One thing heavily overlooked is how technology shrinks the supply chain. By supply chain I mean in the broadest and most general sense how a product or service is ultimately delivered through to the end user.
This morning Fred Wilson wrote about Demand It! From Eventful. With Demand It! the basic concept is simple – users demand a certain service (movie, concert, or other event) and if users can accumulate enough “demands”, the event will come to their location. Historically, concert organizers played an important intermediary role. Through the use of technology, bands can no identify the most attractive markets and sidestep any analysis previously done by intermediaries.
Technology also helps to capture a more precise quantitative metric and I believe this is an important reason why technology is able to shorten and consolidate the supply chain generally. Intermediaries in markets like summer concerts would frequently rely heavily on their understanding of how successful a certain genre of music would be within a given market. Historically bands would be beholden to these intermediaries, but they can now rely on a more quantitative measure of interest within a given geographic market.
There are a plethora of other examples of how technology has shrunk the supply chain. The move to digital files has allowed content creators to deliver directly to the end market because the move to digital significantly curtained shelf space scarcity. With shelf space no longer a constraint, content creators and end users are no longer beholden to intermediaries like record labels and music stores who have historically provided a vetting process to determined what content passed down the supply chain. Because of constraints like limited shelf space downstream in the supply chain, these intermediaries culled or funneled the content that actually made it to the end consumer, but with digital files producers can now go directly to consumers.
eCommerce solutions allow producers of a product or service to deliver their product or service directly to the end user – in many instances bypassing several layers of retailing. Airline ticketing provides one of the best examples of how the move to eCommerce shrunk the supply chain between producer and the end-market buyer.
Kickstarter is another example of how technology is shrinking and consolidating the supply chain. The list goes one. With unlimited choice, the importance of search and curation are certainly key. And creating a relationship with a fickle consumer is clearly easier said than done – but we’ll save these for another day.
With technology shrinking the supply chain and consolidating players within the supply chain, end users can work quickly and easily back up the supply chain. This is exactly what is happening in the case of Demand It!. End users have the able to push their wants and desires back up through the supply chain. Quirky, which uses a wisdom-of-the-crowds approach to product development is another example of how consumers can push their desires up the supply chain.
The shrinking and consolation of the supply chain will also open up new services and opportunities for end-users to push their preferences up the supply chain. Over a decade ago John Hagel and Marc Singer wrote about infomediaries, which are services that act as a personal agent on behalf of consumers to control their personal information. Personal.com is an example of these infomediaries. Project VRM is another example of how users might leverage infomediaries to work up the supply chain.