It’s no secret that Ben Thompson was the primary progenitor of the paid newsletter — basically every media pundit recognizes his technology publication Stratechery as the inspiration for Substack.

His consistent and high-quality insights have cultivated a significant influence amongst the tech industry. Thompson has hosted interviews with prominent notable leaders including Meta founder & CEO Mark Zuckerberg and Microsoft CEO Satya Nadella — once he even interviewed both of them at the same time.

In the decade since launching Stratechery in 2014, Ben Thompson has independently established himself as one of the internet’s most credible sources for his insightful analysis of the business strategies leveraged by the world’s leading technology companies.

If major tech companies like Microsoft, Salesforce, and Adobe provide access to software as a service, then Stratechery provides access to content as a service.

The idea of paying $12 per month (or $120 per year) to read an email newsletter sounds crazy until you realize that you aren’t paying for an individual email. You’re paying for access to Ben Thompson’s consistent analysis of the latest developments impacting the tech industry. People pay thousands of dollars to access products like the Bloomberg Terminal for similar reasons.

Not only has Thompson been consistently accurate with his predictions and insights, he’s always quick to correct his (infrequent) mistakes. Knowing that Stratechery is entirely reader-supported only further validates the trust inspired by the quality of his analysis — it proves there are thousands of other Stratechery readers who have aligned incentives.

Compared to advertising based business models, which almost always end up incentivizing high quantities of content output, this independent, reader-funded model incentivizes quality.

Every niche competes on its own terms
A chart from Ben Thompson’s 2020 article Never-Ending Niches

As the business has grown, Thompson has continued to innovate with his distribution methods: Stratechery content is essentially medium agnostic. Text articles can always be read on the Stratechery website or via email, but subscriber-content is also available as a podcast where Thompson narrates each new post.

This is interesting in theory and fantastic in practice. Because the content meets me where I am, reading or listening to Stratechery is one of the most convenient experiences in digital media. In retrospect, this method was so obvious that Substack followed suit once again.

In the years since introducing the audio posts and an interview series, Stratechery subscriptions have started including access to additional podcasts. The first podcast was Dithering, which Thompson co-hosts with the renowned Apple pundit John Gruber. Then, he launched Sharp Tech with the indomitably calm Andrew Sharp, who now co-hosts two more shows included with a Stratechery subscription... which Thompson doesn’t appear on. If you squint, Stratechery is starting to look like a media company.


Every now and then, a critical framework emerges to help us understand the ebbs and flows of the economy. In these regards, Ben Thompson’s Aggregation Theory is a spiritual successor to Clay Christensen’s seminal Theory of Disruptive Innovation.

Where Christensen’s famous Theory of Disruptive Innovation describes how Davids take down Goliaths, Thompson’s Aggregation Theory describes how Davids become Goliaths.

Like Christensen’s theory, Aggregation Theory might feel a bit counter-intuitive at first, because the internet has completely changed the classical tug-of-war between supply and demand. As described by Thompson, with pre-internet businesses “there have always been far more users/consumers than suppliers, which means that in a world where transactions are costly owning the supplier relationship provides significantly more leverage.”

Image via Stratechery

Owning a hotel or printing a newspaper is something only a relatively small number of suppliers are capable of doing. Because they controlled supply they could influence demand, and they reaped the majority of the rewards. According to Thompson, “the fundamental disruption of the internet has been to turn this dynamic on its head.”

Now, instead of calling a cab service, we call Uber; instead of finding a local bed and breakfast we go to Airbnb. Instead of going to the library, we search Google. Who needs to go to the store when it’s probably cheaper on Amazon?

These companies all have one thing in common: they aggregate goods from a relatively small number of suppliers and then conveniently package it for consumption by a massive audience. This is no simple task — the few companies that have properly leveraged the ideas described by Aggregation Theory have become some of the most successful businesses in history.





Recommendations

  • Acquired podcast interview with Ben Thompson (📺 YouTube, 2021)
  • Tim Wu says Stratechery is "smart, but a little too much Kool-Aid" (📖 Medium, 2020)
  • Andreas Stegmann analysis of Stratechery business (📖 Medium, 2020)
  • Announcing Dithering, An Interview with John Gruber (📖 not about Apple) (Stratechery, paywalled, 2020)
  • Ben Thompson speaks about platforms vs. aggregators (YouTube, 2018)
  • Ben Thompson explains the great unbundling (YouTube, 2017)
  • Blogging’s Bright Future (📖 Stratechery, 2015)
  • Felix Salmon interviews Ben Thompson (📖 Medium, 2014)
  • 1,000 True Fans by Kevin Kelly (📖 KK.org, 2008)
  • Tim Wu says Stratechery is "smart, but a little too much Kool-Aid" (📖 Medium, 2020)
  • Andreas Stegmann analysis of Stratechery business (📖 Medium, 2020)
  • Announcing Dithering, An Interview with John Gruber (📖 not about Apple) (Stratechery, paywalled, 2020)
  • Ben Thompson speaks about platforms vs. aggregators (YouTube, 2018)
  • Ben Thompson explains the great unbundling (YouTube, 2017)
  • Blogging’s Bright Future (📖 Stratechery, 2015)
  • Felix Salmon interviews Ben Thompson (📖 Medium, 2014)
  • 1,000 True Fans by Kevin Kelly (📖 KK.org, 2008)

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