So how do you explain Preveen Madan and Christin Evans?

Two very intelligent people - they each have MBAs and successful consulting careers - they left the corporate world 19 months ago to take a flier on a business model everyone else seems to be fleeing.

That's right. Despite booming Internet book sales and creeping chain store dominance, the married couple bought Booksmith, a small bookstore on Haight Street. Geez, why didn't they just take their nest egg and corner the market on cassette tapes?

Why? Here's the real story. Defying conventional wisdom, and despite what you hear every time a landmark bookstore closes - Stacey's on Market Street is the latest example - independent bookstores are thriving in San Francisco.

"A lot of people tell you this is the worst possible time to buy a bookstore," Evans said. "But what we hope to do is push the boundaries of a bookstore for the 21st century."

Yes, Evans admits that sounds a little like Bud Lightyear. But is it possible they know something the rest of us have missed?

"Not only could this work, it is working," said Hut Landon, the executive director of the Northern California Independent Booksellers Association. "Nationally, independent bookstores sell about 10 percent of the new books in a market. In the San Francisco Bay Area, it is 55 percent."

The key is that these aren't the old mom-and-pop bookstores, small, musty places with random stacks of best-sellers. Nor are they sprawling outlets with thousands of feet of bookshelves.

"The conventional wisdom 10 to 15 years ago was that to compete you had to be a big, huge bookstore that stocked everything," Landon said. "Well as Stacey's and Cody's (the famous Berkeley store that went out of business) found out, that's not how you compete."

So what's the secret? As Madan and Evans can tell you, there are several answers. First, your store must become an integral part of the neighborhood. Booksmith holds fundraisers for local schools, brings in local authors for readings, and hosts discussions on local issues. Madan said the store held more than 100 events last year.

"We're not the Commonwealth Club," Evans said. "But we are having entertaining conversations about things like rock biographies, pop culture, and new fiction that is pushing the edge."

It helps that the customers are so tech-savvy. Those who attend events sometimes record parts of the discussion and post it on blogs. Or, Evans said, they Twitter that "I am at Booksmith and just found the greatest book."

Another key for independents is to be extremely careful about the books they stock, making a point to target the demographics of the neighborhood. Pete Mulvihill, one of the three partners that runs Green Apple Books on Clement Street in the Richmond District, said that an eye for what their customers like is what keeps them afloat.

"We weed out all the crap that San Franciscans don't want," he said. "We pick carefully. A good example is a recent book by a Chez Panisse chef. We knew it would be sold out so we ordered a ton of them. Sure enough, we had them on our shelves when every place else ran out - including Amazon. I checked."

Evans said they think of their staff as "book concierges," gently nudging browsing shoppers toward books they might not have considered. They group books in unusual categories on shelves. A recent favorite is "Long Dead Writers - Read Them Before You Meet Them."

"It's the personality that makes the Booksmith the Booksmith," Evans said.

The real key is that successful local bookstores become a regular stop on a stroll through the neighborhood.

"It is that physical experience," Mulvihill said. "After sitting on your butt all day in front of a computer, you want to walk around a little. And it's cheaper than going to a movie."

And while you are walking around the store, there is that other factor that you'll never get on Amazon. The neighborhood bookstore is a great place for singles to meet.

"Once a week there's a 'missed connection' on Craigslist," said Green Apple's Mulvihill. "You know, 'I'm looking for that cute guy with the red goatee.' "

And speaking of connections, there's no telling who you might run into at the evening events at Booksmith. The store has hosted Allen Ginsberg, Stanford law professor and Internet guru Lawrence Lessig, and Rodes Fishburne.

Never heard of Rodes Fishburne? You are not alone. The local author has just come out with his first novel, "Going to See the Elephant," and Madan said hosting an event for him may not make anyone a lot of money, but it will still be worthwhile.

"If we don't do it, who is going to?" he asked. "He isn't going to get on 'Oprah' by himself."

C.W. Nevius' column runs Tuesday, Thursday and Saturday. E-mail him at cwnevius@sfchronicle.com.

This article appeared on page B - 1 of the San Francisco Chronicle