"premature profitability"? I think it's easy to sit on the outside of a business and judge it smugly, but considering that the estimated net worth of the founder is north of $50mil (https://www.fundera.com/blog/successful-entrepreneurs), I don't think he would say that there is anything wrong with their "premature profitability".
Maybe there is mismanagement, or poor decisions, or just not staying ahead of trends in the market - but putting millions of dollars into the pockets of the business owners is the intent of all businesses. Knocking that as "premature profitability" seems silly
> Maybe there is mismanagement, or poor decisions, or just not staying ahead of trends in the market
Or perhaps we need to consider the idea that it's actually OK for a company to not live forever. Threadless had a good run, made a lot of money for the employees and made a lot of consumers happy. It's not a failure if they don't continue to do that in perpetuity.
Society6 and Redbubble are still losing money but they will also crush Threadless by the time it's over. This is a winner take all marketplace business, not a t-shirt business.
You say that as if there's a guarantee that the upstarts will find a way to be profitable once they've spent several years losing money. The barriers to entry are pretty low in the t-shirt business so it's not like there's some golden goose to be captured after millions of dollars of capital are set on fire.
It's not a t-shirt business, it's a marketplace where designers sell their designs and the designs are placed on t-shirts, mugs, carpets, stickers, etc. So basically these sites are like eBay but for artists. Like any marketplace business, it takes a long time to build up both sides of the marketplace but once it's in place, it's very hard to compete with.
It takes a long time, so might as well be profitable along the way. Think of how many businesses enter a "it takes a long time" industry and run out of runway before they can turn a profit. Good for Threadless for being able to generate profits for the better part of 20 years, even if they didn't achieve world domination. They got rich and had almost no risk
Let's say the core business is to put customer designs on various products and sell them in a marketplace. So like Etsy, but instead of the artists making everything, the artist makes the design and the marketplace business produces it.
Becoming the number 1 player in that market could be profitable if said company could implement innovations that are difficult to replicate by others. But it's not the type of business where a network effect is going to shut out competitors. Customers will go to where they can get the best balance of price, quality, ease of use, and speed.
Spending a lot of VC funding selling dollar bills for 50 cents is not the only strategy, and it risks running out of money before getting to the promised land.
Running a profitable business doesn't mean you can't come to be the best in a market segment either. Profit can be reinvested in the business, and decisions can be made based on what makes sense for a sustainable business.
Maybe there is mismanagement, or poor decisions, or just not staying ahead of trends in the market - but putting millions of dollars into the pockets of the business owners is the intent of all businesses. Knocking that as "premature profitability" seems silly