Bundling & Unbundling

This is a standalone essay under 500 words on Day 4 of the Tech Progressives Writing Challenge 2, also join build_ to connect.


The infinite circle of making money.

In university my specialization has been in entrepreneurship & innovation. The theory we were studying was mostly from famous researchers. It was very interesting as there are many scientific ways how one can measure the future success of an innovative product. Looking back, definetly one of my favourite courses to attend.

Later, I've been working at an VC and an accelerator. On one hand, the methods in accelerators were similar to what I studied in university, rather scientific and schematic. On the other hand, the methods in vc were much more common sense and skimmed down. I was actually a bit dissapointed once I saw that it was more of a spray and pray approach in leading industries and betting on smart founders.

Also, and this is my personal opinion, I think the content of y-combIf inator has changed. Before, it was more schematic, similar to disciplined entrepreneurship. Now, it has become different from the classic lean startup theory. It is much more pragmatic and more focused on the personal experiences of the founders of y-combinator.

If you would ask me why that happened in vc, I would explain it with the intuitive process of “knowing”. The process of “knowing”, somehow goes from learning -> understanding -> systematizing -> improving efficiency -> making sense. The last part is where I think the master-level-gurus reside. They forgot all the theory, it just makes sense to them. If you know - you know, kind of vibe.

Same goes for Marc Andressen, who I follow for quite some time. His VC firm a16z is probably one of the most successful investement companies ever. Similarly, he is on the master-level, he just knows. Thus, often he approaches startups more different than the rest. It feels like he just thinks deeply about a certain industry and knows what will be.

He does not rely on a lot of theory, because he lived it, it seems that he rather argues from a logical standpoint. Similar to a theory that he supports and quotes a lot: Bundling and Unbundling. It seems so simple, even stupid, yet it's a powerful concept and some even say it is the only way to make money.

What is it about? At its core, the main job of the product stays the same, just the way of consumption is different. Let's take music for example. In the 90's one had to buy a full CD to listen to one song (bundled). Then the internet came and one could download track-by-track (unbundled).

Why does it happen? As I understand it, there are several reasons for it:

  1. the underlying technology, only with the internet it was possible to provide streaming
  2. the stage of the company, once a company grows it tries to add more business and due to efficiency mostly bundles the products
  3. trends, web3 is about decentralization and user rights
What does it mean for the future? Most probably, the future of the internet will be unbundled. It's web3 and the fashionable thing is decentralization and self-ownership. Thus, we will likely see many services unbundled.

For me, I will start from a clean laptop with new pseudonyms, urbit as my OS and an unused crypto hardware wallet.