by Blake Robbins
I highly suggest consuming the full piece here (8 min. read time)
“In the future, similar to automotive companies, software companies will be made up of hundreds, if not thousands, of suppliers. Every company should be asking: Why are we building this instead of using suppliers? Which aspects of our business need to be built in-house?” — Blake Robbins
“Modern suppliers typically have one or more of these characteristics:
- Leverage software to lower the barriers of entry for new companies and markets to emerge.
- Provide tooling that is difficult and resource-intensive to be built and managed in-house. This tooling is often a fixed cost and outside of a company’s core thesis.
- Aligned incentives with their customers. They usually have a “pay per use” pricing model with the ability to scale operations ‘infinitely.’” — Blake Robbins
“Most of the modern suppliers, today, are focused on fairly broad use-cases. However, there are endless opportunities for new suppliers to emerge. The more complex and regulated an industry is, the more opportunities there are for suppliers. Modern suppliers that specialize in heavily regulated industries help abstract away the intricacies of these industries.” — Blake Robbins
“These modern suppliers are fundamentally democratizing the opportunity for anyone to build and scale. It’s, arguably, never been easier to start a software company. However, distribution and attention is the bottleneck for most companies.” — Blake Robbins
“While the incentives of modern suppliers and companies are fairly aligned, it’s important to highlight the potential ‘monopolies’ that these suppliers can form over time.” — Blake Robbins
My two cents: This was part 1 of Blake’s series on suppliers. I’m excited for his part 2 (releasing hopefully soon). I’ve never truly thought about digital suppliers. Previously, suppliers to me were physical suppliers for cars, airplanes, computers, etc. It seems like digital suppliers have only scratched the surface of the potential value they can provide to businesses. The suppliers Blake mentions in his essay already own a huge chunk of the internet’s plumbing pipes. I still think we’re only in the early innings.
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