Chris Anderson, a writer for Wired Magazine, wrote a stunning treatise a few years ago called The Long Tail (Powells or Amazon). If you are unfamiliar, it highlights that more money can be made by selling less of more. Think iTunes, which has made a killing carrying millions of albums and selling a few of each as opposed to Walmart who carries a few thousand albums and sell lots of those. The long tail refers to the sales curve, where hits are few but sell tons (the head) and then tails off where individual units sell fewer and fewer.
As for examples, I could go on all day. Amazon sells tons of stuff you can’t find anywhere else. Start-up Etsy is trying to do this for crafts. eBay for all of us who want to sell our junk.
The problem is that there is tons of money for the aggregator but not that much for the suppliers. I have seen this first-hand for years. It was never the developers that made tons of money. Most of us scrambled to make a few hundred thousand dollars a year, and that was by putting tons of effort and energy into it. We were all suppliers to the long tail.
Apple, with the AppStore, is trying to recreate the magic of iTunes for mobile software. They may very well succeed and make tons of money from it, but I can guarantee the very dynamics of the market will mean very few of the software developers make it big.
If we want to build big companies, I argue that we as software developers need to think beyond the mobile device. What does it mean to be web connected? What does it mean to work everywhere? And what’s the bigger story that includes mobile but is not only mobile?
Thanks Elia I enjoyed your perspective and it is an interesting quandary but aren’t you missing something? The challenge isn’t necessarily trying to “broaden the tail” by expanding beyond mobile – its putting the marketing research, product development, and promotion into being one of the hits. I wouldn’t focus on the tail unless I was a one man shop, if I was a development company with the assets and experience I think I would try to tackle the “head” of the beast. I saw that Super Monkey Ball sold over 300,000 units in its first month on the store. $9.99* .7 (minus Apple’s cut) * 300,000 = $2,097,900 in Gross Revenue in the FIRST month. That was not luck. They recognized that this was going to be a great platform, got in early, and capitalized on their successful brand. They also marketed the hell out of their product demoing it everywhere before the store launched. While it could be argued well that SEGA a HUGE conglomerate but there are other examples were folks have the right app, well designed, that meets a need for the masses and they KILLED striking closer to the “head” than the “tail”.
Sorry I digress. Love the blog! Bottom Line I don’t think it’s necessarily “looking beyond the mobile market” its easy to always look for new “fertile fields” I think success is usually found by putting the hard work into farming what you have when you have dominated that, maximized it’s potential then start exploring.
Your biggest fan!
So, what are you saying?
Boo hoo hoo, I can only make a few hundred thousand dollars, and I have to work for my money instead of writing a blog entry, so I am not going to release PowerOne as an iPhone app?
There are lots of calculator apps in the app store, but none that can do what yours does.
The moment one appears that can do it all, that’s the one that those of us are waiting for PowerOne will buy, and you will have lost your opportunity.
It also has to be competitively priced, since you are competing with $5 calculator apps. Most of us are not going to pay $25+ for an app when their are other solutions that cost far less. Sure, it may take 2 or 3 calculator apps to do the same as 1 of yours, but if it saves us $$$, that is what we’ll have to do.
So, get to programming. Don’t give us some lame-o web app, and make us a PowerOne iPhone app you can be proud of.
Tom, that’s exactly what I mean: understanding my customer’s businesses in enough depth to see what they need to have done and supplying the tools to help them do it. For our customers there is an overriding need to perform calculation quickly and easily from the mobile device. But there also is a need — for a sub-section of our customers — to do something with that data. And that’s where the web comes in. The goal, Tom, is to provide a complete solution. And I believe strongly that in many cases the complete solution will involve getting stuff off the device and to somewhere else.
I have two great examples today:
1. MobileMe is a killer solution for Apple. (They’ll work out the bugs.) It gets your data off your iPhone and into a shared environment on the web simply and easily. No worrying about sync, no worrying about backing up. I can jointly connect with family, too. I don’t have to do anything to make it work. It just works.
2. SplashData just launched SplashID, which (if I read their propaganda correctly) includes wireless sync to Windows and Mac. Beautiful! No cables, no remembering to sync. Just make a change and go because I need my passwords everywhere, not just on my iPhone.
Gus, Please see this link (available from our site’s home page):