Aggregators find that the cost of acquiring new customers goes down over time as well, which is completely opposite from what most businesses experience. Aggregators generally operate in a winner take all fashion because it becomes increasingly difficult to compete at scale if not only does the product get more valuable for users, but it also gets cheaper to acquire users. So tie together these three things, that is aggregation theory.
Todays episode breaks down a business framework that explains why some businesses are so powerful, so defensible, and only get more powerful & defensible with each day that passes.
Listen to my episode on Network Effects here.
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