BILLIONS Are Made From The Bottom Third
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“Nobody wants to create a business serving the bottom third of an industry. Everyone competes for the top third. If you can find a business model that serves the bottom third, you could be the one player in the space and that’s worth billions.”
—Jim McKelvey, the founder of Square
The idea of Square came from a personal experience of Jim’s when he couldn’t complete a sale for his glass art because he couldn’t accept credit cards.
The sale: $2000
Jim saw the gap and realized he was part of the bottom third of the market that wasn’t being served.
Jim had a background in technology and knew Twitter founder, Jack Dorsey, from other ventures… so that helped a bit…
They developed the square-shaped card reader that we all know so well which worked by plugging into your phones audio jack.
The goal was simple. To SIMPLIFY payment processing and give small business owners access to credit card processing.
Square launched in 2010 and by 2015 they went public and were able to raise $243 million.
The point here is that Jim recognized a market that wasn’t being served. There was a problem that needed a solution.
Comparing it to the stories told about the gold rush.
There was gold.
Some got rich on the gold, but the real money came from the bottom third
👖Levi Strauss & Co selling jeans to the miners
⚒️Studebaker Brothers Manufacturing selling the wheelbarrows and other equipment
🍫Ghirardelli Chocolate selling their sweets to the rush of people moving into the area
🏦Wells Fargo providing a way to transport and store the gold found.
It’s not as easy to see, but when you find those underserved markets and opportunities staring you in the face. Don’t look away.