The Long Tail Theory – Our Dilbert of the Digital Age

I have a very good friend who always asks me: “How do you make a million bucks?”

There’s a lot of vaporish theories lotsa smart alecs try in wrestling over this question.

But, here’s a smart-ass answer I like: Make a $1000 a 1000 times.

There’s another way to interpret the question though. A two-sided answer to this classical question:

  1. Sell a lot of a few items (be it goods or services)
  2. Sell a few of many items.

The Autocratic World of the Creator Age

The thing is, in a time not too long ago (before the Internet Age), there’s an amazing homogeneity in the products we buy, the clothes we wear, the books we read, the movies we watch, the songs we listen to. You go into a shopping centre and you end up buying the same birthday gift for every friend, disappointing the poor fella who wonders what he did wrong to receive three CDs of the latest hit album which he hated but was considered a safe choice.
Many successful enterprises today subscribe to Point 1. They hold a carefully-groomed, meticulously-managed product portfolio and hire legions of pesky salesmen, clairvoyant crystal-ball-gazing marketing gurus, self-righteous management consultants in an attempt to uncover the Next Big Thing before their “Auld Enemy” or competitor beats them. In order to manage the scarcity of their resources enforced upon by the classical laws of “brick and mortar” economics, they focus their efforts on a select small group of products and attempt to homogenize product selection choices of customers. They treat customers as target boards and call effective marketing “targetting” as if finding customers was an activity akin to shooting at the rifle range. During selling, some seek to convince you honestly, some to brainwash you and totally rewire your brain (check multi-level marketing), and some just plain tricking/ scamming. It was a Command and Control Economy.
Jailed by the Space-Time Continuum: The Autocracy of Shelf Space and Distribution Cost

In pre-Internet Days, consumers were dung, subjected to the whims of Creators also known as manufacturers and their partner-in-crime, the Retailers. Retailers had finite shelf space, finite stores, limited human and financial resources to make and subsequently sell products. This is the Spatial Limit.

During the Cold War, the communist regimes best exemplified this as they gave out ration coupons for goods no one had a choice to say no to. With Democracy, we had Sears, evolving to Walmart today with thousands of selections. Yes, the regimes are getting ircreasingly democratic, but the democratization process is by no means complete for us the consumers.

Add the Time Limit too. Our world is segregated by our natural universe of Light and Night. Barring nocturnal humans, our modern society adjusts to nature and structure our social and economic activities in line such conventions. Save for 7-Eleven, most stores earn diminishing returns once we go past peak hours of human activity and encounter rising labor costs.

The Democratic World of the Consumer Age

Enter Ebay, iTunes, MySpace, Amazon. No longer are consumers subjected to the tyranny of the physical world. The Digital Age brought us the Internet, a virtual marketplace of unlimited ideas, products and opportunities. It injected transparency into the consumer world, bringing us hope and optimism while conversely bringing gloom to the Creator class that now has to grapple with a “sentient” Consumer Class no longer shackled by lack of choice.

  • Why buy a whole CD when u only like one song? It took almost a decade of online piracy and still the music industry, which is supposed to be in the business of providing listening pleasure, is not listening.
  • If you thought you liked Artist A, well there’s tons of Artist-A clones, or remixes. And this is just the variance in terms of product – the “What”. The “how” of listening to music by Artist A is no longer only your local record store, you could still choose classicial CD format, or DVD of the music video versions, MP3 format, AAC for your iPod. Same goes for say a book u liked.
  • If you thought Dan Brown was good, check out the clones he spawned, the reviews on Amazon, the thousands of retailers you could possibly get it at, at a price cheaper than your local brick and mortar store. Or perhaps you can buy an “ebook”. Maybe you prefer listening as it fits your commuting lifestyle in the mornings while fighting with the peak-hour traffic in the trains or the highways. Buy an “audio-book” then.
  • No time to shop because you are at work all the time?

Disrupting the Space-Time Continuum

Well, the Internet Store’s open 24/7/365. Globally. Anytime. Anywhere. Any customized format.

I just had to plug this book. I am halfway through and I can’t stop nodding my head all the time as I read it. The Long Tail by Chris Anderson. He inspired me to write this dead in the middle of the night at 3am.  There’s a Long Tail blog too. Click here to check out Guy Kawasaki’s new-found affection for Long Tail theories too.


4 thoughts on “The Long Tail Theory – Our Dilbert of the Digital Age

  1. Yes I have been following this too as it ties in alot with my social-entrepreneurship business Firmwareproject. However being in the business, I’m still wrapping my head around this concept as I dont agree with alot of it. In particular it goes against the ethos of mass manufacturing. Thus my feeling is that this idea cannot apply generally across to all kinds of product.

    Stay in touch.

  2. (

    Yes I too have been reading this book. Alright so Chris Anderson developed The Long Tail Theory in Wired magazine back in 2004 to describe how economic business models of, Netflix, and others have created their riches. His book only recently came out.

    The problem with this book is that the focus is purposely too broad to appeal to a wider audience and increase book sales. Even the author of “The Purple Cow“, Seth Godin told me that he wanted to appeal to a broad audience to help increase book sales. Think of how multi-level marketing and being an IBO works. Everyone sees how easy it is and thinks they will be able to make money when in reality the appeal is soo broad that the market becomes over cluttered.

    The bottom line: Don’t think of every marketing book out there as a great resource. A great marketer who writes a marketing book is looking to.. of course… market their book to the largest audience to generate the most sales. Just don’t expect every book out there to solve your problems.

  3. Pingback: » The Long Tail - Our Dilbert of the Digital Age - Singapore Entrepreneurs - Entrepreneurship in Singapore

  4. As society becomes less homogenous and the possibilities for the individual to make choices get broader every day, only a few Ford T models survive. You can take the iPod ans an example of a modern Ford T model. It’s a singualr product (yes, they have a few variations in the market, but it’s basicaly one product) that has been adopted by the masses.
    Look at books, audiobooks, music on CD etc, the coices are vast and if you want to make money in these markets you either need to niche down deep or go extremely broad. The nice thing is, that with the digital copies for download, i.e. audio book dowload, stocking a very broad choice of articles is more practical and less costly.

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