Modern intermediaries are not brokers of goods. They are brokers of coordination.
What Changed About Intermediation
The classic account of intermediation describes brokers who connect buyers and sellers, reduce search costs, and profit from the spread between what buyers pay and what sellers receive. This model is accurate for a specific class of intermediary in a specific economic context: markets for standardised goods where the primary friction is search.
The intermediaries that are capturing outsized value in contemporary fragmented systems are doing something structurally different. They are not primarily reducing search costs. They are providing the coordination infrastructure that allows actors with complementary capabilities and genuine mutual need to work together at all. The friction they are addressing is not finding the right counterparty. It is producing the shared framework, the aligned incentives, the mutual trust, and the compatible operating procedures that make collaboration possible once the right counterparty is found.
The Coordination Problem
Coordination problems are structurally different from search problems. A search problem has a solution: find the right match. Once the match is found, the problem is solved. A coordination problem requires a solution that is continuously maintained. Aligned incentives drift. Shared frameworks decay. Trust must be renewed through consistent behaviour. The coordination infrastructure that makes collaboration possible does not stay in place without active maintenance, which means the value of the coordination intermediary is generated continuously throughout the collaborative relationship.
Where Coordination Brokerage Appears
Coordination brokerage appears wherever multiple actors with genuine complementary capabilities face significant obstacles to working together effectively. It appears in the professional services firm that allows clients to access specialised capabilities without having to manage the coordination between specialists directly. It appears in the platform that provides the standards, trust mechanisms, and governance frameworks that allow independent actors to exchange value reliably. It appears in the regulatory body that provides the shared rules within which competing actors can operate without every interaction requiring bilateral negotiation of basic norms.
In each case, the intermediary's value lies not in the goods or services it produces directly, but in the coordination infrastructure it provides and maintains. Remove the intermediary and the actors on either side do not simply lose a broker. They lose the framework within which their collaboration was operating, and must either build equivalent infrastructure themselves — at significant cost — or accept a degraded mode of collaboration.
The Strategic Implications
Understanding intermediaries as coordination brokers rather than goods brokers changes the strategic analysis of intermediation. It explains why attempts to disintermediate by connecting actors directly often fail even when the technology to support direct connection is available: the technology can solve the search problem but cannot automatically solve the coordination problem.
It also explains why coordination intermediaries often achieve more durable competitive positions than goods intermediaries. The search function can be replicated by anyone with access to the same data. The coordination infrastructure — the standards, relationships, trust architecture, and governance frameworks — takes years to build and cannot be replicated quickly regardless of capital investment.
The new intermediaries do not hold goods in transit. They hold the protocols that make exchange legible, the frameworks that make trust transferable, and the standards that make collaboration possible at scale — and systems that depend on them discover their value most clearly when they are gone.
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