A friend told me of an incident she found particularly irritating: a retailer where she is a frequent client, with an account and loyalty card, asked for the item's receipt.

We all know that stores collect every bit of data they can on us, including our socio-demographic profile, address, shopping habits, and everything we've ever bought, so why would they need a fading receipt? Who knows? That their consumers try to pass off other goods? It's easy to verify past transactions to see when the item was purchased.

That's it. Why require receipts? Companies send us incentives, discounts, and other marketing, yet when we need something, we have to prove we're not cheating.

Why require us to preserve data and documents when our governments and governmental institutions already have them? Why do I need to carry documents like my driver's license if the authorities can check if I have one and what state it's in once I prove my identity?

We shouldn't be required to give someone data or documents they already have. The days of waiting up with our paperwork for a stern official to inform us something is missing are over.

How can retailers still ask if you have a receipt if we've made our slow, bureaucratic, and all-powerful government sensible? Then what? The shop may not accept your return (which has a two-year window, longer than most purchase tickets last) or they may just let you replace the item.

Isn't this an anachronism in the age of CRMs, customer files that know what we ate for breakfast, and loyalty programs? If government and bureaucracies have learnt to use its own files and make life easier for the consumer, why do retailers ask for a receipt?

They're adding friction to the system. They know we can obtain a refund, use our warranty, or get our money back. But if I ask for ludicrous criteria, like keeping the purchase receipt in your wallet (wallet? another anachronism, if I leave the house with only my smartphone! ), it will dissuade some individuals and tip the scales in their favor when it comes to limiting returns. Some manager will take credit for lowering returns and collect her annual bonus. Having the wrong metrics is common in management.

To slow things down, asking for a receipt is like asking us to perform a handstand and leap 20 times on one foot. You have my information, use it to send me everything, and know everything I've bought, yet when I need a two-way service, you refuse to utilize it and require that I keep it and prove it.

Refuse as customers. If retailers want our business, they should treat us well, not just when we spend money. If I come to return a product, claim its use or warranty, or be taught how to use it, I am the same person you treated wonderfully when I bought it. Remember that, and act accordingly.

A store should use my information for everything, not just what it wants. Keep my info, but don't sell me anything.

ZERO GRACE/ZERO MALICE

Big companies and wealthy people make stupid mistakes too.

Your ancestors kept snakes and drank bad water. You (probably) don't because you've learnt from their failures via instinct+, the ultimate life-lessons streaming network in your head. Instincts foretell the future. If you approach a lion, it'll eat you. Our society's nuanced/complex decisions have surpassed instinct. Human growth depends on how we handle these issues. 80% of people believe they are above-average drivers, yet few believe they make many incorrect mistakes that make them risky. Stupidity hurts others like death. Basic Laws of Human Stupidity by Carlo Cipollas:

1. Everyone underestimates the prevalence of idiots in our society.

2. Any other trait a person may have has no bearing on how likely they are to be stupid.

3. A dumb individual is one who harms someone without benefiting themselves and may even lose money in the process.

4. Non-dumb people frequently underestimate how destructively powerful stupid people can be.

5. The most dangerous kind of person is a moron.

Professor Cippola defines stupid as bad for you and others. We underestimate the corporate world's and seemingly successful people's ability to make bad judgments that harm themselves and others. Success is an intoxication that makes you risk-aggressive and blurs your peripheral vision.

Stupid companies and decisions:

Big Dumber

Big-company bad ideas have more bulk and inertia. The world's most valuable company recently showed its board a VR headset. Jony Ive couldn't destroy Apple's terrible idea in 2015. Mr. Ive said that VR cut users off from the outer world, made them seem outdated, and lacked practical uses. Ives' design team doubted users would wear headsets for lengthy periods.

VR has cost tens of billions of dollars over a decade to prove nobody wants it. The next great SaaS startup will likely come from Florence, not Redmond or San Jose.

Apple Watch and Airpods have made the Cupertino company the world's largest jewelry maker. 10.5% of Apple's income, or $38 billion, comes from wearables in 2021. (seven times the revenue of Tiffany & Co.). Jewelry makes you more appealing and useful. Airpods and Apple Watch do both.

Headsets make you less beautiful and useful and promote isolation, loneliness, and unhappiness among American teenagers. My sons pretend they can't hear or see me when on their phones. VR headsets lack charisma.

Coinbase disclosed a plan to generate division and tension within its workplace weeks after Apple was pitched $2,000 smokes. The crypto-trading platform is piloting a program that rates staff after every interaction. If a coworker says anything you don't like, you should tell them how to improve. Everyone gets a 110-point scorecard. Coworkers should evaluate a person's rating while deciding whether to listen to them. It's ridiculous.

Organizations leverage our superpower of cooperation. This encourages non-cooperation, period. Bridgewater's founder Ray Dalio designed the approach to promote extreme transparency. Dalio has 223 billion reasons his managerial style works. There's reason to suppose only a small group of people, largely traders, will endure a granular scorecard. Bridgewater has 20% first-year turnover. Employees cry in bathrooms, and sex scandals are settled by ignoring individuals with poor believability levels. Coinbase might take solace that the stock is 80% below its initial offering price.

Poor Stupid

Fools' ledgers are valuable. More valuable are lists of foolish rich individuals.

Robinhood built a $8 billion corporation on financial ignorance. The firm's median account value is $240, and its stock has dropped 75% since last summer. Investors, customers, and society lose. Stupid. Luna published a comparable list on the blockchain, grew to $41 billion in market cap, then plummeted.

A podcast presenter is recruiting dentists and small-business owners to invest in Elon Musk's Twitter takeover. Investors pay a 7% fee and 10% of the upside for the chance to buy Twitter at a 35% premium to the current price. The proposal legitimizes CNBC's Trade Like Chuck advertising (Chuck made $4,600 into $460,000 in two years). This is stupid because it adds to the Twitter deal's desperation. Mr. Musk made an impression when he urged his lawyers to develop a legal rip-cord (There are bots on the platform!) to abandon the share purchase arrangement (for less than they are being marketed by the podcaster). Rolls-Royce may pay for this list of the dumb affluent because it includes potential Cullinan buyers.

Worst company? Flowcarbon, founded by WeWork founder Adam Neumann, operates at the convergence of carbon and crypto to democratize access to offsets and safeguard the earth's natural carbon sinks. Can I get an ayahuasca Big Gulp?

Neumann raised $70 million with their yogababble drink. More than half of the consideration came from selling GNT. Goddess Nature Token. I hope the company gets an S-1. Or I'll start a decentralized AI Meta Renewable NFTs company. My Community Based Ebitda coin will fund the company. Possible.

Stupidity inside oneself

This weekend, I was in NYC with my boys. My 14-year-old disappeared. He's realized I'm not cool and is mad I let the charade continue. When out with his dad, he likes to stroll home alone and depart before me. Friends told me hell would return, but I was surprised by how fast the eye roll came.

Not so with my 11-year-old. We went to The Edge, a Hudson Yards observation platform where you can see the city from 100 storeys up for $38. This is hell's seventh ring. Leaning into your boys' interests is key to engaging them (dad tip). Neither loves Crossfit, WW2 history, or antitrust law.

We take selfies on the Thrilling Glass Floor he spots. Dad, there's a bar! Coke? I nod, he rushes to the bar, stops, runs back for money, and sprints back. Sitting on stone seats, drinking Atlanta Champagne, he turns at me and asks, Isn't this amazing? I'll never reach paradise.

Later that night, the lads are asleep and I've had two Zacapas and Cokes. I SMS some friends about my day and how I feel about sons/fatherhood/etc. How I did. They responded and approached. The next morning, I'm sober, have distance from my son, and feel ashamed by my texts. Less likely to impulsively share my emotions with others. Stupid again.

He explained everything.

A drinking buddy confessed. Alexander. He says he works at a startup based on a scam, which appears too clever to be a lie.

Alexander (assuming he developed the story) or the startup's creator must have been a genius.

This is the story of an Internet scam that targets older individuals and generates tens of millions of dollars annually.

The business sells authentic things at 10% of their market value. This firm cannot be lucrative, but the entrepreneur has a plan: monthly subscriptions to a worthless service.

The firm can then charge the customer's credit card to settle the gap. The buyer must subscribe without knowing it. What's their strategy?

How does the con operate?

Imagine a website with a split homepage. On one page, the site offers an attractive goods at a ridiculous price (from 1 euro to 10% of the product's market worth).

Same product, but with a stupid monthly subscription. Business is unsustainable. They buy overpriced products and resell them too cheaply, hoping customers will subscribe to a useless service.

No customer will want this service. So they create another illegal homepage that hides the monthly subscription offer. After an endless scroll, a box says Yes, I want to subscribe to a service that costs x dollars per month.

Unchecking the checkbox bugs. When a customer buys a product on this page, he's enrolled in a monthly subscription. Not everyone should see it because it's illegal. So what does the startup do?

A page that varies based on the sort of website visitor, a possible consumer or someone who might be watching the startup's business

Startup technicians make sure the legal page is displayed when the site is accessed normally. Typing the web address in the browser, using Google, etc. The page crashes when buying a goods, preventing the purchase.

This avoids the startup from selling a product at a loss because the buyer won't subscribe to the worthless service and charge their credit card each month.

The illegal page only appears if a customer clicks on a Google ad, indicating interest in the offer.

Alexander says that a banker, police officer, or anyone else who visits the site (maybe for control) will only see a valid and buggy site as purchases won't be possible.

The latter will go to the site in the regular method (by typing the address in the browser, using Google, etc.) and not via an online ad.

Those who visit from ads are likely already lured by the site's price. They'll be sent to an illegal page that requires a subscription.

Laziness is humanity's secret weapon. The ordinary person ignores tiny monthly credit card charges. The subscription lasts around a year before the customer sees an unexpected deduction.

After-sales service (ASS) is useful in this situation.

After-sales assistance begins when a customer notices slight changes on his credit card, usually a year later.

The customer will search Google for the direct debit reference. How he'll complain to after-sales service.

It's crucial that ASS appears in the top 4/5 Google search results. This site must be clear, and offer chat, phone, etc., he argues.

The pigeon must be comforted after waking up. The customer learns via after-sales service that he subscribed to a service while buying the product, which justifies the debits on his card.

The customer will then clarify that he didn't intend to make the direct debits. The after-sales care professional will pretend to listen to the customer's arguments and complaints, then offer to unsubscribe him for free because his predicament has affected him.

In 99% of cases, the consumer is satisfied since the after-sales support unsubscribed him for free, and he forgets the debited amounts.

The remaining 1% is split between 0.99% who are delighted to be reimbursed and 0.01%. We'll pay until they're done. The customer should be delighted, not object or complain, and keep us beneath the radar (their situation is resolved, the rest, they don’t care).

It works, so we expand our thinking.

Startup has considered industrialization. Since this fraud is working, try another. Automate! So they used a site generator (only for product modifications), underpaid phone operators for after-sales service, and interns for fresh product ideas.

The company employed a data scientist. This has allowed the startup to recognize that specific customer profiles can be re-registered in the database and that it will take X months before they realize they're subscribing to a worthless service. Customers are re-subscribed to another service, then unsubscribed before realizing it.

Alexander took months to realize the deception and leave. Lawyers and others apparently threatened him and former colleagues who tried to talk about it.

The startup would have earned prizes and competed in contests. He adds they can provide evidence to any consumer group, media, police/gendarmerie, or relevant body. When I submitted my information to the FBI, I was told, "We know, we can't do much.", he says.

He kept it under wraps for years until he legally couldn’t.

His shirt is incomplete. I can’t stop thinking about this…

Actually, ignore the article. Look at it. JUST LOOK at it… It’s quite disturbing, isn’t it?

Ughh…

Me: “Hey, what up?” Friend: “All good, watching lord of the rings on amazon prime video.” Me: “Oh, do you know how Amazon grew and became famous?” Friend: “Geek alert…Can I just watch in peace?” Me: “But… Bezos?” Friend: “Let it go, just let it go…”

I can question you, the reader, and start answering instantly without his consent. This far.

Reader, how did Amazon succeed? You'll say, Of course, it was an internet bookstore, then it sold everything.

Mistaken. They moved from zero to one because of this. How did they get from one to thousand? AWS-some. Understand? It's geeky and lame. If not, I'll explain my geekiness.

Over an extended period of time, Amazon was not profitable.

Business basics. You want customers if you own a bakery, right?

Well, 100 clients per day order $5 cheesecakes (because cheesecakes are awesome.)

$5 x 100 consumers x 30 days Equals $15,000 monthly revenue. You proudly work here.

Now you have to pay the barista (unless ChatGPT is doing it haha? Nope..)

• The barista is requesting $5000 a month.

• Each cheesecake costs the cheesecake maker $2.5 ($2.5 × 100 x 30 = $7500).

• The monthly cost of running your bakery, including power, is about $5000.

Assume no extra charges. Your operating costs are $17,500.

Just $15,000? You have income but no profit. You might make money selling coffee with your cheesecake next month.

Is losing money bad? You're broke. Losing money. It's bad for financial statements.

It's almost a business ultimatum. Most startups fail. Amazon took nine years.

I'm reading Amazon Unbound: Jeff Bezos and the Creation of a Global Empire to comprehend how a company has a $1 trillion market cap.

Many things made Amazon big. The book claims that Bezos and Amazon kept a specific product secret for a long period.

Clouds above the bald head.

In 2006, Bezos started a cloud computing initiative. They believed many firms like Snapchat would pay for reliable servers.

In 2006, cloud computing was not what it is today. I'll simplify. 2006 had no iPhone.

Bezos invested in Amazon Web Services (AWS) without disclosing its revenue. That's permitted till a certain degree.

Google and Microsoft would realize Amazon is heavily investing in this market and worry.

Bezos anticipated high demand for this product. Microsoft built its cloud in 2010, and Google in 2008.

If you managed Google or Microsoft, you wouldn't know how much Amazon makes from their cloud computing service. It's enough. Yet, Amazon is an internet store, so they'll focus on that.

All but Bezos were wrong.

Time to come clean now.

They revealed AWS revenue in 2015. Two things were apparent:

1. Bezos made the proper decision to bet on the cloud and keep it a secret.

2. In this race, Amazon is in the lead.

They continued. Let me list some AWS users today.

• Netflix

• Airbnb

• Twitch

More. Amazon was unprofitable for nine years, remember? This article's main graph.

AWS accounted for 74% of Amazon's profit in 2021. This 74% might not exist if they hadn't invested in AWS.

Bring this with you home.

Amazon predated AWS. Yet, it helped the giant reach $1 trillion. Bezos' secrecy? Perhaps, until a time machine is invented (they might host the time machine software on AWS, though.)

Without AWS, Amazon would have been profitable but unimpressive. They may have invested in anything else that would have returned more (like crypto? No? Ok.)

Bezos has business flaws. His success. His failures include:

• introducing the Fire Phone and suffering a $170 million loss.

• Amazon's failure in China In 2011, Amazon had a about 15% market share in China. 2019 saw a decrease of about 1%.

• not offering a higher price to persuade the creator of Netflix to sell the company to him. He offered a rather reasonable $15 million in his proposal. But what if he had offered $30 million instead (Amazon had over $100 million in revenue at the time)? He might have owned Netflix, which has a $156 billion market valuation (and saved billions rather than invest in Amazon Prime Video).

Some he could control. Some were uncontrollable. Nonetheless, every action he made in the foregoing circumstances led him to invest in AWS.

Niches are rich, as the adage goes.

Micro SaaS requires a great micro-niche; otherwise, it's merely plain old SaaS with a large audience.

Instead of targeting broad markets with few identifying qualities, specialise down to a micro-niche. How would you target these users?

Better go tiny. You'll locate and engage new consumers more readily and serve them better with a customized solution.

Imagine you're a real estate lawyer looking for a case management solution. Because it's so specific to you, you'd be lured to this link:

instead of below:

Next, locate mini SaaS niches that could work for you. You're not yet looking at the problems/solutions in these areas, merely shortlisting them.

The market should be growing, not shrinking

We shouldn't design apps for a declining niche. We intend to target stable or growing niches for the next 5 to 10 years.

If it's a developing market, you may be able to claim a stake early. You must balance this strategy with safer, longer-established niches (accountancy, law, health, etc).

First Micro SaaS apps I designed were for Merch By Amazon creators, a burgeoning niche. I found this niche when searching for passive income.

Graphic designers and entrepreneurs post their art to Amazon to sell on clothes. When Amazon sells their design, they get a royalty. Since 2015, this platform and specialty have grown dramatically.

Amazon doesn't publicize the amount of creators on the platform, but it's possible to approximate by looking at Facebook groups, Reddit channels, etc.

I could see the community growing week by week, with new members joining. Merch was an up-and-coming niche, and designers made money when their designs sold. All I had to do was create tools that let designers focus on making bestselling designs.

Look at the Google Trends graph below to see how this niche has evolved and when I released my apps and resigned my job.

Are the users able to afford the tools?

Who's your average user? Consumer or business? Is your solution budgeted?

If they're students, you'll struggle to convince them to subscribe to your study-system app (ahead of video games and beer).

Let's imagine you designed a Shopify plugin that emails customers when a product is restocked. If your plugin just needs 5 product sales a month to justify its cost, everyone wins (just be mindful that one day Shopify could potentially re-create your plugins functionality within its core offering making your app redundant ).

Do specialized users buy tools? If so, that's comforting. If not, you'd better have a compelling value proposition for your end customer if you're the first.

This should include how much time or money your program can save or make the user.

Are you able to understand the Micro SaaS market?

Ideally, you're already familiar about the industry/niche. Maybe you're fixing a challenge from your day job or freelance work.

If not, evaluate how long it would take to learn the niche's users. Health & Fitness is easier to relate to and understand than hedge fund derivatives trading.

Competing in these complex (and profitable) fields might offer you an edge.

B2C, B2M, or B2B?

Consider your user base's demographics. Will you target businesses, consumers, or both? Let's examine the different consumer types:

• B2B refers to business-to-business transactions where customers are other businesses. UpVoty, Plutio, Slingshot, Salesforce, Atlassian, and Hubspot are a few examples of SaaS, ranging from Micro SaaS to SaaS.

• Business to Consumer (B2C), in which your clients are people who buy things. For instance, Duolingo, Canva, and Nomad List.

• For instance, my tool KDP Wizard has a mixed user base of publishing enterprises and also entrepreneurial consumers selling low-content books on Amazon. This is a case of business to many (B2M), where your users are a mixture of businesses and consumers. There is a large SaaS called Dropbox that offers both personal and business plans.

Targeting a B2B vs. B2C niche is very different. The sales cycle differs.

• A B2B sales staff must make cold calls to potential clients' companies. Long sales, legal, and contractual conversations are typically required for each business to get the go-ahead. The cost of obtaining a new customer is substantially more than it is for B2C, despite the fact that the recurring fees are significantly higher.

• Since there is typically only one individual making the purchasing decision, B2C signups are virtually always self-service with reduced recurring fees. Since there is typically no outbound sales staff in B2C, acquisition costs are significantly lower than in B2B.

User Characteristics for B2B vs. B2C

Consider where your niche's users congregate if you don't already have a presence there.

B2B users frequent LinkedIn and Twitter. B2C users are on Facebook/Instagram/Reddit/Twitter, etc.

Churn is higher in B2C because consumers haven't gone through all the hoops of a B2B sale. Consumers are more unpredictable than businesses since they let their bank cards exceed limitations or don't update them when they expire.

With a B2B solution, there's a contractual arrangement and the firm will pay the subscription as long as they need it.

Depending on how you feel about the above (sales team vs. income vs. churn vs. targeting), you'll know which niches to pursue.

You ought to respect potential customers.

Would you hang out with customers?

You'll connect with users at conferences (in-person or virtual), webinars, seminars, screenshares, Facebook groups, emails, support calls, support tickets, etc.

If talking to a niche's user base makes you shudder, you're in for a tough road. Whether they're demanding or dull, avoid them if possible.

Merch users are mostly graphic designers, side hustlers, and entrepreneurs. These laid-back users embrace technologies that assist develop their Merch business.

I discovered there was only one annual conference for this specialty, held in Seattle, USA. I decided to organize a conference for UK/European Merch designers, despite never having done so before.

Hosting a conference for over 80 people was stressful, and it turned out to be much bigger than expected, with attendees from the US, Europe, and the UK.

I met many specialized users, built relationships, gained trust, and picked their brains in person. Many of the attendees were already Merch Wizard users, so hearing their feedback and ideas for future features was invaluable.

focused and specific

Instead of building for a generic, hard-to-reach market, target a specific group.

I liken it to fishing in a little, hidden pond. This small pond has only one species of fish, so you learn what bait it likes. Contrast that with trawling for hours to catch as many fish as possible, even if some aren't what you want.

In the case management scenario, it's difficult to target leads because several niches could use the app. Where do your potential customers hang out? Your generic solution: No.

It's easier to join a community of Real Estate Lawyers and see if your software can answer their pain points.

My Success with Micro SaaS

In my case, my Micro SaaS apps have been my chrome extensions. Since I launched them, they've earned me an average $10k MRR, allowing me to quit my lousy full-time job years ago.

I sold my apps after scaling them for a life-changing lump amount. Since then, I've helped unfulfilled software developers escape the 9-5 through Micro SaaS.

Whether it's a profitable side hustle or a liferaft to quit their job and become their own Micro SaaS boss.

Having built my apps to the point where I could quit my job, then scaled and sold them, I feel I can share my skills with software developers worldwide.

Read my free guide on self-funded SaaS to discover more about Micro SaaS, or download your own copy. 12 chapters cover everything from Idea to Exit.

Watch my YouTube video to learn how to construct a Micro SaaS app in 10 steps.

Christopher Janz of Point Nine Capital created the SaaS napkin in 2016. This post shows how founders have raised cash in the last 6 years. View raw data.

Round size

Unsurprisingly, round sizes have expanded and will taper down in 2022. In 2016, pre-seed rounds were $200k to $500k; currently, they're $1-$2m. Despite the macroeconomic scenario, Series A have expanded from $3m to $12m in 2016 to $6m and $18m in 2022.

Valuation

There are hints that valuations are rebounding this year. Pre-seed valuations in 2022 are $12m from $3m in 2016, and Series B prices are $270m from $100m in 2016.

Compared to public SaaS multiples, Series B valuations more closely reflect the market, but Seed and Series A prices seem to be inflated regardless of the market.

I'd like to know how each annual cohort performed for investors, based on the year they invested and the valuations. I can't access this information.

ARR

Seed firms' ARR forecasts have risen from $0 to $0.6m to $0 to $1m. 2016 expected $1.2m to $3m, 2021 $0.5m to $4m, and this year $0.5m to $2.5m, suggesting that Series A firms may raise with less ARR today. Series B minutes fell from $4.2m to $3m.

Capitalization Rate

2022 is the year that VCs start discussing capital efficiency in portfolio meetings. Given the economic shift in the markets and the stealthy VC meltdown, it's not surprising. Christopher Janz added capital efficiency to the SaaS Napkin as a new statistic for Series A (3.5x) and Series B. (2.5x). Your investors must live under a rock if they haven't asked about capital efficiency. If you're unsure:

The Capital Efficiency Ratio is the ratio of how much a company has spent growing revenue and how much they’re receiving in return. It is the broadest measure of company effectiveness in generating ARR

What next?

No one knows what's next, including me. All startup and growing enterprises around me are tightening their belts and extending their runways in anticipation of a difficult fundraising ride. If you're wanting to raise money but can wait, wait till the market is more stable and access to money is easier.