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Comment by soniman | Hacker News Reader

Society6 and Redbubble are still losing money but they will also crush Threadless by the time it's over. This is a winner take all marketplace business, not a t-shirt business.

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> This is a winner take all marketplace business, not a t-shirt business.

...What? Please explain why selling t-shirts online is a business where one winner will take all the market share.

Utilities are a natural monopoly. T-shirts are a commodity. There will always be thousands of sites selling them.

You say that as if there's a guarantee that the upstarts will find a way to be profitable once they've spent several years losing money. The barriers to entry are pretty low in the t-shirt business so it's not like there's some golden goose to be captured after millions of dollars of capital are set on fire.

It's not a t-shirt business, it's a marketplace where designers sell their designs and the designs are placed on t-shirts, mugs, carpets, stickers, etc. So basically these sites are like eBay but for artists. Like any marketplace business, it takes a long time to build up both sides of the marketplace but once it's in place, it's very hard to compete with.

It takes a long time, so might as well be profitable along the way. Think of how many businesses enter a "it takes a long time" industry and run out of runway before they can turn a profit. Good for Threadless for being able to generate profits for the better part of 20 years, even if they didn't achieve world domination. They got rich and had almost no risk

Let's say the core business is to put customer designs on various products and sell them in a marketplace. So like Etsy, but instead of the artists making everything, the artist makes the design and the marketplace business produces it.

Becoming the number 1 player in that market could be profitable if said company could implement innovations that are difficult to replicate by others. But it's not the type of business where a network effect is going to shut out competitors. Customers will go to where they can get the best balance of price, quality, ease of use, and speed.

Spending a lot of VC funding selling dollar bills for 50 cents is not the only strategy, and it risks running out of money before getting to the promised land.

Running a profitable business doesn't mean you can't come to be the best in a market segment either. Profit can be reinvested in the business, and decisions can be made based on what makes sense for a sustainable business.

As with much of this, I can see amazon eating it all [0].

They have the marketplace and the tooling already, just artificially limiting scale.

0: https://merch.amazon.com/landing

There has to be an element of cool and fun. These are artists, they want to be where the cool people are . . . and that's not Amazon.

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