We are a three-way marketplace at Leverage Edu -b/w Students, Mentors, & Universities.
And while all stakeholders are🙏, we’ve always been “Student First”
When I was asked “why” in yr 1, I used to answer with DNA/❤️/moral etc etc
Until recently, when a lot of digging led me to:
Aggregation Theory 👉 Stratechery ⭐
3 parts to Value Chain: Suppliers, Distributors, Consumers
👆Goal = Monopolize 1, OR combine 2 (& offer vertical solution) Eg of latter: printed newspapers, where distribution+suppliers integrated (content creation) -> advertising 💰
Book Publishing: distribution capabilities integrated w/ control of authors
Video: broadcast availability integrated w/ purchasing content
Hotels: brand trust integrated w/ vacant rooms
👆- distributors integrated backwards into supply > OWNING supplier relationship is 🏅
But internet companies change the game,
– distribution is free (limited supplier integration advantage)
– transaction costs zero (hence distributor can integrate forward 2C)
Hence, we get a fundamental change in company building:
“no longer do distributors compete based upon exclusive supplier relationships, with consumers an afterthought. Instead, suppliers can be commoditised leaving consumers as a FIRST ORDER PRIORITY”
(like we play “Student First” 👑 at Leverage Edu)
Hence, most important focus areas are:
– NPS- UX
– Zero CAC / Negative CAC loops
– User ❤️ measured by Referral %
In the new world:Aggregators > Backward Integrators
🌟Modularise-Your-Supply
🌟Digitise the Differentiator/s
🌟Have your demand attract supply
Thanks Ben Thompson, for the inspirational piece “Aggregation Theory“, and you are right when you say “every industry will belatedly discover it has a critical function that can be digitised and commodified”
Aggregation theory is truly the means.