Tuesday, October 11, 2005

Feet of Clay better for individuals

The toughest part of the Long Tail and economics is being able to follow your own star or scratch your own itch. Then put the thing on the Internet as a beta (under Creative Commons license) and move onto your next itch. Market the thing in your spare time and comment about it on popular forums/blogs to get the "virus" moving. But be prepared for complete and utter solitude in your work. At some point, your volume of work will reach a "tipping point" and people will discover you via search engine and start buying your product. More to this, for sure, but be advised that the basics here are pretty simple and can be done with almost no outlay except personal hours doing what interests and captivates you.

Epeus' epigone - Kevin Marks weblog:

"Long Tails, Big Heads and Feet of Clay

One thing that struck me after talking with Chris Anderson about The Long Tail was that his formulation is in some ways only a small step towards the end of the tail; his focus is mainly on how to exploit niche markets for products like books or movies.

There's an old joke that seems apposite here:
Q. How do you get to run a small newspaper business?
A. Start with a large newspaper business and wait a bit.

A true long tail business is one that copes with the ultimate niches - where there are just one, or even zero customers. You need to be sure that your submission model can cope with these limiting cases and not choke, especially as you do not know a priori which ones are going to garner customers.

So, what businesses fit this model? The obvious one is eBay. Omidyar's model of a perfect marketplace is tuned so that it is stable if you don't find a buyer (eBay takes a small listing fee), but works better if you do (eBay takes a percentage). Most auctions only have a single successful buyer, but they expanded the model to allow multiple identical goods to be sold too.

Another example is cafepress. They don't even set a listing fee, working on the assumption that the effort to build a product list is enough of a hurdle, and have prices set so that a production run of one item is cost effective for them (they aggregate sales and pay monthly). They also have a higher payback rate if you do gather more orders and let economies of scale kick in on their back end.

Longer standing examples are the venerable photo-processing by mail business (now undermined by digital cameras) and the newer videotape to DVD service offered by YesVideo. In a similar field, there is CustomFlix, which does on-demand DVD distribution, though with a setup fee that puts breakeven above a single copy (and expects you to make the DVD yourself first).

Perhaps the purest of all these businesses i"
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