David Rosenthal: prediction

Transcript context

…Yeah. So discussed in six different episodes is Aggregation Theory of Ben Thompson of Stratechery. This of course talks about building superior user experiences as the winning strategy in an infinitely accessible zero-cost distribution world aka the internet. This was discussed on Acompli, Snapchat, Jet, Android, Skype, and Marvel. So I think for us it says a lot about the power of the theory that once you see it, you can’t unsee it. Once you realize that “oh, this is a predominant factor in making these companies successful,” every company we analyze we’re like, “Oh, I see what they’re doing here.” Obviously, a big hat tip as well as we’re doing the show to Ben Thompson and all of his work. I think it's interesting how much we’ve talked about it and also reading Ben’s work throughout the year, he first published the post on Aggregation Theory last year in 2015. But how much it keeps coming up in his past work too and how he keeps refining this concept and adding onto it. But the core of it, I think that insight that in this world where the cost of distribution of zero and in digital marketplaces, your accessible market is the entire world. That it is really the superior customer experiences that are going to beat everything else because you can have sort of perfect competition amongst the whole world and so the best will rise to the top. It’s totally informed my work and I’m sure, Ben, yours too, in companies that we work with, when I’m meeting with startups trying to decide which to invest in and which I think might be successful and won’t be, it’s been hugely influential not just on this show but in my everyday work too. Yeah, absolutely. Moving on to things that were discussed four times throughout the year, and I think listeners, what we’re going to do here for the structure of the show is move through these fairly quickly to kind of just establish a baseline of where we come from and then really spend the bulk on 2017 themes. Also, we have sort of an extended Carve Out section to kind of talk about the best things that we’ve bought, read, listened to, or paid attention to this year. So that said, going back to the 2016 themes, the ever-so-dominant network effects. In Virgin America episode, PayPal, LinkedIn, and Adobe. This one for me was such a dominant theme that I gave this talk at a product conference called Industry earlier this year. I had two ideas for talks going. I was working on both of them. David and I were recording, I forget which episode it was but it suddenly dawned on me that like, “Oh my God, this talk has to be about network effects.” It was actually pretty interesting because it was conference for, like, product managers and people that have some amount of product management in their role. It was really interesting to take sort of a venture lens to a product audience and talk about building network effects and virality and dependencies on the rest of your user base into the core product and rather than thinking about it as kind of an afterthought.…

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