Trends to Consider when making a Midlife Career Change – Disintermediation

In a prior column I listed the seven macro trends one should consider before making a midlife career change. We have covered the first two trends and now look at the third: disintermediation. Since I have written two prior columns on this subject (here, and here) that explain the historical development with examples, this column will be more conceptual in nature.

Disintermediation is basically the force that removes the middle man. The root of the world is’ intermediary’, so when you add the prefix ‘dis’ the meaning becomes clear: removing the intermediary. We are in an age of disintermediation. The single most powerful agent is the Internet. As examples in the earlier columns indicated, entire industries have been restructured due to the disintermediating force of the Internet.

If you are looking at a new career, it is critically important that you consider what the effect of the Internet might be, or has been, on it. While a generalization, it is safe to say that the Internet will restructure any business that has protected, proprietary knowledge as a foundation. Think of the travel, stock brokerage and music businesses if you doubt this. The consumer insurance and residential real estate industries are under siege because of the Internet. So the first step is to avoid going into any industry that smugly thinks that the Internet will not affect how business is done. The only question is to what degree the effect will be felt.

The opportunity here is to think of ways that you can have the force of disintermediation at your back as you sail into the future. For example there are now several Internet oriented real estate brokerage firms that will rebate the majority of commission to you if you are ready to do a lot of the work, use the Internet aggressively and don’t need personal hand holding. All these firms were created in the last few years. Steve Jobs has the wind of disintermediation at his back with iTunes. Etrade the same in the discount brokerage business.

The key here is to think about how the Internet, a gadget [think digital camera and the film and film developing businesses], or something that gives convenience of choice to the consumer can create a new business. The simple device we all have, the remote control, more than anything else [until Tivo] changed how we watch TV. YouTube is a truly disintermediating business -- anyone can produce a video and reach an audience. Who needs a network executive to approve? Any business that can provide the consumer or potential customer with a wider choice, faster choice and easier choice is a great business to be in. Any business that exists solely as an intermediary or middle man between buyer and seller is a business that will, to some degree be changed by the forces of disintermediation now at play in the world.

As mentioned in earlier columns, the Flow to Global and the Flow to Individual are creating a global village of networked individuals. The development of community without concern for time or distance is the new hot business called social networking. MySpace and Facebook are businesses built upon the Internet and the force of disintermediation.

May this force be with you in your new career!