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In the technology industry there is a tendency for markets to be "winner takes most." That means that most competition in technology starts with dozens or even hundreds of firms and eventually coalesces down into two or three,with one of the remaining firms "owning" most of the marketplace.
Take search for example. In the early days of the Internet, there were dozens of search engines. I recall Lycos, Hotbot, AskJeeves, Yahoo, Inktomi, Dogpile, Overture and a host of others. Fast-forward to today and search equals Google ...with Bing being a far distant second (and the existence of Bing is only due to the remarkable fact that Microsoft is willing to lose hundreds of millions of dollars to prevent Google from having a true monopoly).
This is the reality of the technology industry and, let's face it, many industries.
We can look at hardware: Smartphones are dominated by Apple and Samsung. PC's are dominated by Dell and Lenovo. Even many creative industries: In music, the top musicians take nearly all of the market. In movies, the top actors command nearly all of the money.
This reality in technology leads to a race of sorts, and a sort of pervasive fear that drives many companies. For example, it would be nice to have a small to medium size business and balance it with a nice lifestyle. However, knowing that most markets are "winner take most", none of us can ever slow down.
If, in the end, you're not one of those top 2 firms, then you're likely gone or struggling.
The reality is that most markets really do follow "the long tail" idea where most of the profits, fame and recognition accrue to the top two (or maybe three) players. Many people were excited at the idea of the "long tail", but what it really means, in most industries, is that if you're not in the "fat head" part of the curve, well, you're not going to make much money.
Al Ries, co-author of the famous marketing book Positioning called this the "law of duality", with each major industry coalescing around two major firms. This makes it extremely difficult for the "little guy" to break into the market, or, indeed, even remain in the market.
Imagine, as a minor player, trying to launch a new smartphone against Apple and Samsung. It would be almost impossible. Even Amazon, with all of their resources, failed with the FirePhone.
There's only two ways to survive in these markets.
The first is to be one of the top two (or, occasionally three) winners. If you can't win one of the top spots, then you must play a different game. You must scale down and focus on a niche... or you must find a different market to play in.
This follows the spirit of what Charlie Munger (Warren Buffet's business partner) once said, "...occasionally, scaling down and intensifying gives you the big advantage. Bigger is not always better."
Bigger is not always better. And that's an important thought.
Think about Apple with their line of Macs. They've never been close to being a top two player in computers. But they are the "better" choice, especially for creatives and developers.
Facebook might be the biggest social network. But NextDoor is the best social network for you to connect and socialize with people who live in your neighborhood.
Think aboutFASO Artist Websites. We're not the biggest website builder, that honor goes to Wordpress. But we're the best website builder for fine artists. That's why we're the leading provider of professional artist websites.
While I called this strategy "focusing on a niche", it's really what Positioning author Al Ries calls "creating a new category." Websites is one category. Websites for fine artists is yet another.
We didn't invent websites. But we did invent Websites for fine artists.
The market for art...at least original art is different. And that's a very, very good thing for individual artists.The original art market has always been...different. And by "original art market", I'm talking about the original art market for living artists.
Not the original art market for deceased artists (the market for deceased artists has already consolidated into duality with Sotheby's and Christie's controlling the vast majority of market share). So far, nobody has been able to "corner" the original art market for living artists the way that they have in other industries.
I suspect it's not possible to truly consolidate the original art market. Because it's really thousands of different small markets. On the production side, there are thousands of artists working today. And, it's not too far off the mark to say that each artist is a "category of one."
On top of that, production can't scale in the same way as many other markets. Apple can make as many iPhones as necessary to maintain their place at the top of the smartphone duopoly: 212 million iPhones sold in 2016 alone. But what artist, even if the demand existed, could produce 212 million original works of art?
Obviously that's an extreme example, but it makes the point. Although it might not seem like it when you're struggling to market your art,it's possible to generate so much demand for an individual artist's works that he or she can never fulfill it.
Back in my gallery days, we used to sell-outMian Situ'sexhibits via a lottery system. That created a few happy winners who purchased his artwork, and many people who went back to the waiting list.What about the distribution side?
There are hundreds of ways to distribute original art.
Traditionally, it's been the gallery system, and while there has been consolidation in the gallery system, it remains quite fragmented. There are hundreds of galleries of all kinds of different sizes, all focusing on different genres.
In theory, it might be possible for somebody to "win" the distribution side of the art market. It would be difficult, but, perhaps, possible. But,even so, how could that winning "super gallery" work with thousands of artists?
On top of that, artists don't really need galleries.
There are huge advantages to being in a great gallery, but many artists are doing just fine by selling direct from their studios, selling at art fairs, selling at pop up shows, selling on their websites, selling via email, selling on Facebook, selling on Instagram... you get the idea.
Yes,the original art market is extremely fractured.
And thus original visual art remains this "cottage industry" of sorts with thousands of artists, hundreds of galleries, and multitudes of websites. Many niches exist. The sheer number of artists in the marketplace creates a lot of noise and contributes to the paradox of choice.
It takes hard work, dedication and hopefully a unique strategy to rise above the crowd and be noticed. Publishing has never been easier, but getting read has never been harder.
But, despite that, for the individual artist, there are big advantages to the fractured art market.
It's wonderful that in the art world, we don't have to deal with a faceless corporation. Our market is human...it's interesting. And, frankly, it's fun. Have you ever tried to deal with Apple tech support?
What about Facebook or Google? They won't even talk to you. Go try to find a phone number sometime. Good luck with that. [1] When FASO customers have trouble with Facebook or Google, do you know who they call? They call us. And we help them [2]. That's the nature of our wonderful industry.
We're allhumans,dealing with otherhumans, in arespectful and dignified manner.
Despite the human-ness, the art market takes hard work. It can be extremely hard work to garner attention and develop a following. But, and this is important, it's possible. And moreover,due to the fractured nature of the market, it's possible for the "average Joe" to put in some elbow grease, hard work and actually build a following.
Marketing a new smartphone against Apple is just about impossible. Selling your original paintings is definitely possible with AMP (Art Marketing Playbook), a complete marketing strategy designed for artists. AMP takes the hard work out of marketing, by helping you with marketing resources that work to help you consistently connect and engage with your audience in meaningful ways and focus more on what you love.
And if it's possible, that means, with some hard work, that you can do it.
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