Three’s Company: Of Shopify, Amazon, and Etsy
The Janus Rule, the Misjudgment of Solomon, and a critique of Aggregation Theory
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…
