The Aggregation Theory: What’s the Internet’s future?

1. 0:00 – 1:20

   Intro

   1. BTBen Thompson0:00

      That's a big reason why Twitter's not what it used to be, 'cause now people are scared. People thought Apple was doomed. People thought the internet was inherently decentralizing. Facebook is way more dominant and valuable than anyone thinks. Again, today, it's everyone understands that, but it was, believe it or not, very controversial a decade ago.

   2. BGBen Gilbert0:15

      I wanna switch gears and ask you about aggregation theory. There's a multi-pronged question here. So the business that you're running is far, far, far superior to a thing that I'm sure you've been asked a zillion times about, "Why don't you write a book?" So, like, you make $150 a year per subscription, or at least that's what I pay for the full bundle, I think.

   3. BTBen Thompson0:33

      No, you got a refund and a discount to $120.

   4. BGBen Gilbert0:35

      All right, then I pay $120 a year.

   5. BTBen Thompson0:37

      Yeah, dithering is now wrapped into a Stratechery subscription, so yes. I should be clear for anyone listening, you got a credit on your [laughing] subscription.

   6. BGBen Gilbert0:44

      [laughing]

   7. BTBen Thompson0:44

      We do not issue refunds, but you did get a credit.

   8. BGBen Gilbert0:47

      But that is to say, I have no idea what I'm paying, and there's some segment of your listeners that are so wildly price insensitive about what you do that it doesn't matter. So it's probably hard to price discriminate on them.

   9. BTBen Thompson0:56

      Yeah. No one, no one should look to me for pricing strategies, 'cause I, I know it's, it's, it's not optimal.

   10. BGBen Gilbert1:01

       But anyway, my quick math was if you did $150 a year, and I know it's $120, and you assume some five-year lifetime on, on customers, um, and you compare that to, like, what you would make selling somebody a book once, which is, what, $20 times 7% goes to the author, it's literally 500 times more revenue to you to do what you do versus writing a book.

2. 1:20 – 3:30

   Book about the aggregation theory

   1. BGBen Gilbert1:20

      And on the other hand, there's something that you've become known for in aggregation theory, and some other topics around the edges of it, that sort of deserve a canonical work. It's sort of the modern Porter's Five Forces. It deserves a canonical notion, rather than something that's been edited, and revised, and attached, and rethought through. So have you thought about what form canonical Ben Thompson topics would take?

   2. BTBen Thompson1:45

      Yeah, aggregation theory is the obvious one. I think the time to have written that book would probably be, you know, 2017. I, uh... I, I mean, I was writing about the ideas of aggregation theory from the very beginning. It's hard to imagine, but back in 2013, again, like, back then, people thought Apple was doomed. Uh, people thought the internet was inherently decentralizing.

   3. BGBen Gilbert2:05

      Oh, it was not long after the Facebook IPO, and it was a disaster.

   4. BTBen Thompson2:08

      Yeah, and Facebook was doomed. Well, then Microsoft was the other thing. I was able to come out of the gate with really four takes that were providing tons of content. Number one, Apple's not doomed. [chuckles] They're actually gonna be doing very, very well. Number two, the internet is centralizing, it's not decentralizing. Everyone's understanding of the dynamics are completely wrong. Again, today, it's everyone understands that, but it was, believe it or not, very controversial a decade ago. Number three, this is what Microsoft should do. Like, there actually is a clear path forward. They're not doomed to irrelevance. And then number four, uh, Facebook is way more dominant and valuable than anyone thinks. Uh, and so that was a, that was a... Again, like I said, I had lots of [chuckles] low-hanging fruit to sort of pick.

   5. DRDavid Rosenthal2:47

      Well, it's easy. You're, you're, you're being self-deprecating here, obviously, but, like, you know, I mean, I think a big part of the reason, this is behind Ben's question to you of, you know, it deserves canonical work, the reason these are accepted truths and realities now is in large part, you know, due to your work.

   6. BTBen Thompson3:02

      It is a little humbling to be a writer, because I think people would understand all those things had I not written it. I think at best, they understand them maybe a few months or, at best, a year or two before it becomes common knowledge, and that's just the reality of the game. The edge you can provide is usually measured in sort of months or years or a very low number of years. I do think aggregation theory should be a book. Uh, it was probably, again, more pertinent at the height of all these sorts of things. Maybe it's still pertinent now, but

3. 3:30 – 4:45

   Challenges on writing a book about aggregation theory

   1. BTBen Thompson3:30

      number one, uh, there's just a logistical issue. I write every day, and to your point, I make way more money [chuckles] writing every day than I would writing a book. Uh, so that's number one. Number two, there's a fear factor, which is people think I'm very productive, but I, in reality, have daily deadlines that spur that productivity, and the absence of those daily deadlines would terrify me in terms of a book. And number three, there's a second fear factor, which is a book is frozen in time, and if I were to have written an aggregation theory book a couple years ago, I probably would've centered it on Netflix, and that ended up being wrong. It was wrong in another way that I wrote about, where content is super important. That's how you break away from aggregators, is having high diversion content, and I had the balance wrong between Netflix's aggregation effects versus the power of content. And so I'm very fortunate I didn't write that book. Whereas now, I was still wrong, but I have the, the medium and ability to go back and say, "Well, I was wrong. This is where I was wrong. What does this mean for Discovery Time Warner? What does this mean for Disney? What does this mean for the other platforms?" So that is a fear factor. And then number four, I think there's an aspect, yeah, maybe it deserves the treatment, but Stratechery is very much of the internet, and I think the nature of the internet is it's transient, it's not, it's not permanent. Again, another thing people got wrong. I think

4. 4:45 – 5:20

   Mistake Twitter made

   1. BTBen Thompson4:45

      actually one of the biggest mistakes Twitter made, and it's understandable, no one could have seen this at the time, but Twitter should have had disappearing tweets from day one. It should have always been a just in-the-moment sort of social network. I think it would be a much better product. Honestly, I think they should still do it now. People experience it and think of it as a in-the-moment product, and then are stuck with this archive that induces fear, induces ruin, and it reduces the frisson of, of what it's like to be on Twitter. That's a big reason why Twitter's not what it used to be, 'cause now people are scared.

   2. DRDavid Rosenthal5:15

      Well, to the aggregation theory point, I, I think I've heard you make this argument before, but

5. 5:20 – 9:56

   Ben should have written a book about the aggregation theory

   1. DRDavid Rosenthal5:21

      articulating it the way you have over the years and revising it on Stratechery is actually a better product than if you were to, like, have written a book five years ago.

   2. BGBen Gilbert5:29

      Oh, I so disagree, David. It makes it really difficult to explain what it is to people. I'm like, okay, like, if I'm on the board of a company and I'm trying to, like, explain to them that they need to reframe their thinking and think about aggregation theory, if someone's like, "What's that?" I'm like: I actually don't know what to send you. Like, read these things in this order to watch this guy contradict himself and say what he got wrong, and then sort of take away what you think the modern interpretation is?

   3. BTBen Thompson5:51

      I think you're both right. There should be a set-in-stone treatise. Honestly, there's just a matter of priority. I mean, I think there's an a- again, it, it would be good to share and point to this thing and go read this. To be clear, I'm in the middle of massive self-rationalization right now for explaining why this is the case, so take everything I'm saying with a grain of salt. [laughing]

   4. DRDavid Rosenthal6:08

      [laughing]

   5. BTBen Thompson6:08

      And the other thing is, I'm just having more fun and more interested in building software, and figuring out podcasts, and, uh-... and I would like to think, "Oh, a book is just really about my ego and putting it out there." So I'm not that sort of person. I just wanna give back to the creator community. That's why I said I'm definitely in rationalization mode.

   6. DRDavid Rosenthal6:26

      You're definitely rationalizing. [laughing]

   7. BTBen Thompson6:28

      [laughing] But no, I should write a book. I just haven't. I don't know if I ever will, but I, I agree that I should have by now written a book, but alas.

   8. DRDavid Rosenthal6:38

      One last quick question on, on Aggregation Theory. Um, obviously, you were building up towards it, even as you said at the time, I think, uh, over... Did the- was it one or two years you were doing Stratechery before you wrote the first post?

   9. BTBen Thompson6:51

      This is actually an example of the power of branding. I wrote articles that were basically Aggregation Theory well before I wrote Aggregation Theory, but giving it a term and coining it is what made it stick. Um, and actually, some of those articles that I wrote before, there's one, I think it was called, like, Economic Power in the Age of Abundance. [laughing]

   10. DRDavid Rosenthal7:11

       [laughing] Doesn't have the same ring to it.

   11. BTBen Thompson7:13

       I think it's a better articulation of our Aggregation Theory in many respects. I wrote it in 2014, I think, and yeah, number one, doesn't have a good ring to it. Number two, it's one of my least read articles up to that date. Like, no one, like, just no one got it or understood what I was talking about, and i- it's a weird thing as a writer. Like, there's things that I'm thinking about now or that I know I will write about, but it's not the right time, and that's something you just learn over time, where you can be too early as a writer, too. This kinda goes back to, like, I didn't know how to communicate, right? Like, I remember I was in, um, I was in... There was some meeting at Microsoft, and we walked out, and my manager's like, "Uh, Ben, you're the only person in the room that actually understood the issue and what we should do, and absolutely everyone- no one understands what you're talking about, and, and people are kind of annoyed at you." [laughing] And he's like, "The problem is we want to get to H, but everyone in that room is on A, and you cannot talk about H. You have to talk about B, and then C, and then D-"

   12. DRDavid Rosenthal8:07

       Is this JR?

   13. BTBen Thompson8:08

       It is JR, yes.

   14. DRDavid Rosenthal8:10

       [laughing]

   15. BTBen Thompson8:10

       And it's funny 'cause that applies to writing online, too. Number one, sometimes I'm wrong, so it's good to wait or to be sort of sure. But number two, there's an aspect where there's just the right time and place for things. There's always stuff I'm sort of thinking about, and one thing I've learned is it's definitely better to write about something, a current event, which is bad for a- from a book perspective, 'cause I'll write an article that actually has some key insights, but it's talking about some event that happened, like, 2015, which no one remembers or cares about. But in the nature of my business, that is actually much better for helping people grok it, get it, spread it, share it, those sorts of things. So there is a, a bit where the incentives of my business do work against timeless pieces in a certain i- i- in, in a certain respect.

   16. DRDavid Rosenthal8:51

       Okay, so when you hit publish, though, on Aggregation Theory, did you think it could be what it became?

   17. BTBen Thompson8:59

       I did know. You know, I thought about the name. Obviously, I was, I was inspired by Clay Christensen, Disruption Theory. That was sort of the, um, uh, you know, one of the things, but I had written a number of articles going up to that, that were clearly building to that point. So there's one about Airbnb. There's one about Netflix. There's one about just websites and publications, and then Aggregation Theory was sort of short and sweet 'cause it was basically distilling what was in those previous articles into one thing. I felt very confident I had a thing, and I wanted to have a definitive piece that was doing what it was, and it needed to have a name.

   18. SPSpeaker9:36

       [singing] Who got the truth? Hmm. Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth? Who got the truth now? Hmm.

Episode duration: 9:56