To Bundle or Not to Bundle—That Is The Question

There are only two ways to make money, says former Netscape CEO Jim Barksdale, "One is to bundle; the other is to unbundle."

Product strategy tends to ping-pong between these two approaches. For a while, the trend will be to bundle products together and sell them for a single (ostensibly) lower price. Then, the trend reverses, and product bundles get broken apart and sold piece by piece.

I was reminded of this while doing my evening flyby of The Verge. I spotted a quick post announcing a new Disney+, Hulu, and Max bundle. Get all three services, with no ads, for $29.99—a nearly 40% savings on the price of the services separately. I tried to sign up for this new offer but still haven't figured it out because—I think—my Hulu subscription is bundled with my Spotify already.

So, yeah. Bundles.

I am, of course, old enough to remember the original television bundle: cable.

The last time I had cable was 2016-2017. I wanted to watch the presidential debates that cycle and that kind of live viewing wasn't available via streaming yet. Before that, I'd been on a four or five-year hiatus from cable.

Growing up, it was common to hear people complain about the high price of cable, especially as more and more channels were added to the bundle that they absolutely had no interest in watching. Wouldn't it be great to just pay for what you actually watch? And it was great—while it lasted.

I signed up immediately when HBO Go launched. It was the first time that HBO was available without a cable subscription. Between HBO Go and Netflix, I had everything I wanted. But you know the next chapter of this story. Netflix started to produce its own content. Studios decided to launch their own services rather than license their content to Netflix. Within a few years, Netflix was churning out all manner of crappy content while services like Peacock, AMC+, and Apple TV+ started offering their own content for a monthly fee.

The undiscerning streaming customer (i.e., me) could easily end up paying the equivalent of a cable bill and still be awash in content they'd never watch, struggling to find something new to break up repeat viewings of 30 Rock and The Office.

Outside of the entertainment sphere, direct-to-consumer brands (e.g., Casper, Glossier, Allbirds, etc.) provided an unbundled, focused approach to a single product category. They could claim to have an edge over legacy brands that often had a much wider range of options. However, DTC brands are now seeking distribution in more mass-market retailers. Casper is now sold in Target, Glossier is sold in Sephora, and Allbirds is sold in REI.

We can also see the bundling/unbundling cycle among micro businesses, including B2E (business to entrepreneur) services, online learning, and publishing. In the rest of this piece, we'll examine why we bundle (or unbundle) and the opportunity either approach creates. Then, we'll zoom in on two specific cycles—hiring and online learning—of bundling in the micro business and independent work ecosystem. Finally, I'll offer some thoughts on what to consider around bundling or unbundling your own work.

Why We Bundle (Or Unbundle)

Bundling and unbundling are money-making strategies, certainly. And, they're also ways to fill holes in the market or solve problems customers express.

When early streaming services came on the scene, customers got what they had wanted for years—the ability to pay for the content they were actually excited to watch. Now that services are bundling again, we have to ask whether they're solving a need or just reinventing cable. If you're currently subscribing to Disney+, Max, and Hulu separately, bundling them to save money is great. But at the same time, you're paying for a lot of content you don't want to watch (and wouldn't have time to watch). Is the streaming bundle an improvement on cable? Because it kind of feels like we’re back to square one.

We can see the same cycle in publishing or media businesses. Take newsletters like this one. The money you may spend supporting this publication would probably have gone to a newspaper or magazine subscription in the past. I would have worked for a larger publication and benefited from the resources it pooled together. But as newspapers and magazines shut down over the last quarter century, journalists and media makers unbundled themselves into micro publications like this one.

Unbundling media production did diversify who, what, and how journalism was done and culture was made.

Unbundling provided opportunities to media makers who'd been laid off or never given the chance to get started in the industry. Real, solid benefits. However, unbundling also created problems—less fact-checking, lower standards, and fewer resources for reporting, editing, or in-depth research. So what's happening now? Bundling—new publications with more direct, cooperative control like Hell Gate, 404 Media, and Flaming Hydra.

The question is, can the new bundles maintain the benefits created by unbundling and avoid the problems created by newspapers and magazines in a profit-driven economy? The publications I just cited are proceeding with intentional governance structures that should help them answer yes to that question. But whether that becomes the industry standard is still up in the air.

Bundling and unbundling shouldn't only be opportunities to make money (or help consumers save money). They're strategies that should help us improve on what we offer and how we offer it. With either approach, we can investigate the problems or complaints that have come before and move into the next phase of the cycle seeking to overcome those issues.

Now that we've looked at why we bundle (or unbundle), let's take a closer look at how these cycles have played out in the world of micro business and independent work.

Software & Services

The first wave of unbundling among micro businesses was focused on hiring. It seemed less risky and more flexible to hire a number of specialists who could be hired for a few laser-focused hours a month or per project than to hire a full-time employee who would need to be trained to do a wide range of tasks. The appetite for hiring specialists was met by the influx of people hanging out their shingles to provide marketing, coaching, or admin services.

However, this left the micro business owner with a massive management workload. They had to communicate with and coordinate the activities of these specialists, often creating much more work (i.e., expense) for themselves. Cue the online business manager. The OBM is a kind of labor bundle—part project manager, part human resources coordinator, part strategic planner, part business development team, part idea and people wrangler. The OBM often fits into the budget like a specialist but performs much more like an employee, bundling a variety of tasks and managing others.

We also got the rise of the micro agency, another kind of bundle. These B2E service companies offered a more complete set of services and took on the management of the specialists on their own teams. YellowHouse.Media is an example of exactly this type of bundle. The market opportunity I saw was the challenge that podcasters had managing their shows and the people who made them possible (e.g., editors, virtual assistants, content strategists, etc.). I thought that if we could bundle those services together in one productized service package, we'd have an edge in the market and a self-evident value proposition. I was right.

Finally, micro business software services—which largely began as unbundled, specialized products—started to bundle, adding features to their existing products to give entrepreneurs and creators a one-stop shop. Fifteen years ago, the only one-stop-shop service was InfusionSoft (now called Keap). It was an expensive and complex tool. Those business owners who had enough revenue to afford it often ended up shelling out for a specialist to manage their InfusionSoft system, too.

Today, many services are vying for entrepreneurial dollars and offering to be a whole business "operating system." ConvertKit, SquareSpace, Mighty Networks, Circle, Kajabi—each one has its own take on the bundle, but the underlying premise is the same.

Online Learning

Online learning has gone through its own cycle of bundling and unbundling. The first wave of online learning unbundled learning generally from institutions. It also unbundled skills like copywriting or web design from the need to hire a specialist. You could learn how to build a website, write a book, or sell your own online course without having to buy into a whole institutional education.

Before long, people were buying online courses—often for thousands of dollars—left and right. So, some micro business owners decided to bundle their courses, and the membership site was born. Much like streaming services, eager online learners could pay a "low" monthly fee for access to courses and/or ongoing training. As social media became enshittified, many of these offers also bundled a social component, adding members-only social media areas to their bundled courses.

Today, there are still plenty of membership sites selling bundled online learning. But I'm starting to see unbundling rise again in this space. Cohort-based courses, one-time workshops, and on-demand learning seem to be scratching an itch that both creators and consumers feel. Creators seem to be interested in specializing again, while consumers seem to be interested in a diversity of information sources rather than following a guru who can educate them on everything under the sun.

I would even throw the paid newsletter renaissance into this trend. My former membership site charged $100 per month and included a lot of perks for that price. But it also operated in a system of "implicit feudalism"—that is, my point of view necessarily shaped everything that happened on the platform. But for $100 per month, someone can subscribe to 10-15 paid newsletters. It's not exactly online learning, but you can curate a set of diverse experts who write about the things you care about.

To Bundle or Not to Bundle

Both bundling and unbundling have upsides and downsides. They both have pitfalls to avoid and real points of leverage you can use. Neither is inherently unethical or exploitative, although they can easily morph into dangerous territory—like any business offer within the capitalist system.

When it comes to bundling, I think the operative consideration on the consumer side is whether or not bundling features, products, or services will make it more likely for the customer to feel successful or like their needs have been fully met. Does adding a feature help your customer overcome a common hurdle? Does it fill a gap they have trouble filling on their own? Does it fix a problem created by the market? Those are all good reasons to bundle.

For example, does offering your courses in a membership site make it easier for your customers to feel successful because they have access to ongoing support and on-demand training? Or does it make it harder for a customer to feel successful because they don't have the temporal constraints on learning and acting that they do when a course is live? Both can be true in different businesses or within different markets.

But bundling also has to make sense from a business perspective. Does bundling make your job easier or harder? Does it add or subtract friction from the sales process? Does it make your value proposition clearer or more obscure?

For example, does offering strategy, design, editing, and admin bundled into one podcast production package make the value proposition clearer or more obscure than offering a specialized service like podcast editing?

Of course, there's the financial consideration, too. Bundling introduces new variables into a pricing strategy. The offer of a Disney+/Hulu/Max bundle I mentioned at the top indicates that those three companies decided they could make more money and make more customers happier by reducing fees. Their profit per customer may go down, but if that's offset by more customers and longer customer lifecycles, it's worth it. At the scale they operate at, that's a good bet. At a smaller scale, it's harder to predict the results of bundling on the bottom line.

Unbundling is often very tempting for micro business owners. Once you've established a full-service package, it can seem like a no-brainer to try to increase sales by offering smaller packages or á la carte services. And that can be a good strategy. But it often comes with unexpected overhead and operational woes.

Unbundling tends to create more administrative and customer service tasks. You're dealing with more customers or clients who are paying you less. That can be quite costly.

Unbundling can also make it feel like a business is doing better financially than it really is. Unbundling typically results in more sales because you have more products on offer, so it can feel like customers (and money) are everywhere! But internally, you might be spending more time or money per customer than you would if offers were bundled. Unbundled services have to be managed carefully, or else they can become financially and operationally unsustainable very quickly.

Strategically, asking whether to bundle or not to bundle—to unbundle or not to unbundle—is really useful. It encourages you to examine everything from financials to customer experience to operational systems. It can help you reevaluate your value proposition, improve your positioning, and market your offers.

Even if you wind up neither bundling nor unbundling, considering your own offers through the bundling/unbundling lens is a useful exercise.