The Long Tail is about how information technologies are transforming many markets, and about the true shape and character of market these technologies reveal.

Information technologies are transforming many markets, notably media and consumer goods.  The technologies are:

• efficient inventory storage and retrieval, providing vast, near infinite inventory
• search and filtering technologies to navigate these huge inventories
• increased availability of production tools for the population

Such markets include:

• books ( Amazon )
• music ( iTunes, Rhapsody )
• movies ( Netflix, YouTube )
• consumer goods ( Amazon, eBay )

For example, let’s take books and Amazon:

• Amazon has huge centralized warehouses where it stores all the goods it sells.  It must be able to receive and ship orders quickly.  Also, through it’s Marketplace program, resellers use their storefront, but have their own warehouses and shipment systems.  Thus, Amazon doesn’t even store these items.  Thus, Amazon can store millions of items.  The largest brick&mortar super-bookstore can only have about 175,000 books.  With 6.1 million books available in the world, and 100,000 being published per year in recent history, traditional stores cannot cater to everyone’s desires.  Amazon can offer nearly 350 times the variety.
• Amazon tracks user’s ratings, stores useful customer reviews, tracks what other customers have bought, based on usage history, and utilize this information to help you search and filter the vast catalogue to your current interest.  Traditional stores can only choose one presentation of their goods, and every person must search within that specific constraint.  You will find things through the Amazon website that you’d never know about in a normal store.
• While not specific to Amazon’s operations, book publications have sky-rocketed, as tools for production, such as desktop publishing software and reduced costs of printing, such as print-on-demand services, mean that more of the populous can produce books.  This increases the number of books to catalogue, search and recommend.

The shape of markets, when sorting items based on popularity, follow a “power-law” long-tail distribution.  In short, this means that, while the popularity of any one item out on the tail is small, there is just so-much in the tail that, if made available to customers, it would comprise a significant part of one’s business.  For example, 90% of the products on Rhapsody or Netflix is not available in any stores, but this 90% make up roughly 25% of their profits.

Another interesting feature of long-tailed markets is that, as one moves into the tail, one is more satisfied with the goods, compared to the the goods at the head of the tail.  A few factors here are:

• everything in the head has broad appear to the whole audience.  Therefore, it is a bit mediocre compared to each individual’s tastes.
• everything in the tail has very specific niche audiences.  A gem item for one individual will be utter rubbish to 10,000 others.

To capitalize on the tail, one must connect each user with the content they value.

There any many more points in the book than I can outline here.  Many transformative businesses and websites are discussed, such as Google, Wikipedia, etc.

For anyone who’s exerienced these technologies and recognizes something fundamentally different’s going on, this is a great read.  For anyone who’s heard about the buzz, but doesn’t feel they understand it, this should be a great exposee.  And for anyone who works in any IT industry, you should really read how our world is transforming many aspects of human business and activity.

4 of 4 possible stars, without hesitation.

Jeff Goodell is a contributing editor to both Rolling Stone and The New York Times.  He wrote the New York Times bestseller book “Our Story: 77 Hours That Tested Our Friendship and Our Faith“, which covered the Quecreek Mine accident of 2002.  From this writing experience, he became interested in the coal industry as a whole.  What he finds there is a grim reminder of America’s energy reality.

“Big Coal” refers to the coal-mining industry, the railroad-freight industry, and the electricity companies.  Together they have allot of interdependency and allot of clout.  The book’s order roughly covers the mining, transportation, and burning of coal, taking in-depth detours along the way to discuss miner’s safety, environmental safety, pollution ( both in heavy metals and noxious fumes, ) and global warming.

Unfortunately this book is not fresh on my mind, but there were several notable things:

• the interdependency of the coal-mining, railroad, and power companies.
• the ever increasing demands for energy consumption creating more coal-fired plants, despite their ugly environmental & health impacts.
• the undeniable evidence of the G. W. Bush’s administration giving Big Coal a free-pass.

There were other interesting bits, mostly political intrigue, along with some sorta notable technologies like CO₂ sequestration and coal liquidification processes / IGCC power plat design.

Overall, it was a good book.  I just read through it too fast, and didn’t have enough time to reflect upon it.  2.5 of 4 possible stars.

Dr. Strogatz is a professor at Cornell University, and has had a prolific career examining complex systems in diverse fields such as circadian rhythms, Josephson Junctions, and “small-world networks“.  This book captures many of the stories of progress in these and related fields of today’s progressive minds.

The book covers a very diverse set of discoveries and domains, with many notable scientists along the way.  It’s too much to recount here, without creating a 10 page review.  However, the most notable subjects to me are:

• the basic conditions of connectedness and similarity of components of a synchonized system.
• circadian rhythms, and how nice it is to know I’m normal, not lazy.
• Kirkwood Gaps, which are gaps in the Asteroid Belt which coincide with orbital ratios with Jupiter.
• the spooky magic of quantum mechanics in Josephson Junctions.
• coupled chaotic systems synchronizing.
• spiral and scroll waves in excitable media
• small-world networks, where the cliquiness/clumping is still high, yet the average path between two nodes is very small.  Scale-free networks are a sub-category of these types of networks.
• the spontaneous nature of brain cell synchronization in memory and cognition

Unfortunately, I didn’t read this book in a dense set of settings, and there’s many names a disicplies to go around, so I’m forgetting many notable details.

Still, it’s a very good survey book regaring dynamical / non-linear / complex / systems science that has taken place in the past few years.  3 of 4 possible stars.

Gweneth Cravens is a writer and journalist, and was a anti-nuclear activist. She met and debated the merits of nuclear power with Dr. D. Richard (Rip) Anderson over the course of many years, and eventually one day Rip asked her: “Why don’t you go on an American nuclear power tour?” This book is the result of that journey.

This book starts out with her background, and her suspicions, her initial interactions with Rip, and then a chapter by chapter walk through the life of nuclear power, “cradle to grave”. Many fascinating comparisons with all other viable energy sources are discussed, safety analysis dissected, and places visited.

The short, inescapable conclusion is that nuclear is the only viable, safe, and plentiful power source that can carry us through the coming decades, centries, and millenia while allowing us to undo man-made damage to the climate and environment, foremost of which is global climate change.

A fascinating journey, and arguable one of the most important issues of my generation. 4 of 4 possible stars.

The book at three sections, which are basically: old and broken way, new and shiny way, and finally a summary of points to take away from the book.

I’ve not economics or financial training, so the first chapter was quite educational, pretty much capturing the development of modern practiced financial theory. Along the way, he shows many of the assumptions and estimations that went into each step, and also alludes to studies that show these assumptions are not true.

The second section was also educational, in respect to fractal analysis that’ve been done to financial data. Along with many nifty details about fractals and probability distributions the basic results is to show that:

• price variations at any time-scale are Power Law distributed, not Gaussian distributed as theory assumes.
• price variations at any time-scale are time-dependant or Fractional Brownian Motion, not independent or traditional Brownian Motion as theory assumes.

It goes on to demonstrate a multi-fractional construction that seems to account for these factors. as well as “fractional time” to create a time series that manifests all known anomalous characteristics of market behaviour by traditional analysis.

The book has a rich history, and fascinating contradictions to what I was taught. However, it… wasn’t very moving at the end. It didn’t have a silver bullet. I know this is science, and science’s best discoveries are the new anomalies. Yet, I couldn’t help being disappointed. In a literary sense, this book had a “pathetic” ending.

Despite all the educational aspects, ground-breaking work discussed, I didn’t get as much from it as I had hoped. 2 of 4 possible stars.

The book is best categorized as a Philosophical Logic work.

The premise of the book is to define what finite and infinite games are, differentiate the two, and then apply those patterns to many aspects of everyday life to surprising consequences.

For example, imagine a suburban neighbourhood where a group of kids gather for baseball games every afternoon during the summer. Anyone can play, and teams are divided so that they are evenly matched. Players are implicitly ranked by their peers from performance over past games.  Poor players are welcomed to play, even if it makes a team perform worse.  The point is to keep playing and keep changing the game.

Next, imagine a little league team from a nearby neighbourhood. They had to try-out, and poor players are screened out. Practice games are required several times a week. Players are ranked against each other according to various stats, and players are encouraged to perfect various skills for the betterment of the teams performance.  The point is to win as many games in the little league series that summer.

Now, imagine what would happen if the two groups were to play together. If the daily neighbourhood game players had the little league team come over, two things would happen: the little league would insist on playing against each other, not mixing the teams, and would adhere to their strict rules, and likely the neighbourhood kids would loose since they don’t play this way. Eventually the neighbourhood kids would get bored and stop playing the little league game.

Finally, image the little league team hosting the neighbourhood kids in a game. As part of the invite they mix members like the neighbourhood kids games do. The little league players would become immediately frustrated because the neighbourhood kids haven’t seriously practiced and each team doesn’t work efficiently together. They would perceive the neighbourhood kids as not playing seriously, perhaps making a parse of the whole enterprise, and would not enjoy the game at all.

Although a contrived scenario, ( kids learn early on which style they enjoy, and that these are two fundamentally different activities, ) this demonstrates the two styles of play and how they compare to each other.

The book also has an almost lyrical component: James chooses words which we’d normally use as synonyms, but in the context of finite and infinite games become antonyms or complementary terms. Notable examples were “powerful” / “strength” and “theatrical” / “dramatic”. I found this amusing and thought provoking, as I tend to obsess on the connotations of words in certain works.

Overall, I didn’t agree with all the points of the book, but it’s premise, it’s style, and ability to inspire make me give it 4 of 4 possible stars.

The main tenant of the book is that human psychology causes us to create meaning and find patterns in what well be randomness, noise, unpredictability, or natural complexity.  He uses the markets as his main analogy, but cites a few philosophers and psychologists work.

Additionally, he also points out that the human mind is not very good at scientific / mathematical thinking.  Simple probability is easily misunderstood.  He also addresses the inability of us consider alternative histories or do Monte-Carlo runs on future possibilities.

Things I found of note were his approach to this subject, which is that of a non-serious, philosophical skeptic.  I find it refreshing.

Reading a bit on Amazon’s review of this book, I see allot of chiding remarks.  Nassim uses many known financial professionals as examples in his book, and it’s apparent that some did not take kindly to it.  However, the auther makes his intentions, those of non-serious dialogue and argument from simple logic deduction, clear in the prologue to the book.  Any who didn’t read that far may well have earned their disappointment.

3 out of 4 possible stars.

The book is broken down into 8 Chapters: several are by popularizers of Fractals, several are republished papers by active researchers, and one covers the making of the educational video. This video and book was endorsed / promoted by the recently deceased Sir Arthur C. Clarke.

I found several chapters of note:

• Chapter 1: “The Nature of Fractal Geometry” is the intro written by Ian Stewart, a mathematician, professor, and prolific popularizer of science. Well written prose that targets laymen with an amateur interest in science and math.
• Chapter 3: “A Geometry Able to Include Mountains and Clouds” written by Benoît Mandelbrot, the central figure in the development of fractal geometry. His article derived from a lecture to a Nobel Conference in 1990, and covers many of the aspect of fractal geometry in more detail:
  • Clouds, mountains and coasts; self-similar natural systems, fractal dimensionality and roughness.
  • Seemingly infinite complexity arising from fundamentally simple transformations.
  • Most striking was the “diffusion limited aggregations (DLAs)”, which show the fractal nature of natural systems growing & evolving over time.
• Overall, I found this article compelling because of the holistic synthesis, and the obviously deep and finessed presentation Mandelbroit gives.
• Chapter 6: “Self-organization, Self-regulation, and Self-similarity on the Fractal Web” is written by Gary Willaim Flake and David M. Pennock, then at Yahoo! Research Labs. This paper addresses many related issues, including:
  • The positive feedback loops of authors, search engines, and readers through a page’s connectedness, its page rank, and its traffic, respectively.
  • The self similarity of network traffic, and the power law distribution of it.
  • Other web metrics which also obey power law distributions, such as inbound & outbound links.
  • Community structures that form into fairly regular bipartite relationships of hubs and authorities.

  Anyway, this paper by far proved the viability of fractal pattern analysis to a very new, vital and familiar technology.

• Chapter 7: “The Human Social Experience Forms a Social Fractal”, written by Robert R. Prechter, J., covers the concept that the financial markets are a fractal phenomena. The analysis given was simplistic, yet the concept was compelling. Thus I’ve picked up a book about that subject exactly to get a better feel… but that’s another post. Interesting concept; weak presentation.

The book also comes with a DVD containing the documentary video. It’s a very simplified intro to fractals, as in elementary / middle school usage. It’s not very detailed or thought provoking on a mathematical / scientific level. However, it’s meant to share the artistic wonder of a fractal, and it does a decent job there. My only lamentation is that the video was not remastered for DVD; there are obvious analog artifacts that distracted me from the intent of the visual experience. Additionally, I felt the Davoid Gilmour soundtrack was unnecessary / dated.

Overall, it was a good investment. 3 / 4 possible stars.

Anyway, my bookmarks are here. I’ve also linked it in the Wordpress “Links” section.

• amateur video of the press release.
• Wired’s coverage of the event.
• Virgin Galactic’s promotional video.

I find this exciting because the promise of space-travel is finally coming into existence. Between SpaceShipTwo and Bigelow Aerospace’s “Genesis” project, the underpinnings of space travel and being built. (Insert ‘ironic’ tag “it’s private industry doing this instead of any government” here.)