James does a nice review of “The Long Tail” – Chris Anderson.  Worth the read.

Chris boils the whole thing down to this:

1. Make everything available

2. Help me find it

Source: Enterprise Decision Management – a Weblog: Hits and Niches

Since we have been speaking here about disintermediation of Banks a lot this week, lets use the Long Tail model and try this one on social lending.

Consider Zopa and Prosper.  Right now they are way out on the right on this model.  The Banks who sit in the red on the left, won’t notice them.  But what happens when there are 30 Zopa’s or 1,000 Zopa’s … the Long Tail says that those in the Orange will first enlarge the market, but eventually can get big enough to change the market. 

Smart Banks will do stuff in the Orange area, experiment, stick with it … understand what is happening out there.