Saturday, July 08, 2006

The Long Tail

At GlobalGiving, we spend a considerable amount of energy trying to find out what donors like, and how to help them find what they like. We also try to find out why certain projects appeal to donors. I’ve seen them as two sides of the same coin, and I’ve never questioned the value of following up on those lines of inquiry.

I just read another article about the long tail in the New Yorker—and as the article itself attests, this is hardly the first time we’ve heard about the long tail. In essence, it argues that technology has drastically reduced the cost of offering more choices to people so that niche markets are much better served today than before, whether the market for obscure art house movies on Netflix, low-print editions on Amazon, or obscure collectables on eBay.

What struck me today though, was that while it may still make sense to try and find out what donors like, and how best to help them find what they like, maybe we shouldn’t concern ourselves with why certain projects appeal to donors. Cast in the light of this article, it sounds like trying to discover why some (very few, I suspect) like to watch the early Soviet era movie “Man with a movie camera.” Frankly, I suspect Netflix doesn’t care why, it just cares to know that some people want it, and the cost of stocking a very few copies of “Man with a Movie Camera,” is minimal compared to the loyalty they can get from those few consumers who really care about that movie (and probably other obscure movies). What’s different today from 15 years go is that Blockbuster, given its business model, couldn’t deliver obscure movies to most of its customers, but Netflix can, making both Netflix and lovers of art movies happier today than they were 15 years ago.

So the analogy for us may be—with two important caveats below—to stock as many and as varied projects as possible and just note whether they attract donations or not. We shouldn’t care to know why.

Caveat 1 is that movies, books, and even collectables are all more common currency than development projects. What this means is that they exist in an ecosystem where movies, books, and music are discussed in traditional and non-traditional media, and that helps people decide whether they think they might want to see/read/listen to it or not. Or in our internal GlobalGiving language, they have a lot of "choice helpers". Plus it’s a lot easier to design a search for things that are talked about. So if we put up a whole bunch of projects on GlobalGiving, people may find it harder than ever to find the project they like.

Caveat 2 is that books, movies, and collectables aren’t time bound the way projects on GlobalGiving are. Projects happen in a certain place at a certain time, and frequently will not make sense later, or the cost of letting an init languish is measured in human welfare, not in foregone royalties. It’s not always easy to “let the market decide” in this context.
What keeps us going though, on this marketplace centered approach, is our conviction that it is better to have a market than not to the extent that this opens up a new avenue of support for social entrepreneurs worldwide. And it certainly gives the average donor more choices than they had before. And that’s got to be better than a world without a market for international philanthropy. Which sums up, I think, my attitude going into this conference on social investment markets where I will be meeting up with some old friends from DonorsChoose, Modest Needs, GiveIndia, PCNC, Keystone, Greater Good South Africa, HelpArgentina, and the Omidyar Network, as well as new market friends I hope from Brazil and South Korea.

1 comment:

Elizabeth said...

MK -- I do realize you blogged about this over a year ago, while your colleague was enjoying drunken bocce. But just to show that I was listening -- found this link about long-tail philanthorpy from Lucy Bernholtz and thought this would be the right place for it. It is built on the work of Kellogg's tools cluster, which is a useful application of those get togethers.