Rishi Taparia - Issue #48
This week we have a whole lot of Amazon (last mile delivery, PillPack and China), the missing item from Ikea’s India strategy, fun payments facts from the World Cup, a podcast on how to spot a bullshitter and more. Enjoy!
Commerce
Wanted: Hundreds of Entrepreneurs to Start Businesses Delivering Amazon Packages
Amazon stepped up the push for last mile delivery, calling for people to start companies focused on delivering with Amazon (and committing to $1mm in funding veterans who start these businesses). From the press release:
Amazon will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business. Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance
A unique approach to solving one of the company’s biggest challenges, taking care to avoid the negative baggage of the ‘gig economy’ while reaping the same benefits.
Amazon + PillPack: Takeaways For Entrepreneurs
Speaking of Amazon, the company also spent $1bn to get into the pharmacy business, buying PillPack. Built around the idea of improved packaging for pharmaceuticals, the company raised $118m through 4 rounds. The founders will walk away with about $100m, Amazon walks away with a pharma license and Walmart walks away with their market cap down $3bn after having apparently underbid and subsequently missing out on the deal.
Surviving the Retail Apocalypse
Foursquare (yes, they are still around and actually doing quite well) did a survey looking into the common characteristics between the most popular malls. High level:
Tip 1: Invest in the right secret weapons
Tip 2: Know your audience, and be realistic about what works
Tip 3: Add the right food options (and a burger joint)
Tip 4: Avoid hobby shops and keep a close eye on apparel.
Tip 5: Make some big changes
Not all together new, but with some good data behind the suggestions, well worth investigating.
IKEA news: Ikea bets big on India but keeps meatballs off the menu
The furniture giant Ikea is set to open its first store and restaurant in Hyderabad, India after years of trying. However, one thing they are not bringing to the country is arguably its most famous item - meatballs. Understandably citing religious given the main ingredients are beef and pork, instead “there will be chicken meatballs and vegetarian balls”. An interesting test to see how much lift the meatballs bring to the stores!
FinTech
Visa, Mastercard Near Settlement Over Card-Swipe Fees
Margins in payment processing are accelerating towards zero thanks to a number of reasons, not least of which being retailer push back. Now Visa, Mastercard and a number of issuing banks appear to be close to settling a long-running (try 2005!) antitrust lawsuit with merchants over card-payment fees in which the merchants would be paid around $6.5 billion.
Ingenico Next on Takeover Radar Amid Europe Fintech Frenzy
Payment terminals are apparently hot business these days. In the wake of private equity takeover of Verifone, firms are setting their sights on French payments processor Ingenico. Arguably holding more assets than Verifone given the recent slew of acquisitions (including Bambora), it’s understandable that they would be the subject of inquiry. It will take a bigger check (they are trading at 2x Verifone’s market cap) but could provide an easier path to multiple expansion than Verifone will.
Visa Data Shows One Fifth of Purchases at 2018 FIFA World CupTM Use Contactless Technology
Some fun World Cup payments facts:
- Average transaction size: $56.65
- 20% of transactions done via NFC
- Game with the most transaction volume: Russia v Saudi Arabia
Largest purchases by category:
- Luxury goods: $364.55
- Lodging: $237.75
- Fashion: $126.86
This Amazon job post reveals the e-commerce giant's ambitions in China
Amazon is typically competing with Alibaba when it comes to China. Now, it seems as though Amazon may take aim at Alibaba’s sister company Ant Financial. The US giant is looking to hire a senior leader to launch its small business lending program in China. Why start there takes a bit of squinting to truly understand, and it’s not as easy to find success in the market as it once was, but hey, at least they’re trying?
Technology
A Beginner’s Guide to AI/ML 🤖👶 – Machine Learning for Humans
A tremendous guide for anyone who, like me, is not technical but wants to understand in greater depth machine learning, deep learning and artificial intelligence. Easy to understand, well framed and written in plain-English explanations while accompanied by math, code, and real-world examples, bookmark and come back to it later if you don’t yet have time. You’ll thank me later.
Random Tidbits
The Age of the Essay
An oldie but goodie from Paul Graham that has proven prescient.
Alive Time vs. Dead Time: My Conversation with Robert Greene
A great listen between Shane Parrish and Robert Greene, five-time NYT best selling author, speaker and world-renowned strategist. They discuss his famous notecard system, how to spot a bullshitter, and how to use the rules of power to get the most out of life.
Quote I’m Thinking About: “When you show yourself to the world and display your talents, you naturally stir all kinds of resentment, envy, and other manifestations of insecurity… you cannot spend your life worrying about the petty feelings of others” ― Robert Greene, The 48 Laws of Power