Rishi Taparia - Issue #62
This week we look at Amazon’s minimum wage increase, Target going discount, Square getting into consumer lending, Stripe’s path to $20bn, praise for mediocrity and more. Enjoy!
Commerce
Amazon's $15 Minimum Wage Could Shake Up the Economy
Amazon announced to their employees (and the market) that they were increasing the minimum wage for all employees to $15 an hour. Why, you ask? This piece goes into the three reasons:
Amazon is bending to pressure from left-leaning critics
Amazon is raising wages not because of political pressure, but because of wage pressure
Bezos wants to burnish his populist bona fides as the company nears the long-awaited announcement of its second headquarters location (likely DC)
My guess is it’s the last one but that’s just me!
Target’s Answer to Discounters Is an Even Cheaper Store Brand
Target is going deeper into the private label business, only this time they are doing it at a cheap price. The retailer has created over 20 brands over the last two years, focused mainly on apparel and home. Now they are launching Smartly, a line of personal care products priced under $2, an answer to generic brands at drugstores and discount chains, as well as the Harry’s and Dollar Shave Clubs of the world.
Stitch Fix Subscription Service Expands Into UK
Stitch Fix is going across the pond to the UK. Expected to launch in 2019, the subscription clothing service has successfully launched multiple verticals since having gone public. International expansion brings with it more logistical complexity, but given the strength of the leadership team and performance thus far, I’m confident they’ll be able to pull it off.
Re:Store, WeWork for Retail, Will Bring Instagram Brands to Storefronts
Being able to make a move from online to offline is becoming increasingly for brands that started with an Instagram page or a Facebook account that are trying to grow their businesses. Re:Store is trying to help make that transition smoother, enabling Instabrands to market their wares in a physical location. An interesting idea (and certainly not the only company to be doing it) but a space that is worth spending more time evaluating.
FinTech
Square expands its bank-like offerings, letting sellers charge customers in installments
Square continues making great moves, and traditional banks continue to get jealous of the fast moving financial services firm. Square announced this week it will let businesses using its payment network to give customers the option to break big payments into smaller, fixed monthly ones. Building deeper into the consumer side and going squarely (pun most definitely intended) after Affirm, Karrot and other POS based consumer lending players, Square continues to build an impressive financial services stack.
The untold story of Stripe, the secretive $20bn startup driving Apple, Amazon and Facebook
I’m not sure how “untold” Stripe’s story is, as between them and Square they suck most of the fintech news oxygen out of the room (mostly deserved), but regardless, a solid read on a tremendous business.
Brazil payments processor Cielo struggles against upstarts
The Brazilian payment processors, Cielo and Rede, at one point in time owned over 90% of the total processing volume. Now those once fat margins have been decimated by new upstarts like Stone who are leasing or sell credit card terminals to merchants for a fraction of what the market leaders have charged.
Aadhaar verdict sparks fresh trouble for India's banks
A 5 panel judge in India struck down a law “which allowed corporate entities or even individuals to demand the unique Aadhaar number in exchange for goods or services.” A boon for consumers who aren’t getting harassed to link their bank accounts, a nightmare for banks who have enjoyed the ease and speed of a single verification method for customer acquisition.
Technology
When Tech Knows You Better Than You Know Yourself
A fantastic interview of Sapiens author Yuval Noah Harari and Tristan Harris, director for the Center for Humane Technology, discussing technology, its impact on society and how humans can make themselves ‘harder to hack’.
Private Businesses Built Modern China. Now the Government Is Pushing Back.
Taxes are rising. Regulation is tightening. The government is taking more control of were once privately run businesses. A look into the changing business environment in China.
Random Tidbits
In Praise of Mediocrity
A well written piece on how the idea of ‘hobbies’ and leisure time have been seemingly destroyed by the “the pursuit of excellence”. It’s along the same lines as a piece I wrote a few years back, but certainly much better articulated. Worth a read and a bit of time to think.
The promise of our civilization, the point of all our labor and technological progress, is to free us from the struggle for survival and to make room for higher pursuits. But demanding excellence in all that we do can undermine that; it can threaten and even destroy freedom. It steals from us one of life’s greatest rewards — the simple pleasure of doing something you merely, but truly, enjoy.
Quote I’m thinking about: “Bottom line: It’s better to give before you receive. And never keep score. If your interactions are ruled by generosity, your rewards will follow suit.” Keith Ferrazzi