12. Eliminate the Middleman
Intermediaries know as the “Middle Man” can be capturing value in your market. By disintermediating them, you can do the same tasks at a lower cost. Think about the travel agents of the past. They have largely been replaced by Online Travel Agencies (OTAs) like Expedia and Booking.com. Be cautious though in thinking that digital disruption is always cutting out middle man, who bring some value to the table. Travel agents still exist, but far fewer of them. Brokers still form a large part of financial services. Real estate agents are often preferred in many countries. Be cautious to take into account the intangible value that some middlemen can provide such as trust, face-to-face interaction and other social dynamics of some professions.
13. Change the Value Proposition
You can become more scalable by changing your value proposition. You can change how business is done, and in some cases, simplify it. Examples include changing processes, the payments, the exchange of value, the redistribution of risk, the management of operations, etc.
Uber was able to increase scale. Its technology at the time was actually not a major breakthrough, using existing geopositioning technology, existing mobile payment technology and customers’ own smartphones. But, Uber transformed the customer value proposition. It combined mobile payments, customer reviews, a real time marketplace between buyers and sellers, existing GPS technology already available on mobile phones and leveraged a transformative rise of the gig economy and independent contractor model.
By building scale, Uber was able to match supply and demand to allow customers to get a ride at any time for a price. It disrupted the taxi model, and provided customer value improvements. These value proposition improvements included a better ride, reduced anxiety for tipping, reduced need for cash in your wallet, safety, and a better overall experience.
14. Build partnerships with influencers