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Unlike unbundling, disintermediation affected both digital and physical service providers. Therefore, its impact was arguably larger, as it afflicted many more industries, from home video (disrupted by Netflix) and home improvement (disrupted by BuildDirect) to dating services (disrupted by eHarmony). This tidal wave flooded markets during the 2000s, beginning to ebb by 2010. As an incumbent that was disintermediated, there was little you could do except hang on and try to adjust as best you could. But more disruption was on its way. By 2012, I began to discern a third wave of business model innovation on the horizon. The most innovative companies were no longer responding to shifting consumer behavior by unbundling products or disintermediating services. Rather, they were stealing customers by "decoupling" specific activities that customers normally performed in the course of shopping. As we saw in Chapter 1, Birchbox decoupled the sampling of products from their purchase. Amazon decoupled the purchase of products from browsing. Turo decoupled the usage of cars from their purchase. Because this latest wave was afflicting companies that sold physical products such as beauty supplies, electronics, and cars in addition to companies that sold content and services, the wave's devastating power was potentially even larger. This third digital wave also differed from the other two in that now disruption was taking place across the customer's value chain. The first wave, unbundling, largely took place at the product level and in the consumption stage: some consumers read only newspaper articles, others only the classified ads. The second wave, disintermediation, occurred within the supply chain (e.g., cellulose companies selling pulp directly to the newspapers, bypassing paper manufacturers).
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1 Unlike unbundling, disintermediation affected both digital and physical service providers. 2 Therefore, its impact was arguably larger, as it afflicted many more industries, from home video (disrupted by Netflix) and home improvement (disrupted by BuildDirect) to dating services (disrupted by eHarmony). 3 This tidal wave flooded markets during the 2000s, beginning to ebb by 2010. 4 As an incumbent that was disintermediated, there was little you could do except hang on and try to adjust as best you could. 5 But more disruption was on its way. 6 By 2012, I began to discern a third wave of business model innovation on the horizon. 7 The most innovative companies were no longer responding to shifting consumer behavior by unbundling products or disintermediating services. 8 Rather, they were stealing customers by "decoupling" specific activities that customers normally performed in the course of shopping. 9 As we saw in Chapter 1, Birchbox decoupled the sampling of products from their purchase. 10 Amazon decoupled the purchase of products from browsing. 11 Turo decoupled the usage of cars from their purchase. 12 Because this latest wave was afflicting companies that sold physical products such as beauty supplies, electronics, and cars in addition to companies that sold content and services, the wave's devastating power was potentially even larger. 13 This third digital wave also differed from the other two in that now disruption was taking place across the customer's value chain. 14 The first wave, unbundling, largely took place at the product level and in the consumption stage: some consumers read only newspaper articles, others only the classified ads. 15 The second wave, disintermediation, occurred within the supply chain (e.g., cellulose companies selling pulp directly to the newspapers, bypassing paper manufacturers).