Yesterday Innovation Writer, Ben Thompson, shared a piece about two scooter-sharing startups. I thought the piece was going to be a prediction about which startup would be acquired by Uber. Instead, the piece was about Uber and aggregation theory.
Aggregation theory is about how a company understands its goal. The theory distinguishes platforms from aggregators. If Uber only understood itself as a car-sharing platform, then its view of itself would be to provide car sharing services. As a platform, it would view the recent dent in car-share rides made by scooter-sharing as a threat. But if Uber, instead, sees itself as an aggregator of transport options, then they see the scooter-sharing space as an opportunity and thus they would work to acquire a scooter-sharing platform.
As the saying goes, the customer doesn’t want a drill, they want the hole in the wall. Aggregators who understand this have a monopolistic edge over silo-visioned platforms. But what does this mean for startups? Is the dream to get acquired by a huge aggregator and if so, what are the steps you have to take to get that dream? Or is the dream to carve out a niche, to be small but scalable and repeatable in your own space? And if so, how do you win at that?
The answers to questions about the types of dreams startups might have are personal and situational. But the answers to questions about how to achieve those dreams, whether going for an acquisition or planning to walk to the beat of your own drum are less clear. Is it about who you know? Charisma? Tech talent? There’s a lot at play.
Another question: Is aggregator the new word for monopoly and platform the new word for small? Or are there instances in which a startup that doesn’t want to be acquired can become an aggregator in their own right.
What do you think?