Fifteen years ago, as Silicon Valley was recovering from the dot-com bust, David Hornik, a long-time VC at August Capital, started seeing a recurring theme in pitches from startup founders: overt references to a new term called “the long tail.” A typical pitch deck included a slide showing a stylized sales graph taken straight from a 2004 Wired magazine article by that name, written by the magazine’s editor-in-chief at the time, Chris Anderson.
“That slide was a constant,” Hornik recalls. “I saw it every week for years.” By the time Anderson converted his article into his bestselling 2006 book, The Long Tail: Why the Future of Business Is Selling Less of More, the ideas represented by the term were so well-known in internet startup circles and the slide so commonplace that one founder labeled a slide “The Obligatory Long Tail Slide,” captioning the accompanying graph with the phrase “Enough said.”
“The Long Tail” was Anderson’s catchy name for a set of observations about the economics of internet markets — observations that are as resonant as ever in today’s “passion economy,” in which anyone can try their hand at turning their specialized interests into sources of income. In his article and book, building on the work of academics like Erik Brynjolfsson, Jeffrey Hu, Michael Smith, and Anita Elberse, Anderson observed that brick-and-mortar stores were constrained by limited shelf space, and therefore aimed to carry only the most popular products. In sharp contrast, online platforms like Amazon and Netflix had infinite shelf space. The tech journalist’s thesis: This radical shift would have far-reaching effects, from the media and entertainment industries that were his main focus, to the markets for everything from crafts to kitchen appliances.
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