Zero-sum markets and CPG

I stumbled across this term in a post by David Pakman about Dollar Shave Club from 2014: for DTC, he says, "invest only in zero-sum markets."

Zero sum is a situation in which a participant's gain or loss is exactly balanced by the losses or gains of the other participants. In this context, "a customer buying your product means they stop buying your competitor’s products."

It's an interesting thing to think about, because "zero-sum" isn't quite repeat rate/purchase frequency, strength of brand affinity, or whether the vertical lends itself to subscription. It's a measure of whether you fill that need for the consumer for a certain amount of time. The closest I've gotten is the old "vitamin versus aspirin" analogy, but even that doesn't nail it.

It's a potentially very useful criterion (if true) because it lets you eliminate a lot of possible investment opportunities: everything that is fashion, for instance. Then again, as my colleague Deepka notes, non-zero-sum doesn't stop Glossier from being successful with lipsticks, eyeshadow, etc. Or Allbirds, for that matter.

But we will certainly pay more attention to businesses that "remove" the consumer from competition because, c.f. Thiel, that's one way of building a (temporary) monopoly.

P.S. Glossier is cool to the point of where I want them to have a men's sweatshirt.