Bundling and unbundling

All business is bundling and unbundling

Shaan applies the Marc Andreessen line that most business is just bundling and unbundling to newsletters: they're currently all unbundled, so bundling your favorite writers into a single flat monthly fee, like a cable package, is the opportunity.

“I'm kind of a believer in that, that the Marc Andreessen thing that he stole from whoever, which was basically like most business is just bundling and unbundling. And so I think that right now newsletters are all unbundled and somebody creating a bundle of newsletters, it'll be like the cable package and somebody will say, ah, why am I paying for, I don't want to pay for 10 individual subscriptions and some of them are good, some are bad. And instead if I could just pay a flat $15 a month and get access to my 10 favorite writers, like, great.”

Steal thisWhen a market has fully unbundled (e.g. paid newsletters), the next move is to bundle the best of it into one flat subscription.

Bundle or unbundle: the only two ways to make money

Greg cites Netscape's Jim Barksdale: there are only two ways to make money, bundling or unbundling. Andrew Parker's classic 'unbundling of Craigslist' post showed the aggregate market cap of the spun-out verticals (Airbnb, StubHub, etc.) far exceeds Craigslist itself.

“It's a famous thing, I think in the '90s, that Jim Barksdale, Marc Andreessen's partner, co-founder of Netscape, basically said there's only two ways to make money. You can either buy bundle or unbundle. And just, you know, there's, I think, a post by Andrew Parker from— he was at Spark Capital, 2012 maybe. He wrote this post about the unbundling of Craigslist.”

Steal thisFind a big aggregator (Craigslist, Reddit), pick one high-energy vertical, and build a dedicated product for just that community.

Anything big enough is going to get unbundled

Greg's thesis: beyond unicorn status there's 'unbundling status.' Any platform large enough (Craigslist, Reddit, Facebook Groups) will inevitably have its vertical communities spun out into standalone businesses.

“My belief is that like there's unicorn status and then there's unbundling status. Anything big enough is gonna get unbundled.”