Aggregation Theory [Alex Lieberman]

<p>Audio source: <a href="https://art19.com/shows/the-founders-journal/episodes/a77afe33-236f-44b6-a2e8-55b6ff5c8e02">https://art19.com/shows/the-founders-journal/episodes/a77afe33-236f-44b6-a2e8-55b6ff5c8e02</a></p><p>Ben Thompson's <a href="https://stratechery.com/concepts/">own writing on Aggregation Theory</a><br> <br><strong>Transcript</strong></p><p><br></p><p><strong>swyx: </strong>[00:00:00] I generally think that Ben Thompson's aggregation theory is the most important tech strategy concept of our time. It explains a lot. But Ben Thompson himself doesn't really have a good explainer on his own site. So I really appreciated this. Summary by Alex Lieberman of aggregation theory. I thought it was the clearest explainer, with some examples, that I've ever heard. So enjoy.</p><p><strong>Alex Lieberman: </strong>[00:00:23] Aggregation theory says that some of the most dominant companies in the world became dominant by doing three things. </p><p>First, they have a direct relationship with their customer. </p><p>Two, there is zero marginal cost to serve their customer </p><p>and three, they have network effects. </p><p>I'm going to unpack each of these qualities. </p><p><br></p><p><strong>Own The Relationship</strong> [00:00:43] </p><p>The first quality that I mentioned was having a direct relationship with the user. </p><p>Google is the most trafficked site on planet earth. There are 63,000 searches that happen every second on the site. By the end of this episode, there will have been 50 million searches that happen on the platform. Since you started listening. Google's power is in its relationship with you.</p><p>The user, when you search something on Google, you are Google's customer. You're not the customer of the website that you end up going to Google captures your data. They monetize you. They recommend the most relevant content for you to click on. And Google is the website that you go to when you want to find an answer.</p><p>And so just so you have a comparison around like what it looks like to