Unbundled

How the breaking apart of traditional, rigid structures is creating a personalized, on-demand future and changing the everyday interactions of people, politics, and profit.


About this post

This post is based on a theory and a book outline I’ve been chipping away at since 2010. Since I’m probably going to be too busy to ever finish the full thing, I figured I would massively truncate and post it here so that it’s finally out in the world in some form. In the six years I’ve been thinking about this subject, it’s only become clearer with the advent of the on-demand economy, 3D printing etc. Please excuse the length!


Introduction

In Silicon Valley we’ve used the term “Unbundling” to describe the phenomena of mobile apps breaking apart into multiple separate apps, each essentially providing more focused, single purpose features. Think of the Facebook app being separated into Facebook + Messenger.

I believe this Unbundling phenomena is happening almost universally across all aspects of life. It’s a meta-trend that has been happening for decades (or more) and will continue for decades to come. It’s a common process affecting many of the things happening in the world today. In fact most of the major disruptions we see (loss of traditional jobs, failing record companies, terrorism, divorce rates, the rise of fringe/underdog political candidates etc) are all, in at least some way, connected to this fundamental transition.

Definition: Unbundling is the process of breaking apart rigid, man made structures (i.e. bundles) into individual, atomic parts. With this higher level of granularity people are more empowered to more efficiently remix and mashup their favorite things, on-demand. This results in deeper personalization and individual freedom. This trend is happening broadly across all aspects of modern society and is causing a vast array of personal, political and professional shifts.

This phenomena is happening at different speeds and to various levels of completeness across various aspects of life. In some cases full unbundling and disruption has occurred. In others (most) cases the unbundling is just beginning or, in the short term, has even receded somewhat. But my theory is that the general trend, over decades, towards more granular parts remixed on-the-fly is inexorable.

Examples

News

Telling stories has become unbundled from mass/mainstream media. Instead we are now increasingly telling each other stories through social media and creating new media properties hyper-optimized for growing populations of niche audiences. In many ways, this unbundling is actually a return to a more natural kind of storytelling before mass publishing.

Music

Songs used to be sold in bundles called albums. These albums have now become unbundled and available as individual tracks, accessible on-demand via YouTube, Apple Music, Spotify, iTunes and more. Where radio companies/DJs and store shelves were the gatekeepers to sales, artists can now just drop their music online and reach their audience directly.

Apps & Bots

Not only are features being broken out into separate apps, but now they are even being unbundled from individual brands/interfaces and starting to surface into chat interfaces or voice agents (like Amazon Echo, Siri) and bots (like those supported by Slack and FB Messanger).

Presence

Since the advent of language, stone tablets, paper, the printing press and radio we’ve been working on higher and higher fidelity forms of unbundling presence from the experience/memory. Sharing the sense of ‘being there’ without having actually been there has been a fundamental human need. It’s a kind of time travel. Film, television (especially live) took this to a whole new level. Live streaming services like Periscope or Facebook Live democratized live video and now, perhaps the most profound leap forward yet, is starting to hit the mainstream — virtual reality.

But this is not just about digital content, it’s also affecting the real world…

Work

Increasingly, work is being unbundled from corporations. Freelancers, contractors, flex-workers, free-agents etc are empowered to work when they want, how they want, anywhere they want. It’s very likely that the last vestiges the traditional corporation will begin to dissipate as individuals get better and better at connecting and collaborating together on the fly, and new techniques are discovered for quickly finding the exact right team for any given task at a moment’s notice.

Ownership

The Unbundling of ‘access’ from ‘ownership’ is becoming a significant and disruptive trend. Accessing a great many things we don’t own (E.g. cars, housing, power tools) is becoming as easy (or easier) than owning them. What might happen if people could start living in hot-swappable homes, having the freedom to change their experiences week-to-week?

Relationships

Marriages are starting later in life and often ending in a divorce (although divorce rates have declined recently). Instead, parents, grandparents, step parents and friends are all acting as a flexible family collective that work together to raise children. As we continue to shed the taboo of non-traditional relationships and breakups these transitions are becoming somewhat less contentious and painful.

War

In the modern era, Wars have traditionally been fought between nation states. Increasingly, though, they are now being fought by individuals who share not nationality but rather an ideology. Battles that used to be about killing the most soldiers and capturing the most land are now about affecting the hearts and minds of individuals with terror tactics.

Money

Regardless of what you think of Bitcoin, it has proven that there’s at least the possibility that Money can be unbundled from Governments. While traditional currencies require delegated value stored, backed and regulated by central banking authorities, Bitcoin uses the Blockchain to provide a distributed (i.e. Unbundled) means of production, scarcity and trust.

Government

As usual, government/governance is the last to catch up. However in the US it’s clear that, despite Citizen’s United, some presidential candidates can now fund multi-billion dollar campaigns from small donations over the Internet. There’s even been efforts to be the ‘internet Candidate’ whose decisions would be based on real-time internet polls. In addition, all campaigns are now forced deeper into the grass roots than ever before. Where once an appearance on the evening news was enough, politicians need to use Twitter, Facebook, YouTube and other tools to get the word out. Even as president, Obama has regularly meet with top YouTubers and podcasters to reach increasingly fragmented audiences. In all these examples, political power has been unbundled from the politician, the power brokers and the pundits and put into the hands of ordinary citizens.

I’m certain there are countless other examples you can think of.

Is this a positive or negative trend?

These examples, and many more like them, show the wide ranging effects of the Unbundling trend. It takes many forms and touches many aspects of our lives.

In the short-term, the effects of unbundling can impact individuals and society in both positive and negative ways. For some, the breakdown of a bundle like marriage, for example, is probably horrifying. I’m sure there may be plenty of psychological, spiritual or economic reasons why this trend is not constructive for society when viewed within the framework of limited time horizons.

My sense, though, is that while there may be short term disruption, frustration and even pain, ultimately this transition actually translates to a greater sense of personal empowerment and choice. When individual parts are unbundled from rigid systems, there tends to be an increased flexibility for empowered individuals to have more choices and more personalized experiences.

In the case of marriage, individuals are now less likely to tolerate unhappy circumstances or bad pairings for the good of the ‘family’ bundle. Instead, when the bundle becomes unhealthy they are choosing to break it apart and reclaim/refocus on their own personal happiness and needs while still maintaining a new, broader kind of family unit for the good of the kids. A study even shows that, when it comes to raising children, a happy and harmonious family dynamic is more important than the composition of the family.

In the case of music, individuals are now able to have more choice when selecting the songs they buy or listen to. They don’t have to buy a whole album just to get the 4 songs they really like. In fact, they can fill their playlists with just the songs they love.

In the end you will need to make up your own mind. My goal here is primarily to highlight the trend without passing judgment on it.

Contributing Factors

Information Technology

Information Technology is the leading contributor to this trend. It has a broad spectrum of impacts on people and processes that each is perfectly suited to converge and facilitate Unbundling.

Some of these impacts include…

  • Reducing the cost of inventory and discovery to, in many cases, zero or near zero
  • Reducing the cost of direct communication and orchestration with more people at once — bypassing the need for manual mediators/editors/orchestrators/curators
  • Substituting 1:1 trust with digital reputation systems
  • Helping to detect and visualize complex patterns
  • Automating manual or non-scaleable processes or patterns; making them hyper-efficient self-serve

Steve Jobs once said that “Computers are like a bicycle for our minds”. Just as a bicycle allows us to travel faster and further than walking alone, computers have improved our perception of the world around us while also giving us, as individual actors, power that far exceeds our grasp.

Where we once needed the centralized command and control provided by traditional, rigid bundles to be able to handle the inefficiencies and complexities of the world, information technology now gives us new found insight and the power to solve for these complexities on our own in my much more efficient and flexible ways. The result is individuals who, with little more than a cell phone, can participate in (or even design their own) processes to solve personal or collective problems on the fly.

Manufacturing Technology

Another key driver of Unbundling in coming years will be manufacturing at the edge. 3D Printers will facilitate the production of highly personalized goods at the last minute and at the last mile. Printing what you want in your home will make centralized manufacturing obsolete in a growing number of use-cases.

Population Density

Another key driver of Unbundling is population growth. Even the most niche product can find an audience sufficient in size to justify production and manufacturing. This, combined with migration back to urban centers means that people, products, and processes can find critical mass quickly and effectively.

Human Nature

The final key driver of Unbundling is human nature. In some cases, modern Unbundling is actually reversing a short term trend of the industrial and information age that saw once peer-to-peer processes become centralized for a period of time.

Case study: News and Entertainment Media

Note: I wrote this section years ago. As a result, most of it is fairly obvious now, however as you read, consider how this applies to the other examples of unbundling listed above.

After 10+ years building social media tools and partnering with traditional media, let me unpack how this trend is playing out in that field. Interestingly I am using Medium to publish this post. Keep that in mind.

Traditional Media constructs like News Orgs, Record Labels, and Movie Studios have been dramatically and fundamentally disrupted by advances in Information Technology resulting in a more democratic, distributed and personal media landscape.

This disruption is coming from next generation media platforms like Facebook, Twitter, Medium, Snapchat and YouTube that transform traditionally passive audiences into low cost content creators (active participants) creating stiff competition for eyeballs, attention and revenue.

Unlike traditional media businesses who have highly paid teams on staff to create ‘high-quality editorial content’, next generation media platforms facilitate the production of massive volumes of content by anyone. The best, most interesting or most relevant content then floats to the top of newsfeeds or timelines that are personalized by end-users using a combination of implicit or explicit controls.

In this landscape, traditional organizations struggle to find their unique editorial voice and differentiation. For the most part, they have fundamentally failed to understand their role in an an age where these unbundled, atomic units (the former audience members) have become empowered agents that source or publish their own news and entertainment.

Information Technology, especially, has directly contributed to this continuing trend by…

Reducing the cost of direct communication and orchestration with more people at once — bypassing the need for manual mediators/editors/orchestrators/curators.

  • Social Networks allow people living through a given news story to tell their own version of events.
  • Next generation media platforms have no editorial oversight or gatekeepers. The audience decides what’s popular which results in authentic or surprising content automatically rising to the top.

Reducing the cost of inventory and discovery to, in many cases, zero or near zero.

  • The cost of Production (via smartphone cameras, iMovie etc) and distribution (via Facebook Posts, Tweets, YouTube Videos, Medium posts, Snapchat, Instagram etc) is literally free for end-users.

Substituting 1:1 trust with digital reputation systems

  • Reputation is now earned through consistent, quality interactions. There’s no longer any unrealistic expectation of ‘unbiased journalism’. All humans are Biased. Every editorial choice to use the word ‘Terrorist’ or ‘Rebel’ or ‘Freedom Fighter’ is a form of bias. Instead, modern storytellers earn credibility by being transparent and authentic.

Helping to detect and visualize complex patterns

  • #hashtag searches and their resulting visualizations provide profound insights into the movement of new ideas across the globe.
  • On the business analytics side, TV viewers were once exclusively sampled by Nielsen boxes. Next generation media platforms, on the other hand, carefully measure each and every click and can A/B test every last pixel and shade of color.

Automating manual or non-scaleable processes or patterns; making them hyper-efficient self-serve

  • Young people or groups with something special to say can find themselves becoming part of the global consciousness thanks to the simple but important viral mechanics built into all the popular social networks.

Maybe even more impactful than the unbundling of the media production process is the unbundling of the media consumption process. Where users once consumed content inside the bundle in which it was produced (E.g. Content created by CNN was consumed on the CNN channel or website) it is now being smashed into a million unbundled, atomic units and aggregated in highly personalized packages on the fly. The Twitter Timeline and the Facebook Newsfeed is now the primary news consumption tools for the mainstream.

This is fundamentally undermining the business model of media companies who rely on control over eyeballs so they can charge advertisers to reach their audiences. In fact, there are entirely new media companies that are capitalizing on this new reality. NowThis and Vox are good examples.

These changes to the fundamental nature of news and entertainment production and consumption — along with the cost structures and business models that enable them — have caused a lot of disruption in and of themselves. On top of this, though, the mainstream news media has demonstrated a fundamental misunderstanding of the trend of Unbundling in its actual reporting.

Whether it’s reporting on US politics/governance, terrorism, global warming, immigration or any of the other key issues of our generation, the lack of authentic, accurate, nuanced and honest reporting have gotten to the point where a disgruntled audience has decided to change the channel and look for (or create their own) authentic sources.

For their part, major media companies are trying a series of gimmicks to attempt survival in this rapidly evolving landscape including…

  • Capitalizing on nostalgia from legacy IP (E.g. Reboots of many popular or cult properties from the past like Star Trek, Star Wars, Terminator, Marvel, DC etc)
  • Investing in massive CGI budgets/spectacle to create blockbuster/watercooler events
  • Using social media as a way to source new talent, memes and content for re-broadcast into ‘the mainstream’
  • Using wedge issues (or hyping every-day events) to generate fear and passion which result in highly activated and sticky audiences
  • Outsourcing publishing and engagement tools to the popular social networks hoping that their magic will rub off on them

Where to from here?

In many cases, we’re just at the beginning of the Unbundling process. Like a fractal, the pattern repeats over and over.

Continuing with the example of media, there have been many, many incremental unbundling phases — presumably with many still left to go. From cave walls to paper, from hand illustration to the printing press, from print to TV, network to cable, cable to websites, websites to newsfeeds, newsfeeds to notifications, notifications to voice/chat agents. Who knows what will happen next. But each time the unbundling gets more and more granular.

Each inexorable step forward leads to a world of increasing choices and personalization for individuals. But it can also causes a great deal of pain, frustration and disruption to the corporations or workers caught in the transition.

In recent years, in some facets of life, the effects of Unbundling have accelerated as the contributing factors have begun to converge. We’re seeing the availability of new technologies, increases in urbanization and increasing levels of trust for strangers and devaluating of traditional ownership.

Taken to its logical conclusion, in every aspect of life, one could imagine a world where each individual gets precisely what they want, the moment they want it, at the perfect price, free of angst and friction. Will this be a utopia of abundance, or an isolating, myopic hellscape? As with most things, it’s likely going to be something in between.

The question is, given these trends, how can you get ahead of the curve and capitalize on the new patterns and tools that emerge?


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Special thanks to some people who helped me edit/refine this before posting: Elias Bizannes, Sarah Buhr, Dan Rowinski and Ben Way

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