Digital Robber Barons and Digital Vertical Integration

I love talking about business models because in the end, it's usually the best business model, not the best technology, that wins the day. And digital transformation has the potential to reinvent business models by leveraging superior customer, product and operational insights to disrupt industry value chains and disintermediate customer relationships (see Figure 1). As the title of the book "Moneyball" states ("Moneyball: The Art of Winning an Unfair Game"), some of these reinvented business models will be based on "winning an unfair game". We have historical lessons about how Robber Barons[1] of the late 1800's created and won "an unfair game" that gave them monopoly power over suppliers, customers and competitors. To create this unfair game, Robber Barons leveraged a concept called "vertical integration" to dominate industry value chains and construct indissoluble customer and supplier dependencies. Let's review the lessons of these Robber Barons to understand how digital transformation might enable modern companies to win the digital unfair game.