Finding A Lucrative Niche-Within-A-Niche In The Internet Economy

An entire business built on a payment widget for subscription box services? Welcome to the new age of hyper-specific startups.


You have doubtless noticed the proliferation of those “box-of-the-month” clubs. They started innocently enough, with fruit. Then, as the model took off, they proliferated into all sorts of categories: wine, clothes, luxury products. They became so ubiquitous as to merit their own BuzzFeed listicletwice. The subscription box service metastasized.


What Ryan Pfleger began to realize, though, was that these services had become so widespread that they needed an infrastructure of their own. Now, Pfleger has just launched PayWhirl, a startup solely dedicated to helping people with minimal tech savvy to rapidly set up subscription billing plans. And in the process, he’s illustrating a principle of the new, new web: Opportunity is to be found in niches–or even, sometimes, niches-within-niches.

Ryan Pfleger

Pfleger and his colleagues had begun by filling a simple, first-order niche. Their initial startup, Yovigo, is a website-building company, like the better-known Squarespace. But Yovigo–again–filled a niche: It’s geared specifically toward building e-commerce sites, and targets people with little or no know-how when it comes to web design. The idea behind it is that if you have an idea for something to sell over the Internet, the fact that you don’t know JavaScript shouldn’t stop you. You can either pay Yovigo a monthly fee for your website, or you can set up the site for free, then kick Yovigo 2% of your sales.

Pfleger rapidly found that Yovigo’s customers were repeatedly asking for ways to set up a recurring payment option through their sites. “We kept getting requests for recurring solutions,” says Pfleger, “and we realized there’s this rush in the box service industry.” A bit of tooling around on Google AdWords confirmed this, says Pfleger: budding e-commerce entrepreneurs all over were regularly searching for terms like “recurring payments,” “subscription management plugins,” and even “how to start a subscription box service.” And it’s no wonder, he says. “When you dig down into business, it’s just sweet to have recurring revenue. That’s what we’re doing, to be honest.”

So Pfleger and his colleagues built PayWhirl, which is now open in public beta. Users can log on, set up, and name plans for their subscription services, and get a widget that can be easily embedded into their websites. The underlying payment architecture is powered by Stripe, a leading payment processor.

Pfleger finds wine clubs and yoga studios to be the biggest users of the widgets so far. But various box-of-the-month clubs have expressed interest, too: several breweries, a kitchen-gadget box service, a coffee curator, and what Pfleger calls a “glow-stuff-of-the-month service.” (“I’m sure it’s for festivals, like a rave kit kind of thing.”) PayWhirl takes a 1% cut of money processed for its fee.


If a widget specifically built for recurring payment processing, coming from a web-services company specifically geared toward e-commerce sites, seems weirdly specific to you, then welcome to the nature of the web today. It’s increasingly user-friendly, meaning more developers like Pfleger are creating more and more off-the-shelf solutions. “There are more tools every day,” says Pfleger. “Developers are building tools that are making it easier for people to do things. There’s a waterfall coming down from the top.” Pfleger says Yovigo surveys its customers, asking them about their tech ability level on a scale from 1 (low) to 10 (high). “Some sign up with 1’s, 2’s, and 3’s,” says Pfleger, something not imaginable just a few years ago.

The bottom line is that this is good for entrepreneurs, because it means the barriers to entry for testing out a business have gotten lower and lower. More people can try things faster. “People can use tools like these and rapidly prototype something,” says Pfleger. “You can create a Yovigo site in two minutes, then go to PayWhirl, and boom, you’ve got something that can process recurring payments. You can go spend 100 bucks on Facebook to target a specific audience. You can go try it in literally an hour.” You can test a half-dozen businesses before lunch, if you get an early start on your day.

Consumers and small business owners stand to win in the new world of web design–and the losers may be web designers who refuse to update their skills. “You don’t have to have a technical degree to [build a website],” says Pfleger. He laughs. “Which is scary.”

He goes on: “I got a degree in professional photography, right before digital. My education became obsolete in a matter of years. In some regard, there’s a similarity here in web design. If you’re not studying every day what’s coming next, you could easily be left behind–it’s moving that fast.”

And for web designers out there, the lesson of PayWhirl is that the skill you should probably hone is the ability to identify a promising niche. “Find your niche, and you can become a player in that space,” counsels Pfleger.

About the author

David Zax is a contributing writer for Fast Company. His writing has appeared in many publications, including Smithsonian, Slate, Wired, and The Wall Street Journal