Friday, July 18, 2008

Micro-Markets And The Long Tail

Seth Godin:

A lot of people don't seem to understand a key implication of the long tail: Given the choice, it's better to make a hit.

If you have a choice of cutting a top 10 record or making a track of Jamaican polka music for iTunes, go for the hit.

If you have a choice between being on page 30 of the Google results for "Bolivian sushi" or the number one match for "buy life insurance", go for the latter. No brainer.

The problem, of course, is that you don't have a choice. You can give the hit a shot, but it's awfully crowded at that end of the curve.

The implications of the long tail have nothing to do with this false choice. What it explains in a powerful but subtle way is:

  1. Collecting many many products among the tail permits you to amalgamate a market that may be just as big or bigger than the short head. But you need a lot of them. Squidoo is my proof--a profitable site with no real short head. So are eBay and YouTube and dozens of other places. Which is going to be worth more in ten years: the leaky boat of a network TV franchise or the relentlessly growing collection of long tail video at YouTube?
  2. Within the long tail, there are micro long tails. The long tail permits entirely new micro-markets to emerge (exercise clothing, for example) and within that market there are hits and then the tail. It's sort of a fractal curve of new markets living within markets. (Simple example: Amazon enabled an entire eco-system of books on presentations and graphics to emerge).

(HT Chris Anderson)

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