Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Friday, March 11, 2005


Verticalization, Pt 2

I think it's important to be clear about what verticalization means. It's not rebranding the same model across different domains - it's tailoring and remixing components of the dominant design for maximum efficiency within each domain. It's a game of recombinative innovation.

Peerflix, I think, demonstrates how. By remixing the market-making component of the switchboard model (ie, by replacing auctions with simple matching), Peerflix achieves a model which is inherently more efficient than eBay (etc).

Now, whether we're talking about search, as Battelle does, or b-model economics, as I'm doing - the point remains that verticalization implies tailoring the model to a specific domain.

If this seems obvious, I'm only going on about it because I can feel a lot of entrants who don't do much more than rebrand an old model - which is a surefire recipe for failure.

Next verticalization entry will discuss why industries fragment...

-- umair // 12:03 PM // 0 comments


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