Linear #033: 11 Wedge Ideas, The Story of Credit Karma, Getting Initial Traction

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Aug 14, 2023

11 Wedge Product Ideas

Every great software company starts with a wedge product.

The initial "get-in-the-door" product offering.

11 wedge ideas and sample success stories:

Let's start off by defining WHAT a wedge product really is... A wedge product is the initial tool you launch. It’s your “get-in-the-door” product. It quite literally determines your success. Wedge products solve very specific problems in a relatively short amount of time.

They enable you to build a good early reputation within your space. They enable you to LEARN about your customer and your market. Once successful, you can leverage it as a 'jump off' point into more offerings.

Ok, now that we're on the same page, here are 11 wedge product examples:

#1. Turn-Key Websites Sample Company: Broadlume

Quick Overview: Started with turn-key, SEO-enabled websites and scaled from there into an all-in-one software suite for flooring companies, a $90B market largely untouched by tech.

#2. Reviews Sample Company: GoSite

Quick Overview: Go-Site started with review management to get in the door, literally as a marketing agency. They've now expanded into a full suite of marketing automation software for SMB's.

#3. Booking Aggregation Sample Company: Cloudbeds

Quick Overview: Cloudbeds recognized the pain hoteliers felt when it comes to managing bookings from different consumer websites. They aggregate them into one interface and have expanded into an end-to-end hotel management SaaS.

#4. Credit Cards Sample Company: Mercantile

Quick Overview: Mercantile has used credit cards as wedge into group purchasing. They are able to offer big discounts by aggregating a bunch of SMB's into one network.

#5. SSO Sample Company: Clever

Quick Overview: Schools had a ton of different software tools that all required different logins. That becomes very painful with students and staff, especially when their gradebooks don't match. They created one unifying interface and login.

#6. Data Aggregation Sample Company: Palantir

Quick Overview: Industry-tailored data aggregation into dashboards is missing in many industries. Especially those with proprietary and on-prem systems like government. Palantir started here and has evolved into a massive business.

#7. Attendance Sample Company: CourseKey

Quick Overview: Recognizing trade schools were regulated around attendance and handling it with pen and paper. Mistakes led to school closures. They digitized and automated this and expanded into a full SaaS solution for trade schools.

#8. Procurement Sample Company: Vendr

Quick Overview: The average company uses 10+ software tools. SMB's don't have procurement teams. Enter Vendr, who started with a simple SaaS to manage SaaS products. They've expanded into negotiation as a service and group discounts.

#9. Digital Franchise Sample Company: Slice

Quick Overview: Many old-school verticals & SMB's STRUGGLE with technology. They don't want to integrate different tools. Slice offered a digital franchise and brought the best tools into one simple platform. They then expanded into POS

#10. Order Aggregation Sample Company: Owner(.)com

Quick Overview: Owner is gaining traction by unifying ordering. Dealing with tablets from Door Dash, Uber Eats, etc is painful Bringing it into one place was needed. They have now built a full marketing platform for restaurants.

#11. UI/UX Layer Sample Company: HiBob

Quick Overview: Sometimes software tools are so bad, but hard to rip and replace. So you can just build a UI layer. HiBob did this with legacy HR tools and have grown into now offering their own payroll. They've built a $B company doing so.

One Biz Story:

The Story of Credit Karma

you remember when credit scores cost money? That was the norm until a start-up made them 100% free. From simple idea to $7B acquisition, here's the incredible story:

Credit Karma was founded in 2007 by Kenneth Lin. He wanted to create a company that would empower consumers with their credit and financial data for free. Why should it cost money? He felt they could monetize in other ways once they achieved some scale.

To test their idea, many founders deploy a 'Painted Door Test' to validate whether or not their idea is worth building. The Credit Karma team was no different. They drove traffic to a web page to see how many people were willing to plug in an email. It turns out A LOT were.

So they built and launched the first version amid the financial crisis in 2008. That probably seemed like a bad idea to most but it turns out this was EXACTLY the time to offer a free credit score. They grew rapidly, reaching 1 million members in 2010 and 10 million in 2013.

From there it was time to monetize. They used a free credit report as their wedge. and from there offered a bunch of paid product offerings to website visitors. These included credit cards, credit score simulators, real-time credit monitoring, and more...

In 2014, Credit Karma became one of the first FinTech unicorns, valued over $1 billion. They also started offering free full credit reports from two major credit bureaus, TransUnion and Equifax,. These key partnerships created strong competitive moats.

In 2016, Credit Karma launched in Canada, its first international market. Shortly after, in 2018, they launched in the UK. They also continued to add new features such as financial account monitoring, approval odds, direct dispute, and more.

As they scaled internationally, Credit Karma couldn't be stopped. They eclipsed the magical milestone of $1B in revenue in 2019. 100+ Million members leveraged the free financial management platform.

In 2020, Credit Karma was acquired by Intuit, the maker of TurboTax, QuickBooks and Mint, for $7.1 billion. The deal combined two of the largest personal finance platforms in the world. What a ride...

Credit Karma is a remarkable story of how a simple idea can change an industry and create value for millions. They proved that free is not only possible, but profitable.

What are other examples of successful companies that took an existing paid service and made it free?

One ‘How To’:

Ultimate Guide For Getting To Initial Traction (SaaStr)

Click the photo above to see the eBook.