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and map out all the activities in that group’s typical customer value chain.
trip ...
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To make an error or mistake:
First, they are overly generic in articul...
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Decouplers also flounder by failing to identify all the relevant stages in the value chain.
With this far more detailed CVC, we can fully appreciate the complexity of the car-buying process, and how many options for decoupling exist.
It’s so important to get this first step correct.
The CVC is the blueprint of digita...
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flesh...
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add details, as to an account or idea; clarify the meaning of and discourse in a learned way, usually in writing; "She elaborated on the main ideas in her dissertation"
elaborate, expatiate
Step 2: Classify the CVC Activities
If the decoupler takes both a value-creating activity and a value-charging one, it might have a profitable business.
Step 3: Identify Weak Links Between CVC Activities
Step 4: Break the Weak Links
Successful decouplers achieve this by increasing the specialization forces that I discussed in Chapter 3.
They reduce the money, effort, or time it takes for the consumer to fulfill each activity so that the combined costs fall below what consumers currently encounter with the incumbent.
Step 5: Predict How Incumbents Will Respond
we can broadly classify these responses into two major categories:
recoupling
preemptively dec...
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As any amateur chef knows, trying out a new recipe is never as straightforward as it seems.
Storefront
In order to accomplish that objective, they must perform four activities as part of their CVC: acquire merchandise > acquire (buy, rent, or lease) commercial retail space > showcase their merchandise > sell merchandise.
By lowering the cost for small shops to acquire real estate space, Storefront decouples the owning of retail space from the showcasing of merchandise.
One way or another, Storefront must figure out how to address these possibilities before they occur.
Keaton Row and Trunk Club
they need to do the following: visit a retailer that sells multiple items that can be combined into an outfit > choose an initial item (e.g., a blouse) > choose a second item (e.g., a matching skirt) > choose a third item (e.g., shoes) >…> purchase all the items > use the items together in an outfit.
Using personal stylists (Keaton Row) and algorithms (Trunk Club), these decouplers discern their clients’ styles and do the work of searching online for all the items in an outfit on behalf of their clients.
These five steps can be applied to virtually any situation in which you have customers who perform a series of activities in order to acquire a product, service, or idea.
As long as a single company currently provides more than one activity to customers, an opportunity exists at least in theory for an entrant to come in and decouple those activities for customers.
I discovered that the investor market seems to value the three types of decoupling quite differently. Investors assign much higher market value to value-creating decouplers. They assign the lowest market value to value-eroding decouplers, and they assign a value somewhere in the middle to the value-charging decouplers
the decoupling of value-creating activities correlates with a median valuation of around $600 million
a second category of decouplers—value-charging—less highly, giving them a median value of $350 million
Dropbox
Sp...
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Z...
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JetSm...
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Rent the Runway,
Fresh Direct,
Dollar Shave Club,
Value-eroding decoupling has a median market value of
100 million
this type of decoupling is easily copied by other startups as well as by incumbents.
Birchbox
Fast growth is highly valued by investors. At the same time, there is no guarantee that the decoupler will find an alternative source of revenue to justify the business.
Be especially wary of value-creating and value-charging decouplers. Value-eroding decouplers will likely pose less of a threat and can be dealt with differently.
stumbling upon
(stumble across/on/upon) — find or encounter by chance
as we’ve seen, there is more than this to a successful startup when the startup in question is a decoupler.
three layers.*3
The first layer is the traditional way of doing things,
the standard busine...
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In the next layer, digitization,
