Terms & Conditions Arbitrage

A strategic approach to competing with large companies by specifically targeting markets they explicitly avoid due to their terms and conditions restrictions.

Core Strategy Concept

• Look for what big companies explicitly say they won't do in their terms & conditions
• Target businesses that are restricted by major platforms' policies
• Focus on markets that incumbents can't enter due to core business conflicts

Why This Strategy Works

• Large companies can't enter these markets because it would:
  • Threaten their core business relationships
  • Risk existing partnerships (e.g., banking, advertising)
  • Compromise their "clean" brand image
• Examples of successful applications:
  • OnlyFans vs Instagram (adult content)
  • Payment processors for cannabis industry

Real Implementation Example

• Entrepreneur targeted Stripe's restricted markets:
  • Identified prohibited businesses from Stripe's terms
    • Cannabis companies
    • Get-rich-quick schemes
    • Mugshot publication websites
  • Created prospecting list from restricted categories
  • Found alternative payment infrastructure
    • Approached multiple providers (Galileo, Synapse)
    • Eventually secured partnership with small Canadian bank
  • Successfully onboarded cannabis dispensaries

Key Considerations

• Must find alternative infrastructure partners
• Need to work with providers willing to take on restricted industries
• May face challenges from traditional financial institutions
• Important to understand regulatory and compliance requirements
• Consider long-term sustainability and risk management

Potential Markets

• Cannabis/CBD
• Adult content
• Certain crypto businesses
• High-risk industries
• Industries restricted by payment processors