A follow-up thought to Segmentation…

I am currently re-reading Here Comes Everybody, Clay Shirky’s book on the new organizing principles of today’s world.  I have been meaning to do a review of it for ages and realized that I needed to re-read it again!

In the first chapter he cites a well-know probability exercise called the Birthday Paradox (yes, there is a Wikipedia entry for it).  

If I asked you what the chances are that two people in a room of 30 would share the same birthday, you would probably say not that high.  In actual fact, the chances are very high.  It’s a counter-intuitive problem because we aren’t good at understanding how probabilities combine.  

In his book, Clay Shirky uses the example as an illustration of the complexities of large groups.  He’s right.  As groups scale in size, our ability to understand the relationships between each individual and each other individual falls dramatically.

His other, more intutive example, is about trying to find a group compromise as the group scales in size.  It becomes exponentially harder.  We’ve all felt that one.

As I read this, I realized it was another nail in the coffin for traditional market segmentation studies.  If group complexity and relationships between members scale exponentially as the group gets larger, how could we ever expect to describe thousands of users of a product or service by five or six simplified labels?

It’s definitely food for thought.

One Response to “A follow-up thought to Segmentation…”

  1. February 16, 2009 at 4:19 pm #

    snap – reading this as well. there’s a great vid over at O’Reilly [ http://radar.oreilly.com/%5D with Clay Shirky talking about
    * The effects of low cost coordination and group action.
    * Where to find the next layer of value when many professions are being disrupted by the Internet
    * The necessary role of low cost experimentation in finding new business models