Manufacturers are also just Middle Men06 May 2012
Any market where unnecessary middlemen stand between customers and their successful use of a solution is about to be disrupted.
This quote is from an article by Box.net founder Aaron Levi on FastCompany.com. It got me thinking about how bad life must be as a Middle Man.
In the article, Levi mentions Amazon and Ebay as examples for simplicity through disintermediation. Both companies drastically improved processes by removing intermediate parties, aka “Middle Men”. Ebay did it with private sales, and Amazon did it with book sales, then sales of everything, then server commissioning, then book authorship, and so on. Today the trend to kill middle men keeps most of the world’s tech startups busy: Uber, Exec, Spotify, 23andMe, etc—everybody is trying to kill some sort of middle man. Who are these unfortunate people in the middle?
Today’s endangered middle men live at the top of the supply chain. They are retailers, distributors, medical professionals, taxi dispatchers. In the supply chain, they are between the producers and the consumers. They have in common that some or all aspects of how they add value is in the process of being replaced by a cheaper and/or better technology that enables self-service.
What’s quite interesting is that a new batch of middle men is already getting in line for disintermediation. They are the manufacturers. You read that right: Manufacturers are also just Middle Men. In the supply chain, they currently live between the designer and the soon-to-be-gonedistributors and retailers mentioned above.
Manufacturing is often regarded as solid future-proof business because its value-added is physical. Middle man assassins today stop at manufacturing because making stuff is hard. Enter 3D printing (which really just is a catch-all term for a group of novel manufacturing methods). Suddenly the assumption that manufacturing is hard is as outdated as the assumption that you can earn money by stocking dead trees on shelves.
The time when you can have an affordable machine in your home that can fabricate many of the objects we are used to buying from a store will be here sooner than you think. Five years in, it will increasingly seem ridiculous to have finished objects transported from a far-away production facility to your house. Who needs free UPS Second Day shipping with Amazon Prime when you can buy a blueprint from the designer and have it fabricated in your home within an hour or two? There will be a new group of startups ready to remove the manufacturing middle men and to cash in on this change.
To pacify theskeptics I should mention that the change I am describing will be gradual and incomplete, just like the current wave of middle men assassinations. Some things will never be fabricated at home (Higgs Bosons, dark matter, etc). Many items will remain more economical to produce in factories for a long time. And there will always be people who prefer doing things the old fashioned way (your parents, progress deniers, the Amish). None of that invalidates my main point though: Manufacturers are middle men.
One more thing: Remember how I wrote that manufacturers are middle men between designers and consumers? There is no reason to assume that designers aren’t next in line to play the role of the unloved middle man. Once manufacturing has been disintermediated, designers are just the middle men between ideas and and consumers. First attempts at design automation are old news even today…