Aggregation Theory

Ben Thompson argues that Aggregation Theory, the thread running through his Stratechery posts, explains how Internet-era companies win: they digitize or commoditize the supplier side of a value chain and then own the user relationship at scale. The theory combines Clay Christensen's Conservation of Attractive Profits with the observation that the Internet has made digital distribution free and transaction costs zero. Google, Facebook, Amazon, Netflix, Snapchat, Uber and Airbnb are given as examples, with Uber and Airbnb cited as showing that even non-digital industries like taxis and hotels can be disrupted once a critical function is digitized.