The Fast Future Blur

Chapter 1The Fast Future Arsenal: Unbundling, Rebundling and Innovating at the Intersections

Sangeet Paul Choudary

My daughter loves her Lego sets. Over the years, she's acquired a range of Lego sets – ranging from cityscapes to complex motor vehicles – and built them block-by-block as per the instructions. But once built, she promptly pulls them apart – block-by-block – and throws them in with the pile of all the Lego blocks across all the Lego sets she's ever acquired. Lego's prescribed recipe holds her interest for exactly one iteration.

Once disassembled, that growing pile of Lego blocks is where the magic lies. A wheel from a dumpster truck ends up as a roller skate for a ‘Lego alien’ she's been creating. A triangular wing off an airplane set ends up as a skirt pleat on a large Lego doll she's been working on. She returns to that pile every day to create assemblies limited only by her imagination.

Over the past couple of decades and more, every new generation of digital technologies has had one repeated effect on the landscape of enterprise value creation – reduction in transaction costs that emerge in inter-firm coordination.

These falling transaction costs transform the landscape of value creation into a pile of Lego blocks – building blocks of value that can be recombined into new business models. All business model innovation today follows a cycle of unbundling and rebundling, much like throwing Lego blocks into a pile and reassembling them in innovative new ways. ...