Opening bottlenecks

Chris Anderson's lively but meandering bestseller, The Long Tail, has spawned a new catchphrase, but it's long on buzz and short on substance when it comes to the real world.

A distinct risk of writing a would-be-popular business book is that it usually requires the author to coin some catchphrase that, as the title rises on the New York Times bestsellers list, is increasingly likely to be misappropriated for unrelated ideas.

It's already happening with Chris Anderson's The Long Tail (Hyperion, 2006), published just this July. At a recent event for Canadian technology execs, one speaker framed the morning's discussion around three broad trends affecting business today: the flat world (referencing the Thomas L. Friedman bestseller), disruptive innovation (popularized by Clayton M. Christensen in The Innovator's Solution, circa 2003), and, finally, the long tail. Of the latter, the speaker said, “This is talking about customization, miniaturization, taking the transaction to the point where it can be delivered at a fraction of the cost to a massive amount of people, breaking open all bottlenecks and constraints.” He got it basically right–but many at the event who tried to pick up on the buzz were not as successful.

Anderson would happily try to make sense of it all. He did, after all, turn his October 2004 story in Wired (the U.S. techno-culture magazine he edits) into a research project, blog and this lively but mildly meandering 230-page book.

The titular tail is the shape of a dramatically sloping demand curve, on which products are charted against popularity (or sales), with the most popular product at the far left. As more products with progressively less popularity are charted out to the right, the curve takes on a shape that looks like–you guessed it–a long tail. Products on the left of the curve (the “head”) have higher demand, while those to the right along the tail have gradually lower demand. So, employing a long-tail strategy would necessitate selling a wide array of goods to meet the unique demands of nearly everyone.

Anderson's insight is that while traditional businesses have focused on making products that only have the highest demand–the blockbusters that appeal to the mass market–new business models are finding ways of tapping into those many niche segments far out along the tail where demand for products is much lower and has otherwise been unmet.

Key to it all: the infinite, virtual shelf of e-commerce. In the real world, only so many products can fit onto one shelf, one store, so it makes sense to only stock those items most likely to sell. But on the Internet, so long as even one person is willing to buy a product–and find it–it's worth stocking.

His analysis of the unique economic forces shaping successful new companies such as Amazon, eBay and Netflix is engaging and valid. One takeaway, intentional or otherwise, is that the big winners of a long-tail market don't make kazillions of products–they leverage the Internet to sell them. But what does that mean for all those Luddites making products?

Any ambiguity around what “the long tail” really is comes from just how broadly Anderson claims the phenomenon is happening, but then fails to back it up much beyond his focus on the cultural industries of movies, music and books. He only sporadically addresses the model in regards to Google, and late in the book he briefly notes changes in's business approach that applies the long tail to business software.

Still, The Long Tail is worth a read–even if it's only so you can know when other people are getting it wrong.