Craigslist in Los Angeles.

But he certainly found fans: The lively posthumous career of the writer known to obsessive acolytes as DFW proves there are no high literary barriers to the spread of fan culture. His unwieldy, relentlessly thing-choked and name-checking oeuvre has become a gilded playpen for the most sophisticated crackpots.

Who knew that the nerds who first attended Star Trek conventions to speak Vulcan were such cultural pioneers? And what better place than Small Demons to debate the question of whether the allegedly fictional Leonard Banks in Jeffrey Eugenides's The Marriage Plot is, in reality, DFW himself?

"Every city and every place has a history that is both real and imagined," Vakili said. People too. "We want to bring them closer to each other."

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