Friday, July 28, 2006

The Long Tail 'Ain't So Long?

The "Long Tail" is an oft-quoted theory that underpins many a Web 2.0 business model - the idea that the low-demand niche products at the esoteric end of an inventory can be aggregated into a collection of sales that rival or exceed the more popular products. In other words,

"A very, very big number (the products in the Tail) multiplied by a relatively small number (the sales of each) is still equal to a very, very big number. And, again, that very, very big number is only getting bigger."

The idea rapidly took off, as David Hornik notes in Where's The Money In The Long Tail?

"Six months ago there was barely a pitch I heard that didn't include a slide entitled "Long Tail" or "The Long Tail of [fill in the vertical]," with the obligatory long tail curve. Impressively, it has taken less than a year of entrepreneurs explicitly referencing and explaining the Long Tail before it has become so well recognized and understood that it need only be implicated in passing without the same sort of fanfare as it used to receive"

Guy Kawasaki also has heard so many long-tail pitches, he's produced cyncic's checklist for Long Tail ipmlementations.

However, the figures behind the idea may not quite add up after all - or at least, the figures have been exaggerated and doubtless been subject to a kind of Chinese Whispers - after all, when everyone concerned has a vested interest in a mem taking hold, it's not difficult to see how "I Want To Believe" can turn into "I Believe".

more details from everyone's favourite IT red-top scandal sheet, The Register at The Long Tail's maths begin to crumble :

The Long Tail, then, isn't snake oil. Rather its restorative properties have been exaggerated. Who wants to let facts get in the way of a buzzword bestseller good thesis?


Anonymous said...

Just read the book and also The Register article.

The book is not too bad, as far as such things go. Anyone will find reasons to see that his examples will not fit into various markets or certain web sites. But frankly I don't think his book makes crazy or unrealistic claims. Many times he suggests it is still slow going, but rather that the tail is just starting to emerge. Most of the book is about the dynamics that even alow the tail to emerge. Nothing shocking or very new. Just a somewhat different perspective, and empowers people to think outside of the "hit" model. That doesn't mean anyone with a "long tail" type of business plan is going to be rich. It still needs to be a decent idea excecuted very well by the right people.

As for the article, it is unclear, angry and quite frankly seems written simply to be the anti-book statement and garner traffic because of it. I have read a few negative reviews and most have little to back up their issues with the facts. I am all about having the right facts presented. But at least present facts that convince me to care about your argument.

My one issue with the book is that it really should have been a few blog entries or large article. Not a whole book. There were several articles that I skimmed over completely.

Alistair Davidson said...

oh, I certainly wouldn't claim that The Long Tail doesn't exist. I'm all in favour of niche interests getting better representation - many of my own interests are pretty esoteric (as anyone who's scanned my music tastes knows!) and it's refreshing to be able to find the stuff I want online....

...however it's also true that in the strange Web 2.0 business environment we're in at the moment, the chase for VC / acquisition dollars can result in an idea taking off *too* widely and *too* quickly, because everyone wants to catch the Next Big Thing and no-one wants to miss out. Lots of people would absolutely love another dotcom bubble, either because they missed out last time or they hope that this time round, they'll be smarter and get out quicker. In that context, it's disturbing if you hear the Long Tail quoted as if it's a Silver Bullet, and can put you in mind of those halcyon days of dotcom 1.0 :

"We're going to sell..... er... dogfood..."
"Yeah, and....?"
"...over the INTERNET!"
"Well, sheesh, why didn't you say ?!?! Here, have 50 million dollars of venture capital! Have an IPO and trade at a P/E ratio of 400 or more! Have my life savings! And my grandma's pension too!"

repeat ad nauseam until the market catches on.

So I think we actually agree - you need to have a decent idea executed very well, by the right people.

And the article - of COURSE it's unclear and angry - it's The Register! :)

MHN for short said...

Hey! I just googled "long tail snake" for my sons school project and your blog popped up. Nice. :-) Hope you have agreat day!

Alistair Davidson said...

Hi MHN - you have a nice day too!