Oh man, I'm not sure you understand markets and businesses with scope at all.
If a business can find profit in a market, they can expand into that market, especially when they don't need to create the market.
I understand it. Maybe too well. TAG won't be successful because they capture a greater share of the Canadian market.
TAG will be successful if their graded cards outsell those of their competitors on the secondary market.
What market does the Canadian market primarily cater to in terms of sports card collecting? Hockey. What sport is the least cared about in the secondary market in collectables in the US? Hockey. So if a bunch of hockey cards with TAG slabs outsell PSA then that's not going to move the needle for them if PSA still owns the baseball, football and basketball secondary market because those cards dwarf the price of hockey cards. Justin Herbert has been in the league for less than 3 years and already has a million dollar card on the secondary market. I only did a quick google search and the top McDavid card that I could find was less than 150K. Also logistics doesn't just end with TAG. How many people will refuse to buy a card because it's located outside their country?
People are going to grade their cards with the company that gives them the best resale value regardless of technology. All the tech and bells and whistles are amazing but they don't mean anything if a TAG card sells for 30% below what a comparable PSA card would.
TAG could own 100% of the Canadian market and it won't mean anything. TAG is not structured the way someone like KSA is. Where if you can slab X amount of cards you can make a profit in grading. They need to become the dominant player in grading and have their cards get a premium on the secondary market in the categories that matter in the US. Which is baseball, basketball, football and gaming. And they have to be fast at it because I'm sure competitors have their toes dipped in the water. If PSA dropped some kind of technology based grading at the end of the year then TAG would be irrelevant.
The way the board of TAG is structured I can't see a way that it's ownership isn't different in 5 years time. It either gets sold at a premium because it's the market leader or it gets liquidated to a competitor for the technology and gets rebranded because competitors replicated a similar form of grading before TAG could capture enough meaningful market share. How do you get to where you need to get to the fastest? You make yourself as efficient and streamlined as possible and laser like focused. Amazon wasn't a global company when it started. It was a US bookstore marketplace. Could they have made more money servicing the World globally from the start? They would have made more revenue but it would of greatly slowed down their growth in the much more important US market. Most companies will establish a footing in a core marketplace before adding on headaches from international markets. It does concern me that TAG thinks the Canadian market is important this early. It's not in my opinion and it's basically a pimple on the butt of America (business wise only speaking) I would feel a lot better about their success if they focused exclusively on the US market and put 100% of their resources there. Time will tell.
The grading market already exists and PSA gets 100k cards a day. TAG is at a huge disadvantage because they aren't creating a new category, they are trying to revolutionize an existing one. Failing to move fast enough and efficient enough they will just become a laser disc because a competitor comes out with a comparable technology with a brand name the market already prefers. At the end of the day the secondary market will speak and we can see what TAG graded cards are selling for a year from now compared to equal PSA ones. I'm pulling for them though.
