Rishi Taparia - Issue #42
This week Macy’s crushes earnings, Whole Foods goes Prime, PayPal buys its way into SMB, Coinbase bucks the traditional startup method for scale, Henry Kissinger debates AI and more. Enjoy!
Commerce
Macy's thinks it has a 'winning formula' as it crushes in Q1
Macy’s reported earnings this week and, counter to all the doom and gloom that has been surrounding retail as of late, outperformed expectations by a whole lot. EPS was 25% higher than consensus estimates with top line sales coming in slightly higher as well. “The winning formula for [Macy’s] is a healthy brick-and-mortar business, robust e-commerce and a great mobile experience,” says CEO Jef Gennettee. While I’m tempted to say thank you Captain Obvious, credit owed where credit is due. Now let’s see if this trend is sustainable.
Captain Obvious applauds you.
Amazon cuts Whole Foods prices for Prime members in new grocery showdown
Whole Foods Prime is gearing up for launch. Amazon announced this week that they will be offering discounts to Prime members at all 463 of the grocer’s stores starting this summer, starting with Florida rolling out now. Offers are expected to range from 10% items to weekly specials changing out on a rotating basis. Let the games begin!
Walmart launched Jetblack, a ‘members-only’ personal shopping service
Walmart is trying to move upmarket, looking to leverage technology to capture the “rich city dweller — certainly not the historical sweet spot for Walmart’s main business”. An interesting move given all the challenges it is having with technology, the latest being shuttering Scan & Go checkout a few months back, letting customers scan their own products via their mobile phone (who knew that customers don’t actually like doing the operational work of check out, and instead would prefer to use technology to browse and shop…) Still in closed alpha (?), it seems to be a work in progress for over a year. Hopefully we see a launch soon.
FinTech
Why it’s so hard to fix banking: An interview with Simple’s exiting CEO
In 2009 Josh Reich and two other cofounders started Simple, with the idea of remaking banking. The company was later acquired by BBVA, and this week Reich became the last of the three to leave the Spanish banking giant. This interview with him goes into a range of topics including some of the challenges the company faced, why banking remains broken and what the constraints (and opportunities) for growth are. Some interesting ‘post-mortem’ reflection here, very much worth digging into.
PayPal to Buy iZettle for $2.2 Billion to Compete With Square
PayPal is going deeper into the brick and mortar game, this week announcing a $2.2bn acquisition (their largest ever) of Swedish based iZettle. iZettle, started in 2010, most recently announced intentions to go public having raised their last round of funding at a purported $950m valuation. In my view the acquisition reflects PayPal feeling the heat on all sides, with Apple and Google among others encroaching on their online checkout business, Square’s Cash app taking market share in P2P, Adyen and Stripe pulling people off the PayPal/Braintree processing platforms and virtually no offline business to speak of compared to Square. iZettle gives PayPal a head start in Europe and LatAm, and an opportunity to try and create the holistic experience for consumers and merchants where they been lagging behind. An interesting move to be sure.
Move deliberately, fix things: How Coinbase is building a cryptocurrency empire
Coinbase has built an incredible business over the last 5 years, reaching over $1bn in revenue in 2017 and amassing over 20 million accounts (for context, Charles Schwab is said to have about 10 million brokerage accounts). This article goes into the startup’s methodology, how it manages its brand very carefully (“carefully cultivated, [it] is one of trust and legitimacy, in contrast to what it says are “fly-by-night” exchanges that freely operate in a legal gray zone in other parts of the world.”) A worthwhile read into a company helping shape the future of one of the world’s most polarizing technologies.
What Starbucks could learn from this Washington restaurateur about race at work
At Busboys and Poets, the orientation for new hires is an intimate conversation about racism. I thought the article quite timely given the current state of affairs in the country, in particular with the recent incidents at Starbucks and Nordstrom.
Technology
How the Enlightenment Ends
You’ve probably read a few pieces by now on AI, the challenges it creates for humanity and how we as a society need to ensure we create the right framework for ongoing development. However, I’m quite sure you’ve never read a piece on the subject by a former Secretary of State by the name of Henry Kissinger. Take the time, well worth it.
Future Apple biometric security may include scanning veins in a user's face
Introducing…Vein ID? Apple has filed a patent that supposedly will make FaceID even more secure, in this case by now mapping veins in your face. Harder to counterfeit (probably?), supposedly this technology will make even determining between identical twins more accurate as facial veins are apparently not the same.
How China’s Tencent Uses Deals to Crowd Out Tech Rivals
By amassing stakes in hundreds of companies, Tencent has become one of the world’s largest and most active technology investors, a calculated strategy that is crowding out rivals and bolstering its profits.
Random Tidbits
Ancient Rome’s Collapse Is Written Into Arctic Ice
Talk about my “holy crap, science is crazy” moment of the week. According to this article, scientists can finally track Ancient Rome’s economic booms and recessions (long debated)—thanks to the exhaust of its massive coin-making operation. They do this by examining Greenland’s ice sheet where the exhaust from the coin manufacturing has been preserved for centuries. Really.
Playlist Generator Plays Hit Music From Your Graduation Year
A fun playlist generator launched ahead of high school graduation that shows you the best songs from the year you graduated. Enjoy a blast from the (relative?) past!
Quote I’m thinking about: “When you can’t change the direction of the wind — adjust your sails.” ~ H. Jackson Brown