Okay I’ve talked myself into believing this. The logic is simple. Vertical integration lends itself to more powerful branding and differentiation. This moves positioning from concrete commodity features to abstract woo and aura. Much friendlier to grift.
Conversation
In Charles Fine’s Clockspeed there’s a model (dated; book is from 90s) about how industries cycle through vertical/horizontal. You get vertical phases when knowledge is more complex than orgs and highly tacit. Sectoral pioneer phases and macro disruptions drive verticality.
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You get horizontality when org structure catches up, tacit knowledge gets codified, stack layer interfaces of formerly vertical structure get opened up. Brands weaken, horizontal products/ services compete on features and industry benchmarks rather than differentiation aura.
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There is of course grift in horizontal eras too. But the type is different and solution is different.
In a declining vertical era you get eroding brand promise. Brands go from standing for superior differentiated quality aura to overpromise/under-deliver and monopolistic apathy.
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In a horizontal era, knockoffs and unbranded sketchy quality things compete with branded things. Price premium is commanded by relationship trust and QA guarantees.
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Vertical eras are driven by distant marketing pull, horizontal by relationship sales push.
Vertical marketing is built around customer belief in secret sauces, the horizontal sales is built around customer beliefs in quality guarantees.
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We’re at the tail end of a 13-year vertical phase. Brands are eroding. Every major brand is being hollowed out. Claims of differentiation are increasingly bullshit and get called out as such. Cunning buyers develop market intelligence in cheaper grey market products and services.
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Horizontal integration I strongly suspect is on the rise. Supply chain uncertainty is an accelerant for what was already ascendant.
Pick a horizontal slice. Aggregate demand, compete on quality/features, forget differentiation, mostly ignore brand marketing, focus on sales trust
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Also the CEO had consciously set less focus on marketing compared to the engineering. Started raising more marketing noise only recently.
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Replying to
Heh, Sridhar Vembu once reached out to me for potential consulting in 2014 but I was fully booked at the time so conversation didn’t go anywhere.

