Millions of Markets of Dozens

Rather than dozens of markets of millions. These are words taken from Joe Kraus's Bnoopy blog. I referenced him in a earlier piece - he's the guy behind Excite, and now JotSpot. He posted a very long item on Software's Long tail that you should go and read, but I'm going to try to summarise a few of his points for you here and add a little of my own spin.

The purpose of software in business is to support an organisations processes - selling, ordering, hiring, manufacturing, warehousing, accounting. Some of these processes are similar enough between businesses that they can be addressed with standard software, like ERP. A large number of these processes might have the same name in different companies (e.g. recruitment) but actually happen in completely different ways. Then there are many other processes that will be unique to the particular business.

There are plenty of software products available for the mainstream business application areas, where the market volumes make it economic for them to be developed, marketed, and sold in thousands or millions of standard copies. But there is an enormous volume of processes that are never touched, because they could only be sold in 100s or 10s or 1s - software's long tail.

However these application areas do get addressed by most organisations with 2 standard tools - the spreadsheet and e-mail. The same problems that give us a headache with Excel in the traditional area of accounting occur here too. Have I got the right version of the spreadsheet? Someone else has updated it but forgotten to mail it to me. No integration between the spreadsheet items, and the mails and documents they relate to.

Many of the tools that are emerging in the Web 2.0 world - cost effective intranets, wiki based intranets, and blogs are tools that can do a much better job of addressing these applications than isolated spreadsheets and e-mails. They provide platforms to integrate the data and with version control and history. You should be looking to apply these to your business to take better control of the ad hoc systems that have evolved.

And lastly, this long tail presents business opportunities for software developers and entrepreneurs. Joe wraps it up in these words:

"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."

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