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Appetite for destruction April 8, 2009

Posted by David Gillespie in business strategy.

(best blog post title ever!)

Watch: the below TED Talk by Clay Shirky from 2005 where he talks about the ideas that went on to coalesce in handy book form, disguised as his popular work Here Comes Everybody (or put it away for later and just keep reading, you’ll get the point).

The trouble starts in the wide open spaces

The trouble starts in the wide open spaces

Here’s the thing about disruption: it doesn’t happen by someone releasing a better product, it happens by someone releasing a simple product that caters to your least demanding customers (aka the people in the long tail, aka the wide open spaces). From there, it is easy to move up the tail a) as your product improves, and b) as people learn what features they can actually do without. This is why arguments like Google Docs isn’t as feature-rich as Word don’t work; the people using Google Docs aren’t playing on the field that makes Word a better choice.

Google CEO Eric Schmidt said the long tail is all well and good, but you need a strategy for the head because that is where the money is. And he is right. What Clay gets at in his talk though, and what I am proposing, is your strategy can be to work your way up the tail, co-creating with your audience to the point where you are impinging on the head.

Bet your ass you will have the attention of everyone in the room at that point.

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1. re: turn on - April 16, 2009

While I’m not an advocate (not publicly at least), I can’t help but be amazed by the online pornography industry, an example of the long tail with multiple heads.

The porn industry has had major past disruptions, such as the advent of video replacing film production depicted in the movie Boogie Nights. I assume the only ways you could get porn pre-internet was either via mail-order or throwing on a high-collared trench coat and going to an Adult store. The market exploded when porn became instantly and privately available on home computers. Such a powerful economic incentive drove innovations that paved the way for the rest of the internet, like online credit card transactions. Porn was also the first instance of amateur content producers monetizing their offerings and going professional.

Now there appear to be various revenue models or “heads” that the online porn industry use. Some operate on a tiered subscription basis, others on a pay per download and I’m sure they’re out there trying other means of making money.

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