The Long Tail – Our Dilbert of the Digital Age

“How do you make a million bucks?” That was the question posed to our resident contributor, Bjorn Lee by a good friend of his. In this witty article, he introduces the concept of the long tail and explains how this concept is important for business in our digital age.

Contributed by Bjorn Lee

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