This post was originally published on Medium.com. To read the full post, please click here.  

In a recent post , we highlighted the expatriate’s struggle to find things to do based on their interests. It could be due to not knowing anyone in the locale, a faulty website, information overload, inaccurate information, or something else. All of these issues are tied with a common thread: a consumer-business disconnect.

Our current digital climate makes connections easier, faster, and more effective. If utilized intelligently, websites and digital applications can take user satisfaction levels to new heights. While this possibility becomes easier to achieve, it requires a different business model and identity than a majority of incumbent internet services. As of 2015, we know this model falls under what is called the “Aggregation Theory”.

What is Aggregation Theory?

Aggregation Theory is a new concept in business models by Ben Thompson, author and founder of Stratchery. It is an attempt to describe the relatively new phenomenons of Google and Facebook, and how they have been able to generate immense profits, blowing away the competition.

Traditional business models operate in a world where transaction costs are high. To sell one item, you need to buy it first, store it in a warehouse, ship it to an expensive retail location, and have someone explain to a shopper what it does. Those are four time-consuming and/or costly processes meant to create a sale in a matter of minutes. Since transactions costs are high, both on the supply and demand sides, corporations started consolidating the supply chain to reduce costs, thus enabling a profit.

This post was originally published on Medium.com. To read the rest of this post, please click here.