Institutions not Industries!
Earlier this week I launched my public thinking on “Bundling and Unbundling” #BaU and offered two categories of #BaU — Products and Industries.
More recently this week, I discovered a valuable shift in framing what exactly gets bundled and unbundled. Institutions (not Industries) experience bundling and unbundling. Examples of institutional bundling include:
- Universities (not education)
- Hospitals (not medicine)
- Courts (not law)
- Church (not religion)
- Corporations (not business)
Here is a surprisingly fascinating definition of institutions from Wikipedia that deserves to be unpacked and discussed:
As structures or mechanisms of social order, [institutions] govern the behavior of a set of individuals within a given community
One of most apparent forces that drives the bundling and unbundling of institutions is a change in the definition of “community”.
Until the last 20 years, individual universities, hospitals, courts, churches, and corporations (like everything else) relied on physical presence to build their communities.
This requirement of physical presence has been one of the earliest constraints and influences on how we have built structures of social order.
The requirement of physical presence caused institutional bundling that established Universities as the profit-center. Universities brought together experts, and physical spaces for experimentation, discussion, and reflection, and bundled those resources to earn high margins on young people with curiosity and ambition and eventually on parents with an entrenched sense of the previous social order.
Removing the requirement of physical presence is now causing institutional unbundling that establishes a new institution — the Content Marketplace — (i.e. Udemy, Udacity, Coursera, EdX, 2U) as the profit center. The Content Marketplace similarly brings together experts and *digital* spaces for experimentation, discussion, and reflection.
The lens of institutional #BaU is a stronger platform for understanding how technologies disrupt profit-centers. Next post on a closer examination of how #BaU of the corporation has not yet affected traditional B2C sales, but will soon.
