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PhilGoetz comments on Market Failure: Sugar-free Tums - Less Wrong Discussion
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My point is that the existing companies failed to provide a product that consumers wanted, and VCs relied on the "fact" that the market is efficient to "prove" that Thinx could not succeed, since it did not bring anything to the table that the big companies couldn't have done themselves..
Thinx disrupts the existing business model.
Tampon producers make money by selling tampons that aren't reuseable. They might lose money if women's standard underwear absorbs all fluids and thus women don't need to buy tampons anymore.