What is Aggregation Theory?
Aggregation Theory is a completely new way to understand business in the Internet age. Business schools suggest that with the right frameworks, an executive can understand how to manage all kinds of problems: what happens, though, when many of the inputs to those frameworks are zero?
Zero distribution costs. Zero marginal costs. Zero transactions. This is what the Internet enables, and it is completely transforming not just technology companies but companies in every single industry. Old moats are gone — and new ones can be built — and Aggregation Theory helps you identify both.
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The disruption caused by the Internet in industry after industry has a common theoretical basis described by Aggregation Theory.
Clayton Christensen claims that Uber is not disruptive, and he’s exactly right. In fact, disruption theory often doesn’t make sense when it comes to understanding how companies succeed in the age of the Internet.
Tech is entering a period of inequality where the big winners lift the sector as a whole even as smaller companies suffer. The best example is Facebook, Google, and digital advertising.
The FANG companies — Facebook, Amazon, Netflix, and Google — are far more similar than you might think. Their rise in value is no accident, and it is connected to Aggregation Theory.
An apolitical analysis of what is happening in U.S. politics through the lens of Aggregation Theory
The European Commission’s antitrust case against Google is likely to be the first of many against aggregators, because the end game of Aggregation Theory is monopoly.
It’s trivial to say that the Internet changed media; what is more interesting is unpacking how different types of media were affected, and why — and what might happen to TV.
Uber has a new CEO, and the reason he is a great choice explain why the Uber job is still an attractive one: the company is an aggregator, just like online travel agents.
WPP is dealing with not only a changing advertising industry but a changing world, thanks to the Internet. Antitrust needs to change as well.
Facebook is in trouble — again — for Russian ads about the election; figuring out how to deal with them requires first understanding that Facebook, like Google, is a Super-Aggregator. It faces zero transaction costs in all parts of its business.
The Daily Update applies Aggregation Theory to the daily news cycle; it is subscription only
There’s another new payments solution coming — Chase Pay. The punchline is easy: it will fail. Why it will fail, though, is interesting, and it shows the opportunities and challenges for Apple Pay specifically and the usefulness of Aggregation Theory.
The impact of the Internet continues to reverberate: in this case, there is a clear link between Aggregation Theory and the tie-up between Marriott and Starwood.
FinTech seems like the perfect application of Aggregation Theory, but over this past week it has blown up in the face of serious issues at Lending Club. The mistakes that were made in do to a degree validate why I haven’t covered the space to date.
Netflix’s earnings were disappointing for reasons characteristic to disappointing earnings for all service companies. For Netflix, though, the stakes are higher.