Louis C.K. recently cut out the middleman in the process of selling tickets to one of his performances. His experiment has been quite interesting. He’s not the first to bypass sites like StubHub and TicketMaster, and I’m sure he won’t be the last. Why? Because his experiment demonstrates an interesting concept–disintermediation–the removal of intermediaries in a supply chain.
Disintermediation represents a benefit to consumers and a significant challenge, even fatal challenge, to those in the middle. The lesson to be learned?
If you’re a middleman, you’d better be thinking about how you’re adding value–and not just cost–for the end user. If you don’t figure out how to do that, don’t be surprised if some clever competitor emerges to cut you out of the loop. More cost and no value really doesn’t provide you with much of a competitive advantage does it?
Suggestion: here’s a very important point for you to consider if you’re an intermediary. Are you adding value? By that I mean, are you adding value as defined by your market. If you’re not, you are at risk of being disintermediated (that may not be a word…yet!). If your market doesn’t need you because somebody else can deliver the same–or better–thing to them for less cost why in the world would you remain a viable option?
In a technology-enabled market environment it is increasingly easy for companies to reach consumers directly, reducing or in some cases eliminating the need for intermediaries. That represents both opportunity and risk depending on which side of the equation you’re on. If you’re on the risk side, it’s time to begin thinking about how you can minimize that risk: adapt, migrate, mutate or die.