In the late 90’s, the founder of Ebay sold a broken laser pointer in an auction. He asked the buyer if he understood that he was buying a broken product. The buyer said, he is a collector of broken laser pointers!
Soon, Ebay connected all the collectors of the world into one giant marketplace. It went on to become arguably the largest online auction platform. Millions of customers were trading billions of articles amongst themselves.
About 20 years later, a collector of sneakers ordered Jordan sneakers over Ebay. They turned out to be fake. He realized that Ebay does not have a process to verify the products that individuals buy or sell on its website. He went ahead and created goat.com. That company vets every sneaker for authenticity.
The two stories best illustrate how technology has changed the business model.
Ebay’s business model is optimized to be everything for everybody. It is the hallmark of the industrial era applied to an internet platform.
On the contrary, goat.com is built for specific categories (sneakers & apparel). It is the hallmark of the digital era, where everything is customized using data.
In the late 1990’s, the web brought us together into a global marketplace. The geographic chains of the physical world had shackled us until then. Platforms like Ebay rode the wave. We became buyers, sellers or both on one global auction site.
These days, the cloud is democratizing the technology that removes the vulnerabilities of the previous era where we were users, not individuals. Our footprints across multiple digital touch points are being analyzed to serve us as individuals. An undifferentiated platform serving the lowest common denominator is no longer good enough.
They say there are two ways to make money – Bundling and unbundling (of products and services). Welcome to the era of unbundling.
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