Emerging World of Free

Recently saw a video of a talk by Chris Andersen (of The Long Tail and Wired fame) on Emerging World of Free. He talks about how in today’s world the resources of Bandwidth, Storage and Processing power are approaching zero, that is, becoming free, and how it impacts businesses. He says that previously the limited shelf space in a traditional store was a limiting factor in the variety of goods available in that store. There was only space for the most popular brands, and a “One size fits all’ approach ruled. There was no space for satisfying the long tail, the custom made, the marginal tastes. With the emergence of the internet as a virtual market place, with infinite shelf space at zero cost(cost or the underlying technology approaching zero), you have the possibility to cater to the Long Tail, satisfy unlimited choices, tastes and provide infinite options to the consumer.

For me this was particularly insightful since it opens up a previously untouched, unlimited market. We always think that newer emerging markets are those people who have never used our product. While this is certainly true for developing countries, what about the ‘saturated’ markets of the developed world? The internet as a market place offers vast possibilities in these tech savvy nations to tackle the yet untapped Long Tail of the curve: the niche, customized market, where each consumer is spoilt for choice, AND is willing to pay more for it. And going by the numbers which Chris showed, the Long Tail contributes to anywhere between 25 to 50% of the total market depending on the product!!

I would think the virtual marketplace would fit in very cosily in the the gaps left by the traditional stores. For any business, both can share a symbiotic relationship and leverage each others strengths and eliminate their weaknesses. There is already a lot of activity happening in this space, and as Google said: we are moving from a dozen markets of millions to a million markets of dozens...

The video can be seen here.