I've seen a lot of failed businesses that try…
I've seen a lot of failed businesses that try to cut out the middleman and a lot of successful businesses that sell a product or service to the middleman. 🤔
I've seen a lot of failed businesses that try to cut out the middleman and a lot of successful businesses that sell a product or service to the middleman. 🤔
Perhaps this isn't a useful observation except insofar as generating ideas. The idea to cut out the middleman is a fairly common one, whereas ideas around providing services to middlemen seem to be less common.
I'd guess there's also less friction in the latter approach. You're creating something to help another business make money at, probably, nobody's expense. You're going with the motions of an existing industry in a judo-esque way, as opposed to pushing against them.
Whereas cutting out a middleman often means fighting against powerful entrenched forces, which probably exist and haven't been replaced for strong reasons that will be painful for you to learn about down the road. (There are obviously many exceptions to this.) To make things harder, your goal is probably to save your customers money, which is generally a tougher sell than helping your customers make money.
In my experience, middlemen (at least the good ones) know their business and what they do inside and out. Usually understand to a point that they are replaceable, and fight to the death anything that tries to take them out.
Middlemen aren't necessary, but they are phenomenal at making sure as many people as possible still think that they are.
this is a good observation. Thanks @csallen
Yes. I experienced this firsthand with my first company.
We started off trying to cut out the middleman (or become the middleman ourselves, which is what that normally means if we're being honest).
Ended up selling services to the middlemen which made everyone involved better off.
Often, the reasons why middlemen exist in certain niches are neither obvious nor easily overcome.
It's worth working with the middleman to at least get a really good understanding of who you're trying to replace and why.
I've seen a lot of failed businesses.
I once read (but can't remember where) on IH:
"It is better to have 50% of something than 0% of nothing."
🤔
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