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Aggregation Theory

Founder's Journal

The Virtuous Cycle of Network Effects in Aggregators

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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.

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