I’m a big fan of both Chris Anderson and Peter Thiel. Recently I have been reading a number of reports and articles contradicting the thesis behind the Long Tail, a concept coined by Anderson in 2004. The Long Tail describes a niche strategy of businesses that sell a large number of unique items in relatively small quantities — primarily using the internet as the platform for sales. Examples are Amazon.com and Netflix.
However, new research from the Harvard Business Review demonstrates that the revolution in Long Tail sales described in Anderson‘s book has not happened and the article begins to ask why that is.
Peter Thiel needs no introduction on this blog: PayPal Founder, Hedge Fund Manager, Facebook board member, and early stage VC/Angel. Interestingly many of Thiel’s trading and investment strategies are rooted in the philosophy of Rene Girard. One of the Girard’s primary assertions is the idea that mimetic desire drives much of economics. Mimetic desire states that we envy first the one who possesses an object and in many cases, we feel more satisfaction in the fact that another does not possess the object, than any value we actually take from an object itself.
Well Long Tail economics essentially contradicts Girard’s notion of mimetic desire. That is, if consumers actually gravitate toward the niche, or owning original, unique objects they are not envious of what others’ own. Also from a social standpoint, both on and off line we see huge growth in communities that rally around certain brands, missions and identities. In a world where everyone owns unique objects rather than mass-consumed objects, the role of community and sociality isn’t as strong.