The Battle Is For The Customer Interface
Jared Sperli stashed this in startup
The Internet age means building things is nothing other than code.
There are two approaches.
Full Stack Companies
Full stack companies like Tesla, Warby Parker, BuzzFeed, Nest or Harry’s seek to ensure control by owning all layers. From R&D to marketing, from distribution to sales, these companies do it all. It’s a great way to keep profit in the family, yet it’s harder to scale and build.
The Interface Owners
The new breed of companies are the fastest-growing in history. Uber, Instacart, Alibaba, Airbnb, Seamless, Twitter, WhatsApp, Facebook, Google: These companies are indescribably thin layers that sit on top of vast supply systems ( where the costs are) and interface with a huge number of people ( where the money is). There is no better business to be in. The New York Times needs to write, fact check, buy paper, print and distribute newspapers to get their ad money. Facebook provides a platform for us to write our own content, and Twitter monetizes the front page of newspapers, which happens to now be the Twitter feed.
Our relationships are no longer with the service providers. Our mobile operators seem like dumb data pipes while WhatsApp provides the services we value and can monetize our attention.
The Interface Is Where the Profit Is
The interface layer is where all the value and profit is. Withings scales can cost five times than other weighing solutions because the addition of an app makes it smart health management, not just weight measurement.
Phillips Hue lighting can make 1,000 times more profit than a colored light bulb because it’s a home emotion system. Sonos beats any other music system I’ve tried because the experience of music while using it is delightful.
The value is in the software interface, not the products.