Cutting Out The Middleman

by MR Magazine Staff

There is no single path to launching a business today. But the default towards direct to consumer or nothing has done plenty of harm. These startups, and the entire premise of cutting out the middleman, are predicated on a misunderstanding that is verging on a fallacy: that cutting out the middleman is inherently a good thing that makes it easier and cheaper to build a scaleable business. Many companies have been founded on this premise without considering the potential benefits or disadvantages of cutting out middleman—and the additional work doing so now requires. Additionally, the lack of specificity about which middlemen were being cut fueled the “Warby Parker for x” gold rush that was wildly misunderstood. This meme-driven fallacy has had two major effects. First, it demonized the actual benefits of middlemen; and second, it undersold the challenges of starting a direct-to-consumer business and scaling it. Read more at Loose Threads.