Rishi Taparia - Issue #72
This week we look at the rise of sneakers in high fashion, Robinhood’s no-fee 3% account of some kind, the rise of meditation and battle between Headspace and Calm, a unique friendship between an NBA superstar and a scientist and more. Enjoy!
Commerce
Why a Massive Luxury Retailer Is Betting Big on Sneakers
In 2018, sneakers became cool again, and with cool comes massive amounts of cash.
This year alone, StockX took in $44 million in investment money, Grailed grabbed $15 million, and Goat merged with Flight Club while pulling in $60 million.
Farfetch (an online luxury retail platform which went public last year and is going to do over $1bn in sales this year) has now bought sneaker reseller Stadium Goods in a fascinating crossover move illustrating just how important the category has become.
Instacart, Whole Foods Part Ways
As expected, Instacart and Whole Foods have parted ways. The company announced this week that it was pulling “the first group of 1,415 workers out of its 76 Whole Foods locations in February.” It won’t affect their business much, having dropped Whole Foods to less than 5% of revenues - a testament to quick thinking and great leadership.
Oh What’s That Over There? It’s SMB Tech: $200+ Billion of Market Value Created in the Last 8 Years
A reasonably good look at the growing business in SMB technology by GGV partner Jeff Richards. The one thing I don’t think he discusses in enough depth is distribution and the challenges associated with getting people to adopt products. There is a huge graveyard of companies that have built good products but struggled to keep customer acquisition costs low. There isn’t a silver bullet when it comes to getting SMBs using your product, and the higher the CAC the higher the ARPU needs to be, which tends to lead to a price that’s too big to stomach for the customer, or trying to up sell on additional products which isn’t easy.
FinTech
Robinhood launches no-fee checking/savings with Mastercard & the most ATMs
This week Robinhood launched, to much hype, a no-fee checking/savings account that offered (among other things) 3% interest on deposits. Sounds amazing right? Like most things that seem too good to be true, so was this. Unlike when first advertised, it turned out that these accounts were not going to be SIPC insured, which meant user money wasn’t going to be protected in the event the company failed. Big problem. Although was it a stroke of marketing genius? They captured 600,000 signups as of Friday and counting. So the founders had to issue an apology. The launch did what they wanted it to.
Fintech startup Plaid raises $250M at a $2.65B valuation
Fintech infrastructure is big business. Plaid, a startup founded in 2013 providing access to banking information via secure API, announced a $250m raise at a $2.65bn valuation, 10x from its last raise. Plaid is the backbone behind a number of huge applications including Venmo and Coinbase, they are a great example of selling picks and shovels, not reliant on the success of any individual product. With the banks unlikely to cooperate and create a competitive product, these guys have room to run.
How Chinese companies are planning a global fintech coup
Chinese fintech (or rather “techfin”) players Ant Financial and Tencent have been playing a 4 dimensional chess match on a global stage. This is a tremendously well researched piece focused on Ant Financial and their march through South and Southeast Asia, with their eyes now set on Africa. A bit of a puff piece, but some fascinating nuggets in here including Some crazy Ant Financial stats for you: the fact that Ant processes 256,000 transactions per second and has a staggeringly low fraud loss rate of 0.01%.
Technology
Headspace vs. Calm: The Meditation Battle That’s Anything but Zen
I started meditating a few months ago, a few weeks after my son was born. It’s been a fascinating (and difficult) journey for me as I try and develop the ability to quiet in the mind and simply ‘be’. Meditation has certainly moved into the mainstream over the last decade, assisted by apps on phones guiding people through their individual practices. Headspace and Calm are the biggest, engaged in a very real battle for meditating supremacy. For the record, i use Headspace (largely because my wife’s company subsidizes it).
Random Tidbits
My Dad's Friendship With Charles Barkley
An awesome and touching read (and listen) about an unlikely friendship between Charles Barkley (NBA superstar) and Lin Wang (Ph.D and cat litter scientist).
Animation: The World's 10 Largest Economies by GDP (1960-Today)
Data porn alert: An amazing video that shows year-by-year changes in GDP for the world’s 10 largest economies over the course of 57 years.
Cute Aggression May Make People Better Caretakers
Undoubtedly you’ve been in a situation where you’ve encountered a cute baby or small animal (puppy, kitten) and just wanted to squeeze them so hard because they are so gosh darn cute! I myself have been experiencing this quite a bit of late. Well, there’s a scientific reason you want to squeeze a cute little face - it’s called Cute Aggression.
Quote I’m thinking about: “Surround yourself with people who look like magicians to you. Then imagine yourself as one, older and wiser, in great detail. Imagine yourself as the person you would be afraid to say you want to be out loud to others (because it seems so ridiculously impossible right now). Write it down in great clarity and detail, then forget it. And let the part of your subconscious mind that still remembers lead you to becoming the things you want, and maybe, years later, check if it did.” - From an essay authored by Autotranslucence