Decoding Digital Disruption: Mapping & Decoupling the Customer Value Chain

As a professor at Harvard Business School, I've studied the common approach to digital disruption and created a framework for identifying and capitalizing on opportunities to decouple customer value chains.

1. Talis Sasser, professor at University of California, discusses digital disruption and high growth startups.
2. A common approach to digital disruption can be engineered or designed by following tools and approaches.
3. An example of decoupling the customer value chain is Uber's ride-sharing service.
4. Customer value chain refers to the series of activities that customers are required to do in order to acquire, use, and dispose of goods and services.
5. Early stage founders should map out the customer value chain and identify weak links or activities that customers are unhappy with.
6. Decoupling is the breaking of the links of the customer value chain by a digital player that has been historically provided together by established companies.
7. There are three types of activity in any customer value chain: value creating, value capturing, and value eroding.
8. Disruption through decoupling can occur in all three types of activities.
9. An example of decoupling a value creating activity is Twitch, which offers consumers the opportunity to watch others play video games online.
10. Breaking apart value eroding activities can be seen in services like Netflix, which eliminates the need to physically rent or buy media.
11. Value capturing activities can be decoupled through business models such as the premium model used by mobile games.
12. Investors tend to value much more startups that disrupt through value creating decoupling than the other two types.
13. Disrupting an industry or decoupling does not guarantee financial reward, and entrepreneurs must build a business, scale it, learn the economics, and then determine profitability.
14. The recipe for decoupling involves five steps: mapping out the customer value chain, classifying each stage into value creating, capturing, or eroding, identifying the weak link, breaking apart th
15. Weak links in the customer value chain represent opportunities to build a business that will most easily steal customers from big established companies.
16. Identifying unfulfilled needs and wants or changes in customer behavior can lead to opportunities for decoupling.
17. Customers tend to be unhappy with activities that are expensive, time-consuming, or require a lot of effort.
18. AI, specifically generative AI, can be used as a tool to increase value for customers by making certain activities cheaper, faster, or easier.
19. It is important to identify the correct application for AI in order to create value for customers and reduce costs.
20. Startups should try applying the decoupling framework to an industry they are familiar with before trying to identify a new business model in an unfamiliar industry.
21. The five steps of decoupling involve mapping out the customer value chain, classifying each stage, identifying weak links, breaking apart the customer value chain, and understanding likely respons
22. Weak links in the customer value chain represent opportunities to build a business that will most easily steal customers from big established companies.
23. Disrupting an industry or decoupling does not guarantee financial reward, and entrepreneurs must build a business, scale it, learn the economics, and then determine profitability.
24. Decoupling through AI can increase value for customers by making certain activities cheaper, faster, or easier.
25. It is important to identify the correct application for AI in order to create value for customers and reduce costs.

Source: EO via YouTube

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