Platform vs. Verticals and the Next Great Unbundling

One of the holy grails in the newco world is to build out a digital platform that successfully serves the needs of a broad number of adjacent verticals, and become the definitive platform in its space. We know the now-canonical early examples of this: Amazon, eBay, Craigslist. And we also know that once that holy grail of a new digital platform is attained, competitors quickly come a’ callin’. 

One of the most effective forms of that competition often comes in the form of newcos who aspire to take chunks out of that emergent platform by better addressing the needs of a specific vertical within that platform—by creating a user experience or business model that’s much more tailored to the unique attributes of that vertical. StubHub, for example, took a big chunk out of eBay by creating a ticket-buying experience that was so in tune with the needs of those specific buyers and sellers—with ticket verification, venue maps, and rapid shipping—that they were able to get strong traction in spite of the fact that their fees were substantially higher than what eBay was charging (which likely motivated eBay to buy Stubhub in 2007). 

Read the full article at a16z (with Jeff Jordan)