Probably everyone in the web industry knows this book: The Long Tail by Chris Anderson (a.k.a. the founder and editor in chief of Wired a.k.a. the magazine of the new economy). I don’t like to summarize the content here – Wikipedia has a fine summary. And there is also a website, i.e. a blog. In short terms, the long tail are the niche markets that are growing thanks to the Internet. If you didn’t read the book yet, read it!

Special vs. General

What often surprises me: people refer to the long tail as an argument for building (very) special interest communities (i.e. social networks). Don’t get me wrong. This is fine as long as it’s not your business but your passion. In every business you have fixed costs, especially development costs. These costs are the same whether you build a social network for soccer fans from Munich or for soccer fans from the rest of Germany. However, the rest of Germany is much bigger and will bring you much more profit. Think this far further and you end up with something like Facebook – a generic social network.

Open Platform vs. Whitelabeling

In my opinion, Facebook and other meta networks are the real suppliers for the long tail of communities. Their market is not a part of the long tail. Their market is the long tail. Of course, it isn’t this simple, because with greater generality the features become more and more unspecific and thus less attractive for some users. Facebook made a wise step to open its platform for external specialized applications, but the branding is still Facebook. This gives chances for whitelabeling products and so the development costs of special interest communities decrease. However, the solution must be flexible enough to be customizable to the users need.

Niche market vs. Mainstream

What also strikes me: everybody talks about the long tail and forgets the mainstream. Comparing the market volume the niche markets and main markets are equally important and most successful web start-ups also include mainstream products. I think integrating both parts in your business is important for two reasons: market shares and user demands. Don’t donate your competitor anything and offer your customers everything. Of course, this isn’t easy because mainstream products and niche products are often very different.

Down the tail vs. Up the tail

So the final question is: do you (as a web start-up) move up the tail – from niche products to mainstream products? Or the other way round: from the mainstream to the niches? I think this depends on your specific service or product and on the market. Maybe some of my readers have deeper insights here and more experiences.

Have a good time!