Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption

by Thales S. Teixeira

As of 2016, Mayer had acquired fifty-three digital and tech startups, spending between $2.3 and $2.8 billion, not to mention countless hours of her top executives’ time for M&A due diligence.

In 2017, unable to grow, Yahoo was acquired by Verizon for $4.8 billion, a far cry from Yahoo’s peak valuation of $100 billion.42

Overresponding can kill companies, just as failing to respond can.

To spot early signs that customers are considering decoupling, examine their changing consideration sets.

Try to see what they see, and you will better understand what is at stake.

After looking at decoupling from the customer’s and decoupler’s vantage points, next assess the situation from your own vantage point, calculating the market at risk. Ultimately, the customer savings, the decoupler’s potential gain, and the incumbent’s risk are the exact same thing: they represent a

transfer of value. The difference is who gains and who loses when thi...

In the book’s first section, we looked at what’s really disrupting businesses: the decoupling of activities done by customers. The second section delved into whether, when, and how established companies should respond. Incumbents can respond in two distinct ways when confronting a decoupler: either they can glue various customer activities back together (recoupling), or they can find ways of accepting the rupturing of these activities and coexisting peacefully with it (rebalancing). To decide what to do before or after a disruptor has entered your market, you must assess the multiple risks involved in taking action or in failing to do so. In-depth analysis of customers’ choices, preferences, and associated costs will reveal how incumbents should approach the threat of decoupling in their industries.

“intrapreneur”)

All businesses, large and small, traditional and disruptive, hew to a similar pattern in their journeys toward increased market penetration. During the initial phase, revenues and market share gains are typically slow. If companies survive this phase, they tend to progress into a second phase of much more rapid growth. Some companies flounder during this phase. Those that survive it eventually reach a third phase: a tapering off, slowing, or declining growth. The challenge here is to sustain growth as long as possible, or to jump-start new growth.

But they all follow this trajectory.

Life stages define the “experience” of a business.

Before going all in, he decided he wanted to test his idea cheaply,

healthy

informal considerable in size or amount: a healthy sum.

According to the NPD Group, American women between the ages of eighteen and forty-five owned thirteen handbags from seven different brands, on average.

At this point, Gorra confronted a problem facing all would-be disruptors: Where should he start?

end-to-end

If you can’t attract customers, how much of a future does your business really have?

Most potential decouplers fail either because they didn’t acquire enough customers or because they couldn’t profitably serve those customers who had signed on.

how markets develop.

In 1858, Macy’s saw an opportunity to offer multiple categories of good-quality consumer goods conveniently delivered in one large store at reasonable prices.

As the first business in a fast-growing market, mass offerings eventually attract competitors.

So instead, new entrants usually specialize.

niche offerings

To serve customers’ desire for specialized

offerings, new entrants arose, each choosing a small subset of key dimensions at which to excel.

As more niche players enter the market, incumbents that fail to respond decisively lose market share to specialized players that “eat around the edges.”

Bonobos

Warby Parker

Indochino

Stitchfix

Amazon Fashion,

instead of specializing on the basis of the type of customers or the types of products, decoupling entails specialization in activities that make up the customer value chain.

We can define online marketplaces as digital platforms that attract and match two very different types of customers.

Media companies essentially serve as platforms that match consumers with advertisers.

The Wealth of Nations,

In theory, the “invisible hand” helped these vendors and producers find one another automatically. In practice, of course, this matching often didn’t happen.

What online marketplaces did was displace the “invisible hand,” decoupling the act of offering to sell (or to buy) goods and services from the actual delivery (or receiving) of these products.

Trying to attract one set of customers or the other leaves entrepreneurs facing a chicken-and-egg problem.

As an entrepreneur, if you can understand how to acquire and retain two kinds of customers from scratch, chances are you will know how to acquire customers for a typical (one-sided) business, too.

In 2008,

Brian Chesky,

Joe G...

Nathan Blecharc...

were on to

The founders weren’t sure how to overcome the chicken-and-egg problem.

Airbnb’s story is especially interesting because the company didn’t generate demand solely on the basis of a new and innovative idea.

So what can entrepreneurs learn about early customer acquisition from Airbnb and, by extension, from other fast-growing marketplaces such as Etsy and Uber?

Don’t target their customers. Instead seek out customers they can’t or won’t serve.

hotels reach full capacity.