The long tail of software. Millions of Markets of Dozens.

Hello blogging, my old friend…

You know you’ve been constipated in getting a post out the door when you start it with three caveats:

  1. This post is WAY long. For that I’m sorry. Some things just take a while to say.
  2. This post is not so much about entrepreneurship as it is about where I see opportunities for entrepreneurs to create new businesses and describing the general direction of my new company, JotSpot.
  3. This post is based on a presentation I’ve been giving for the last five months. If you want a copy of it, you can download it here. Download jotspot_long_tail_sw.ppt
     


Excite and the Long Tail.

In Excite’s heyday, we were handling millions of searches a day. If you graphed the frequency of those searches (the Y axis being the number of times a query was asked per day and the X axis being the actual query listed in order of frequency) you got a power law curve that looked something like this (excuse my lame-ass powerpoint graphing…).

Without_percentages_3

The most popular searches (things like Sex, MP3, and the bare midriff female singer du jour) were vastly more popular than the 1000th most popular search. For example, “sex” was on the order of 100,000 times more popular than the 1000th most popular search (whatever that was). Said another way, there were a handful of extraordinarily common queries and millions of far less popular queries.

In fact, the frequency of the average query was 1.2. That means if you wrote each of the millions of queries on a slip of paper, put them all in a fish bowl and grabbed one at random, there was a high likelihood that this query was asked only once during the day. Of ten-plus million queries a day, the average search was nearly unique.

The most interesting statistic however, was that while the top 10 searches were thousands of times more popular than the average search, these top-10 searches represented only 3% of our total volume. 97% of our traffic came from the “long tail” – queries asked a little over once a day.

With_percentages_1

Down the tubes

You know the real reason Excite went out of business? We couldn’t figure out how to make money from 97% of our traffic. We couldn’t figure out how to make money from the long tail – from those queries asked only once a day.

Overture figured it out, Google perfected it and we all know what happened from there. Those guys figured out something revolutionary — the long tail of search was a advertising marketplace. But it wasn’t a traditional advertising marketplace like television, where a handful of large advertisers reached out to a handful of very large markets. It was a special kind of marketplace where small advertisers could reach small markets efficiently. It was and is a revolution to the traditional economics of advertising (where the cost of producing and distributing advertising requires large markets to justify the expenditure).

Search is a long tail business and that is the source of its power and profit.

Other Long Tail Businesses

Can I get a shout-out for Chris Anderson? For those of you who don’t know him, he’s the editor-in-chief of Wired Magazine and he wrote a great article called the Long Tail about six months ago.

Chris pointed to three other long-tail businesses (Rhapsody, Netflix and Amazon) as examples of the power of the tail.

Here was the first set of charts Chris showed.

Anderson_1_1

Let’s look at the Amazon example. This graph shows that Amazon sells roughly 2.3M books and that the average Barnes and Noble retail store stocks 139,000 books. So, Amazon stocks roughly 2.2M more books that Barnes and Noble.

No surprise here. That’s the benefit of an online storefront. Massive inventories housed in ultra-low-rent areas that are fronted electronically.

The astonishing figure is the percent of sales that comes from the “long tail” of books (books that Amazon carries but that Barnes and Noble doesn’t).

57%.

57% of Amazon’s sales come from books you can’t even buy at a Barnes and Noble (to be fair, there is some skepticism around this number voiced here). This runs totally counter to the traditional 80/20 rule in retailing – that 80% of your sales come from 20% of your inventory. In Amazon’s case, 57% of their book revenue comes from 0% of Barnes and Nobles inventory.

Anderson_2_1

To quote Gary Coleman, I can hear retailers across the globe saying,  “What you talking about Willis!?”

ITunes and the Long Tail

iTunes has over one million songs in it’s catalog. You know how many have been bought at least once?

Every one.

Completely counter to the traditional 80/20 rule, every iTunes song has been purchased at least once.

What this says to me is that the tradition 80/20 “rule” is more a function of consumers having their expectations set by the limits of physical inventory in retail stores than it is about real human nature. Amazon and iTunes are great examples.

So what?

What all these data points mean to me (and to most folks who are interested in long-tail stuff) is that the most interesting, transformative businesses that have been built over the last decade and that will be built over the next one are going to operate in and make money from the long tail.

Google, eBay, Amazon, Rhapsody, Netflix, iTunes. What do they all have in common? They all work the long tail and they’re all radically changing the dynamics of their more traditional businesses.

The Long Tail of Software

The long tail doesn’t just apply to music and movies. There’s a long tail for software as well. Here’s why.

The purpose of software in business is to support the way a business does business – from the way a business runs it’s hiring and firing to the way it orders materials to the way it tracks sales. In the market-speak that surrounds the technology business, the purpose of software in business is to support these “business processes”.

Let’s do some simple math. First, every business has multiple processes. Things like hiring, firing, selling, ordering, etc. Second, while some of these are pretty common in name from business to business (recruiting, for example), in practice, they are usually highly customized. Finally, there are simply a large number of processes that are either unique or that are common to millions of very small markets and therefore not traditionally worth the effort to buy software for (for example, the process by which an architecture firm communicates between it’s clients and the city planning office).

These three facts

  • every business has multiple processes
  • processes that are similar in name between businesses are actually often highly customized
  • there exist a large number of processes unique to millions of small clusters of industries.

means that there is a combinatorial explosion of process problems to solve and, it turns out, little software to actually support them.

Said another way, there is a long tail of very custom process problems that software is supposed to help businesses solve.

Inaccessible Tail

In the past, software’s long tail has been generally inaccessible because software has been

  • Too difficult to write
  • Too expensive to write and distribute
  • Too brittle or expensive to customize once deployed.

It just hasn’t been economical for someone to create a custom software company to help architecture firms.

That’s why, in the software business, the traditional focus has been on dozens of markets of millions instead of millions of markets of dozens. The traditional software model is to make software have enough features and address enough of a homogeneous market that you can sell millions of copies of the same software. In the past, that’s been the only way to make money.

How the software tail gets address today

The market doesn’t like a vacuum and people do solve their software needs in the long tail. They do it using two basic tools: Microsoft Excel and email. I’ve seen so many business that run on Excel+email. People build structured lists in Excel and then send them out over email for comments and updates – a list of people to hire, a list of deals they want to do with action items included, a list of features for the next product. Something like this

Excel_sheet_5

While normal users don’t think of it this way, what they’re really building is an long-tail application – a custom application, built by the end user and networked over email.

Doing better (warning, personal plug for JotSpot coming…)

Excel and email are the wrong tools for software in the tail and we all know it. It’s really easy to start with, which is fantastic, but it suffers from.

  1. Versionitis. We all know what happens with spreadsheets like these. You create it, you mail it to 10 people. One of them changes and mails it back out. Rinse, lather, repeat until everyone’s inbox is full of this thing and no one knows who has the latest version.
  2. Updates. You only know the sheet has changed is when someone emails it to you.
  3. No integration. What about the stuff that doesn’t fit in the grid? – the email and documents that go along with these spreadsheets?

That’s where JotSpot comes in. JotSpot is a company that is building a platform to make it easy and affordable to build long-tail software applications. To take those Excel spreadsheets and turn them into real web-based applications where you don’t have versionitis, where updates find you instead of you looking for them and where you can integrate data in your hard drive with data from the web, email and other applications.

Please, really Joe, wrap it up…

So, my tip for entrepreneurs? It’s all about the long tail. Whatever business your starting, think about how to serve millions of markets of dozens instead of dozens of markets of millions. Serving the head isn’t a bad strategy. You can build a great business. But, figure out how to serve the tail of your market efficiently and you’ve got a blockbuster.

190 Comments

  1. JD says:

    Excellent, excellent write up!
    Those Excel+Email tools sounds very familiar to me having worked for different Fortune 500 companies. Definitely, there is a market for product which end user himself can customize. Though I think that this kind of product, which end user can themselves use, would be very very difficult to create. (I agree with Joel Spolsky on this). I think I am going to register for JotSpot beta and try it out.
    JD

  2. JD says:

    Btw, is your goal with JotSpot is to create a tool which end user can use OR to accelerate development of apps by any average Joe (pun intended) developer?
    JD

  3. fling93 says:

    It strikes me that the Excel + e-mail approach is better replaced by a Wiki.

  4. Mr. Analogy says:

    Email and Excel are what these folks know. They do NOT have TIME to learn anything else.
    So… if you’re going to provide a program to help them with this, it better be immediately intuitive to nearly anyone in the first 5 minutes.

  5. Gabby Dizon says:

    I’ve been Jotspot for a short while. It has its quirks, but so far I like it.
    There are 2 pressing things for me (and I’m probably a classic case of the long-tail market) to consider though, before I can switch to this: pricing, and applications hosting.
    1.) Pricing – The Jotspot website says it hasn’t figured out pricing yet. But if it’s an application for the long tail, it has to be priced very competitively.
    2.) Hosting – I don’t want to host sensitive company information on a remote server. In fact, I’m probably switching to something else I can install ion my server, just for peace of mind. It just creeps me out. Can I install Jotspot on my own server, and download the custom applications from a central repository? That would be the deciding factor for me.

  6. Chao's Blog says:

    http://blogs.osafoundation.org/chao/000876.html

    How can I serve millions of markets of dozens instead of dozens of markets of millions? Great post by Joe Kraus co-founder of Excite. Reminds me of Ted Leung’s recent post about serving the long tail through plugins: How can a million plugins serve doz…

  7. mrakeslog says:

    There may be hope for me yet.

    “Millions of Markets of Dozens” This is, in words, how I’ve felt about software for a long time. Don’t try to be everything to everybody. Do something (well) for a specific group of people, but write smart, flexible code that…

  8. James says:

    Joe,
    I signed up for JotSpot beta several months ago. I got an email about a delay with the beta and then nothing. Should I just sign up again?
    Thanks.

  9. Frank says:

    Jim,
    The lesson in this single page is more powerful than anything I have ever read. I will look at the wired article as well. With some history in the retail business and all things being equal, it is understood that billing a million customers for 10 bucks has always had more value than billing 10 customers for a million bucks, and while you can take that apart the essence is true. When you enter the word “bubble gum” in googlesuggest (http://www.google.com/webhp?complete=1&hl=en)you get over 800,000 sites. That’s a nightmare for the guy looking or selling. I believe that the next wave of the web will be (are you ready?) word of mouth. Jim, best of luck with jot. I am looking forward to my delivery of jotbook.jot.com. I look forward to buildig it a foot wide, and a mile deep, with a nice long tail.

  10. /dev/blog says:

    the long tail

    here’s a good read with insights about entrepreneurship. At the end it turns slightly into a marketing speach but worth reading anyway……

  11. dan says:

    Sorry for nitpicking, but in the last paragraph is says, “Whatever business your starting,” but it should be you’re instead.
    Just so you know. ;)

  12. dan says:

    And wouldn’t you know it, I made a typo myself. I meant “it says” not “is says.”

  13. Software’s Long Tail

    A though-provoking post by Excite co-founder Joe Krauss about the applicability of Chris Anderson’s long tail concept to the software world. In a way, this turns the logic of my “Open Source Lessons for Digital Media” essay on its head. Whereas I postu…

  14. Dave's Rants says:

    links for 2005-03-11

    SXSW 2005 Showcasing Artist Over 750 full MP3s from the Music Festival (categories: mp3 sxsw music festival) Google Desktop…

  15. Neuvo says:

    The long tail

    Joe Krauss has returned with a very interesting article titled “The long tail of software. Millions of Markets of Dozens” which takes a very interesting, if involved, look at the substantial segment of the Web using market that has been largely ignored…

  16. Infloop says:

    The long tail of software

    The long tail of software is quite a good read. It reinforces my belief that in house development that is customized is well worth it in the end. If JobSpot really can figure out how to do that without…

  17. That’s our market, and it’s a tough one. You need more than a web interface — you need to be able to deal with business rules using a product that a non-programmer can use, and you need to handle integration.
    I agree there’s a huge untapped market here – all the major app vendors are trying to go there.
    See you at the finish line!

  18. jhn says:

    Things like versionitis are better solved by having shared, networked directories with files that anyone can modify (with changes logged); and by wikis. There is no need for some new elaborate architecture.

  19. Kraus Posts

    Yippee, Joe Kraus has posted on the long tail Web 2.0 meme! And wouldn’t you know it, the framing is all about search. Referring to Excite’s search stats, he notes: In fact, the frequency of the average query was 1.2. That means if you wrote each of t…

  20. Fine James says:

    Ummm…its Lather, Rinse, Repeat. You really should read your shampoo labels more clearly, dude

  21. animesh says:

    i could not get the ppt slides….it is corrupted..can u mail it to me at sir_Animesh@hotmail.com
    thanks a lot

  22. adam says:

    Wondering about how broken the 80-20 rule really is (not to say that it won’t be moreso soon).
    For example, just because Amazon has 57% of its sales (which as Jeff Bezos clarified, is more around 25-30%) outside of B&N’s inventory, that doesn’t mean that 80% of amazon’s sales don’t come from 20% of its inventory.
    If you compare the two (2.3M vs. 120K) it shows that 100% of B&N’s inventory only accounts for 6% of Amazon’s, meaning that Amazon still has plenty of room in its top 20% of inventory.
    It’s not about how much of Amazon’s sales come from B&N’s inventory, instead we need to compare apples to apples.
    I don’t think the long tail will have its full affect until its easier to find ‘non-mainstream’ material. Hope to write more soon.

  23. Steve says:

    The point about Amazon is not whether 20% of their inventory represents 80% of sales. The real point, from the consumer’s perspective, is that only Amazon can satisfy your needs when you’re not looking for The DaVinci Code. As a result, you’re much likelier to be loyal to Amazon and to return to their store for all of your book needs.

  24. Wonderful article, I just thought that it was amusing you ended it with “But, figure out how to serve the tail of your market efficiently and you’ve got a blockbuster.” rather than saying “… and you’ve got a netflix.”

  25. JotSpot is a Web 2.0 Web apps company?!? – I thought it was a wiki :-) !

    Perhaps I need to take a closer look at it; it appears JotSpot is more than a wiki ++ and is “programming for the people” which is something I am very interested in.From Bnoopy: The long tail of software. Millions…

  26. Blogging is the Killer App of Community

    My first title for this post was

  27. Flow Of Time says:

    Long tail

    Here’s a bit more about the long tail by Bnoopy….

  28. colbert says:

    interesting and thought provoking…Makes you wonder who will beat GOOGLE in the end

  29. Clippings says:

    Bnoopy: The long tail of software. Millions of Markets of Dozens.

    Bnoopy: The long tail of software. Millions of Markets of Dozens. (Bnoopy via John Battelle’s Searchblog)…

  30. The long tail of software

    The virtual world makes the long tail of wacko fascinations accessible.

  31. Bobnar Blog says:

    The Long Tail of SEO

    Joe Kraus has an excellent post on the possible range of applications of the long tail. Obviously, there’s books: 57% of Amazon’s sales come from books you can’t even buy at a Barnes and Noble[...]This runs totally counter to…

  32. peterme.com says:

    There’s Plenty of Room at the Bottom*

    Over two years ago, I attended the Supernova conference, and wrote about a panel I saw on collaborative business. The gist of the panel was that monolithic tools to support collaboration don’t work, and that what does work are smaller,…

  33. The Small Head, the Medium Body, and the Long Tail .. so, where’s Microsoft?

  34. The Small Head, the Medium Body, and the Long Tail .. so, where’s Microsoft?

  35. Lawrence Liu says:

    Joe, excellent post. However, I believe that the Long Tail of JotSpot is severely limited due to 1) Jot-based apps being online only, and 2) lack of APIs/tools to extend the base platform (i.e. it’s closed, not open). Although more and more people are getting online, it doesn’t mean that people want to run online apps only. There are two reasons why smart/fat clients will continue to flourish: 1) Privacy of use as well as of the user’s data, and 2) richness of the user experience being much better than online apps. Google’s Long Tail works because online advertising is a fairly “passive” application in that the user simply points and clicks. There’s very little data i/o and no need for rich user interaction. Nevertheless, the arrival of Google Maps represents a new breed of online apps that may rival smart/fat apps at least from the richness standpoint, but still, the privacy issue remains unresolved.
    So, which software company do I think is creating a viable Long Tail? Answer: SalesForce.com with its Sforce Platform and On-Demand Architecture. Actually, they created this Long Tail over two years ago, and it’s clear (with 150 ISV apps and almost 14,000 customer apps) that it continues to grow rapidly.

  36. Internetting The Market

    Apropos Stephen Carson comes another discussion about entrepreneurs and business models: The long tail of software. Millions of Markets of Dozens.You know the real reason Excite went out of business? We couldn’t figure out how to make money from 97%…

  37. A Head without the Body to support the Long Tail .. is evil

  38. Million of markets of dozens

    The long tail of software : That’s why, in the software business, the traditional focus has been on dozens of markets of millions instead of millions of markets of dozens.

  39. The long tail is everywhere, also in software production

    Very interesting article: “The long tail of software. Millions of Markets of Dozens”….

  40. Enterprise software & the long tail

    Joe Kraus has a post that applies the now famous long tail argument to software. He admits that the argument…

  41. The long tail of software

    I’ve just finished reading Bnoopy: The long tail of software. Millions of Markets of Dozens. and I highly recommend it. The idea of a long tail is not new, but was popularized by Chris Anderson of Wired. The concept contrasts…

  42. Drakeview says:

    Krause on entrepreneurship

    Joe Krause, co-founder of Excite, posts occasionally to his blog – Bnoopy.

  43. Matt says:

    There are some problems with extending the “long tail” anaolgy to software. When I listen to Sleter Kenny, it doesn’t matter whether they have 100 or 100 million fans: my enjoyment is just the same (indeed, for some folks, the more obscure the better). But the utility I get out of Microsoft Word depends very much on it being a universally used standard.
    There are HUGE network effects to software. If that wasn’t the case, the OS market wouldn’t consist of one big gorilla and a few little apes. Sure, there may a lot of small sellers that make decent money, but in the long run in software you need to either get big or someone else in your category will.

  44. Terence says:

    Music, Movies, Books, fine, the long tail is working out just dandy for them. But as least as big as any of these industries is videogames, and their long tail is seriously dis-proportioned. It consists almost entirely of what would in the other media industries be called backcatalog, games that either aren’t made anymore, have been re-released as “Platinum Hits”, etc., or are rented via services like Gamefly. There is no room for the “indie” games in videogame retail. The Long Tail is opening up, but videogames are in danger of being left behind if the publishers don’t wake up. Just look at the racks at Walmart; sequels, movie tie-ins, franchise titles. The new availability of the Long Tail means nothing if their aren’t similarly broadened avenues of content creation as well. Let’s not leave the plight of this industry out of the Long Tail Discussion, or it might just be left out of the revolution.

  45. Joe Kraus says:

    To Lawrence:
    Hey Lawrence-
    I appreciate your perspective on JotSpot. I honestly don’t know if we’ll be successful in our approach, but I do know that it certainly seems like an opportunity worth striving for. Let me see if I can address your points.
    Richness of experience:
    I agree that fat clients have it way better than the web, but I think there is a serious, long-term shift toward rich internet interfaces. Certainly Oddpost, Google and others are/were leading the way and we’re investing pretty heavily in this area. But, I concede the point, the richness of web based interfaces will remain inferior to think clients for some time to come.
    The advantage of course of not having a download is that you receive a much easier trial ability.
    Lack of APIs:
    This one isn’t true. In fact, JotSpot’s philosophy while not open source, is certainly open data. We haven’t published the documentation around our APIs, so they might as well not yet exist, but we intend to have a large variety of interfaces in and out.
    Privacy:
    I agree with you that the *perception* that hosted services are less secure is an issue. Like rich interfaces, I think time is on the side of hosted services but the question is ‘how soon’. We believe that JotSpot can be successful as a hosted service, but you should see some news from us soon on this front as well.
    Thanks again for the comment.
    –Joe
    Joe Kraus
    CEO/Co-founder, JotSpot

  46. Ray says:

    Great piece.
    But I am new to this site, so: who is this writing? I downloaded the presentation and there is no name there either.
    Just a suggestion: in the pie charts about the portion of sales from long tails, please mark which sector is the long tail. It’s obvious from this writeup, but not so in the presentation.

  47. Nach says:

    Doesnt Linux solve the problem of long tail?

  48. The Long Tail and patents

    Great blog post by Joe Kraus on how The Long Tail applies to software. Ideas (music, search, books, films, software)…

  49. Emma Blowgun says:

    Marketing/awareness of software solutions for the long tail markets should prove to be extremely challenging. Commodity goods such as music and books are perfectly understood in the mind of the consumer. But specialized software apps to help streamline miscellaneous business processes, that’s something that no consumer has much interest in. Users generally don’t want to learn any new software to accomplish their goals– they themselves can barely describe what custom result they need to accomplish their general-purpose tools.
    Good luck, though.

  50. Blog Indeed says:

    The Long Tail & the Death of Categories

    As the ‘long tail’ of the web grows, rigid categories are becoming less and less useful for finding things. Websites that are locked into a walled-garden approach – such as eBay, Craigslist, and most job boards – still tend to embrace category search…

  51. Search’s Long Tail

    If you’ve somehow missed discussion of "The Long Tail," it’s a reference to a landmark article of the same name by Wired editor Chris Anderson that ran last October. It covered how the media and entertainment industries will succeed not…

  52. Mike Sanders says:

    Joe
    Didn’t Quickbase (www.quickbase.com) from Quicken try to address this market? It doesn’t look like they were successful, in that they are now targeting the corporate departmental market. What is Jotspot doing that Quickbase didn’t?

  53. The Long Tail in Software

    Joe Kraus has an interesting article on the long tail and how it might apply to software. So lets assume he’s right and there’s a long tail in easily written custom software that matches the needs of a few dozen customers, and further lets assume that …

  54. Long tail.

    The more I read, the more I realize how much I don’t know…. Proposed career change would take me away from all of this stuff.

  55. Drakeview says:

    Kraus on entrepreneurship

    Joe Kraus, co-founder of Excite, posts occasionally to his blog – Bnoopy.

  56. fundiblog says:

    The Long Tail

    Wired Editor-in-Chief Chris Anderson is convinced about the inappropriability of the old 80/20 rule (20 of the goods are responsible for 80 of revenue for example). He has analysed data from internet music and book shops and thinks that his…

  57. Common Craft says:

    Millions of Markets of Dozens

    I’m assuming that the BNoopy blog is by Joe Kraus, founder of JotSpot and previously Excite. The blog has no attribution whatsoever, but does use “Joe” once in the 3rd person. Anyway, I just read a post a BNoopy called The long tail of software. Millio…

  58. The Long Tail of Recombinant Components – Bridging the Semantic Gap

    In Manageability – The Long Tail of Recombinant Components, Carlos E. Perez expands on the previously discussed article The Long tail of Software. Millions of Markets of Dozens by addressing how this relates to recombinant computing – or the ability…

  59. The Long Tail of Recombinant Components – Bridging the Semantic Gap

    In Manageability – The Long Tail of Recombinant Components, Carlos E. Perez expands on the previously discussed article The Long tail of Software. Millions of Markets of Dozens by addressing how this relates to recombinant computing – or the ability…

  60. Doransky says:

    Hosszú farok

    JotSpot az egyik jól használható wiki host feje írt egy remek cikket a “hosszú farok” problémájáról a szoftverfejlesztésben.

    http://bnoopy.typepad.com/bnoopy/2005/03/the_long_tail_o.html
    http://www.wired.com/wired/archive/12.10/

  61. Millions of Markets of Dozens

    Joe Kraus: So, my tip for entrepreneurs? It’s all about the long tail. Whatever business your starting, think about how to serve millions of markets of dozens instead of dozens of markets of millions. Serving the head isn’t a bad…

  62. Millions of Markets of Dozens

    Joe Kraus: So, my tip for entrepreneurs? It’s all about the long tail. Whatever business your starting, think about how to serve millions of markets of dozens instead of dozens of markets of millions. Serving the head isn’t a bad…

  63. Rincewind says:

    I think Jotspot misses the point. It seems to be the adjustable spanner (monkey wrench) of the software world. I don’t want an adjustable spanner that can do everything. I want the right sized spanner for exactly what I need.
    When I ask my helper for a 24mm spanner, that’s what he passes me. This is the role that Google, Amazon, iTunes and the like provide. They hand you exactly what you want when you want it.
    Google don’t make one website that contains all information. Amazon don’t make one book that tells every story. iTunes don’t have one track that plays every note, cord and lyric. So why is Jotspot trying to be every software application in one.
    The more you adapt something to suit every purpose, the less it suits any purpose.

  64. Paul Golding says:

    I think that a previous comment was spot-on, namely that any new solution in the market had better be immediately usable. Usability is a key to the adoption of so many services and products. Excel/email is actually a *good* long-tail solution because it’s ubiquitous and “usable” (i.e. your target market has already gone up that learning curve).
    Anyway – a fascinating read and I really hope that Jotspot works out.

  65. reemer.com says:

    ETech: Talk with Chris Anderson and Joe Kraus about the Long Tail

    My notes from a too-brief Long Tail talk between Chris Anderson and Joe Kraus, the founder of Exite and his curent company, Jotspot. Anderson asks, what did you learn about Excite’s failture to become Google?” Kraus replies that if you…

  66. reemer.com says:

    ETech: Talk with Chris Anderson and Joe Kraus about the Long Tail

    My notes from a too-brief Long Tail talk between Chris Anderson and Joe Kraus, the founder of Exite and Jotspot. Anderson asks, what did you learn about Excite’s failture to become Google?” Kraus replies that if you mapped query searches…

  67. Chris says:

    For those of you who think Excel/E-Mail is a great solution, you should live with one or more business process thats “automated” this way. One, there’s no version control – for data or the presentation of the form (or whatever you’d like to call it), two there’s no practical way to automate beyond “I’ll send this stuff to (whoever I think it should go to), hope they get it and do something with it”, and three there’s no way to flex, enhance and then roll out updated business rules.
    With that said, I wonder whether a web-only application/presentation can win the day in the process management space, if that’s where JotSpot is going (doesn’t at all mean you can’t build an interesting company and make some moolah, though). I’ve been there – and on the desktop side, and neither is the solution the enteprise craves.
    What could be a solution is a combination of centralized AND distributed business rules, web AND thick (or whatever you’d like to call them), web services, versioning and some method of moving the work around the enterprise.

  68. Chris says:

    You know you’re Post Constipated when you have to start your comment with AND ANOTHER THING… (grin).
    You’ll likely find your prospects interested in one (or more) of three delivery models.
    1) “I want to have you host everything – please do that for me. I’m OK with the security concerns (meaning you’ve convinced me security is looked after). I like the fact that you’ll care for, feed and water the servers and software for me”. I call this an ASP, or business process outsourcer – something like that.
    2) “Are you on Crack? I’d never have an outside entity host my mission critical data. Please let me buy/lease your stuff so I can have my minions lord over it and care for, feed and water it for ourselves”. I’ll call this traditional enterprise software ownership, for lack of a better term.
    3) I think is an up-and-coming blend of one and two. I’ll call it a “managed service”, meaning “I’m not really comfortable having my stuff hosted on your iron, so lets move it behind my firewall. You can care for and feed and water it, and I’ll happily pay you more for that than I would if you just hosted it OR if I owned it. I don’t even mind paying you for all of this as a subsctiption – I’m just not cool with you having ALL the control”.
    Food for thought.
    Or 3, which I call a

  69. mike says:

    This is bullshit! The “long tail” doesn’t represent a market for software, it represents a non-market. It’s all those apps that a software development firm cannot cost-justify to market and that can only be developed for internal use by one firm. JotSpot has put a general purpose tool with limited capability out there and is hoping to sell it to someone. But few if any products developed in JotSpot will be re-saleable – there is only a market of 1 for it.

  70. 80/20 rule versus “The Long Tail”

    Bnoopy: The long tail of software. Millions of Markets of Dozens. iTunes has over one million songs in it’s catalog. You know how many have been bought at least once? Every one. Completely counter to the traditional 80/20 rule, every…

  71. Dave Koo says:

    In response to Mike’s post just above, I would say that the ease with which you can modify a JotSpot application is what makes it potentially very powerful. Let’s say that 1,000 businesses need a particular app for one process in their company, but they each need a slightly different variation of it (say a 20% difference). This isn’t a big enough market for a software vendor to enter. But they can take the JotSpot app that one company writes and customize the 20% to get what they need. This is better than writing the 100% yourself if there is no software vendor that services this market.
    If the apps are easy enough to write, chances are someone will start with a simple one, someone else will add onto it, and eventually maybe a small market will form a community around the app. Granted that support may become a bit of a nightmare with 1,000 different apps out there, but we’re not talking about rocket science here. These are basically spreadsheets on steroids :-) And if a small community does form around the mini-app, then they should be able to support each other.
    So I think we could eventually see a huge collection of little JotSpot apps kicking around with an equally large number of little communities supporting them. Very interesting stuff to say the least!

  72. guerby says:

    At work we now use wiki in replacement than email + attachment, like many people said this is a no brainer.
    The long tail of software is service and custom development.
    In the “proprietary” model for software it is harmed by interoperability problem, vendor “lock-in” and infinite licensing cost .
    But everything works fine in the “open source” model where you can quickly glue for a customer very complex software components behind a web server without hundred of years of licensing negociations, or dealing with obscure/proprietary protocols and data formats. No lock-in and competition for support as a bonus for clients!
    Of course, you need to get rid of software and business method patents, it starts by helping us poor european get rid of a Microsoft written proposed european law by writting more horror stories about them. If we manage to save Europe from this plague, USA and Japan are very likely to get rid of that too.
    http://www.nosoftwarepatents.com/
    And then long live the long tail of software :).

  73. DAtum says:

    Long-Tail Software – the power of components

    Several companies have come up with several tools – purportedly to tailor to all these users. Joe Kraus himself plugs Jotspot. But in my opinion, the only type of companies who have actually been able to tap into this market are .. IBM, SAP, Inductis…

  74. DAtum says:

    Long-Tail Software – the power of components

    Several companies have come up with several tools – purportedly to tailor to all these users. Joe Kraus himself plugs Jotspot. But in my opinion, the only type of companies who have actually been able to tap into this market are .. IBM, SAP, Inductis…

  75. JimLanzone says:

    Search Update:
    I think you’d find it interesting that a high % of the revenue in search advertising still comes from the top % of advertisers and the top % of queries. While it’s greater than 3%, it’s far less than 57% – in both cases – that drive the vast majority of revenue.
    If you think about marketplace dynamics and user behavior, it makes sense. “Premium” keywords generate the most auction competition, driving up price to levels that are exponentially higher than those for tail queries. You can only get one click per page, and most users do not venture past the first page of results, so advertisers compete hard to be on that first page. Thus, a click on a popular (competitive) keyword drives far more revenue than a tail keyword. So far, the total volume of marketing activity on tail keywords fails to match those on popular ones.
    I do believe that over time this will change, with the tail representing much of the upside for search companies as more and more businesses advertise online (especially local ones). There are a lot of free leads being generated there in our editorial results, as search engine optimization companies know.
    Jim

  76. Peaktalk says:

    THE LONG TAIL

    At one of my early stage companies we are currently working on a Google Ad campaign and in the process came across this interesting post – a must-read for bloggers and entrepreneurs – which explains how the web is going…

  77. Toru Takahashi says:

    Dear Sir,
    Do you have email newsletter?
    Please put my name in your mailing list.
    We tried several times to put our name
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  78. Most abused phrase of the year

    Rick Segal predicts the death of the phrase that dominated PC Forum: “The long tail,” which is a trademarked term of art owned by Wired Editor-in-Chief Chris Anderson. I don’t think it will die, but it is certainly the…

  79. The Long Tail of Software – Part I

    The long tail of software. Millions of Markets of Dozens.

  80. The Long Tail of Software: Millions of Markets of Dozens: Part II

    I would like to start Part II of The Long Tail of Software: Millions of Markets of Dozens with a recap of some salient points in Joe Krause’s blog and then take off from there.
    These three facts
    every business has multiple processes
    processe…

  81. Longtail business models

    I did read Chris Anderson’s seminal article on Longtail in the Wired
    magazine a few months back. But when i …

  82. Prayatna says:

    The long tail in software on the supply side as well as the demand side

    Joe Kraus, the founder of JotSpot, recently described the potential of the long tail in (business) software on the supply side. These three facts every business has multiple processes processes that are similar in name between businesses are actually o…

  83. Abundance of the Long Tail

    The most interesting, transformative businesses that have been built over the last decade and that will be built over the next one are going to operate in and make money from the long tail….  If you don’t know what the Long Tail is read the …

  84. Jetlag

    Jetlag is a bitch. I didn’t feel it heading to Canada but coming back to Australia I’m feeling it. So far I haven’t managed to sleep past 5:30 AM yet. In honour of my tired state I offer up a…

  85. Anonymous says:

    Long Tail Business

    An excellent post by Joe

  86. The Long Tail.

    I recently realized that not everyone is clued in to one of the hottest (new) blogosphere buzzwords: the Long Tail .

  87. ThePef says:

    Given the recent announcements concerning the discontent of record labels with iTunes pricing, what do you think is thier vision of the long tail? They are looking to grab a higher per song cost from newer releases and reduce the amount charged for the lesser known or archived works.

  88. If you are interested in the markets, econoimcs, politics, modern culture, or any random blather from an undergraduate student: check out my new and first blog.
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  89. what is in a name ? says:

    the formular sounds awfully familar not only with what it references but sounds a great justification for downising a company
    I can see if I ever have to downsize a company (not like since I don’t own one) that that formular would come in handy
    just hand them that formular and google statelite map direction to the nearest social security office and they are set

  90. Hashim says:

    I think JotSpot may be an answer to an unasked question. What’s wrong with running your business on EMAIL and EXCEL?
    Let me adress the problems you brought up:
    1. Versionitis. Within my job we make clear in our emails what type of changes are made. More often the burden of change rests on one person who collects responses and controls versonitis.
    2. Updates. “You only know the sheet has changed is when someone emails it to you.”
    Doesn’t sound bad to me. With a wiki you only know change has happened when the feed gets updated. And if your newsreader checks every hour, then you’re not getting the updates in “real time.” Not to mention checking for updates requries knowledge of this whole xml technology.
    3. No integration. Any type of document can be attached to an email, even other emails.
    I personally like Jotspot because I’m a geek and this is like a new toy. However, I can’t see businesses being weened off their email and spreadsheets.

  91. xeo says:

    Bad Statistics and Silly Conclusions
    Almost any set of nominal data can be ordered in such a manner as to display an apparent power law distribution. The data could as easily have been arranged in an apparent normal distribution, for example. [ Try it: select the highest value and make it the mean; select the two lower values and place them symetrically around the first value; continue 'til done.]
    A true power law distribution requires that the domain be defined on an interval scale. Inotherwords the absence of a scale on the X-axis tells us that it makes no sense to speak of power law distributions (indeed of any particular distribution).

  92. Friday, May 13, 2005 10:43 PM

    Joe Kraus: The Long Tail of Software. I find his posts fascinating, especially wisdom drawn from “the old days” when Joe was a co-founder of Excite (I was an interested observer in the front row when I was with Intuit). His focus in this article is…

  93. Josh's Log says:

    Charles on Google and Weblogs

    Charles has a great post. Read it. The web does not exist to serve Google. The web should not stay…

  94. cacheop says:

    Long tail of software

    Hindsight is 20/20. Joe Kraus, co-founder of Excite wrote a long and insightful post where…

  95. cacheop says:

    Long tail of software

    Hindsight is 20/20. Joe Kraus, co-founder of Excite wrote a long and insightful post where…

  96. Clarify % of sales from long tail figures? says:

    Could you please clarify the pie graphs for the “% of sales from long tail”. It would seem to me that Rhapsody’s 22% and Netflix’s 20% of sales from the long tail argue that those businesses still count on the major markets to make their business profitable. Am I misinterpreting the diagrams?

  97. Thank You Sir for adding to my education.
    I think the “long Tail” of my industry would perhaps be Indie labels. Thousands of dozens of cottage within cottage. Combined with the 20% majors which we are VERY LUCKY to work with.
    Seems “Relatively Sound” to me….
    Thank You Again, You Are Inspiring!
    M. Thomas Southerland Founder/CEO
    QuantumMedia Publishing Inc. (Ca. Corp Based in Beautiful Sonoma County)

  98. Google’s ingredients

    I have some interesting notes that I want to write down. For some reasons I’ve had a number of discussions with a couple of my friends about Google and how they become what they are. 1) Google pretty much solved…

  99. Zoli says:

    I’d like to add another criteria for where the “long tail” of the software application market is from a corporate user’s point of view:
    – NOT in their core competency / critical business process, but rather an ad-hoc need
    – applications served up in an easily accesible way, not requiring a lot of research, learning, implementation
    – priced like inexpensive PC tools, yet solve enterprise problems
    Whether the right price is $9, $19, $29 ..etc … it almost doesn’t matter, as long as it’s in the range that it’s a no-brainer to download for an ad-hoc need, and is reimbursable for mid-lower level managers, without any pre-approval process.

  100. A Blueprint for the “Social” Enterprise Application Architecture – The Next Big Thing in Enterprise Software?

    There is little doubt that we are experiencing the formation of the next wave of software innovation.

  101. A Blueprint for the “Social” Enterprise Application Architecture – The Next Big Thing in Enterprise Software?

    There is little doubt that we are experiencing the formation of the next wave of software innovation.

  102. Google’s ingredients

    I have some interesting notes that I want to write down. For some reasons I’ve had a number of discussions with a couple of my friends about Google and how they become what they are. 1) Google pretty much solved…

  103. Blog says:

    Long Tail of Software

    This article talks about building software for the millions of small markets that exist. I am not sure its what we want to do, but it’s interesting to read!

  104. The Music Industry Evolution – How Localisation, Social Networks, Niche Markets and the Long Tail Will Change Music Forever

    How much niching can you handle? The long tail has been mentioned on my blog many times – the concept of millions of markets selling hundreds rather than hundreds of markets selling millions. It’s also clear that although the Internet is a globa…

  105. Very good writing Sir, I have the same belief about that ‘long tail’ market and you have just reinforced that idea. I think most start- ups should concentrate on tapping that market.

  106. Small Plus Disruptive = Powerful

    I lived a stone’s throw from Apple headquarters in Cupertino, in the heart of Silicon Valley. Apple is hiring. But it’s not the Apples, Oracles, Intels or Ciscos that make the economy hum here. “Historically, it is start-ups, not established…

  107. Insure Blog says:

    StorageTek

    What does this ruling mean? If it stands up on appeal, it means StorageTek has a monopoly on service for all of its machines. No independent vendor will be able to compete with them for service contracts because no independent vendor…

  108. Blogger says:

    Blog

    Here’s a bit more about the long tail by Bnoopy

  109. Long says:

    Flow Of Time

    Here’s a bit more about the long tail by Bnoopy….

  110. Pareto doesn’t do search

    Joe Kraus from JotSpot (and previously Excite) wrote an excellent article called “The long tail of software. Millions of Markets of Dozens.”.

  111. Fascinating post. As an educator, I’m wondering how to apply your advice. As an educational technologist, I’m wondering about what the long tail is in getting folks to use technology.
    Love to get your feedback.
    “Whatever business your starting, think about how to serve millions of markets of dozens instead of dozens of markets of millions”
    Wishing you well,
    Miguel Guhlin
    http://www.mguhlin.net/blog

  112. dental says:

    My notes from a too-brief Long Tail talk between Chris Anderson and Joe Kraus, the founder of Exite and his curent company, Jotspot. Anderson asks, what did you learn about Excite’s failture to become Google?”

  113. Podcasting says:

    Millions of Listeners…What Do You Do?

    What do you do to make money when you have millions of potential podcast listeners out there? Perhaps a better question: “How do you make 20 million listeners part of a conversation?” The latter question is much more interesting, isn’t…

  114. Longtail in Perspective

    I enjoyed this piece as it put the long tail in an understandable more-layman-like perspective. The examples were easy for me to visualize and I liked that it had a purpose – to challenge entrepreneurs to start thinking about how to succeed by serving …

  115. Under the radar?

    Under the Radar? I haven’t been blogging for ages. But now I prepare small steps in order to fully make my comeback to the ever-so increasing blog-o-sphere, with something like an article-not-ready. And yes, before anything else grabs your

  116. Download: Jason Matusow’s excellent OSBC keynote

    Jason Matusow continues to prove that a monolithic view of Microsoft is as inaccurate as it is useless. He delivered one of the best keynotes/sessions of OSBC Boston, and the best presentation I’ve yet heard him give (and I always…

  117. My Micro-ISV says:

    The Long Tail and micro-ISVs

    By Bob WalshOne of my favorite sayings is, there’s nothing more practical than a good theory. So what’s the theory, the economic model, the historical imperative behind the rise of micro-ISVs as a successful way of doing business? The Long…

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