IDEA #1 | VENTURE STARTUP

Dynamic Pricing Engine💲

Something new on the menu

1. Problem/Opportunity❓

Wendy’s were in the headlines last week. Why?

Well for once it had nothing to do with their unhinged tweets.

No, Wendy’s was in the news for their pricing.

CEO Kirk Tanner told investors on a call this month that starting as early as 2025, Wendy's would begin testing dynamic pricing in their restaurants. The idea is that at certain times of the day prices would change to drive more demand for products or to generate more revenue from customers at busier times.

Customers were not happy and quickly took to Twitter to voice their complaints.

The backlash was so intense that Wendy’s had to backtrack and explain that they won’t introduce surge pricing, but they will still likely test dynamic pricing in the future though.

But despite the pushback dynamic pricing is here to stay, so why not embrace the trend and build a business to meet this demand.

2. Solution ✅

Here’s the idea…create a pricing engine to enable bars and restaurants to seamlessly introduce dynamic pricing into their establishments.

Here’s how it works. A bar or restaurant chain signs up to the platform and then sets the prices of the different menu items on the business’ digital menus, digital displays and through their EPOS systems.

The establishment then works with the platform to set certain pricing rules that they want to test, for example reducing drink prices earlier in the night or increasing prices later into the night up within pre-specified ranges. Then once various different experiments are completed the platform hones in on the company’s optimal pricing strategy to maximise revenues.

For businesses this would ultimately increase revenues but could also be used as a marketing tool. For example imagine a stock market themed bar where, every 20 - 30 minutes, the prices of a select few drinks fell by 80% - 90% for 5 minutes.

By rolling up all of the data you could test different strategies, benchmark customers against each other and use all of this data to optimize pricing for all of these customers. You could also bolt on a payment processor to this business if you wanted to collect more margin.

3. Business Model 🏦

Go-to-market: Start by working with a small number of bars/nightclubs then move on to chains and chain restaurants

Monetisation: Monthly subscription for using the software based on the size of the establishment

Startup Costs: This would be a pretty complex build on the software side, meaning you’d need to raise some money to get this off the ground and secure some meaningfully big contracts

4. How You’ll Get Rich 💰

Payment processing is fundamentally a race to the bottom from a pricing power perspective, so they would be keen to expand to industries where they can build out moats where the product is more sticky and has a better data advantage.

IDEA #2 | STARTUP

Shared Recommendations App 🌟

Sharing is caring after all

1. Problem/Opportunity❓

We’re all drowning in information. In fact, if you take all of the data in the world today, 90% of it was created in just the last 24 months.

That’s a lot of data.

It’s truly mind boggling how much information there is out there in the world. And we’re all struggling to make sense of it all.

Podcasts. Tv shows. News feeds. Articles. Books. We’re all consuming information constantly. You’re consuming information right this very second (pretty meta right?).

But here’s the question. In a world of boundless information and limited time how do we decide what to watch or read?

Often the best source of what we should be reading or watching are recommendations from someone we admire or trust. A recommendation from a knowledgable friend or someone who we admire is a shortcut to sense check the quality of information.

Many of us keep lists on our notes app of choice of recommendations on what we should watch, read or listen to. And here at Half Baked we have a rule - where someone is using their notes app for something, there’s an app opportunity.

So let’s create that app.

2. Solution ✅

Here’s the idea. Create an app which allows users to connect and share content recommendations dynamically with their friends.

Here’s how it works. Users sign up for the platform and connect with their friends, or ideally encourage them to join the platform if they’re not already on it (we love some network effects).

Once people join the platform they make content recommendations such as podcasts, YouTube videos or books to specific friends who they think would enjoy it. Once a user finishes reading, watching or listening to a recommendation they then rate how good the recommendation was.

This means that everyone on the platform gets a dynamic list of content recommendations from their friend as their main feed on the app. Over time the algorithm learns what type of content the user enjoys and which friends make the best recommendations and recommendations are dynamically ranked based on what they’re most likely to enjoy, similar to how search engine serve results to customers.

Influencers can also join the platform who users can then follow and they can broadcast recommendations to their audience which gets added to their feeds too.

3. Business Model 🏦

Go-to-market: Find your friends who are information junkies and build them a prototype to nail down the UI. Then build from there.

Monetisation: Run targeted ads for content in user’s feeds.

Startup Costs: You’ll need some engineering talent to get this off the ground. If that’s you then great! If not you may need to do a small raise to get some engineering talent in.

4. How You’ll Get Rich 💰

This is fundamentally an incredible data business which would be an acquisition target for a big data company in the media space, like Nielsen.

NO BRAINER IDEA

Permaban Captchas

We’ve all had that moment where we’ve sweated over getting a captcha right?

Well why not introduce even more jeopardy by introducing permaban captchas on your website? If a user get is wrong they’re banned forever from the site, no exceptions, no appeals.

That’ll teach the robots a thing or two.

BIG DECK ENERGY

Archer Aviation’s 2021 IPO Deck

Year: 2021

Stage: IPO

Amount: N/A

Brett Adcock hit the headlines last week when his robotics company Figure raised $675m at a $2.6bn valuation from an all-star roster of investors including Microsoft, OpenAI, Nvidia and Jeff Bezos. But what was Brett doing before Figure? Archer.

Archer is building an all-electric vertical takeoff and landing aircraft (and the preferred method of transport by Usher apparently according to their website). The company has raised over $1.1bn in total and went public in 2021 via a SPAC. Here’s the deck they used to do it.

THE MONEYSHOT

The $10bn AI Company with 11 Employees

Midjourney is an incredible business.

In fact, generative AI is so good it has people questioning their own reality, wondering if what they’re seeing is real or not.

Put what’s as impressive as Midjourney’s image generation capabilities is its operations.

The company has more than 100,000 customers, does over $200m in revenue per year, has never taken on any outside funding and is worth around $10bn.

But the most incredible thing about the business? Its headcount.

The company only has 11 full-time employees.

That’s right, according to their website this company has only 11 full-time employees. Based on their LinkedIn profile it looks like they work with a lot of advisors and contractors, but regardless even if the company only had 100 people this would be crazy impressive.

In fact, as we can see from this interview, Sam Altman believes we’re on a path to a one person billion dollar company: