Office Hours: Amazon’s Aggregators, Turning Data into Insights, Career Moves, and Why the Don Draper Era is Dead

Business Strategy

Scott Galloway explores the business strategies of Amazon aggregators like Thracio, which have raised significant capital to acquire and scale brands on Amazon's marketplace. He draws parallels to his experience with about.com, highlighting the risks of relying on platforms controlled by larger entities. Scott warns that these aggregators might face challenges if Amazon decides to become more involved, as they control the algorithms and traffic.

Amazon is the second largest search engine in the world behind Google and they control the algorithm for what you see and what's recommended to you.

--- Scott Galloway

He suggests that while smaller players can thrive, reaching a certain scale might attract Amazon's competitive attention 1 2.

   

Marketplace Risks

The discussion shifts to the inherent risks faced by aggregators operating on platforms like Amazon. Scott emphasizes that these businesses are vulnerable to changes in platform policies and algorithms, which can drastically affect their valuations and operations. He recounts how a change in Google's algorithm significantly impacted about.com's revenue, serving as a cautionary tale for Amazon aggregators.

They have figured out a way to take the funnel of traffic that was coming to our content site, about.com, and they're pushing it elsewhere.

--- Scott Galloway

Scott believes that while aggregators can initially benefit the ecosystem, they must remain vigilant as they grow, as larger platforms may eventually view them as competition 2.