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Page 91 GO IT ALONE!
to the development of the SpinBrush, which Procter & Gamble subsequently purchased for $475 million. In discussing his success with the publication Knowledge at Wharton, Osher noted the importance of using existing technology: “Our advantage was that we were trying to design up from 80 cents, while everybody else was trying to design down from $79.” Business models that are successful in one industry may also inspire successful innovations in other industries. The now-familiar Internet-based mortgage lending model, where multiple lenders compete for each consumer’s business, has been applied to a variety of consumer and business-to-business comparison shopping arenas, including life insurance, car buying, phone services, broadband, and health insurance.
Where Can Unbundling Occur?
As discussed earlier, the unbundling of specialized activities from larger companies is one inevitable consequence of the growth of the Internet. These activities may be functions performed today in large corporations, or they may be services that have been bundled into the activities of professional service firms. Look for particular functions that today are undertaken as part of a larger or bundled activity that can be broken out, with a specialized firm handling them better, faster, or more cheaply.
“I Can Do It Better”
Wyck Hay, a cofounder of herbal tea maker Celestial Seasonings, decided to create KaBoom Beverages after he sampled Red Bull, a drink imported from Austria. As detailed earlier, he believed he could create a tastier, healthier product at a lower cost. In essence, he launched a product in an area that had a demonstrated customer appeal, and improved on it to cater to
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GO IT ALONE! Copyright 2004 by Bruce Judson. Reprinted by permission of HarperCollins Publishers. All rights reserved.
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