added by sari and · updated 4y ago
Defining Aggregators – Stratechery by Ben Thompson
- -Zero Marginal Costs For Serving Users
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- Aggregators have all three of the following characteristics; the absence of any one of them can result in a very successful business (in the case of Apple, arguably the most successful business in history), but it means said company is not an aggregator.
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- Because aggregators deal with digital goods, there is an abundance of supply; that means users reap value through discovery and curation, and most aggregators get started by delivering superior discovery.
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- Then, once an aggregator has gained some number of end users, suppliers will come onto the aggregator’s platform on the aggregator’s terms, effectively commoditizing and modularizing themselves. Those additional suppliers then make the aggregator more attractive to more users, which in turn draws more suppliers, in a virtuous cycle.
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- Level 2 Aggregators: Supply Transaction Costs: Level 2 Aggregators do not own their supply; however, they do incur transaction costs in bringing suppliers onto their platform. That limits the growth rate of Level 2 aggregators absent the incursion of significant supplier acquisition costs.
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- Level 1 Aggregators: Level 1 Aggregators acquire their supply; their market power springs from their relationship with users, but is primarily manifested through superior buying power. That means these aggregators take longer to build and are more precarious in the short-term.
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- Aggregators make it dramatically simpler and cheaper for suppliers to reach customers (which is why suppliers work so hard to be on their platform). This increases the types of new businesses that can be created by virtue of the aggregators existing (YouTube creators, Amazon merchants, small publications, etc.); regulators should take care to prese... See more
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- -Aggregators incur none of these costs:
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago
- -Direct Relationship with Users
from Defining Aggregators – Stratechery by Ben Thompson by stratechery.com
sari added 3y ago