Rishi Taparia - Issue #41
This week we look at the gig economy’s impact on retail, Ant Financial’s monster round drawing the attention of Chinese regulators, Goldman partnering with Apple to go deeper into consumer, Google’s AI making calls on your behalf (talk about wow) and more. Enjoy, and Happy Mother’s Day!
Commerce
What is the gig economy?
The focus of the gig economy has largely been on ride sharing, delivery and freelance work with companies like Uber, Lyft, Postmates, Taskrabbit and the like driving a lot of the discussion. However, more workers are clocking in to on-call temp jobs in retail and restaurant, with companies such as Legion, Snag Work and Wonolo as examples of companies that are helping staff these hourly workers. This is, however, putting pressure on low-wage employees who often are the most vulnerable.
Gen Z's need for speed and how retailers can keep up
Gen Z and Millennials, the favorite target of retailers everywhere thanks to the size of the cohort and their (soon to be) purchasing power. The only problem - this cohort doesn’t care for retailers too much, unless your name is Amazon. Mobile is critical, with mobile commerce having reached almost a quarter of all e-commerce sales, the need to speed being critical to capturing the segment. Some are doing it well (see Nike, H&M, Nordstrom) and some are flailing (see…well, that list is a bit long).
FinTech
China's Got Jack Ma's Finance Giant in Its Crosshairs
The first line in this article sums it up quite nicely.
“There’s no other company on Earth quite like Ant Financial.”
The financial behemoth spans payments, lending, cash flow financing, credit scoring, insurance, wealth management, and that’s only what I can remember. The business just closed on $10bn in financing led by Carlyle, putting its value at $150bn ahead of an IPO, and with 870 million customers, is a once in a generation type of business. Now, in the US we had “too big to fail” financial institutions. In China, Ant is starting to look too big to keep growing. Regulators, worried about potential systemic risk to the financial system that Ant could create, are supposedly drafting regulation that will restrict the ownership structure for the first time, force minimum capital requirements, and require the company to obtain more licenses than previously needed.
Goldman Sachs, Apple Team Up on New Credit Card
Goldman’s push into consumers continues and there is no better place to go get access to consumers than Apple. This partnership makes a ton of sense for both companies and I wouldn’t be surprised to see the two team up on more financial services offerings early next year, including consumer lending. It will be worth paying attention to how the branding rolls out here - who leads?
SoFi Is Said to Plan Credit Card With Help From Former Citi Executive
SoFi was once described to me, thanks to its culture issues, as a cash printing machine that and had been thrown in a dumpster and set on fire. Having recently hired Anthony Noto, former Twitter COO and Goldman banker, as CEO the company appears to be turning things around and are is likely expanding their offering to their HENRY (high earnings not rich yet) customers with a credit card. They’ve hired Richard Garside, former head of Citi’s card operations (Citi is the world’s largest card issuer) to help grow the business - a tremendous move by a company expected to IPO over the next 24 months…once all the fires have been put out.
Technology
Google AI Blog: Google Duplex: An AI System for Accomplishing Real-World Tasks Over the Phone
This week at Google I/O the company introduced Google Duplex, AI technology that quite literally allows you to accomplish mundane tasks. If you haven’t already, stop and watch the demo video. It’s truly remarkable and sparked quite a bit of discussion about whether the AI needs to identify itself as such. This article by Ben Thompson of Stratechery explores the two ways technology companies are building their companies and how Google in particular views building technology: computers helping you get things done.
China Tech Giants Alibaba, Tencent Eye World Media Domination
We’ve often talked about Alibaba and Tencent as technology behemoths in China, focusing in on their payments, commerce and AI technology. However, their reach spreads far beyond technology, with plans for world media domination. Viewing entertainment as growth industries, both are vying for the 140mm and growing paying streaming video subscribers in China (larger than Netflix’s total user base). They are both building their IP base, Tencent building a studio arm with a huge number of titles while Alibaba has taken a slower approach, financing less titles. The battle between these two companies extends well beyond borders and further than technology - if it isn’t already obvious, get to know them both!
Apple, Influence, and Ive
A fascinating interview with Jony Ive, in part due to the fact he rarely gives interviews, and in part due to the subject matter: the Apple Watch, its founding, development and a bit of what’s to come. Most fascinating to me was the fact that unlike most products where Apple maintains incredible secrecy and doesn’t even conduct market research to develop, in building the watch the company went outside its walls and spoke with world-renowned horologists to understand the beauty and nuance of time-keeping. A tremendous read.
“I don’t look at watches for their relationship to popular culture, which I know is so much of the fun – but rather as somehow the distillation of craft, ingenuity, miniaturization, and of the art of making.” - Jony Ive
Random Tidbits
Earning Your Stripes: My Conversation with Patrick Collison
A tremendous podcast episode between Shane Parrish of The Farnam Street and Patrick Collison, CEO of Stripe. Patrick is articulate, incredibly well read and a very deep thinker and the two explore a wide range of subjects including the Irish view of the world, what to look for in a new hire and judging exploration vs. exploitation while scaling businesses. One of my favorite things from the podcast was how Patrick explores reading.
Normally, I’ll jump sort of midway through it and I just start reading and ask “Would I like to have ended up here?” And, almost certainly, there’ll be a bunch of the terms I won’t recognize or the antecedent ideas I won’t be familiar with or whatever, but, yeah, “do I want to be here or have gotten here?” And if for a couple of pages, it seems like the answer is yes, then I might backtrack to the start, pursuing it a bit more seriously.
Podcast transcript here for anyone who’d prefer to read it.
Quote I’m thinking about: “The trouble with not having a goal is that you can spend your life running up and down the field and never score.” – Bill Copeland