Three’s Company: Of Shopify, Amazon, and Etsy

The Janus Rule, the Misjudgment of Solomon, and a critique of Aggregation Theory

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Two’s company but three’s a crowd: Shopify, Amazon, and Etsy (in no particular order)

Shopify has finally attracted mainstream attention of late, due to the company’s remarkable (and remarkably quiet) success in one of this millennium’s hottest, most competitive markets: ecommerce. That should come as no surprise, because the Shopify platform had strategically occupied a blindspot in Amazon’s territorial map, as discussed in “Shopify and the Power of Platforms”:

Aggregators tend to internalize their network effects and commoditize their suppliers, which is exactly what Amazon has done… Amazon benefits from more 3rd-party merchants being on its platform because it can offer more products to consumers and justify the buildout of that extensive fulfillment network; 3rd-party merchants are [atomized, modularized, commoditized, and thus] mostly reduced to competing on price.

That, though, suggests there is a platform alternative — that is, a company that succeeds by enabling its suppliers to differentiate and externalizing network effects to create a mutually beneficial ecosystem. That alternative is…