
Great businesses that aren't being built yet? - ideas-are-cheap
https://www.ideasaintworthmuch.com/
======
rojeee
Nice list. In particular, I think consolidation of payments infrastructure and
the anonymous credit card ideas are great though both are some what opposed to
each other! Merchant acquiring doesn’t need to exist anymore... Just look at
the amount of small shops who refuse to accept AMEX or small card payments -
they are price sensitive to acquiring fees and some of the savings could be
offered to customers an incentives. As you note, network effect is the hard
part but I’m sure there’s a way. On anonymous payments, I think a credit or
debit card like thing that offered anonymity online when buying things would
be quite attractive. I would use it. In the EU, you could implement it with
open banking and there are various services which already provide virtual card
numbers. Problem would be dealing with all the payments regulations.

~~~
ideas-are-cheap
Hey, thanks for taking the time to have a read! It's true that those two are
somewhat at odds with each other. One builds on top of existing infrastructure
and the other attempts to work, as much as it can, without it.

In a funny way, I feel like both could sort of angle towards a similar thing
in the end. For example, while you might use a subscription based service to
pay anonymously at first, you could, once/if established, also offer checkout
options for businesses too. Once you own both ends of the payment, you can
start connecting people directly. Paypal arguably do this already - when you
pay someone's Paypal account from yours, it just settles immediately and
internally.

> On anonymous payments, I think a credit or debit card like thing that
> offered anonymity online when buying things would be quite attractive. I
> would use it.

That is interesting to hear - I have spoken to a number of people who also say
they would use such a service if available. What do you think would be the
absolute minimum such a service could offer? I think it is the virtual cards
and an email address, do you agree? How much do you think you might be willing
to pay for it and how would you expect the pricing to work? A subscription? A
small charge for each time you use it?

I agree with your general sentiment about merchant acquiring etc though - yes
re AMEX, I don't know about the US but in the EU basically no one takes it.
Payments is one of those systems where you draw a diagram of how it works, and
you just think "if I designed this from scratch today... it definitely would
not look like this!". I think it's inevitable it will change, and it is
starting to already. The change we've seen so far is, in my opinion, mostly
superficial though (much like the anonymous online payments idea would be).

> Problem would be dealing with all the payments regulations.

Yes the regulatory hurdle is a big hurdle to overcome for all the financial
services ideas. I believe it is possible but you would need to get in touch
with the regulator from day one and be clear about what you wanted to do. E.g.
Monzo in the UK used this strategy. They just approached the FCA right at the
start, and said what they wanted to do, and the regulator told them what they
had to do.

I think this is tough but probably more tractable than people imagine with a
bit of determination!

> As you note, network effect is the hard part but I’m sure there’s a way

I think it's extremely hard! But then I think, it wasn't so long ago that not
a single store or restaurant could take credit cards of any card (they didn't
exist). How exactly did mastercard get going? Did they start with one
location? I would like to research this, do you know anything about it?

My intuition is that by focusing on small businesses and their customers at
first, you can actually offer something they don't have access to. I see many
local shops stil advertising with flyers or street signs and using stamps on a
card for loyalty programs etc. Word of mouth and perhaps a facebook group is
the only way they reach their customers. A platform that connected them and
their customers would potentially have real value to them. For example, as a
consumer using the system, I might be able to quickly see which places have
got lunch deals on within half a mile, then automatically claim my discount by
paying with the app.

What do you think about that? What would incentivise you, for example, to put
a small amount of money into that system and pay for things with it? Access to
unique offers? Loyalty schemes? Supporting local businesses? A unique payment
experience? Itemised receipts (not on a bit paper!)?

~~~
rojeee
Sorry about the slow reply here.

With the virtual credit cards, you also need a billing address in most cases.
I guess that can be the same for all customers. Perhaps they also get an email
address with it and that handles all the receipts/invoices. Alternatively they
can all be sent to some service/app where they can be sorted/managed.

I would like to use something like this if I'm not keen to share my card
details with a company e.g. because I know they've had a data breach in the
past or something. How much would I be willing to pay for it? Probably not
much to be honest, maybe a few quid?

Must admit, I like the acquiring idea more.

On the merchant acquiring stuff I can see the attraction for merchants but
what's the incentive for customers? I guess there has to be some other
benefit... e.g. offering credit on decent terms to customers but here you are
competing with credit cards? Or maybe offer discounts for paying using this
service. Maybe you can offer a discount AND credit. I guess you'd need to find
out how price sensitive the merchants and customers are. Experience suggests
that small merchants are price sensitive to acquiring fees as they have
minimum spend limits etc. Large retailers e.g. Tesco don't care so much....
though I was buying a car at the weekend and the dealer stopped accepting AMEX
due to the acquiring fees... I guess they were cutting costs in the face of
Corona Virus recession.

As you note, perhaps the app could collate all your receipts and warranties -
could be useful. Itemised receipts would be particularly useful for some.

I imagine a company which offers this service (in the EU/UK) would be an open
banking payment services provider. That is, customers add their bank account
details and permit the service to "push" payments directly to retailers when
they buy something via an API. Of course, customers would manually approve
each payment via the app or whathaveyou.

Challenges: 1) how do you handle off-line payments? 2) how do you handle
disputes?

On the history of merchant acquiring: maybe this helps:
[https://blog.thesharmas.org/2020/06/05/history-merchant-
acqu...](https://blog.thesharmas.org/2020/06/05/history-merchant-acquiring/)

~~~
ideas-are-cheap
No worries - there is hardly an obligation for you to respond :).

Re that anonymous payments idea - you are thinking along the same lines as me
re the email and billing address. Getting all the junk/advertising email sent
to one place would be a good feature.

Really though, asking people to pay for anonymous transactions is simply an
'in'. I don't think there is a big market there, but I think there is _a_
market.

The goal would be to use that as a springboard to start offering banking
services to consumers (e.g. credit, payment consolidation), and merchant
banking to online retailers (similar services plus others, e.g. perhaps you
could buy a saas business' future cash flows off of them).

If you were able to own both sides of that you would not only make it much
easier for people to interact with new online businesses safely, but also
provide an integrated identity/payments service to said businesses. You would
aim to reduce the cost of the original product to 0 as you became able to
generate revenue in other ways.

\---

The acquiring idea...

You have some interesting thoughts here. Yes I think you're right that finding
an incentive for consumers to use the service is not immediately obvious. Long
run, I do think that you would be able to offer credit (both to merchants and
consumers) and other financial services but I don't think that is a viable
'way in' for the business.

To start with, I think it needs something simpler and more obvious that you
can support with a relatively small number of customers. Ideally without
stepping over more regulatory boundaries... you mention discounts and I think
that they are the obvious target (though I may well be wrong). I also think
that discounting (or other offers) for small businesses is not very well
served currently.

Here's an example (fairly arbitrary) of how you could try and kick the thing
off - it's obviously a sort of growth hack but its semi-believable.

Pick a student city and convince a load of local bars/restaurants to sign up
on the merchant end by promising them no fees and a way to advertise offers to
the next batch of students without having to put up flyers and so on. You
would then get students to sign up with the promise that they will be able to
use it to get cheap food and drinks. You would monetise by charging a referral
fee on people redeeming the offers via the app.

If that worked, you would replicate the model in other cities while also
trying to expand the number of merchants signed up in existing cities (to
appeal to more than just students).

Long run, I think the goal of this business would be to offer both merchant
and retail banking services on top of the payments system. In addition to
that, you could also open up your platform for other financial service
providers - with a referral fee or service charge model.

Your idea of implementing this via open banking is quite interesting - I must
admit, I didn't actually think of that.

Would you be interested to talk about this in a more... tangible way? You can
reach me on ideasaintworthmuch at mail dot com (mail is not a typo for gmail).

------
Claw264
These are interesting but they just make me wonder why they’re not being done
already. Perhaps there’s some fundamental reason you’re missing? Also, the
contracts idea doesn't seem that solid to me - my last tenancy already had
digital contracts like this. Exactly what niche is the target?

~~~
ideas-are-cheap
Fair questions and thanks for taking the time to reply. For many of them, I
think some businesses are already working in a similar space. For example, the
data science tooling idea is arguably being worked on by many businesses/oss
projects. E.g. mlflow, metaflow, pachyderm, dolt (and more).

However, I don't think anybody has really wide spread adoption yet and I think
it's because the tools aren't accessible to the majority of researchers
currently. Take, for example, mlflow. It's a great tool in many ways but
requires you to think fairly carefully about how to structure your application
around the framework. Additionally, to run experiments, you need to set up
your own infrastructure.

These requirements may be met in some settings (larger businesses with a
modern engineering culture) but I think are not met in the broader market
(university research departments, smaller businesses, businesses without the
modern engineering focus, etc).

For the ideas in the personal finance space, there are, as we all know, a
large number of fintech companies that are attempting to tackle many aspects
of this right now. It's a very tough space to get into due to regulation and
poor economics at small scales. It's a domain I'm familiar with though and
that means a lot to me. I think the financial industry has a long way to go
and will almost certainly look radically different in the future. As it
stands, I believe the industry is too fragmented from the customer
perspective, with different organisations offering parts of what to people are
really all the same thing.

To plan and save for my future I need a current account with a bank to manage
my day to day spending and as a 'hub', savings accounts (potentially with
other institutions) to save cash, I need a brokerage account to diversify my
savings, a company pension pot (with one or more providers depending on how
you've moved jobs) and possibly an IFA to tie it all together and cut through
the jargon and save you time. This should all be one thing - and it should be
easy, and cheap.

Re the contracts idea specifically - yes I am aware of a few
firms/organisations that independently manage contracts digitally. The idea is
about trying to provide that functionality as a service with the intention
being to make consumers lives easier as much as businesses (e.g. I would like
one central place where I can manage all of my contracts, sign them, ask
questions, be reminded of upcoming obligations, etc). Right now, I think most
people have a drawer somewhere full of paper that could probably be organised
better.

I'll be honest, I don't have a specific niche yet. If I were to validate that
idea further, I would approach legal firms, landlords, and legal departments
as saas businesses first most likely. I'm sure there are other sectors worth
considering. It may also be that the business first way is the wrong way to
approach it? Perhaps You could build a tool for consumers first.

