: Is it okay to have a sequel start immediately after the end of the first book? The sequel to my first book is supposed to start immediately after the end of the first book. Zero time gap.

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Mad Max and The Road Warrior used a variant that initially seems like an immediate sequel - Mad Max ends with Max driving down a straight, empty road; the sequel begins with Max driving down a straight, empty road, but there are obvious changes - he's grown a beard, his car is much more beat-up looking, he's being chased by new characters, etc - that introduce the idea that time has passed without much actually changing.

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For an example of an ending/beginning like this from contemporary literature, you could look at the Neapolitan novels by Elena Ferrante, which track a pair of Italian women from childhood through to...well, ok, I only just finished the second of four, but it's meant to be a lifelong thing.

Both of the first two books end somewhat as you describe -- on a key moment or the sudden appearance of a character who wasn't necessarily expected. Since I've only read through one such transition I'll describe that one.

My Brilliant Friend starts when the narrator is a young girl, like five or six years old, and lasts about ten years. The novel ends at the wedding of a major character as a particular surprising thing happens at the reception. The next book, The Story of a New Name picks up exactly afterward, literally describing as its first point the reaction of characters to the unexpected interruption.

This example demonstrates some of the care that should be taken if you want to use a strategy like this and the circumstances under which it can work. It works because the wedding is a natural transition point or milestone in the story the narrator is telling, just as it would be in any personal biography. It doesn't end the story obviously, but it marks a clear enough sense of completion that one is left satisfied with where the novel has led to. The final lines provide an intriguing twist but they're not world-altering enough ("No, I am your father!") that the preceding story is clearly incomplete. By combining a major event that would naturally end a section of someone's life story with a stinger that sets up further complication, the story manages to feel both complete and immediately ready for continuation.

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I think it's doable. I feel like it's usually better if this happens in a clearly-marked and enumerated series though, because then it'd be more clear to the reader which book they're supposed to pick up next.

Though even if it's part of a clearly marked serial, I think it's worth trying to make the stories at least somewhat self-contained. When I was younger, I read a lot of series with overarching plots across multiple books (e.g. Andrew Lost, Magic Tree House, Tintin), and because of the sporadic availability of the books in the library, I read them all very out of order.

TV Tropes has an entire page on this: Immediate Sequel

There are examples of this being used in various media:

Back to the Future → Back to the Future II
Charlie and the Chocolate Factory → Charlie and the Great Glass Elevator
From the Earth to the Moon → Around the Moon
Destination Moon → Explorers on the Moon

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It is possible, but it depends on the story
As other answers have noted, a book needs to end properly. The exceptions are arbitrarily-divided books like Lord of the Rings, or books from a series where you choose to use cliffhangers to link the volumes.
How to end a book: what you need to do is to have an ending that works as such, but with a new story that, in-universe, starts literally right after the ending scene closed. For example:

Faeria was now safe, and the Chosen One could finally rest. Once an awkward teenager who didn't know how to fit in his life was now a mature young man. Trials and hardships, friendship, love and loss, so much had happened to him... Alas, as much as he loved the lands of Faeria and its denizens, he knew he could not stay - as he belonged to Earth. After tearful farewells, he walked through the portal.
As weeks became months, and months became a year, she had lost hope for her missing son to ever be found again. A small part of her, a mother instinct, had refused to give up, and even now she would not wear the black of mourning. When she heard steps, and saw a broad-shouldered silhouette, she thought her elder son had come back to retrieve one of the documents he so often forgot. Then tears blurred her vision - she had recognized him. Her little boy had grown so much!
"Hello mom. I- I'm home."

And then the second book starts with:

A sound echoed across the city, like had never been heard on Earth, heralding sorrow and loss - the call of a White Wyrm. As it burst in this unsuspecting world, he had felt another tear in reality - something else had come from Faeria! It was now flying with all its strength, for it knew what were the stakes. If the knowledge of Faeria was passed on those humans, if they learned the weakness of the Wyrm, the invasion itself would be endangered.

What happens here is that the first story ends - the hero, now changed and mature, returns home. The second story is completely different, as it is about Earth defending against an invasion. But the invasion itself happens to start right at the hero comes home, because (say) dimensional portals to Earth only open at a very specific time, once every who knows how many years.
In a way, it's a coincidence that the two events happen to be causally linked to the same thing, and thus happen at the same time. The difficulty is to craft a believable coincidence, otherwise it may feel contrived.

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The first book needs to end.

The problem isn't the sequel starting mid-sentence, it's that the first book needs to feel like you've landed the plane. The big issues opened in Book 1, all need satisfying resolves. There can be hanging threads but the major conflict, and the major character arcs must feel complete.

Mary Robinette Kowal teaches a story structure technique called M.A.C.E. (a variation on M.I.C.E. Quotient) in which the story's "big questions" are asked in a particular order, then "answered" in reverse order to close the story. A mileau element is nested within an event, nested within a character arc. This gives the reader cues that the story is resolving itself. It feels like the ending.

You can shift around the elements of your narrative, the immediate conflicts and character arcs to give it a feeling of closure. Since it ends with the long lost relative walking in the door, a M.A.C.E. structure would probably set up that brother's absence as the very first conflict of Book 1, with a very long arc about learning to deal without him, or possibly a character arc about resenting him. Essentially the resolve of that arc is to realize that he isn't needed afterall, all those times they cursed him were about learning to accept he's gone.

The last moment needs to feel like a twist, or a foil to that long arc. The failure of the 1st business feels like the lesson learned. The character has resolved his personal issue, and stepped out of the fantasy milieu back into the mundane world. It's all over – then whoopsie, nope he hasn't learned his lesson because the next business will fix all those mistakes, yadda yadda jump back on the merry-go-round. It's an elliptical ending that tells us it's all going to happen again (whether or not we read the second book).

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Normally a book is a complete story in and of itself. When it ends, there's a conclusion, a drawing-together, and a natural pause. If you want to re-visit these characters or this place again, it feels natural to give them all a chance to recover and whatnot, or wait for another calamity to befall the land, before you send them off again. You may need some new characters to replace those who died / changed sides / moved away over the course of the first book, and since in real life it takes time to get a new job, move to a new house, meet a new friend at the gym and so on, picking up a few months or years later lets you present a full suite of handy characters without detailing the process it took for them to become important in your main character's life.

But if a book is part of a series (here I wouldn't use the word sequel) then absolutely you can pick right up again where you stopped. You don't have to - it's quite common for the final battle to have left everyone needing some time to recover, or the joyous wedding to be followed by a quiet honeymoon that is not detailed in the story - but you can. Also, if you're doing some sort of quest or journey (metaphorical or literal) story, then of course a brand new character can just show up and join the team without much explanation, since that's a trope of that plot. New hire at work, new owner at the favourite café, whatever.

Probably my favourite example of picking up in the very same spot with the same people is in Hyperion and The Fall of Hyperion. Simmons breaks so many rules in these books and manages to create something marvelous by so doing. Not everyone can do that -- heck, even Simmons can't do it every time -- so don't go too far from what people expect. But picking up on the same sentence that the previous book ended can be done.

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What you are describing is a cliffhanger. It is an ending that is clearly not an ending. The name comes from the idea of an ending where the protagonist is hanging from a cliff, with no clear sign of rescue - it sets up a direct sequel with no time gap.

Cliffhangers are usually used in serials. The story is not meant to be over when you reach the cliffhanger, you'll have to wait for the next issue to find out what happens. It is not unusual to have a cliffhanger together with a "to be continued..." sign at the end of a comic book, for example.

This is not how books usually work.

A book is supposed to be a finished story arc. A sequel to a book is supposed to be the next part of the overarching story, while the first book still works as a self-contained story. Take the Lord of the Rings trilogy - they are clearly part of the same story, but you can read each of the books separately without a problem.* This would not be possible with the way you want to do it.

My question is also: why you would want to do it this way? What do you hope to gain from it? Cutting off the story right in the middle of a dialogue just seems very frustrating for the reader, and I cannot imagine a benefit of this.

My opinion is that you should wrap up the story, but then tease the next story that is about to come. It's fine if an important character of the sequel arrives in the last chapter of the first book, but don't have them and the other characters start a conversation that is only finished in the next book. Even if you want to have no time gap at all between the two stories, you should try to wrap things up nicely - and then in the sequel, you should bring the reader up to speed to what's happened before, before picking up where you left off in the last book.

*) Since Galastel mentioned this: Apparently LotR was not meant to be three separate books. I'm not sure whether this changes the point I'm trying to make, but you can also think of other trilogies and how they are set up - His Dark Materials or Harry Potter come to mind, for example. While they may contain cliffhangers that set up the next books, they are always self-contained stories within a larger narrative.

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