Successful companies are creators of value. It occurred to me that some of the best entrepreneurs effectively solve a problem by connecting multiple systems and streams of value.
- In the case of Uber, there was a complex co-ordination issue that involved connecting riders and drivers but also balancing the economics of the transaction.
- SpaceX connected hundreds of moving parts in the rocketry business – from radios (they built their own), telemetry, navigation, reusability, engines – using a combination of vertical integration and clever design and manufacturing, creating enormous value.
- SONOS was able to connect value streams from audio hardware to playback software, to music quality, to listening convenience for the consumer. Wherein music playback software was quickly being dominated by Spotify, they intelligently partnered with Spotify to allow for seamless casting.
etc.
My point here is that aside from the usual barriers to entry, it is harder – but is typically amplifying in value when you connect multiple systems, and streams of value.
In solving a problem, I ask myself – are there multiple systems or streams of value to be connected together, in a way that the sum of the parts is atleast 100-200x more valuable than any singular part?
Conversely, it seems it would be hard to build long-term value by leveraging a single stream of value.