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VC advice on finding the money in the Long Tail
The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-target goods and services can be as economically attractive as mainstream fare.
David Hornik, a VC at August Capital who has been a good sounding board for TheLongTail.com's research, has a long and thoughtful post on where the money in the Long Tail is. He's been pitched countless Long Tail business plans, and his conclusion after all this is the ones that make sense are not so much content creators as aggregators and filters:
The aggregators are those web businesses that seek to collect up as much of the Long Tail content as is possible, so as to make their "stores" a one stop shop for content no matter how popular or obscure.
The filterers are those businesses that make it easier to find the content in which we are interested, despite the increasing proliferation of content creators, hosts, aggregators, etc. The purest form of filterer is the search engine.
full Long Tail report
posted by Unknown @ Saturday, December 17, 2005,
