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 f
ewer 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?