When I came up with my first startup idea, I had just learned and implemented the kMeans algorithm. If you are unfamiliar with kMeans, it is a beginner to intermediate level unsupervised learning algorithm for clustering data. I wondered how I could build an application around this algorithm and bring it to market.
Unbundling Philosophy: Build a game-changing feature in your app.
I theorized that I could use this algorithm to create an incredible vacation planning app. You could use kMeans to organize where different travel locations are geographically. This routing will help you save time when sightseeing in new cities.
At the time, I had just finished a Bachelor’s degree in CS and hadn’t really talked to a lot of business people. When I sought after funding for my project, I came across a lot of mentors who helped me learn about things such as minimum viable product, customer acquisition cost, and bundling and unbundling.
What is bundling and unbundling?
I have found the business framework of bundling and unbundling to be very helpful when coming up with new app ideas. When you are ‘bundling’ you are combining existing functionality into a new interface. An example of this could be if you are trying to integrate google maps, uber, and yelp services all into a new interface through their API providers. These APIs are very cheap to use and these companies have provided extensive documentation to help you use them.
Unbundling refers to taking apart an existing feature and looking at how you can dramatically improve it. An example of this in medium, is the play.it audiobook feature. This feature provides a dramatic improvement to how people digest articles on medium. If you are thinking from the perspective of an ‘unbundler’, you would look at research like Google’s Wavenet and other speech synthesis algorithms to see how you can improve the automatic audiobook functionality.
Bundling vs. Unbundling applications face very different Business Challenges
If you are building a company around unbundling and ‘10x’ing a feature, you may want to think of your company as being built for acquisition. Mergers and acquisitions are a massive part of the tech world, and this is certainly the fantasy for many developers who don’t necessarily dream of bringing their startups to public launches and the New York stock exchange.
A recent example of this is the 3D body model startup, Body Labs, https://techcrunch.com/2017/10/03/amazon-has-acquired-3d-body-model-startup-body-labs-for-50m-70m/. Amazon is working on improving e-commerce by using these models to help people see how clothing will fit before they buy them. Body Labs built great features and technology that will help expedite Amazon’s journey to bring this feature to market.
A company focused on unbundling a feature doesn’t have to worry about things like their go to market strategy or marketing efforts as much as a company based on bundling does.
Software applications based on bundling features together should be very focused on their go to market strategy and validating their idea in the marketplace quickly. These companies still have a great chance at acquisition if that is desirable for them, and they still have the ability to develop 10x features that fit into their product. However, the business strategy of the bundling application is fundamentally different.
What category does my app fall under?
If you are curious wether your app would be classified as bundling or unbundling, you should list out all the features of your app and identify how many of these features already exist in the market and how big of an impact they may have. For example, a deep learning recommendation engine, done well, will have a massive impact. Object detection features using convolutional neural networks will have massive impacts in the market. Additionally, revolutionary user interface and user experience designs could have massive impacts in the market. Usually you can find correlations between impact and difficulty to implement.
However, if you can implement most of your features relatively easily, you are likely a bundling company. This means that you should release into the market as soon as possible and A/B test/mine user analytic data from there.
Thank you for reading, good luck with your software startups! Please follow my profile for more articles about software engineering, deep learning, and startup mechanics.
If you are interested in more reading about bundling and unbundling, please check out this interview with Marc Andreessen from the Harvard Business Review: https://hbr.org/2014/07/marc-andreessen-and-jim-barksdale-on-how-to-make-money