Trim the Fat

 Opportunity: Credit Card Points SaaS

You probably know someone who’s obsessed with credit card points.

I was that guy in my mid-20’s for a bit. I signed up for 20+ credit cards within 6 months, got all the points bonuses, and then left the cards open so that pretty soon I’d have a “long” credit history that would dramatically boost my score.

It worked, but keeping track of all the points was tedious. Anyone who does this undoubtedly maintains a spreadsheet to keep track at a minimum.

The Points Guy does over $30 million in revenue per year. It’s mostly through affiliates, but there’s definitely a market here, there’s over 550,000 people in the “Churning” subreddit.

Why not create a SaaS product to help them manage their points? I’m actually surprised The Points Guy hasn’t done this already.

In addition to charging a simple subscription model for what Max shared above, you could monetize through affiliates and offers for credit cards to have multiple revenue streams on day one.

You could also form partnerships with travel and hospitality companies, brands, and more to promote what people can actually spend their points on.

Since this industry is so affiliate-friendly, it’d be smart to offer a substantial affiliate fee (maybe 50% for 12 months) yourself and leverage the existing industry infrastructure to grow subscriptions that way.

🧠 Framework: Airbnb’s Goal Setting Framework

Airbnb has one of the most opinionated product-building and product management cultures of any big tech company. Even 15 years in, the company is still very firmly founder-led.

When I was a product manager at the company, it was clear that Brian Chesky wanted everyone on his product team to have an infinite time horizon and think about shipping product as steps towards that vision.

As founders we often need to just iterate fast to survive, but if you truly understand your customer then taking time to set a vision isn’t useless and can actually help you prioritize the right things.

Here’s a framework we used to understand how to allocate resources on our teams:

While you may not yet have to worry about “how many engineers to assign” to a specific project, you have to allocate other things:

• Hours of your day/week + attention

• Limited capital

• Limited headcount

Apply the same structure from above but with shorter, more incremental steps, start from a vision of how good life could be for your customer.

📈 Trend: Services as Software

A type of startup holy grail is software scalability with service business prices.

The traditional knock on service businesses is that you need to scale headcount linearly alongside revenue, and therefore your margins can never be good enough to command venture-scale customer bases or returns.

But AI may be changing that. In some verticals, an AI system built by a subject matter expert can handle many of the tasks that junior employees would previously be hired to do. If you can build one then you’ll successfully decouple revenue from headcount.

That would be a big deal.

Think about it, everyone you sell to will have high price points to cover their headcount costs. Since you won’t have those costs you could significantly undercut incumbents / your competitors on price and still have much better margins than them (that you’d then be able to invest in growth).

If this thesis of service-level software becomes a reality we could see a massive consolidation in markets that have traditionally only been accessible to services businesses.

First Round Capital’s Todd Jackson is interested:

💬 Quote: Trim the Fat

I always say that speed is your biggest asset as a founder, but it can get you into trouble if you’re not careful.

Specifically if you’re focused on moving fast it can be easy to ignore simple (some would say tedious) financial management best practices.

Even if you’re venture-backed you should be negotiating with every vendor you work with and making sure you’re canceling subscriptions you’re not using.

At my last startup we automatically cancelled every team member’s Brex card every now and then. This was probably a bit annoying for them, but it saved us from spending on unnecessary subscriptions we were no longer using but were too lazy to cancel. They’d only input their new numbers into the tools they were actually using.

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