Imagine a world where the very parts of your business you rely on for profit are the first things startups target. It happened in Switzerland almost a century ago. J. Dutweiler, a pioneering entrepreneur, realized that expensive wholesalers and distributors kept margins for everyday products and started with his retailer Migros. By taking production and purchasing into his own hands and selling directly to consumers, he made goods affordable and widely available like many others in this time. He democratized access decades before the term “disruption” even existed.
Today, the same forces are at play—but on a global scale. Rising energy and commodity prices, supply chain bottlenecks, labour shortages, geopolitical tensions, climate shocks, and protective regulations are all driving costs up and creating high-margin “hubs” that attract disruption. Startups are exploiting these pressures to bypass intermediaries, capture value, and deliver directly to customers.
Migros, celebrating its anniversary, exemplifies this approach. Dutweiler’s century-old principle—turning structural inefficiencies into advantage by controlling production, distribution, and pricing—is strikingly similar to the strategies of today’s fastest-growing startups. I call it Hub Skipping Disruption: a lens for leaders to anticipate threats and opportunities before they hit the headlines.
As a startup founder, which semi-protected or monopolistic hub would you dismantle today to deliver its hidden margin to the masses—and why haven’t you started yet?
Understanding the Pattern
Traditional value chains are filled with nodes that generate margin. These are wholesalers, distributors, brokers, and specialists—each extracting profit from the flow of goods or services between producer and consumer. In many industries, these hops were the invisible scaffolding that kept products expensive, markets restricted, and innovation slow.
Startups, however, have discovered a consistent shortcut. They skip one or more hubs, reduce friction, and go directly to the end customer. The result is usually a lower-cost, more accessible solution that can reach far beyond the reach of traditional players.
The consequences are profound: the formerly profitable intermediaries see margins vanish, while new entrants capture attention, scale, and loyalty almost overnight.
Defining Hub Skipping Disruption
Hub Skipping Disruption occurs when a startup or new entrant:
Identifies one or more hops in a value chain that deliver disproportionate margin.
Uses technology, direct access, or new business models to bypass them.
Offers a product or service that is cheaper, faster, or more accessible to the end customer.
Forces a redistribution of profits along the chain—usually from incumbents to the disruptor.
Unlike classical disruption theories, this concept is less about technology alone and more about profit architecture and chain vulnerability. Startups are not just innovating products—they are systematically attacking the parts of the chain that are fat with margin and low with customer intimacy.
The Mechanics: Where Margins Attract Attack
Visualize a traditional value chain:
Producer → Wholesale → Retail → Customer
Each hub takes its cut. In many sectors, wholesalers or distributors make more money per unit than the producer. Retailers set high markups. Specialized consultants or brokers collect fees disproportionate to the value they add to the customer experience.
Hub Skipping Disruption works by shortening or eliminating the chain:
Producer (Startup?) → Distribution Startup → Customer
Suddenly, the middleman disappears, the product becomes cheaper, and the startup captures a direct line to consumers.
Why this works repeatedly:
High-margin nodes are predictable targets: they are profitable precisely because they add friction or restrict access.
Technology amplifies bypass potential: e-commerce, apps, digital platforms, automation.
Standardizable offerings: any product or service that can be codified, packaged, or delivered digitally is vulnerable.
Illustrative Cases
Finance: Robinhood, Revolut, Klarna
Traditionally, banks and brokers collected hefty fees for trades, account maintenance, and transfers. These are classic high-margin hops. Startups like Robinhood or Revolut bypassed them with intuitive apps, zero-commission trading, and instant payments. The value chain shortened dramatically, fees collapsed, and access widened.
Hub skipped: traditional brokerage fees, banking intermediaries.
Result: democratization of investing and banking for the masses.
Design & Creative Tools: Canva, Figma
Before these platforms, professional design required expensive software licenses and skilled designers. Agencies added another layer of cost. Canva and Figma offered self-service tools and collaborative platforms that bypassed both software vendors and agencies.
Hub skipped: software licensing & design agencies.
Result: anyone can design professional-quality graphics or interfaces, democratising creative output.
Education: Duolingo, Coursera
Learning was expensive and location-bound: universities, language schools, and training providers charged premium fees. Platforms like Duolingo and Coursera allow millions of learners worldwide to access content for free or at minimal cost.
Hub skipped: premium institutions and physical course providers.
Result: global, low-cost education, and a new market of lifelong learners.
Mobility & Automotive: Tesla, Lime, Bolt
Car dealers, distributors, and rental agencies historically captured large margins. Tesla sells directly online, bypassing dealerships. Lime and Bolt eliminate traditional urban transport channels with scooters and e-bikes, connected to users via apps.
Hub skipped: dealerships, rental agencies, traditional fleet management.
Result: direct customer access, flexible pricing, rapid scaling.
Healthcare: 23andMe, Telemedicine Apps
Genetic testing and basic healthcare consultations were once mediated by labs or in-person clinics. Direct-to-consumer genetic tests and telehealth platforms reduce these intermediaries, lower cost, and expand access.
Hub skipped: specialized labs, in-person clinics, administrative intermediaries.
Result: personalized healthcare accessible anywhere, anytime.
Pattern Recognition Across Cases
Across industries, three conditions make a hop vulnerable:
High margins: if a node earns disproportionately relative to the value it adds, it attracts attack.
Low customer intimacy: distant from end users, blind to actual needs.
Codifiable offering: easy to replicate, automate, or standardize.
Recognizing these patterns allows leaders to anticipate disruption before it appears on their balance sheets.
Strategic Implications for Leaders
For KMU and large enterprises, the lesson is clear: margins are not just profit—they are a signal. High-margin hops in your value chain are potential points of attack. To survive and thrive:
Map your value chain precisely. Identify where the fat margins are.
Assess vulnerability. Are these nodes codifiable? Standardizable? Poorly connected to the customer?
Anticipate attack. Who could bypass these hops with technology or new models?
Adapt proactively. Possible responses include:
Direct-to-customer channels
Platform or subscription models
Automation or bundling to defend your margin
Collaborating with or acquiring potential disruptors
Insight: the higher the margin and the lower the customer intimacy, the more attractive the hop becomes to a new entrant.
Why This Matters Now
Markets are faster, more connected, and more transparent than ever. The internet enabled anyone to communicate with anyone else, collapsing traditional barriers and making many intermediaries redundant. Today, AI is doing the same with cognition: it allows one cognitive system—human or machine—to interact directly with another, distributing value without relying on legacy power monopolies.
Technology reduces friction and amplifies speed. A single well-executed bypass can collapse years of carefully built margin. Leaders who understand the Hop Skipping pattern can predict which parts of their business will be challenged, rather than reacting after the disruption is already underway.
This perspective shifts the conversation from reactive defense to strategic foresight. It allows incumbents not only to protect themselves but also to create their own Hub Skipping innovations, opening new markets, lowering costs for customers, and reshaping entire industries before competitors even realise what’s happening.
Dutweiler & Migros: Historical Proof
J. Dutweiler’s example is more than historical trivia. He spotted high-margin intermediaries, removed them, and controlled both production and distribution. Migros, which celebrates its anniversary today, built on this principle. By cutting out intermediaries, Migros made everyday goods affordable for ordinary Swiss citizens.
This historical case is a blueprint: anywhere there is a high-margin hub, there is an opportunity for direct access and democratization. Startups today apply the same logic with digital tools, platforms, and apps. The principle is identical, even if the technology has changed.
Conclusion: Establishing a New Lens
Hop Skipping Disruption is more than a phenomenon—it is a framework for understanding why and how markets change. By defining it, we provide a tool for leaders to:
Anticipate which parts of the value chain are most at risk
Recognize why startups choose to attack certain nodes
Act strategically to either defend or exploit these dynamics
The next time a startup appears in your market, don’t just look at its product. Look at the margin hubs it is skipping. Chances are, those very margins were the target all along.
This lens allows leaders to see disruption before it becomes a crisis and to harness it as an opportunity rather than a threat. The question isn’t if margins will be attacked—it’s which ones will be skipped next.