Companies That Have Disintermediated

Goals

To locate examples of companies using disruptive technologies, like marketplaces, that have disintermediated, or cut out the middle man. Specifically, to locate information that explains how they kept the existing channel (the middleman) happy during the process.

Early Findings

Companies That Have Disintermediated

  • Amazon started as a used book retailer and has now branched out to every form of retail possible. They have cut out retailers and use a direct to consumer approach.
  • Netflix, a streaming service, cut out the traditional modes of television delivery and stream direct to the consumer.
  • One Dollar Shave Club and Casper are two other companies that have cut out retailers and adopted a direct to consumer selling model.
  • Uber eliminated taxi drivers.

Medical Companies

  • Warby Parker, an online eyewear maker, built their business from the group up and did not rely on partner retailers to sell their products. Currently, they offer a virtual prescription process that cuts out the need for a visit to the optometrist. Once the information is collected, it is sent to a doctor for verification and the patient receives their results in 24 hours. This process has concerned many professionals, but there is no proof that they have done anything to try to make the professionals happier with the process.
  • Curology prescribes personalized acne treatments online. After an assessment is taken, a medical professional prescribes a treatment plan.
  • Simple Contacts offers a contact lens prescription check, eliminating a trip to the eye doctor.
  • SmileDirectClub provides teeth straightening services without a visit to the orthodontist.
  • Hims eliminates a visit to the doctor and provides hair loss, skincare, and erectile dysfunction prescriptions. Their sister site, Hers, offers skincare, hair, and sexual health prescriptions.
  • Roman is similar to Hims.
  • Kick Health sell blood pressure pills or other prescription drugs for unapproved uses like calming the symptoms of performance anxiety.
  • Ro is another medical company that claims to put the patient in charge of their health.

Analysis

  • In these situations, the model is flipped. The consumer picks the drug they want, and the medical professionals act as gatekeepers. Some of these companies operate in a regulatory vacuum that could increase public health risks, according to interviews with physicians, former federal health regulators and legal experts. And federal and state health laws, written to ensure competent medical care and drug safety, have not kept pace with online services, they say.
  • Much like Uber, which argues that it is not a transportation company even as it connects drivers and passengers, the drug sites argue that they are tech platforms, not health providers. The sites connect consumers — and often process their payments — to doctors who may prescribe drugs and pharmacies that can ship the medications.
  • To comply with state laws, the doctors work for separate companies that cater to the sites. The doctors are typically paid for each health consultation, or by the hour, not the number of prescriptions written. The sites generate revenue for themselves by charging service or processing fees to consumers, the doctors or both.
  • Some have recruited experts for advice. Dr. Joycelyn Elders, a former surgeon general is a medical adviser to Ro, and men’s health specialists at leading hospitals.

Results of Initial Research

  • Initial research indicates that the companies are not necessarily concerned with keeping the channel they are eliminating happy.
  • The majority of these companies are using a separate company to contract medical professionals from, therefore they are not technically eliminating the channel. Others have recruited specialists as advisors for the company as a way to improve their image with the customer and the professional community.
  • This initial block of research did not uncover a company that hired medical professionals directly.

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