E-commerce and other internet companies can take cues from industries like retail and commercial aviation to build loyalty businesses
Each day on Tech Twitter, we get up in the morning, open up the website, and then go see what it is we're mad about. A few days ago, it was this: Tweets: @nikillinit , @simoncarless , and @jhtscherck Tweets: Nikhil Krishnan / @nikillinit : This @Alex_Danco piece about positional scarcity is a new favorite of mine - a great framework in how to think about the intersection of curation, prestige, and access https://alexdanco.com/... https://twitter.com/... Simon Carless / @simoncarless : Great @Alex_Danco overview of what he's calling ‘the loyalty business’, as part of a piece addressing ‘positional scarcity’ - music curation, better Google search placement, etc: https://alexdanco.com/... https://twitter.com/... John-Henry Scherck / @jhtscherck : Best take I've read on the @jasonfried tweet: extortion can arise when you have a drawbridge industry (lots of vendors trying to reach lots of buyers & they have to cross a bridge to do so) where the consumers are relying on the bridge operator to make curative decisions for them https://twitter.com/...
Context & Ripple Effects
Alex Danco's essay frames 'positional scarcity' — curation, prestige, and access — as the basis for what he calls the loyalty business, arguing e-commerce and other internet companies should borrow from retail and commercial aviation rather than compete on undifferentiated traffic. Its warm Tech Twitter reception from Nikhil Krishnan, Simon Carless, and John-Henry Scherck signals the framework landed with the growth-and-advertising crowd precisely because it offers a vocabulary beyond paid-acquisition math.
The piece belongs to a 2019–2021 arc of revisionism about internet-scale playbooks: the Blitzscaling critique already flagged the perils of VC-fueled hypergrowth, and by 2021 Benedict Evans argued software had eaten the world and faded into the background, leaving conventional differentiation — brand, service, loyalty — as the actual battleground.
First-order effects
- Internet operators reading Danco get an explicit alternative to growth-at-all-costs: model retention on airline miles and retail loyalty programs, where access and status, not price, do the locking-in.
- The framework gives commentators like Krishnan and Scherck a shared lens for judging whether an e-commerce or media product has a real moat or just rented demand.
Second-order effects
- If commerce platforms chase loyalty instead of audience, their dependence on rented attention weakens — the same logic behind Stratechery's call for Shopify to build its own ad network once Apple's ATT left Meta handicapped.
- Media feels the flip side: with ad markets under strain, Stratechery's argument against forcing Facebook and Google to pay for news assumes publishers need structural fixes, which loyalty-style direct reader relationships are positioned to supply.
Third-order effects
- If the pattern holds, competitive advantage migrates from owning infrastructure to owning the customer relationship — consistent with Evans' thesis that software itself no longer differentiates, so prestige and access become the scarce layer.
- The consumer-facing echo is already visible in how social platforms push writers and artists into personal-brand building: positional goods concentrate returns on whoever holds the audience relationship, pressuring everyone else into platform dependence.
The trend: Internet business strategy is shifting from scale-first acquisition toward loyalty, curation, and access economics as software ubiquity strips away technical differentiation.