I had an interesting conversation with a start-up founder recently, one whose business had received multiple rounds of funding and is scaling well. Our chat soon moved into listing on Amazon/other horizontals, and I was reminded of my post from earlier this year – The Shrinking Shelf Life of Ecosystems. I had written how the advantages of dominating the triumvirate – distribution, product and brand – now have a shrinking shelf life.
I had taken DTC brands as an example of this. But while that is relatively true and there are enough unicorns around, in absolute terms, the distribution might of Amazon and other horizontals continues to be formidable. In this insightful post – Bonsai Brands – Simon Andrews explains that while it might be “easy” to get about $50m, the journey to $100m and beyond gets tougher because efficiencies start maxing out. They could remain viable businesses at a certain scale. (more…)