Rishi Taparia - Issue #70
This week we look Payless’ new high end brand, Amazon’s deceptive baby registry ads, China’s further crackdown on the P2P lending business, the first genetically modified babies, hedge fund performance coaches and more. Enjoy!
Commerce
‘They had us fooled’: Inside Payless’s elaborate prank to dupe people into paying $600 for shoes
This move by Payless was a stroke of genius. The discount shoe store created a pop-up luxury brand, Palessi, invited a bunch of influencers to the store and sold what would have otherwise been $20 shoes for upwards of $600. Now while the goal was “to get a lot of people to consider Payless again, and to realize it’s more than just a shoe store in the mall”, I think the reality is Payless tapped into the fact that we as humans arbitrarily assign value to things, independent of quality and value, based on other signals. A fancy store, an Italian sounding name (Payless said the designer was Bruno Palessi) and a quality Instagram account and the world is your oyster…at least for a day.
Over a third of all Black Friday web sales were made on smartphones
If the importance of clean and easy mobile commerce wasn’t already obvious, the Black Friday numbers should help clear up any confusion. Over $1bn of the $6.2bn on Black Friday was spent on mobile, up 10% from the previous year. Macy’s seems to agree, with Macy’s CEO Jeff Gennette saying “smartphones is now the “mode of choice” for shopping.”
New Parents Complain Amazon Ads Are Deceptive
Amazon’s been building quite the advertising business, pushing the boundaries and giving retailers another channel to mine beyond Google and Facebook. Amazon’s learning that they can’t push too far. Sponsored ads on Amazon’s baby registries are leading the family and friends of new parents to make purchases of unwanted gifts, unable to delineate between an ad or an actual item.
FinTech
China Is Said to Plan Purge of a $176 Billion Loan Market
The Chinese government continues to be wary of its loan market and is prepared to end its $176 billion experiment with peer-to-peer lending.
Chinese authorities are planning to wind down small- and medium-sized P2P lending platforms nationwide…[it] is the clearest sign yet that Chinese leaders want to dramatically shrink a market that spawned the nation’s biggest Ponzi scheme, protests in major cities, and life-altering losses for thousands of savers. It suggests that Xi Jinping’s government isn’t done cracking down on China’s $9 trillion shadow banking industry, despite concern that tougher rules have choked the flow of credit to the world’s second-largest economy.
A number of signs are pointing to a global economic cooling. Any alt-lenders started in the next decade has never experienced a downturn. The rigor and validity of lending models are sure to be tested, and I personally believe it’s going to get very messy.
Ohio becomes the first state to accept bitcoin for tax payments
Left without comment.
Technology
EXCLUSIVE: Chinese scientists are creating CRISPR babies
Genetically modified babies have arrived. In one of the more major stories this week, Chinese scientist He Jiankui used CRISPR technology (CRISPR 101 here) to modify the genome of two embryos prior to implanting them in the mother, hoping to remove the CCR5 gene which would make the babies resistant to HIV (which their father has). An incredibly risky procedure that went against globally accepted standards of science, Jiankui has been pilloried by the global scientific community and a number of critical questions remain. Nevertheless, the “box” has been opened. Now what?
Bird’s new Platform program and the rise of the “business in a box”
Scooter unicorn Bird launched what is essentially a franchise model this week - independent operators can now manage their own scooter fleets, paying 20% of the revenue to Bird in exchange for use of their marketplace of chargers and mechanics (essentially their ops playbook). I thought this piece by Saar Gur of venture firm CRV (Bird a portfolio company of theirs) on the next generation of business in a box was a good reminder of history’s cyclicality and had me wondering what else could be done with a similar ‘franchise’ model.
What's next for marketplace startups? Reinventing the $10 trillion service economy, that's what.
Andrew Chen of A16Z has been on a tear with some great content. This week is an in depth look at what’s next for marketplace startups and where to from here. TL;DR - There is a massive market in the service economy that has yet to benefit from technology and marketplaces that is going to emerge over the next decade.
Random Tidbits
Can India Afford to Cool Down?
As emerging markets get cooler, the world gets hotter. Affordable, energy efficient air conditioning is going to be a multi billion dollar market over the next 10 yrs, with ~2 billion residential air conditioning unites to expected to be added. Old is becoming new again, and in a big way.
Inside the Secretive World of Hedge Fund Psychiatrists and Performance Coaches
I admit that I love the Showtime show Billions (for those of you who haven’t watched it, I highly recommend). One of the more interesting components of the show is the in-house performance coach at Axe Capital, played by Maggie Siff. Her role is to ensure that all the traders at the hedge fund are operating at their very best, offering an outlet for venting and tailored coaching for each. I had wondered whether her character was based on a real role (and why this type of mental health professional wasn’t more common at companies). Turns out there are employer-paid in-house therapists and performance coaches used on the regular and it’s quite the challenge to land the role.
Writing Is Thinking
Writing is a linear process that forces a tangle of loose connections in your brain through a narrow aperture exposing them to much greater scrutiny. In my experience, discussion expands the space of possibilities while writing reduces it to its most essential components.
Thank you all for taking the time to read this writing and offering me an outlet for thinking. As always, feedback is greatly appreciated.
Quote I’ve been thinking about: “Ever more people today have the means to live, but no meaning to live for.” - Victor Frankl
‘They had us fooled’: Inside Payless’s elaborate prank to dupe people into paying $600 for shoes
“We wanted to do something provocative. We wanted to get Payless back into the cultural discourse,” said Doug Cameron, founder of a Brooklyn-based company that created the advertising prank for the discount shoe company.
‘They had us fooled’: Inside Payless’s elaborate prank to dupe people into paying $600 for shoes
“We wanted to do something provocative. We wanted to get Payless back into the cultural discourse,” said Doug Cameron, founder of a Brooklyn-based company that created the advertising prank for the discount shoe company.