It’s easy to see long-tail distributions at the top end, where hedge-fund managers
make $2
billion per year and apartments sell for $200
million. Luxury goods manufacturers and many others are chasing
that market, which is partly
responsible for the continued surge in New York City real estate. But there’s
a long tail at the other end of the spectrum as well.
points out that the bottom 80% of humanity, living on an average of $700 per
year, has about $1.7
trillion to spend each year, while, to use another metric, the 4 billion
people living on less than $3,000 per annum represent a $5 trillion
market. That’s big by any measure.
And yet, we’re told, "only 50 or so multinational companies (there are
63,000 worldwide) have tried to penetrate the base of the pyramid". Obviously,
this isn’t the kind of long tail that can be tapped by setting up a website
– although m-commerce
and m-banking
are growing very fast in many emerging markets.
All the same, the way to make real money is to zig while everybody else zags.
So for an interesting long-tail play, it might be worth thinking not about houses
which sell for $200 million, but rather about houses which sell for $2,000.