Looking to build a profitable startup? Lots have tried, few will have their eyes open — here’s how to “see”.

How To Find A Profitable Startup Product Idea

Intercom and Drift are over-done. Stripe or Square are not. What gives…?

🚀 Ch Daniel
The Startup
Published in
5 min readJun 3, 2019

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Why are Stripe and Square both highly profitable, though they are sharing the market?

And at the same time, Intercom, Drift and HelpScout and many others are competing with each other?

And, more importantly: how can we look at the two types and learn how to come up with the profitable startup idea?

Think of it this way when you’re looking to build a startup or maybe when developing new features for the already-existing one.

I’ll give two ends of a spectrum and your profitable startup idea should be aware of both.

Coordinate 1: Startup Solutions

Total Available Market

If multiple companies/consumers (both B2B and B2C) have to go through a specific hurdle, then that’s your product. Let me explain.

Stripe’s answer was the following: if a merchant is setting up a shop, they need to accept payments very easily. That doesn’t happen just to 1, 10 or 100 businesses. It happens to a lot of businesses.

That’s their TAM (total available market): all these merchants.

But there’s also a minimum level of investment, considering every single merchant would like to create their own payment gateway. That means a lot of small merchants won’t be able to pull it through.

Say you’d be able to create this payment solution with at least $10,000. Street merchants won’t do that — they’ll resort to accepting just cash. It’s not worth for them to build a card payment solution.

Why? Their profit margins likely won’t allow it. And what’s the benefit? Accepting card payments.

Does it make sense for each one of them to develop a mini-Stripe? Illustration: Nico 189

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