AboutHow we built thisSponsorshipShop
SearchSubscribeDecision ToolsBusiness ModelsFrameworksReading Lists
Privacy PolicyTerms of UseCookie PolicyRefund PolicyAccessibilityDisclaimer

© 2026 Faster Than Normal. All rights reserved.

Faster Than Normal
DecisionsPeopleBusinessesNewsletterSubscribe
Start reading →
  1. Home
  2. Mental models
  3. Intermediation & Disintermediation
Business & Strategy

Intermediation & Disintermediation

Model #0616Category: Business & StrategyDepth to apply:
4 min read

On this page

  • Core Idea
  • How to See It
  • How to Use It
  • Founders & Leaders
  • Connected Models
  • One Key Quote
  • Summary & Further Reading

Contents

  1. 1. Core Idea
  2. 2. How to See It
  3. 3. How to Use It
  4. 4. Founders & Leaders
  5. 5. Connected Models
  6. 6. One Key Quote
  7. 7. Summary & Further Reading
·Business & Strategy
Section 1

Core Idea

Intermediation is the insertion of a middle layer between producer and consumer (e.g. distributor, marketplace, aggregator); disintermediation is removing that layer so buyer and seller connect directly. The core idea: intermediaries exist when they reduce cost, risk, or friction; they are vulnerable when technology or trust makes direct connection cheaper or better. Strategy turns on whether you are the intermediary, disintermediating, or being disintermediated.
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.
01
Why the Future Is Already Here — Chris Dixon (blog)
Article
Platforms, aggregation, and intermediation in tech.
02
Platform Revolution — Parker et al. (2016)
Book
Platforms as intermediaries; network effects and multi-sided markets.
03
The Nature of the Firm — Ronald Coase (1937)
Paper
Transaction costs and why firms (and intermediaries) exist.

Why this matters next

mental modelsNetwork Effects

Intermediation & Disintermediation applied the Network Effects mental model

mental modelsValue Chain Analysis

Intermediation & Disintermediation applied the Value Chain Analysis mental model

mental modelsIntermediation & Disintermediation

Intermediation & Disintermediation applied the Intermediation & Disintermediation mental model

mental modelsCost

Intermediation & Disintermediation applied the Cost mental model

mental modelsTransaction

Intermediation & Disintermediation applied the Transaction mental model

mental modelsDistribution

Intermediation & Disintermediation applied the Distribution mental model

Frequently asked questions

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.

Continue exploring

1L

Mental model

100 People Love

Build something 100 people love rather than something 1 million people kind of l

7H

Mental model

7 Powers (Hamilton Helmer)

The seven — and only seven — sources of durable competitive advantage: Scale Eco

BA

Mental model

BATNA

Best Alternative to a Negotiated Agreement — your power in any negotiation comes

CL

Mental model

Competition is for Losers

Peter Thiel's thesis: every moment spent competing is a moment not spent buildin

DC

Mental model

Disagree and Commit

Once a decision is made after genuine debate, everyone — including dissenters —

DI

Mental model

Disruptive Innovation

Inferior products that start in niche markets and improve until they overtake in

More like this, in your inbox

I send a newsletter every week — free, no spam, unsubscribe anytime.

Or open the full subscribe page.

On this page

  • Core Idea
  • How to See It
  • How to Use It
  • Founders & Leaders
  • Connected Models
  • One Key Quote
  • Summary & Further Reading

Popular Mental Models

First Principles ThinkingOccam's RazorCircle of CompetenceInversionConfirmation BiasSecond-Order ThinkingDunning-Kruger EffectSurvivorship BiasPareto PrincipleOpportunity Cost