Without fail, the first question anyone asks when you’re talking about a new business concept is:
Is it scalable?
A couple of my favorite blogreads have been discussing this issue of late:
Jeff Jarvis says that scale doesn’t scale anymore. He applies that to several industries we know and love:
: News: As a producer, why depend on the 300 (expensive, snarky,
recalcitrant) reporters you pay for when you could have 3,000
aggregated reporters to get more news less expensively than ever
As a consumer, why depend on one or two sources of news a day when you can aggregate the best of 200?
: Media: As a distributor, when you can no longer use your
stranglehold on channels to guarantee you an audience, you will have to
aggregate audiences to reach scale.
As a creator, you’re going to have to establish your own direct
relationship with your audience: You have to do your own aggregating.
As a member of the audience, why adjust your schedule and taste to
the distributor when you can aggregate your own entertainment from
: Advertising: They simply won’t have the easy and inefficient
option to buy network soon; they will have to aggregate niches of
consumers to create a new and more efficient scale — with far better
targeting, better advertising, better service, better sales.
Fred Wilson agrees, and explains why the new world is more collaborative than competitive:
You cannot collect all the pieces of a marketplace in a centralized
way and control all of it. The technology won’t allow that to happen.
You can’t "get to scale" that way.
You must be open to others owning pieces of the equation. You must
let the users get the value of scale however the choose to create that
scale. You must facilitate the creation of virtual scale.
Ravi Dronamraju thinks aggregation is dripping with Kool-Aid, and touches on how we plan to provide what aggregators can’t (yet).
All that aggregation solves is comprehensiveness problem. But the real factor that would distinguish one aggregator over the other is relevance. The concept of relevance can be extended really to Matching
in case of some verticals. The way i explain matching is that it’s two
way relevance. For a job, it’s not enough if the job is relevant to my
search criteria, the candidates applying for a job have to relevant to
the employer’s criteria.
I argue, that just simply aggregating
solves a minor component of the problem. The true winner will solve
relevance/matching problems in their space in a very
effective/protected manner. To be able to beat ebay or google, these
aggregators should have enough traffic of buyers (job seekers, partner
seekers) and enough sellers (ok, we crawl the web and identify sellers)
and have proper matching (two-way relevence).
Matching is really the killer problem to solve.
Tom Watson says that scale still scales:
Because this is a media verity: Tiger scales. Old media,
new media, slightly damp media, short tail media, long tail media.
Tiger scales big-time. Tiger doesn’t require aggregation, or citizens
media, or RSS feeds, or a new path. A simple network television
contract with the very old-school CBS Sports will do just fine.
The Masters final round this Sunday past was about the
best sports spectacle since the Red Sox made their amazing comeback.
(The Red Sox also scale, fellas). Stunning, mesmerizing, fascinating…
…And it wasn’t aggregated; it was a single buy. Sure, I’m a
fan of the widening landscape of digital media. This blog is proof of
that. But I reject the notion that the digital Bastille is anywhere in
sight, that Sumner Redstone’s head will be set on a pike on West 57th
Street. The big media boys aren’t going anywhere. We still love
spectacle, and celebrity, and the shared experience. And Tiger Woods
still scales – big-time.
This touches on a sticky wicket for media today — I would argue that far fewer things scale. Pre-cable, when there were only four things to watch, a championship event scaled. Heck, even a regular-season game scaled. But those truly common experiences are fewer and further between.
Remember Roots? Heck, remember The Day After? They were common media experiences that everyone shared. I doubt the same can be said of Revelations. Sure, a lot of people may watch, but you can’t be sure that everyone around the water cooler will even know it aired.
So you get scale three, maybe four times a year with championships and mega-stories. That reminds me of my early days in the city magazine business when we’d pull big, "scalable" special editions out of our hats to stay afloat. That’s a risky way to live. Sooner or later you have to make money day in and out.