Serendipity, Pet Rocks, and The Long Tail

A lot of people want to Get Rich Quick. I don't blame them. I wouldn't mind becoming independently wealthy overnight. In the meantime, however, I need a satisfying job and a reasonable income. It would be nice to get lucky but, in the end, a lot of "get rich quick" success stories seem to involve a large element of serendipity.

We have a friend whose company is merging into Oracle. He'll probably make some money out of the deal. :-) It's not quite overnight success, however. He's been at this for ten years. If he didn't already enjoy the project, I doubt he would have worked to form a company Oracle wanted.

Starting a company because you hope it will be purchased by a bigger company isn't the best business plan. Neither is inventing a toy solely in the hopes of creating the next Pet Rock, or deciding that you should be able to paint as well as Jackson Pollock, or to write as well as JK Rowling. Everybody is different. Sometimes it's luck, sometimes it's skill, sometimes, the other person just got there first. It's not enough to follow in someone else's footsteps hoping to pick up gold along the way simply because it happened to someone else.

The current issue of New York magazine is devoted to Blogging. There's an article entitled "Blogs to Riches: The Haves and Have-Nots of the Blogging Boom".

Funny. When I started my weblogs, I never expected to get rich. I expected to... write. (Duh.) I hoped for a small audience of readers (I salted the audience by subscribing all of my family members. :-)

Apparently some people expect both a large audience and an in-pouring of advertising money. Whodathunkit?

Two years ago, David Hauslaib was a junior at Syracuse University who was, as he confesses, “totally obsessed with who Paris Hilton was sleeping with.” So he did what any college student would do these days: He blogged about it. Hauslaib began scouring the Web for paparazzi photos of Hilton and news items about her, then posting them on his Website, Jossip.com. ...

Then one day Hauslaib took a good look at Gawker, a gossip site owned by the high-tech publisher Nick Denton. Gawker’s founding writer, Elizabeth Spiers, had pioneered a distinctive online literary style and earned a large following in the Manhattan media world. What really got Hauslaib’s attention, though, was Gawker’s advertising-rate sheet. According to Denton, the site received about 200,000 “page views” a day from readers. The site ran roughly two big ads on each page, and Gawker said that it charged advertisers $6 to $10 for every 1,000 page views—almost the same as a midsize newspaper. There was also a smattering of smaller, one-line text ads bringing in a few hundred bucks daily. Doing a quick bit of math, he figured that the income from Gawker’s ads could top $4,000 a day. The upshot? Nick Denton’s revenues from Gawker were probably at least $1 million a year and might well be cracking $2 million.
...
“And I was like, I can do that,” he says, laughing.

Except it didn't work out that way. Hauslaib did all right (or at least, I think so!). According to the article, his site gets about 30,000 visitors a day, generating a “comfortable five-figure income". I'd settle for that. But, it's not millions. It's not a Get Rich Quick success story.

To be honest, I'm amazed that Hauslaib did as well as he did. He started out, not doing something new and different, but entering an established "market". He was trying to emulate a high-tech publisher and a woman who had "pioneered a distinctive online literary style and earned a large following in the Manhattan media world". I think Hauslaib was jolly lucky to get 30,000 visitors and any income!

There's a reason why any one person isn't just as likely to succeed as the next guy (especially if he happens to be following "the next guy".) The reason is something called "the long tail" also known as a "power law distribution".

In simple terms, each of a few get a lot (of whatever we're discussing, be it visitors, or ratings, or dollars), while each of many get a little. So, a few books on Amazon.com sell extremely well, but there are millions of books on Amazon.com which sell a few copies. A few weblogs get very high readership, but there are millions(?) of weblogs on the net, many with just a smattering of readers.

The power law is dominant because of a quirk of human behavior: When we are asked to decide among a dizzying array of options, we do not act like dispassionate decision-makers, weighing each option on its own merits. Movie producers pick stars who have already been employed by other producers. Investors give money to entrepreneurs who are already loaded with cash. Popularity breeds popularity.

“It’s not about moral failings or any sort of psychological thing. People aren’t lazy—they just base their decisions on what other people are doing,” [Clay] Shirky says. “It’s just social physics. It’s like gravity, one of those forces.”

So... people read the first Harry Potter book. Then more people read the second Harry Potter book because other people had read the first book. The numbers kept growing because people had already read Harry so they chose to keep reading Harry. Maybe you think you can write as well as JK Rowling, but she wrote the first Harry Potter book and you didn't and that's that.

Some people get lucky. Some people just "get there" first. Some people are truly more skilled or have a better network. They know the right people, they do the right things. For whatever reason, they were in the right place at the right time and they took advantage of the opportunity.

The trick is, it's difficult to force yourself into the high part of the power law distribution — the end with few people and lots of readers, lots of money, lots of fame. Part of the reason that it's hard to get there is because there is only room for a few at that end. Yes, you might get in (and push someone else out). But you probably won't. If that happens, try another market (and another curve).

And, given that your chances of being striking it rich are never very high, try to pick a market you'll enjoy for itself if you find yourself, once again, somewhere out in the long tail.