What is Intermediation & Disintermediation?

Intermediation & Disintermediation is a mental model used for better thinking and decision-making.

How do you apply Intermediation & Disintermediation?

To apply Intermediation & Disintermediation, identify situations where this framework is relevant, then use it as a lens to evaluate your options and decisions. The model is most useful when combined with other complementary mental models.

What category does Intermediation & Disintermediation fall under?

Intermediation & Disintermediation falls under the Business & Strategy category of mental models. Other models in this category can be found on the Business & Strategy hub page.

Why is Intermediation & Disintermediation important?

Intermediation & Disintermediation is important because it provides a structured way to think about problems that would otherwise be approached with intuition alone. Understanding this model helps you avoid common reasoning errors and make better decisions.

Intermediation & Disintermediation…

Intermediation & Disintermediation… | Faster Than Normal

Section 2

How to See It

Market Structure

You're seeing Intermediation/Disintermediation when a new player bypasses incumbents (e.g. D2C vs retail, creator vs label) or when a platform inserts itself between two sides and captures margin — and the debate is who keeps the value.

Strategy

You're seeing Intermediation/Disintermediation when a company positions as “we connect X to Y” (intermediary) or “we cut out the middleman” (disintermediator), and unit economics and moat depend on that role.

Section 3

How to Use It

Decide your role: intermediary (add value between parties and capture some of it) or disintermediator (remove a layer and capture value by being closer to the customer). If you’re an intermediary, justify your take with lower transaction cost or better match; if you’re disintermediating, be ready for incumbents to fight back or re-intermediate.

Decision filter

"Are we adding enough value between the two sides to justify our cut — or are we a cost that someone will eventually bypass? If we’re in the middle, our moat is the friction we remove; if we’re disintermediating, our moat is that we do it better and cheaper."

As a founder

If building a platform or marketplace, be clear what friction you remove and why both sides stay. If disintermediating, focus on customer experience and cost so “no middleman” is a real advantage. Watch for re-intermediation (new aggregators) or disintermediation (suppliers going direct).

Section 5

Founders & Leaders

Marc AndreessenCo-founder, Andreessen Horowitz; Netscape

Andreessen has long framed software and the internet as disintermediating forces — removing layers between creator and consumer, supplier and buyer. He also backs intermediaries (marketplaces, platforms) when they reduce transaction costs enough to grow the pie. Founders can apply this by asking whether their business is the new layer that earns a take (intermediation) or the force that removes a layer (disintermediation), and by building moats that fit that role.

Section 7

Connected Models

Reinforces

Transaction Costs

Intermediaries thrive when they lower transaction costs (search, coordination, trust). Disintermediation wins when going direct lowers those costs. Transaction costs are the lever: reduce them in a way that justifies your position in the chain.

Tension

Platform Business Model

Platforms are often intermediaries (two-sided, take a cut). The tension: platforms can be disintermediated if one side bypasses them, or can disintermediate incumbents. Platform strategy must account for both intermediation and disintermediation dynamics.

Leads-to

Two-sided Market

Intermediation often takes the form of a two-sided market: you sit between two groups and facilitate exchange. Two-sided market dynamics (chicken-and-egg, take rates) follow from the choice to intermediate.

Section 8

One Key Quote

"Software is eating the world — and a lot of what it’s eating is the middleman. Unless the middleman becomes software."
— Marc Andreessen

Section 11

Summary & Further Reading

Intermediation is adding a layer between parties; disintermediation is removing it. Intermediaries justify their take by reducing cost or friction; disintermediators win by making direct connection better or cheaper. Choose your role and build the moat that fits.

Why the Future Is Already Here — Chris Dixon (blog)

Article

Platforms, aggregation, and intermediation in tech.

Platform Revolution — Parker et al. (2016)

Book

Platforms as intermediaries; network effects and multi-sided markets.

The Nature of the Firm — Ronald Coase (1937)

Paper

Transaction costs and why firms (and intermediaries) exist.

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