Aggregation Theory

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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.

Ben Thompson writes, speaks, and consults about Aggregation Theory and how it is affecting your business.


Weekly Articles are freely available and are the foundation of the subscription-only Daily Update, consulting, and speaking engagements

Aggregation Theory

The disruption caused by the Internet in industry after industry has a common theoretical basis described by Aggregation Theory.

Beyond Disruption

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.

The Reality of Missing Out

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 Playbook

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.

The Voters Decide

An apolitical analysis of what is happening in U.S. politics through the lens of Aggregation Theory

Antitrust and Aggregation

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.

The Great Unbundling

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’s New CEO

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.

Everything is Changing; So Should Antitrust

WPP is dealing with not only a changing advertising industry but a changing world, thanks to the Internet. Antitrust needs to change as well.

The Super-Aggregators and the Russians

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.

Daily Updates

The Daily Update applies Aggregation Theory to the daily news cycle; it is subscription only

Applying Aggregation Theory

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.

Online Travel Agents and Aggregation

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.

Lending Club and Aggregation Theory

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 and the Aggregation Dream

Netflix’s earnings were disappointing for reasons characteristic to disappointing earnings for all service companies. For Netflix, though, the stakes are higher.

Netflix and Aggregation Theory

Is Uber bad at strategy? It would be understandable if they were. Then, Hollywood is finally realizing that Netflix is a textbook aggregator. Plus, why Google Trips exists