The Great Unbundling

If you think about most major industries, over time the companies offering products or services go from being generalist to specialists. They start off offering a major product and literally begin an industry this way. Then come along smaller players who ‘unbundle’ specific aspects of the business model by being better at that specific thing, and along the way the market share of the generalists that started the industry get smaller and smaller. Sure, these generalists companies keep an outsized reward for them being there at the start of an industry, but it’s a smaller and smaller percentage of a pie that gets bigger on the whole.

So what can we do with this observation? Well, if you are the generalist that started an industry (perhaps together with 2 or 3 other companies), the trick is to foresee the unbundling and, at the right time, get ahead of the process by either breaking up your services in smaller pieces or launching new brands to organically compete with your main business.