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January 7 2024

#122 How the Agglomeration Effect is Set to Propel the GPT Store's Success

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OpenAI is poised to launch the GPT Store, marking a pivotal moment in tech innovation. This development beckons us to explore its potential and ponder its limitations.

ChatGPT's primary purpose is to serve as a chat interface driven by the powerful GPT engine. However, it would be an understatement to overlook the significance of this interface or application. In a world where numerous pioneering domains strive to discover a revolutionary "killer app," OpenAI has distinctively set itself apart by commencing with ChatGPT – the proverbial proof-bearing pudding.

GPT has been a game-changer, powering top-tier applications like RoostGPT. This leads to an intriguing question: why introduce the GPT Store? Initially, ChatGPT may have been envisioned merely as a showcase of GPT's capabilities, but its impact has been monumental, akin to the transformative role of ships and railways, combined, in harnessing the power of the steam engine

The Power of Agglomeration

ChatGPT stands out in the tech landscape, particularly when considering its unique value proposition. It might be tempting to categorize it under network or platform effects, but it doesn't quite fit these molds. Unlike typical network effect scenarios, where a platform's value grows with more users, ChatGPT operates differently. Its utility doesn't hinge on the number of users. Even if a solitary user were using ChatGPT on Mars, they would still derive its full benefits. This is because ChatGPT’s value is inherent to its capabilities, not dependent on the size of its user base. Whether it's one user on Mars or millions on Earth, ChatGPT delivers consistent, standalone value, making it a distinct and revolutionary tool in the realm of technology.

The value of ChatGPT can be best understood through the lens of the agglomeration effect, a concept in economics that comes to life in a simple, relatable scenario. Picture a renowned café in a city, celebrated for its exceptional coffee and private meeting spaces, ideal for confidential discussions. Then, a new mall opens in the central business district, bustling with activity and brimming with potential customers. The café seizes this opportunity, setting up a smaller outlet within the mall.

Although this mall location offers less space, it's a strategic move to tap into the high foot traffic. Here, the café serves its famous coffee, giving mall-goers a taste of what it's known for. This strategic move isn't just about selling coffee in the mall; it's a way to introduce a larger audience to the café's full experience. Back at the main café, customers can enjoy the complete ambiance, including the privacy and personalized service that define its exclusive meeting spaces.

This approach mirrors the value of the GPT Store. Companies with products based on the GPT engine can showcase a part of their offerings in this digital 'mall,' harnessing its high visibility. It's an introduction, enticing users to explore further. For the full, more private and customized experience, akin to the café’s main location, users can seek out the companies’ primary platforms or services.


The GPT Store is set to revolutionize the way companies present their GPT-based products. Envisioned as a digital 'mall', it offers a unique platform for businesses to display a segment of their innovative offerings. This strategy not only capitalizes on the store's extensive visibility but also serves as an inviting gateway for users, encouraging them to delve deeper into the world of GPT-driven solutions.