I'm going to bring up a concept that you might not have considered called 'break-even'. And perhaps one called 'never run out of cash' ;)
You've got a fundamental error in your reasoning here. To a craftsman, the market is _irrelevant_. They cannot necessarily scale anyhow. To a craftsman (I know what I'm talking about as I run a Patreon-based open source business along just these lines) the only thing that matters is cash flow and whether you've got your own clientele doing enough business with you to keep the doors open.
You're certainly still creating value, and operating a business just as much as publically held companies, but the market is irrelevant to you and you may even benefit from repudiating the market and claiming you're not confined by its expectations (I do this, quite successfully).
It is still possible to be killed by competition doing this, but only through illegal acts (such as buying your building and kicking you out, or colluding with all your suppliers and making them refuse to sell to you, or killing you outright). If you aren't publically held and you have a clientele that you can service, you cannot get swallowed up by competition no matter what they do: in fact, it's possible to manipulate hostile actions by a larger competitor to your own benefit, by crying foul or claiming they are trying to eradicate a superior option.
These things are, yes, more than 'your craft', but they're completely realistic. I've run Airwindows for over ten years in a really nasty industry along these lines, and as long as I stayed over break-even (or hung in there through lean times!) I ended up just fine :)