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.

"All parts of our economy were previously based on scarcity. In almost every case, that scarcity has disappeared. The way you win on the internet is to be the starting place where people go - Google, Facebook, these aggregators - or you're highly differentiated and you leverage the fact that you have zero distribution to reach anyone."

The Supplier Differentiation SpectrumConsider the six companies I mentioned above: Facebook, Google, Amazon, Netflix, Apple, and Microsoft.The degree of differentiation of tech company suppliers variesThese companies exist on a spectrum in terms of supplier differentiation (and, by extension, supplier power):Facebook has commoditized suppliers more... See more