Day 222 - Consider the Long Tail

May 18, 2024

The conversation explores the concept of the long tail, as discussed in the book 'The Long Tail' by Chris Anderson. The long tail refers to the idea of focusing on niche markets rather than chasing the dominant market. The conversation emphasizes the benefits of targeting smaller, less competitive markets and becoming the dominant player in those niches. It also highlights examples of companies like Amazon and Yahoo that successfully pursued the long tail strategy. The main takeaway is that focusing on niche markets can be a more cost-effective and successful approach to business. Keywords long tail, niche markets, dominant player, market strategy, cost-effective approach Takeaways The long tail strategy involves targeting niche markets instead of the dominant market. Focusing on niche markets can be a more cost-effective approach to business. Examples like Amazon and Yahoo demonstrate the success of the long tail strategy. Becoming the dominant player in niche markets can lead to overall market dominance. Titles Lessons from Amazon and Yahoo Finding Success in Niche Markets Sound Bites "Instead of chasing the market, chase all the smaller niche markets underneath it." "A more cost-effective way to approach the market rather than going after what everybody else is going after." "Success is always found in the diverse paths along the way." Chapters 00:00 Introduction to the Long Tail Concept 02:47 The Power of Targeting Niche Markets 04:36 Cost-Effective Approaches to Business 05:06 Lessons from Successful Companies

Episode Transcript

Guy Reams (00:01.294)
Today is day 222, Consider the Long Tale. So I collect what I call idea books. These are books where the author expands on a concept that provides a unique perspective on an issue or problem that many people are looking the other way or see it differently. So it's usually a unique book. The book always becomes a bestseller and then it kind of disappears into obscurity.

When I'm stuck on an idea, I'm trying to think through a problem. Sometimes I'll go through my bookshelf of these books that I've collected that I call these idea books. And I just kind of go through the titles and then remind myself of what the book was about to see if I can uncover a way to solve whatever problem I'm working on. One of these books is called The Long Tale by Chris Anderson. He's now the CEO of 3D Robotics.

I think the book was published in 2004, 2005 or six, somewhere in there. This book was interesting to me because it kind of broached the subject of a marketing concept that was very relevant to me at the time. So it caught my attention because many people in the business, colleagues of mine and other leaders were focused on how to get market traction or market domination in a particular.

category that many people in our industry were buying. So their idea was, let's become the best at whatever everybody's buying. And as noble as that sounded, I was thinking, maybe that's not so wise. Maybe it's not the best to go take on the big companies that are doing better than us, that are larger than us, and in the market and industry that everybody's chasing.

Maybe that is not the best thing to do, right? So I was thinking, if we were even 10th in this market or 20th in this market, we would be doing pretty darn good. Or maybe we should go after a couple of the other smaller ideas that nobody else is chasing. And that would be great. But then everybody would talk about, well, this is a $500 billion business and blah, blah, blah. But I started thinking, maybe we shouldn't be bent on the leader position or bent on the number one.

Guy Reams (02:21.518)
Maybe that's just too costly. So when I had that thought, that's when this book stood out to me, because it's like, I think he was talking about very much the same concept. So in his book, he was talking about what Chris Anderson was talking about was this idea that instead of chasing the market, the main market idea, the main go -to market, chase all the smaller niche markets underneath it.

and you can become the dominant player by sucking up all the niche markets. Very simple concept, but very powerful. And he used Amazon or Apple or Yahoo. He used these as examples. And if you think about it, these companies actually did, back in those times, did chase the niche markets. Yahoo was really strong in regional plays.

And if you think about it, Amazon certainly didn't chase the same market that Walmart, the dominant player at the time, was chasing. They went after books and then various other niche areas until they became the large dominant shopping platform. But that didn't happen overnight. They slowly started accumulating these niche plays. So my concern is not with Amazon or the big markets. My concern is in the market is in the area that I'm selling.

what I'm trying to get businesses going. So the B2C market is gigantic, but my industry is much, much smaller. But even then, I think this is still very relevant and applicable. Because the number one position is usually led by a company that has a lot more wealth and resources than I would ever have. And so they are more likely in a position to chase the number one trend.

And I know the number one trend might be exciting and attractive, but more likely, I'm going to have more success chasing the other trends that less people are paying attention to. And if I focus on those, then most likely I will start to get dominance because more and more people will start using my service or my product because I'm fitting the needs of much more people through the niche marketplace. So I think,

Guy Reams (04:36.558)
This is actually a much more cost of effective way to approach the market rather than going after what everybody else is going out. When I was younger, a sage business person told me that you should always watch the herd and wherever the herd's going, you should go the opposite direction. In fact, he said, do what the lions do. Lionesses never target the main body, the herd, rather they follow the herd and they pick up the stragglers.

And that's because the stragglers are just easy to get because they're wounded or sick or whatever. And are they the young ones or whatever. And so it's easier. So it takes less energy and they're less prone to failure. In addition, the best targets are sometimes going the opposite direction or leading somewhere else. And oftentimes, that other direction is the best direction for you to go. Rarely does the f**k

herd that is following the main trend, they don't usually find success. Success is always found in the diverse paths along the way. So in this case, I'll watch the herd. And in the case of Chris Anderson's book, I look at the long tail stragglers. So with that, I'll say goodbye.