Aug 31, 2012

The Great Fragmentation

A few weeks ago my partner Albert Wenger wrote about Facebook being unbundled: "Facebook's Real Mobile Problem: Unbundling" where he opined that "mobile devices are doing to web services what web services did to print media: they unbundle." 

Then I recalled this blog post from University Ventures which wonders whether "colleges and universities are the next object of the Great Unbundling." This is what Dale Stephens of Uncollege has been saying to me for a while - that education is being unbundled into its component parts: content, teachers, credentials,community, physical campus, mentors, hiring and network.

Then I remembered this wonderful essay Jason Epstein wrote in the New York Review of Books ("How Books Will Survive Amazon") which suggests that the broad general based publishing industry is at odds with the Internet network: 
"Specificity, reflecting the structure of the web, will matter: a guide to the cultivation of daffodils will more likely succeed than a more diffuse gardening title."
In other words, publishers and bookstores will be unbundled.

What if the power of connected networks such as the Internet is that they unbundle all that came before them? They disintermediate incumbent industries but also do the same to any new attempts at re-aggregation?

AOL back in the day, among many others, did not perceive this and instead built its service around the idea that the wide vastness of the web needed to be tamed, consolidated, presented in a singular user experience. That vision turned out to be wrong. Google's turned out to be right - how fast can we get you away from our service into the messiness of the Internet. 

What if then this unbundling and resultant fragmentation is some kind of digital/physical force, law or property? If it is a feature, not a bug.

What would the implications be?  Well some are:

*this process of unbundling and the fragmentation that results from it will continue, if not accelerate

*this is great for users of services - someone will build, and users can find, the specific application or service that serves their desires precisely

*this may be great for some entrepreneurs that embrace this state of fragmentation and can set their expectations to be consistent with it

*maybe not so great for other entrepreneurs and even venture investors - the winner take all era of web services may no longer make sense and thus may be ending.

Let the fragmentation begin.

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