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Wednesday, January 30, 2008

The Long Tail reviewed

Sure, I recommend this book. And if you purchase it through this link, I'll be paid a tiny fee from

On the five hour flight home last night, I worked my way through a couple of chapters of a somewhat turgid book on sales management, then breezed excitedly through the beginning of Chris Anderson's book "The Long Tail: Why the Future of Business Is Selling Less of More".

The former book advocated the (to me) stereotypical principals of business management and control; including "interview techniques" to discern the suitability of applicants, and "sales testing" suggesting (expensive) conventional approaches. Yawn. I sensed a textbook approach -- perhaps appropriate to train a mediocre person how to do a mediocre job managing a mediocre sales force. But I will get through the book in the next week or so, regardless. Somewhere in the pages I'll find something useful; and in any case, to me it is reassuring to see that we are now operating things sufficiently far above the norm with well-thought and rational management systems that get to the bottom of creating an effective sales force.

Anderson's book is much more exciting because it reflects a fundamental shift in the way business is done. His point: Tiny niche markets are now more than ever viable, and a business that can tap into these markets will create lasting and meaningful value. While his point is relevant for services that can be distributed over very large areas in very small quantities (the antithesis of actual construction projects), I found insights relevant to our industry in the granularity of processes and services underlying the actual projects -- and, in this aspect, highly relevant to contractors, architects and engineers looking to find the competitive edge both in marketing and cost-control in project delivery.

Anderson's point is that businesses such as now sell thousands of titles that would be uneconomic to distribute in conventional book stores - even the largest store cannot hold all the inventory for titles that may sell one copy every three of four months. This dynamic is even greater in music, where files can be downloaded at no 'hard cost'. Sure there are still 'hits' but now choice is much wider and deeper -- and a surprisingly large component of the market is now within this 'long tail'.

I see evidence of this element with the review of search engine logs for this blog -- about half of the inquiries that lead people to the pages here only are made once, period. The clearest evidence of this process is the success of my brother Jim's 'recycling' of music within a genre that I have trouble understanding and following (I am utterly unmusical).

More than a decade ago, Jim cut a CD. It didn't sell more than a hundred copies. One found its way into a used record bin somewhere, then a couple of years ago, someone uploaded it onto the Internet. He received an order from an online music service. Now, although his Renegade Productions Inc. business is still primarily renting music studios in Vancouver, he receives dozens of orders each month from specialized Internet music distributors and consumers -- and even has a modest (but very real) international "fan club" in cities around the world, especially Munich, Germany. Some of his revenue comes from people who pay a fraction of a cent to a music streaming service to listen to one of his songs, once.

Okay, you say, this is relevant for the music business perhaps, but how does it help me win a $100,000 drywall contract, or an architectural commission for a major new project?

Although I haven't reached near the end of Anderson's book, I sense the relevance of this trend is in the details: In the process of how you select and work with your employees and colleagues, especially in discerning and enhancing details that, individually, won't count for much, but overall, will shape your projects in new and exciting ways. Say, you can build in a series of market-centred goodies that capture the ideas of your clients; or find specialized innovations or cost savings in different aspects of your projects; if you could create designs that go beyond the textbook logic; or provide services with just that little bit of sparkle in innovation and 'edge' -- do you think you might win more and better projects, at higher margins? I think so.

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