I doubt they’re going after so niche products. Article says they’re pursuing economies of scale so it has to be things that fit together.

A small company could also be an emerging “niche” in a large space. Like keto snacks were a few years ago. First you could not find, then you could but they were crap / not actually keto, now there are many actual keto snacks, and soon there will be more / cheaper / more prevalent in brick & mortar.

So just taking that as an example, if you rolled up a few keto snack brands, there’s probably economies of scale across both the audience (to personalize ads and up sell products) and supply (it’s not a big world there’s only so many manufacturers at other end)

So I think that’s a good idea. But I do think this is a sign of the times - high profile leader raises a lot of money with no proof it works. He must feel like he can prove it out and cash out before…whatever this market is…tanks.

The extreme examples helped me imagine customer service would by necessity tend towards the generic interactions, like you expect from csr sourced overseas. Seems like no customer would be the wiser, and expect their favorite store has gone mainstream/is a success. As long as they can get their blessed dog bed accessories, customers won’t care much either I suspect.

But the real issue for me is what about the products? Will products get better by further design and development?

Or are we talking about another niche entirely? Crap products catering to customers with more money than sense?

The missing link here is - some businesses that suck make tons of money

Yes, they don't like the comparison to Thrasio but its a great example. Buy a bunch of meh-quality glorified dropshippers and make $$$$

I'm sure their end game is creating a big marketplace. Half the search results on Amazon and other big retailers are marketplace results anyways. And the result product is usually mediocre. But people like mediocre, I guess

Am I betting the Tesla HR manager selling steaks on Shopify was giving customers top quality at top customer service? No, not really

I wonder if they're just betting on unicorns. Sure, 95% of these stores might die but if the last 5% become powerhouse brands it could be worth it.

>but if the last 5% become powerhouse brands it could be worth it.

wouldn't they switch off the platform as soon as they get big enough?

> wouldn't they switch off the platform as soon as they get big enough?

OpenStore is buying the business outright. That's what makes this venture seem crazy to me.

Maybe they'll get lucky and buy a bunch of Scrub Daddy equivalents, but I still think that the founder's personality and what they bring to the table is the determining factor in success for these breakout successes.

Well if the platform owns enough of them they could just try to be a big destination site. But you're right, they probably would need to leave to be huge brands.

> When a merchant sells their long-tail business, can these folks run it just as well? I'm incredibly skeptical of that claim.

Based on my experience from another industry: no, they will run it worse but that does not matter since the difference in valuations between the seller and buyer is big enough.

“Shark Tank for Shopify” already exists, there is plenty of consumer goods VC.

These aggregators are similar to a spray-and-pray VC model, but generally with the ability to do whatever with the company (shut it down, sell it off, merge it with others). Note that in consumer VC, the exit multiples of early stage investing the best companies are not like 100,000x like in tech, they are like 50x max. Also the exit is selling to Unilever and Johnson and Johnson, not ringing the opening bell on Wall Street.

However, consumer goods companies don’t crash and burn a giant pile of cash the way crashing tech startups do, and individual consumer goods companies are pretty uncorrelated with each other. Unless two companies both make the exact same snack or beverage, they can both win, and often do. So a VC basket of decent consumer goods companies is very, very diversified, has lower risk and cash burn, but also lower multiples.

Aggregators kind of make me roll my eyes, it’s just raw, stupid capitalism, not sexy, inventive, or imaginative at all. But lots of these people start a decent company with a decent product, but don’t want to run it until they die or hyperscale it until they get bought by unilever.

wait, there are custom embroidered naruto vest stores? link?

I'll do you one better. Here's one for dogs:

https://hachicorp.myshopify.com/products/kakashi-vest-dog-co...

(Come on, Keith Rabois. Buy this company!)

hachicorp? where have I heard that? lol