Aggregation Theory In Play as we build Leverage Edu

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.

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