> once you have a dominant player they just buy or undercut the occasional competing startup

If they buy startups, a thousand more will spring up hoping to be bought. Investors love this game.

And if you think undercutting works, read up on the story of Dow and how they broke the German bromine monopoly [1].

There is no such thing as a natural monopoly. Only governments can create monopolies, usually through regulation.

[1] https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_m...