The Long Tail November 30, 2006
It’s about time I give my take on The Long Tail. I find myself referring to it on a regular basis as I write articles about blogging and business in general and if you have been following the recent fuss about the evolution of Internet marketing (or known as it’s “death”) or read a handful of popular blogs about business or economics, you have no doubt heard the phrase “The Long Tail” before. It’s certainly having a significant impact on the economics of doing business online and is a buzz term uttered by many of the coolest people in the online business world. In case you haven’t heard the term before here is my introduction for you in good old simple Yaro speak and my attempt to be one of the cool people too.
I can’t remember which blog I read first that introduced me to The Long Tail, but certainly the first place I read anything about it in-depth was from the person credited with creating the term, Chris Anderson, in his now seminal Wired magazine article - The Long Tail. This is certainly the first place I recommend you go to if you want the five-page medium sized story about The Long Tail and if you want the really long story he has a new book out, strangely enough called, The Long Tail, which I will provide a mini review of later in this article as I have just finished reading it.
Source: LongTail.comWhat Is The Long Tail?
The Long Tail is the transition from a hit-focused marketplace to a millions of niches marketplace. While the majority of profits previously were made by selling a handful of products (the hits) to a lot of people, now millions of products are being sold to smaller amounts of people based on niches. Yes that’s right - it’s niche marketing in it’s purest form, although it goes beyond merely setting up content sites to attract niche traffic and make a quick buck from it - we are talking about a general economic transition brought about by an opening up of distribution channels creating a near-frictionless and abundant source of product variety.
The Long Tail exists because in certain industries supply and demand have (finally) come to a point where supply is no longer limited by how much shelf space there is, how much it costs to manufacture, transport, store and deliver a product. The product is now “virtually” abundant and produced at such a low cost that business no longer has to place emphasis on the big hits, the huge mass-market blockbusters as the main source of profits. It becomes possible to make margins from products that in the past were not profitable because not enough people would buy them, the niche was just too small to cater to and the cost of production and delivery out-weighed the potential revenues.
Where Does The Long Tail Exist?
Before we get too excited it is important to explain that Long Tail markets are only emerging now as a result of the Internet. The prime examples are companies and retailers like Amazon, iTunes and NetFlix, where the cost of storing and/or making available the entire range of products in a given category is near zero, hence even if only one or two units of a particular product are sold each month there are still profit margins to be made. Multiply those one or two units by a few million niche categories and together you have more revenues than what the hits produce, or at least a significant enough profit that successful businesses have launched online specifically to take advantage of Long Tail markets.
The reason this works, for example, is because it doesn’t cost iTunes much to make available music in digital form. The cost of servers and computer equipment is so low that from an infrastructure point of view iTunes can carry any piece of music provided there is a potential niche audience for it - and that audience can be near zero, as long as there are sales, profits can be made. Compare this to a mainstream bricks-and-mortar music retailer like HMV, which has limited shelving space and as a result has to focus on carrying only the biggest hits in order to maximize profits, not to forget the cost of running a physical retail outlet (employees, rent, signage, insurance, etc). Essentially that is the key difference, while we used to calculate things in physical reality, we now can do it in a digital world using bits and bytes, which don’t have the same limitations.
The Long Tail isn’t just restricted to digital product though. Amazon sells virtually everything and started out with a very physical product - books. What made Amazon able to capitalize on Long Tail markets was the reduction in the cost of distribution using just-in-time inventory management systems, cheap factory storage and an online store inventory of virtually the entire marketplace of products. Using recommendation systems, search technology and filtering tools, Amazon can cater to virtually any taste within any category or sub-category in any niche that a person has a need or want in. Thanks to the reduction in the cost of supplying and storing goods, Amazon can make profits in the Long Tail of markets.
The Long Tail of niche markets doesn’t always equate to more than the short tail of hits, but the important point is that the Long Tail is now accessible and significant - as business people working online this is what really matters - and it’s important to realize what impact this is going to have on the future of online commerce. We now have the technology that can match a consumer with exactly what they want. This level of satisfaction and abundance has never been seen before and as big business start to leverage this technology and serve niche markets, it will become harder and harder to be successful as a generalist.
From a small business or solo-entrepreneur point of view, there has never been a clearer need to carefully define your niche and USP and become the specialist in your area or risk losing large chunks of your customers as they go in search of even better refined niche satisfaction. Today you may be the best marketer in the “search engine optimization” world, but very quickly tomorrow you may lose out to the Google SEO specialist, the Yahoo SEO specialist and the MSN SEO specialist as your once lucrative niche is further subdivided into smaller markets along The Long Tail.
Does The Long Tail Mean The Death Of The 80/20 Rule?
I was listening to a question and answer session in my coaching club with Rich Schefren and one of my fellow students, who had read Chris Anderson’s book, The Long Tail, just after it was released was asking Rich whether the 80/20 Rule still applied since it appears the Long Tail changes the way the game is played. We had recently covered a module that included the 80/20 Rule in some depth as it related to our businesses and at the time Rich had not read The Long Tail book (I think he has since then). Rich didn’t really argue either way since he had not read the book and simply restated the importance of focusing on the few things that are responsible for the majority of outcomes in your business - the core principle of the 80/20 Rule or Pareto Principle (you can read a detailed explanation of this principle in my article - What Is The 80/20 Rule And Why It Will Change Your Life).
At the time I heard the Q&A call I was halfway through The Long Tail book and was quite familiar with the concept and if I could, I would have loved to have explained my take on the relationship between the 80/20 Rule and the Long Tail to the people on the call. I do not believe the two principles directly influence each other, rather they both describe concepts important to doing business online. Here’s how I see it:
The 80/20 Rule means that the minority of triggers cause the majority of reactions in virtually every aspect of your business. The Long Tail refers to the movement away from hits to the larger marketplace of millions of niches. It could be said that yes, if you looked at the Long Tail in an overall industry sense, the 80% that used to be ignored by companies are now focused upon as a potentially high source of revenues since the cost of accessing the niches is now so low.
However I believe it makes more sense to look at the 80/20 Rule as it applies to each niche within The Long Tail, which is where the 80/20 Rule is still as relevant as it ever was.
If you are a niche company there will still be a minority of customers responsible for a majority of your sales. If you looked at each niche category, or better still, each sub-niche category within each niche, there is an 80/20 Rule in effect. The top revenue sources in the electro section of the larger category of dance will still follow a 80/20 relationship, in that the biggest selling electro hits will account for the majority of sales. However in the past it was just not possible to service the electro category in a profitable business model, it would have only made sense to carry the top 10 overall dance tracks as opposed to the top 10 tracks in electro, house, techno, trance, etc (and believe me there are hundreds of sub-categories of sub-categories in the dance music category - I never know exactly what I am listening to, I just know I like it).
The 80/20 Rule will always be valid whenever we discuss the inner workings of a company. A small number of employees will account for the majority of output. If you run your own business as a solo-entrepreneur then no doubt a few activities you do each day are directly responsible for the profits you make.
The Long Tail specifically applies to the economics of an industry and focuses on the reduction in the cost of distribution making it profitable to service millions of consumer tastes, breaking down niches into ever smaller sub-niches and comprehensively covering the entire marketplace. This results in it being possible to make profits in areas that were not profitable previously. It is still possible to locate 80/20-like relationships in ever smaller (micro-economic) events within ever smaller niches. The Long Tail explains a change in the economics of doing business, the 80/20 Rule still holds true for the overall practice of business as long as humans are involved. One principle does not make the other obsolete.
The Theory Of Abundance
One area of the Long Tail that really spiked my attention was the frequent use of the term “abundance”. Long Tail economics exist because supply becomes limitless, at least in terms of its relationship to demand. Although it’s of course not infinite in capacity, in terms of the size of the market, i.e. the humans able to consume, there is more than enough for everybody who may ever need or want a certain category of product that exists in The Long Tail.
I haven’t mentioned it before on my blog, but those who know me personally know that I am a big fan of The Secret. I’m going to do a proper review of The Secret since I’ve lost track of the number of times I have watched it - it makes me feel that good - but for now I’ll direct you to the person who first introduced me to The Secret, Steve Pavlina and his blog post about it.
One of the core principles in The Secret is the idea of abundance and it’s a concept I’m seeing mentioned more and more in books and movies from a whole range of topics - not just self development. I believe a lot of the world’s problems are caused by the general attitude most people have that there is scarcity, hence we need to horde what we have and develop an “us versus them” mentality. This happens at both the micro level when we work so hard for individual success on a day-to-day basis and spend most of our working lives in service to ourselves, at least in western culture, and also to a macro scale of country vs country, where wars are fought over resources and other countries are considered enemies who must be protected against for fear of them stealing or destroying what we have.
I certainly don’t consider myself blameless - I work most of my time for my own benefit, usually for money to help me get more. I see what others have and it makes me want more. Worse still, the fear of losing what you have because you have worked so hard to get it, causes you to act guarded and fearful and forces competition instead of sharing. It’s a difficult thing to change because it’s so entrenched in the way we think, the way we are raised and of course what we consider to be our current reality. Afterall we are born with nothing and once the marketing kicks in we are well aware of all things we would like to have that we can’t unless we earn big dollars, and we see what our peers have, thus creating even more feelings of greed, competition and jealously - not good emotions. It’s a vicious cycle all brought about because we believe everything is scarce.
If we acted as if everything is abundant, that there is enough for everyone, in fact more than enough for everyone, our lives would be a lot different. There would be no need to fight or to compete for scarce resources and we could all enjoy sharing what we have and focus on creating things for the benefit of others by indulging in our own creative expression. Yes it might be a bit warm and fuzzy and not a real portrait of today, and many people don’t believe that our reality truly is one of abundance or ever will be, but seeing films like The Secret can helps us work towards changing attitudes, which is the first big step in order to create the potential for systems to be established that generate abundance. Awareness of the potential must come first.
I believe concepts like the Long Tail are the initial indications that a world of abundance is possible. Of course The Long Tail talks in economic and commercial terms - we are discussing profiting on the abundance in this case - but at least in principle the idea that there is enough for everyone is realized, an important step towards changing attitudes. Technology brought us The Long Tail and no doubt technology will take it further. Imagine a world where all basic needs were served thanks to technology creating abundance in core areas like food and shelter and delivering abundance in areas like health-care, social services, education, communication, travel and information. It would mean rewriting or at least rethinking the rules of economics, as supply would equal demand with almost zero friction - needs would be met thanks to technology providing abundant resources, which in turn would cause the real shift that is necessary for this to work on a grand scale - a change in the way people think and behave.
The Long Tail Book Review
You can read samples from The Long Tail book and consume related materials at Chris Anderson’s Blog About Page. I just finished reading the book myself but I won’t spend too much time reviewing it since it really is quite simply the only book you will find about The Long Tail written by the man who probably knows the most about it and has conducted a ton of research into it.
The book is a good read and if you want more concrete statistics and examples to back up The Long Tail I definitely recommend it. It’s a very long winded way to essentially explain one concept and you will certainly learn about it from all different contexts by reading the book - it can be bit much at times since you are being told the same thing over and over again just in different ways. I think I grew bored by about half way through, but as I persevered different case studies grabbed my attention again. If you love Internet marketing and want to keep abreast of the latest trends there is no way you cannot read this book. The Long Tail is current and popular and it has too much buzz to be ignored.
The Long Tail is an interesting book in the way that Malcolm Gladwell’s Blink and The Tipping Point are interesting. You get some great stories - case studies that help to elaborate and verify the core principle. It makes for great dinner conversation and for those who may not be exposed to buzz principles like The Long Tail you can certainly sound very smart and up to date by explaining it and offering cool stories from the book to your less savvy friends. Ultimately though they probably won’t quite understand what you are getting at and will just group the concept along with all the other “geeky” things you talk about.
It’s certainly a relevant book for Internet business owners. If you operate an online business it will make you think about how you can leverage Long Tail shifts in your industry or prepare for them when other companies enter your niches with Long Tail technologies. This is probably more important than you think it is, so don’t be surprised in the near future when large companies with staff, experience and technology enter your niche and very quickly take away your customers by offering a greater selection of products, superior tools to filter and recommend products and smarter marketing techniques that quickly erode the advantages you once had.
As I said previously, it’s never been more important than now to start dominating a niche and maintaining your status as the best in your specialty. If you don’t stay educated - and certainly reading books like The Long Tail is part of this - you may very quickly be replaced by other people who have positioned themselves better than you and present themselves as superior options by appealing to tighter niches in The Long Tail.
Changing Landscapes
I’m personally most excited about what The Long Tail may signify in terms of our society and attitudes towards abundance. It’s certainly early days and perhaps I’m reading way too much into what ultimately is just another way that business can make money, but I prefer to see it as something potentially more far reaching and powerful in a positive sense beyond just profiteering.
From a business stand point it’s hard not to be intrigued and compelled by the potential. Satisfying customers is the key ingredient for a successful company and Long Tail markets have some of the most satisfied consumers around. They enjoy abundant selection and advanced tools to help them find what they need and experiment with to determine what they like. There is no other industry or marketplace that offers the customization and abundance of choice like what is available online today and it should only get better as technology reduces distribution costs in different product categories.
For now I am going to sample some new music from some obscure genre I never knew existed before the Internet came along and it’s all thanks to The Long Tail.
Yaro Starak Long Tail Victim
This post is © Yaro Starak 2006 and originally published at Entrepreneurs-Journey.com. You may reproduce this article by permission only. Contact Yaro for details.
Learn more about Internet business in Yaro’s Forums.
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Original Article syndicated via RSS from Entrepreneur's Journey by Yaro Starak
Robert Kingston Covers Mplanet 2006 At SmallBusinessBranding.com
Over at the Small Business Branding blog one of the resident writers, Robert Kingston, has flown from Brisbane Australia to Orlando Florida to do coverage of the Mplanet 2006 event.
Robert was given the opportunity thanks to a relationship he fostered with one of the organizers of the event which came about after blogging about a competition they were running for VISA. Thanks to his blogging Robert was invited to attend the event for free with a press pass to do coverage on Small Business Branding. This creates a win-win situation as the Mplanet organizers get some great coverage over the blogosphere (other bloggers were offered similar invitations) and the bloggers get to attend the event for free.
Robert’s coverage began with his first post - SBB Invited To Cover Mplanet 2006! and just today he has put up the first lot of photos - Mplanet 2006 Kicks Off!. More posts will be going up over the next few days as Robert attends the event and blogs on a daily basis.
I for one can’t wait to see more photos 
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Google and “Spammy Requests”
This morning I did a search on Google for:
inurl:.edu photoshop class
The first results included tons of non edu sites that did not have .edu in the URL. Strange. So I figured maybe I needed to troubleshoot a little and after changing the language preferences from portuguese to english and the number of results to 100, I got this crap:
We’re sorry…
… but your query looks similar to automated requests from a computer virus or spyware application. To protect our users, we can’t process your request right now.
We’ll restore your access as quickly as possible, so try again soon. In the meantime, if you suspect that your computer or network has been infected, you might want to run a virus checker or spyware remover to make sure that your systems are free of viruses and other spurious software.
We apologize for the inconvenience, and hope we’ll see you again on Google.
The thing is, this wasn’t an automated query! It was just me typing on my keyboard and clicking with my mouse. I know, I know - Only an evil black hat spammer could want photoshop classes ONLY from edu sites. Clearly there can be no legitimate use for this query.
Better sound the alarm and tell me that I probably have a virus or spyware!
We know in the past that Google decided to cripple their backlink checker to reduce “spammy requests.” Now they are going to cripple thier inurl command?
I have this feeling that some day I’ll be sitting with my (still-to-be-concieved) son and he’ll turn to me and say:
“Dad, Tell me about back in the day when Google didn’t suck.”
Original Article syndicated via RSS from SEO BlackHat: Black Hat SEO Blog
Don’t Expect any More Answers from Google November 29, 2006
It’s not like Google was ever the paragon of transparency or helpfully answering questions, but the Official Google answers will no longer attempt to be a well of knowledge: Google answers has been shut down.
Original Article syndicated via RSS from SEO BlackHat: Black Hat SEO Blog
The 100 Oldest .COM Domain Names
For me the web started around 1997 when I received my free dial-up Internet account from my university when I started undergraduate studies.
It appears some people were a bit quicker than I was…
The 100 oldest currently registered .com domain names
1. 15-Mar-1985 SYMBOLICS.COM 2. 24-Apr-1985 BBN.COM 3. 24-May-1985 THINK.COM 4. 11-Jul-1985 MCC.COM 5. 30-Sep-1985 DEC.COM 6. 07-Nov-1985 NORTHROP.COM 7. 09-Jan-1986 XEROX.COM 8. 17-Jan-1986 SRI.COM 9. 03-Mar-1986 HP.COM 10. 05-Mar-1986 BELLCORE.COM
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Original Article syndicated via RSS from Entrepreneur's Journey by Yaro Starak
Forums Back Online! November 28, 2006
The new vBulletin powered forums are back!
Yaro’s Internet Business & Blogging Forums
I’m still getting used to the new forum system but I think vBulletin is going to impress me. With all the plug-ins available it reminds me a lot of WordPress, which is awesome (all the great free WordPress plug-ins being a major reason why) and although vBulletin is not free, it looks well supported by a large community.
Forum Passwords
If you already have an account in my forums you may need to reset your password to login in again. You can do this by entering your email into the password retrieval tool.
Big Thanks To Nick From DotZero.com.au
My good friend Nick back in Brisbane did the conversion of the previous invision board forum into vBulletin. He’s the owner of DotZero, a Brisbane web design services business. I’ve known Nick for a while now and if you need any IT stuff done he can probably help.
New Users
If you have never checked out my forums now is the perfect time for your introduction. The forum is growing into a tight-nit and supportive community focused on Internet business and blogging - two of my favorite things!
Please come by and say hello or post your question in my forums sometime soon.
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Original Article syndicated via RSS from Entrepreneur's Journey by Yaro Starak
What’s your Opinion on the “Open Source Making Money List?” November 27, 2006
There have been quite a few great entries in the “Best SEO artilce of 2006”” List.
It’s nice to be exposed to great articles from bloggers you might not have otherwise have known about: a bunch of them are new additions to my RSS reader.
What is your opinion on the article that have been submitted? and what do you think of the idea of an Open Source “List” Article?
Please post your opinions and comments in the Digg Thread and submit your best article from 2006 in the earlier thread.
Original Article syndicated via RSS from SEO BlackHat: Black Hat SEO Blog
Format Text Tool November 26, 2006
If you are like me you send out email newsletters on a regular basis. I only use text based email newsletters and I always need to format the width by using character spacing restrictions. You can read why I do this in my article - Formatting Email Newsletters - Should You use Plain Text or HTML?
In that article I recommend spacing of 60 characters as a good rule of thumb, although today I generally use 50. Each time I prepare a new email newsletter I go to a format text tool and I figured a lot of other people probably do this too, so it would be handy to have a tool right here on Entrepreneurs-Journey.com - so I set one up!
Email Format Tool
You can find the new Format Articles and Text Tool at:
http://www.entrepreneurs-journey.com/format-text.html
The tool is very easy to use and costs nothing. It’s based on the script at Web-Source.net.
I suggest you bookmark it 
.
Enjoy!
Yaro
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Technorati Tags: article formatter, text format Internal Tags: article formatter text format
Original Article syndicated via RSS from Entrepreneur's Journey by Yaro Starak
The Best SEO Articles of 2006 November 25, 2006
Do you blog about SEO or Making Money Online?
If so, here is your chance to get more links and more readers. Submit the best article you wrote this year in the comment section in the Format of:
[Hyperlinked title] [0-200 character description].
Comments not in this format imply that you have poor reading comprehension skills and/or cannot follow instructions.
Remember, this is your BEST post for 2006 about Search Engine Optimization or Making Money Online.
People will read what you submit here and judge your worth as a blogger. If it’s a great article, you will get links and more readers.
Limit one submission per person.
Think of it as an Open Source “Best of” List that you’re all invited help create.
Original Article syndicated via RSS from SEO BlackHat: Black Hat SEO Blog
Another ‘Sport’ Crying For Recognition November 23, 2006
This is a little off topic but it’s too cool not to post it.
Back when I used to play Magic: The Gathering as a teenager the company behind the game went to all kinds of trouble to legitimize it as a real sport. I’m not sure if they were the first to do it, but they coined the phrase “mind sport” as a marketing technique I presume to convince parents that if little Johnny wants to play cards with dragons and elves instead of say baseball or football, it’s not that big a difference - Magic is a sport after all!
I just came across this great video of another “sport” struggling for recognition. This girl certainly has a gift when it comes to stacking cups…
Thanks to Life Goggles for the find.
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