I am, as usual, far from the first person to make this observation. This is a natural result of aggregation theory applying itself to the investment management business.
Aggregation theory says, quite simply that the internet had two big effects:
- It made the distribution of digital goods free.
- It made transaction costs nearly free as well.
What was hard and valuable about running a newspaper in the 20th century was the editorial, selling ad spots, and distributing the physical paper to the end consumer.
This means that newspapers (and other media businesses) tended to succeed by focusing on exclusive supplier relationships with readers mostly an afterhought.
By contrast, the internet aggregators from Google to Facebook to Amazon focus on a user experience that brings in users, with suppliers mostly an afterthought.
Newspapers don’t put their articles on Google or Facebook because they want to, they’d prefer people to come directly to their sites, but that’s where the users are and so they need to go there.
The effects of aggregation theory started in traditional media businesses like books, newspaper, music, but This dynamic will affect every business that deals with the internet. Said another way, it will affect every business.
With the advent of smartphones, it moved into areas that had a physical component. Once everyone was carrying a smartphone with a GPS in their pocket, ride-sharing became an aggregation business – drivers would go to wherever the riders were and so companies like Lyft and Uber focused on acquiring riders (often through subsidizing rides – thanks to all you VCs for my cheap Ubers the last few years.)
Online, it’s not distribution that is scarce, but attention. Anyone that can aggregate a specific type of attention will be able to aggregate that and “match” it with their product or service.
This increasingly means that pretty much everyone has “journalist” in their job description whether they know it or not. Increasingly, writing, tweeting, and podcasting are not things people do to avoid work, they are core to everyone’s job.
Last Updated on June 6, 2025 by Taylor Pearson