On the other hand, customers can choose to deal only with known merchants. I have no worries about sending bitcoin to a merchant because I only deal with reputable vendors. Bitcoin works perfectly here too.
But then how does a new merchant become reputable? The problem is the new vendors who want to be able to sell goods for Bitcoin but if no one trusts them because they are new, then they can't become reputable merchants. This mentality prevents newcomers to the market.
This is accurate, we wouldn't want a monopoly on certain business models, services or products. However if they truly are a vendor with great potential, surely their product(s) or service(s) will attract customers and allow for them to build a positive reputation for themselves. There are all sorts of other ways to attract customers like limited discounts, free items just to name a few.
Overall I don't think this problem is bitcoin-specific, this is a struggle for a lot of start-ups around the globe.
