A practical model for analyzing long tails
Via Chris Anderson of The Long Tail book/blog, here’s a very interesting piece of research: A practical methodology for analyzing long tails, by Kalevi Kilkki: This article provides a simple formula and a practical methodology for analyzing long tails. The same model can be applied to topics as diverse as books, search phrases, size of companies, and geographical distribution of populations.
In my opinion, the long tail concept - and perhaps Kilkki’s model - should be a tool in any technology entrepreneur’s (and investor’s) arsenal. The success of Amazon, Netflix, eBay, etc. can be better understood in this context - and can be applied while defining a new business model, especially for Internet startups.
Anderson argued that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough.
The primary value of the internet to consumers comes from releasing new sources of value by providing access to products in the long tail.
In India, I am sure that we will see a major long tail success story; here are some wild guesses as to where it might come from:
- Regional language blogs / portals / online communities / audio-video
- Micro-lending (similar to Prosper.com)
- Concierge services (as in “we will take care of your chores for Rs x. per month”)
To some extent, this is dependent on how fast PCs, Internet access and broadband connectivity can penetrate the world of the typical Indian. Nevertheless, there are plenty of inefficiencies and/or opportunities waiting for the right business model.
Related Posts: