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

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

Anthony Bardaro
Jul 30, 2019 · 24 min read
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👆 choose GREEN to annotate this article or PINK to get a summary 👆
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Two’s company but three’s a crowd: Shopify, Amazon, and Etsy (in no particular order)
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Janus (or, the two faces of ecommerce: Amazon and Shopify)

The Janus Rule: Markets like these tend to accommodate two complementary businesses that are mirror reflections of one another — one being an aggregator of commoditized suppliers and the other a platform for differentiated suppliers.

Aggregation Theory and the Moat Map

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The Moat Map

The Shopify/Amazon crossover episode

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Moat Map 2.0: Flips the axes to put suppliers/supply as the explanatory variable
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Amazon’s expansion from FBM aggregation into the FBA platform resulted in domination of the entire hemisphere — or, at least, the most desirable territories therein

The Etsy case study

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The Judgment of Solomon (except they’ll actually cut this baby in half!)

The Misjudgment of Solomon: When a startup occupies an undesirable locus outside of the Moat by attempting to be either an aggregator of differentiated suppliers (rather than serving as the platform its market demands) or a platform for commoditized suppliers (rather than the aggregator needed).

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Etsy and Ebay mired in the Misjudgement of Solomon and Walmart stuck in the middle

A Faceless Man

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Shopify should expand from its original platform (“OG”) into a faceless aggregator (“FL”), which should result in its domination of its own hemisphere (a la Amazon FBM+FBA)
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A Faceless Man

The Amazon and Netflix foils

Aggregation Theory and the Moat Map, disrupted

Implications

Applying the Janus Rule and the Misjudgment of Solomon

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