Long Tails - Fat Tails - And Standard Distributions
Statistics are useful for a broad view - but not for dependence on details.
A standard bell shaped curve gives useful guidance - until it doesn't.
Statistics can give us a broad view of past actions and imply trends for the future. Unfortunately statistics can mislead even the wisest practitioner about specifics.
About ten years ago Long Term Capitol Management (LTCM) was formed around the concepts of Nobel Prize winners. The Nobel Prize winners - and the LTCM clients - lost about four and a half billion dollars when they encountered the "fat tails of finance." Events that should only occur once in hundreds of years have a bad habit of showing up far more frequently.
Life is not linear.
The other story - long tales - is a broad view rather than a "statistical probability with a high level of confidence."
In the industrial age marketing departments and product developers shot at the bulge of the bell shaped curve, that's where the economies of scale resided.
Today savvy Internet marketers are looking at the long tails of consumer demand. The low cost of entry into a specific market that will soon encompass the world allows an individual to pick a niche that they understand and serve it extremely well. These niche markets are under served by large companies that consider them small segments of broader categories.
These long tail markets can represent millions of dollars in sales to a small business or a sole proprietorship. Pick one item and concentrate, persist and you may become recognized as the expert for that single product.
When numbers are thrown around to prove a point remember two things.
As part of the Netcohort we need several attributes but one is most important:
- Nothing in the world can take the place of Persistence.
- Talent will not; nothing is more common than unsuccessful men with talent.
- Genius will not; unrewarded genius is almost a proverb.
- Education will not; the world is full of educated derelicts.
- Persistence and determination alone are omnipotent.
- The slogan 'Press On' has solved and always will solve the problems of the human race.
- - Calvin Coolidge
The key is to find an opportunity and keep learning about it and working on it.
Expect to fail, then get up and try again. It is easy to quit if your statistics failed you - it is easier to get up if you believe in your knowledge and apply your persistence.
Do the work - fight the fight - reap the rewards.
Life is not linear.