I’ve several times toyed with the idea of setting up a “Disintermediation Daily” e-mail newsletter to gather a massive list of email addresses to pimp my consulting services to keep people informed of vertically integrated business models unraveling and turning into focused horizontal layers.
Anyhow, I’m too lazy. But here’s a good example of disintermediation anyway — today’s thin and spicy business model. A lot of ideas I get about telecom come from outside of the industry. This one goes to the heart of the matchmaking relationship in banking between lenders and borrowers.
Zopa is a UK start-up that could be considered an “unbank”. They aggregate prospective borrowers into buckets of people with similar credit ratings. A typical grouping might have 50 people. Lenders then directly fund these mini-syndicates, accepting the diluted risk of non-payment, and receiving a pre-negotiated interest rate. Zopa deal with collections and enforcement. The middleman also preserves the privacy of lenders and borrowers.
Zopa lives off a 1% commission on the amount the borrower takes. Unlike a bank, they don’t have an interest rate spread. They also don’t have an expensive distribution network; it’s all on-line.
What’s really interesting is how they’ll sponsor larger lenders who exceed the legal limits for “personal” lending to get a credit license. Thus the barrier to entry from regulation the banks have erected becomes much less of an issue.
You can imagine very similar structures emerging in telecom with new intermediaries brokering those offering and requiring connectivity, and dealing with the regulatorium. Some of the Wi-Fi aggregators have headed down this route, but they didn’t create the right mix of costs and incentives. They burdened themselves with network build-outs (vertical integrated business model) and high access fees, rather than seeding a marketplace where many supply and retail models could compete. But a Zopa for connectivity will emerge somewhere, it’s just a matter of time.
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