Here's a Billion Dollar Startup Idea

On Saturday I shared my 13 most loved deep dives of 2023.

Here’s today at a glance:

 Opportunity: In-Store Conversion Optimization

Tibo’s one of my favorite active builders on X. He usually posts about his own projects but this remarkably simple idea he shared resonated with me:

As the original quote-posted content implies, the hard part here actually isn’t the computer vision work, it’s creating a reliable and comprehensive profile of each buyer.

You need to:

1. Correctly identify each person → their are labeled databases like MegaFace but you may be best to go with Google’s image search here to start (or maybe indefinitely)

2. Pull in relevant data about that person → This can include transaction data from bank and credit card APIs but you may want to consider other factors as well, such as recent actions on social media, to help predict intent.

3. Use the data to create a prediction of how likely each person is to make a purchase → If possible, surface a score for their trip as a whole (and include things like other recent visits, time in store, etc) but also predict it based on each individual item they look at.

4. Surface that and other relevant information to the salesperson in an easily digestible way → You’ll want to integrate with existing POS systems for this, but the problem is that the POS market is highly fragmented, even within most verticals. I’d recommend starting in a vertical with a single, dominant POS player.

That four-step process is the secret sauce you’d be selling to retailers.

🧠 Framework: Market Command Matrix

Patrick Campbell sold his startup, Profitwell, for $200 million last year, and it was entirely bootstrapped.

Since then he’s started sharing a lot of primary research he’s commissioned into topics that there isn’t a lot of ground truth data on. Most recently, he shared his competitive research playbook and shared this framework, the market command matrix:

The y-axis represents how much of a competitor’s resources they’re piling into your market, and the x-axis represents how aware customers in your market are of the competitor.

The big text in each quadrant is what you should do in response. While the placements on the matrix aren’t exact (for example a “big VC bet” could have dramatically more or less mindshare depending on what stage they’re in), Patrick’s recommendations are good.

Note that he only recommends you actually take action against the two quadrants on the right, the competitors who your target and/or existing customers are likely to be aware of.

Another note: “all out attack” may mean to explore partnerships when you both have leverage in different parts of the market, it doesn’t mean go burn all your money on paid ads.

He also includes free playbooks on how to handle competitors in each quadrant, the full article is worth a read.

📈 Trend: Sober Curious

At Andrew Yeung’s Junto Club a few months ago, I had my first “mocktail”, and I wasn’t the only one.

The “sober curious” trend has been growing for the last few years, the #mocktails hashtag has billions of views on TikTok and we’re seeing the still-early signs of a strong digital community around the idea on Reddit:

Brooke LeBlanc is trying to capture this market early with Edge. I’ve seen the pitch deck, and her vision for how to build community is unique. I asked her a few questions about the trend yesterday and here’s what she said:

Q: Why is it trending?

Brooke attributed it to two tailwinds:

1. A global shift towards health optimization due to COVID

2. The distribution of “health 3.0” research showing no amount of alcohol is good for your brain or long-term health, largely due to Andrew Huberman, Peter Attia, and Daniel Amen.

This has created consumer demand and given rise to everything from non-alcoholic drinks to mocktail bars.

💬 Quote: Control Your Psyche

When I went solo and left my last startup at the start of 2023, way before I’d even started Megaphone, the hardest thing I had to manage was my own psychology.

After spending a few years building something it’s hard to separate its success from your own.

Both in my own work and from working with so many others founders, I’ve consistently seen that the best results come when you’re able to stay level-headed.

A surprising amount of that just comes from having strong systems and routines (which are admittedly easier said than done in the chaotic world of startups), and through keeping your big picture goals in mind, it makes the problems that come up feel like blips.

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