The Billion Dollar Matrix

This Simple 2x2 Matrix Found An $80 Billion Opportunity

I'll never forget the first time I saw this matrix in a private equity deck.

After seeing hundreds of VC startup pitch decks (you know the type - some early traction, retention metrics, and grand visions of massive TAMs), I finally saw how differently private equity thinks.

The deck mapped every major media holding company's revenue and audience segments. Each subsidiary was plotted carefully on a simple matrix. But what jumped out wasn't what was there - it was what was missing.

Only select major players had meaningful Spanish-language media outlets.

The strategy was brilliant in its simplicity:

• Acquire independent Hispanic-focused media companies
• Roll them up into a consolidated offering
• Sell to one of the major players who had this obvious gap

This wasn't about building something new. It was about seeing what already existed but everyone else had missed.

From Media to Food Delivery: The Matrix at Work

DoorDash's Tony Xu used this same approach in 2013. His matrix revealed something fascinating: While GrubHub dominated major cities and Seamless owned New York, a massive gap emerged.

No one was solving delivery for suburban restaurants and chains.

That insight led to DoorDash's strategy of targeting underserved suburban markets first. By 2021, they'd captured 57% of the U.S. food delivery market.

The Silent Strategy of Market Leaders

Private equity giants like KKR and Blackstone have been quietly using this matrix for decades. While others fixate on financials, they map markets to spot untapped opportunities:

• TPG spotted a gap in the fitness market, leading to their $1.6B acquisition and transformation of Crunch Fitness
• Vista Equity used it to identify vertical SaaS opportunities, building a $95B portfolio
• Thoma Bravo leveraged it to become one of the most successful PE firms, with over $130B in assets under management

The framework works across fundamentally different markets:

• Dutch Bros used it to expand from a single coffee cart to 800+ locations
• HubSpot used it to identify the mid-market CRM gap between Salesforce and basic tools
• Chime spotted the gap between traditional banks and the underserved digital-first customer

The Billion-Dollar Matrix: Your Practical Guide

The power of the competitor matrix lies in its simplicity. Here's exactly how to build and use one:

Step 1: Map Your Competition

Create a 2x2 matrix with these axes:

• X-axis: Price (Low to High)
• Y-axis: Feature Set (Basic to Advanced)

Let's look at DoorDash's 2013 matrix:

• Top Right: GrubHub (Advanced Features, Limited Food Options, Urban Focus)
• Bottom Right: Seamless (High Price, Basic Service)
• Top Left: Opportunity (Low Cost, Suburban Delivery for All Restaurants)
• Bottom Left: Restaurant's Own Delivery

The gap? Mid-market, tech-enabled delivery for any restaurant, focusing on suburban areas.

Step 2: Track These Specific Metrics

For each competitor, document:

Core Offering:

• Primary products/services
• Key capabilities and limitations
• Unique selling propositions
• Service/product quality level

Pricing & Business Model:

• Price points and structure
• Revenue model
• Cost to serve customers
• Margin potential by segment

Target Market:

• Customer segments served
• Geographic focus
• Market share by segment
• Underserved segments

Distribution Channels:

• How they reach customers
• Sales process/cycle
• Key partnerships
• Market access advantages

Market Position:

• Brand perception
• Competitive advantages
• Market share trajectory
• Customer loyalty/retention

Step 3: Find Your Gap

DoorDash's matrix revealed specific opportunities:

• Suburban markets were underserved
• Chain restaurants had no delivery solution
• Technology could optimize driver networks
• Smaller markets had no reliable service

More Matrix Success Stories

Stripe vs Traditional Payment Processors (2010)

• Matrix Revealed: Enterprise focus left SMBs underserved
• The Gap: Developer-friendly payments for growing companies
• Result: Built a $95B company

Notion vs Traditional Productivity Tools (2016)

• Matrix Showed: Rigid tools, separated by function
• The Gap: Flexible, all-in-one workspace
• Result: 30M+ users

Trader Joe's vs Traditional Grocery (1967)

• Matrix Revealed: Grocers were stuck in two extremes - either high-end specialty stores with premium prices, or low-end supermarkets with basic selection
• The Gap: Quality products at moderate prices, curated selection
• The Innovation: Private label strategy + limited SKUs (4,000 vs 50,000 at traditional grocers)
• Result: Higher revenue per square foot than any other grocery chain ($2,100/sq ft vs Whole Foods' $930/sq ft)

Your 30-Day Action Plan

Week 1:

• Download the Matrix Template [Link here]
• Plot your top 5 competitors
• Map core features and pricing

Week 2:

• Identify 3 market gaps
• Evaluate gap sizes
• Draft initial strategies

Week 3-4:

• Select one gap to attack
• Develop detailed action plan
• Begin implementation

Keep building, friends!