Business Models I Like: Aggregators

by Scott - No Comments

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Everywhere I look there is more and more people coming up complex business models that hinge on cooperation from tons of different actors. I don’t like this. Business models I like are scalable, rely little on the creation of new technology, and are centered around a clear value proposition to the customer.

Right now I’m really digging businesses that center upon the aggregation products/services in a cluttered market. With more and more options for products and services many businesses are finding their niche by aggregating these offerings in one easy place for consumers. Two companies that provide this service and are killing it  are SeatGeek and Yipit. Seatgeek aggregates tickets from the secondary marketplace and has a recommendation algorithm that tells consumers when to buy. Yipit pulls in daily deals from all the sites we love in one place so I don’t need to go 10 different palces.

Both of these sites fit my business model criteria very well. They work as affiliates by helping consumers make the best purchasing choice. What I like about this is they can scale very easily without having to dramatically increase the size of their team etc. For them the main battle is customer acquisition which when you have a great product (like they do) is not an insurmountable task.

Another aspect I like is that they do not rely heavily upon some ground breaking technology. I may be a bit biased here because I am not a technologist, but I think there is some truth here. If you’re only competitive advantage is your tech, that means that you must constantly iterate technically to stay ahead of competitors. Anyone with more technical resources  has the ability to out-build you which for a startup is problematic. I could talk about a slew of other issues here but I’ll spare you.

Finally, aggregators convey a clear value proposition to consumers. With their products I can easily make the best purchasing decision and save time doing it. When the messaging is clear, marketing and customer acquisition becomes a whole lot easier.

So I conclude this post seeking cluttered marketplaces that have not been tapped yet. If you know one drop me a line!

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