How to Steal Customers from $10B Companies 🎯

 

🚀 Understanding Digital Disruption Through Decoupling

In today’s rapidly changing business world, digital disruption isn’t just random luck—it can be engineered. Drawing on lessons from Harvard Business School, UC Berkeley, and startups like Facebook, Airbnb, Uber, and Twitch, Professor Talis Sacher explains how decoupling the customer value chain creates massive opportunities for entrepreneurs. This framework shows how identifying weak links in customer activities can unlock billion-dollar ideas. Let’s break it down.

💡 What is the Customer Value Chain?

The customer value chain is the series of steps we go through to acquire, use, and dispose of goods and services. For example, opening a checking account means comparing banks, visiting a branch, applying, and waiting for approval. Every one of these steps is part of the value chain—but not all steps create value for the customer.

🔗 Decoupling Explained

Decoupling means breaking weak links in the value chain. Uber, for example, realized that people didn’t struggle because cars or drivers were scarce—they struggled because riders and drivers couldn’t easily find each other. By solving this matchmaking problem, Uber pulled customers away from taxis and redefined transportation.

🎮 Three Types of Decoupling

• Value-Creating Decoupling: Twitch proved watching games is just as valuable as playing them.
• Value-Erasing Decoupling: Steam eliminated the hassle of renting or buying physical video games.
• Value-Capturing Decoupling: Fortnite popularized the “freemium” model—play first, pay later.

📈 Why Investors Prefer Value-Creating Decouplers

Research shows that venture capitalists reward startups that decouple value-creating activities the most. These companies grow faster, attract loyal users, and often redefine entire industries.

🧩 The 5 Steps of Decoupling

1. Map the customer value chain.
2. Classify activities into creating, capturing, or eroding value.
3. Find the weakest link—the most frustrating step for customers.
4. Break that link by offering a better digital solution.
5. Anticipate incumbents’ responses and prepare for them.

🏥 Case Study: PillPack

PillPack realized that managing multiple prescriptions was overwhelming for patients. By packaging pills into daily sachets and shipping them directly, they decoupled the most frustrating activity in the pharmacy experience. The result? Amazon acquired PillPack for over $1 billion.

🤖 Decoupling in the Age of AI

AI is a general-purpose tool, but not every application creates real value. The winning startups will be those that use AI to reduce cost, time, or effort in customer activities. The key is not chasing trends—it’s solving pain points.

⚡ Final Insight

Disruption doesn’t guarantee profit. Entrepreneurs must test, scale, and adapt until they find a business model that captures value sustainably. But by mastering decoupling, founders can spot the weakest links in industries and turn them into billion-dollar opportunities.

🌍 Think about your industry. Where are customers paying too much in money, time, or effort? That’s your chance to decouple—and disrupt.

🌟 Ever wondered how startups like Uber and Airbnb managed to topple entire industries? It wasn't just luck. According to Professor Thales Zsaszar, there's a repeatable, engineered process behind digital disruption called "decoupling the customer value chain." In this blog post, we'll break down his framework, complete with real-world examples and a step-by-step guide you can apply to your own ventures. 🚀

🔄 The Common Thread of Disruption

While I was a professor at the Harvard Business School, I was invited to give talks to many startups like Facebook and Airbnb. They all operated in different industries, but they all thought about disruption in a very similar fashion. I realized there was a common approach to digital disruption I did not know or understand, or was not written before.

👋 Meet the Expert

Hi, my name is Thales Zsaszar. I'm a professor at the University of California and was for 10 years a professor at the Harvard Business School. After you read this, I hope that you will understand the process of digital disruption or creating a high-growth startup can be engineered. It can be designed. If you follow the tools and approaches, you will be much more successful at creating a digital startup than if you just follow your intuition or think of it in a very unstructured fashion.

🚗 The Uber Case Study: Decoupling in Action

One example of decoupling the customer value chain we can identify is with ride-sharing. Before ride-sharing existed and Uber was one of the first ones, if you needed to get a taxi to the airport, you would have to go to the street and try to hail a taxi cab, or you would call a dispatcher. The challenge was that there might be, across the street from you or a few streets down, lots of taxis waiting, but none on your street.

When Uber came out, it came out with the idea of facilitating this process of matchmaking riders with drivers. Uber realized that there were enough drivers in the market, enough cars in the market. The problem was that some people didn't know where to get a car and some drivers didn't know where to get passengers. So, Uber looked at the customer value chain—all the activities that people required to do in order to get a car service.

⛓️ What is the Customer Value Chain?

This process is much more common than you would imagine. To really understand how common it is, you need to understand what is the customer value chain. This is what I teach Harvard students and University of California students on the first day of an MBA course.

The customer value chain is the series of activities that we, as customers, are required to do in order to acquire, use, and dispose of goods and services. For instance, if you want to get a checking account, you need to look at all the available options of banks, go to a bank branch, apply, provide documents, and then they'll give you a checkbook. All of these are steps in the customer's value chain.

🎯 Step 1: Map the Customer Value Chain

After an early-stage founder maps out the customer value chain, the next step is identifying the weak link. This is the activity that customers are having to do with established companies but are very unsatisfied with. The next step is really looking at an opportunity to steal that activity, and this is what's called decoupling.

🔗 Defining Decoupling

Decoupling is the breaking of the links of the customer value chain, often by a digital player, that has been historically provided together by established companies. In the case of Uber, the weak link was the inefficient matchmaking. Decoupling happened by looking at the opportunity to matchmake better and provide peace of mind for passengers.

💎 The Three Types of Decoupling

In any customer value chain, there are only three types of activity:

• ✅ Value Creating Activity
• 💰 Value Capturing Activity
• ❌ Value Eroding Activity

By definition, there can only be three types of disruption through decoupling.

1. Decoupling a Value Creating Activity

Twitch is a great example. Twitch gives you the opportunity to watch somebody from around the world play a video game. You can interact with the player or others in the chat room, but you cannot play the game. Twitch realized that watching somebody play is also a value-creating activity and decided to offer just that part.

2. Breaking Apart a Value Eroding Activity

Years ago, if you wanted to buy or rent a game, you had to go to a store. That activity is value-eroding. Steam came out with the idea of streaming video games, so you don't have to go anywhere.

3. Decoupling Value Capturing Activities

This is the standard of mobile games—the freemium model. You can play the game without having to buy it first. Fortnite is one of the biggest examples of decoupling the value-capturing activity (buying the game) from the value-creating activity (playing the game).

📈 Investor Preference

Through my research, I realized that investors and venture capitalists tend to value value-creating decouplers much more than the other two. That doesn't mean the others can't grow tremendously, but investors prefer startups focused on separating value-creating activities.

➡️ From Decoupling to Coupling

After a startup successfully decouples an activity and grows, it often looks at adjacent activities in the customer value chain. I call this coupling—adding additional activities. In the case of Uber, it first provided rides, then delivery of food, then packages.

🧪 The Five-Step Recipe for Decoupling

1. Map the Customer Value Chain

A startup called PillPack realized that managing multiple pills per day was complicated. They mapped the chain: go to the doctor, get a prescription, go to the pharmacy, pay, create a plan to remember when to take the medication, take it, and hopefully get better.

2. Classify the Activities

Each stage must be classified as value-creating, value-capturing, or value-eroding. For PillPack, taking the medication was value-creating (becoming healthy). Almost everything else—going to the doctor, pharmacy, remembering schedules—was value-eroding. Paying was value-capturing.

3. Identify the Weak Link

The weak link is the activity customers are most unhappy with. For PillPack, it was the organizational challenge of managing multiple pill schedules, especially for the elderly.

4. Break the Chain & Steal the Activity

PillPack broke the chain by creating a subscription service. They received the prescription, packaged the pills into dated sachets on a roll, and sent them to customers. The customer just pulled the roll and took the medication.

5. Preempt the Incumbent's Response

Understand how established companies will likely respond and preempt it. PillPack realized pharmacies had little motivation to copy their model because it would mean fewer people coming into the store. This allowed PillPack to grow, and it was later purchased by Amazon for over a billion dollars.

🎯 The Golden Rule: Find the Weakest Link

The most important step is identifying that weakest link in the customer value chain. That's the best opportunity to build a business that will most easily steal customers. In the insurance industry, the weak link was comparing policies. This led to the InsureTech wave of disruption.

😠 Why Are Customers Unhappy?

Customers tend to be unhappy because of three factors:

• 💸 Expensive: The activity costs too much money.
• ⏳ Time-Consuming: It takes too long.
• 💪 High Effort: It requires too much work.

When you see rising costs of money, time, or effort for an activity, you see an evolving opportunity for decoupling.

🤖 The Role of AI in Decoupling

AI, particularly generative AI, is a general-purpose tool. The key is to apply it to activities where customers are unhappy. Use AI to make an activity cheaper, faster, or easier. Don't just apply AI for the sake of it; ensure it solves a real customer pain point.

🚀 Your Mission

If you learned about decoupling for the first time here, my advice is to read my book, internalize the concepts, and then start trying to apply it to an industry you know very well. Before you create something new, try to recreate an existing business model using these tools. This will build your skills before you venture into the unknown.

I wish you the best of luck in this endeavor! 🚀