Sequoia's Mike Vernal applies Christensen's modularity theory to VC — and warns AI agents will trap modularized giants
nbaschez · x · 2026-11-05
Responding to takes like "Europe is hard" and "early stage is hard," Sequoia partner Mike Vernal argues the better lens is Christensen's Modularity Theory: industries start vertically integrated and modularize over time for scale and efficiency, with seed/venture/growth split being modularization applied to venture capital. The catch: late-cycle modularization is also the root of the Innovator's Dilemma — the same forces that let Amazon run consumer services at breakeven and pocket all profit via advertising will trap those companies when personal agents arrive. nbaschez adds that Christensen's most important book is actually The Innovator's Solution.
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