Until Wednesday, the only long tail I followed was attached to my Maine Coon cat. Now I know better.
“The Long Tail” is a marketing – or more accurately a distribution – system for selling stuff. Apparently statisticians started examining long tails right after World War II. In 2006, Chris Anderson wrote a book about it, The Long Tail: Why the Future of Business Is Selling Less of More. On Wednesday, the ubiquitous Geoff Livingston live-blogged Anderson’s keynote speech at the GrowSmartBiz conference.
The long-tail theory demands some noodling, but one aspect is easy to grasp -- fundamental to Anderson’s theory are the concepts of small and free. A thousand thanks to Geoff for the following exemplary insights:
• Chris says he works in a big company, and he owns small companies. Small companies are fast, cheap and nimble and can address small markets of $ millions. The scariest competitor today has two, three people with laptops moving at light speed! Big companies cannot scale down to meet the threat. At the same time, small cos have a hard time scaling up.
• Giving away one thing in order to sell customers another thing is the core model of Free. The loss leader is the 20th century precursor of Free. The 21st century version of Free is the digital free. It’s the economics of bits.
Twitter would appear to be the very model of the modern major company. Founded close to yesterday in 2006 (the same year Anderson wrote his book), Twitter now manages The TwitShip Enterprise with just 352 employees. If that sounds like more employees than Anderson recommends, remember that Twitter has, maybe, 6 million-plus users, so each of those employees services more than 1,700 customers. And then there's the "free" part. In February, the company attracted $35 million in venture investment and another $100 million in investment money came in last week.
So what does Twitter have besides nimble and free? DATA DUH… names, contact info, connections, opinions, preferences – all the stuff that makes marketers salivate. Besides Chris Anderson and my cat, who knew?
-- scrubbed by Marketing Brillo
p.s. Also noteworthy from the conference is Mayra Ruiz’ blog about how small businesses are using social media (hint: possibly not all that much). An interesting read that suggests opportunity for small folks who also get this right.