Wallet Share Reveals Opportunities

A method for identifying business opportunities by analyzing how individuals and companies allocate their money across different categories.

Core Concept of Wallet Share Analysis

• Look at where money is consistently being spent
• Analyze spending patterns across different categories
• Track changes in spending over time
• Identify growing budget categories as potential opportunities

Individual Level Analysis

• Use tools like Mint to track personal spending
• Look at trailing 12 months of expenses
• Identify consistent spending patterns
• Study 5-10 friends' spending habits to spot trends
• Look for common spending categories across individuals

Business Level Analysis

• Review company financial statements and Quickbooks
• Focus on where companies allocate their budget
• Look at specific departments (G&A, marketing, etc.)
• Study public companies' spending patterns
• Can analyze ~4,000 public companies in America

Finding Business Opportunities

• Talk to C-suite executives about their problems
• Ask about their annual budgets
• Identify which budget items are growing year over year
• Look for areas where they're seeking new solutions
• Match problems to actual spending (validate market opportunity)

Industry-Specific Analysis

• Can focus on specific industries (e.g., media companies)
• Track how spending patterns change over time
• Look at expense allocation trends
• Identify shifting priorities through budget changes
• Study competitor spending patterns

Strategic Applications

• Use insights to identify market gaps
• Develop products for growing budget categories
• Target problems with proven spending behind them
• Focus on areas where money maps to problems
• Find opportunities where budgets are expanding