An economics professor and entrepreneur friend of mine always used to tell me that entrepreneurs noticed bundles of resources that could be made more valuable by unbundling, and they noticed unbundled resources that could be made more valuable by bundling.
He used to give the example of cars. At some point in time, the combination of an engine, carburetor, body, frame, and so on could be a lot more valuable than the individual parts. The very same car, perhaps years later, could yield far more valuable broken down and sold as individual parts. Inventors and engineers created these parts. Entrepreneurs took notice of larger trends and saw how value could be created by bundling or unbundling them as market conditions changed.
Venture Capitalist Fred Wilson makes some interesting observations here about current trends, and what he thinks is a wave of opportunities to unbundle things. Technological change has made it possible to get more individually tailored products and services, as more things become modules on a platform, or nodes in a network.
The mention of education is particularly interesting to me, as one of the inspirations for Praxis was the realization that college is a very large bundle of a lot of different goods, and people increasingly want the ability to pick and choose which items are most valuable to them. The current college-as-career-prep model leaves very few options. Everyone must purchase the entire, expensive bundle, even if they only want two or three elements of it.
We’ve unbundled some of the items in the college bundle. We’ve also done some rebundling, as powerful resources like great online content and a network of dynamic businesses have been combined to provide theoretical and practical knowledge for career and life success in a single experience.
What other areas of life are you paying for a bundle, just to get a few pieces? Where are you buying lots of separate items, where you could more easily get a bundle? That’s where the opportunity is.
December 10, 2013
