Rishi Taparia - Issue #84
This week we explore data ownership and Opentable, the founding story of 99 Ranch, the US using Visa and Mastercard as leverage, corruption and state capture in South Africa and more. Enjoy!
Commerce
Who Controls Diners’ Data? OpenTable Moves to Assert Control
Data is the name of the game these days. Who has access to what data has been the subject of everything from senate hearings to documentaries, TV shows to blocked M&A transactions. An Economist cover touted data as the new oil. As with any asset, however real or imaginary, the fight for ownership and control can get messy - who owns what? This week OpenTable, the online booking and restaurant management service, updated their terms and included a provision that “block[s] restaurants from giving competitors access to diner data acquired through OpenTable unless they pay new fees.” Restaurants are understandably miffed. The diner information should be under their control since, in booking with the restaurant, diners have chosen to provide certain information that should be able to use as desired (even if it means sharing that information with another restaurant booking service). OpenTable says they are protecting diner privacy. Tough hill to die on considering they’re willing to trade that for a small additional fee per diner.
How America’s biggest Asian supermarket was born
There is no shortage of options when it comes to grocery in US shoppers. You have huge supermarkets, dollar stores, SMBs and bodegas on the corner, ethnic and farmers markets, and that’s just to name a few options. However, if you’re looking for Asian ingredients, odds are you’ve been to 99 Ranch. A terrific read on the founding story of the business. “We build the community, or the community builds around us. As we establish these stores, we help to establish Asian-American communities around them.”
How Sears Lost the American Shopper
Sears once dominated retailing but from its peak in 1970s it’s been a steady downward spiral. This WSJ piece offers a fascinating oral history from the people who lived it up to the top and all the way down.
FinTech
U.S. considers sanctions to restrict Visa, Mastercard in Venezuela: official
The United States is considering imposing financial sanctions that could prohibit Visa, Mastercard and other financial institutions from processing transactions in Venezuela in an effort to “[tighten] the financial noose on the government of President Nicolas Maduro.” All of a sudden China’s decision to block Visa and Mastercard from entry into the country starts to make a bit more sense. Financial infrastructure relies on trust, reliability and neutrality to be successful. The US government exerting political pressure using financial infrastructure as leverage towards regime change removes the underlying neutrality of the financial service. While not the first time the US has imposed these sanctions (North Korea, Iran, Syria…), today’s uncertain political climate certainly has other countries questioning whether they, like China, need their own payment mechanisms.
Can Square Succeed Where Walmart Fell Short? Bankers Are Set on Ensuring It Doesn’t
Banks around the country and around the world have major Square envy. Now, as they continue to grow their lending business, the banking lobby is doing their best to stop their rapid growth.
The Independent Community Bankers Association is mounting an effort it hopes will do more than delay efforts not only by Square but by other fintechs to establish banks. The Washington, D.C-based trade group this week released a white paper decrying the availability of banking licenses for business entities controlled by nonbanks
China’s Ant Financial, thwarted in the US, is expanding rapidly in Europe
It’s no secret that Ant Financial has global ambitions. With a $150bn private valuation and likely to go public in the next 18 months, the major question is when, not if, the Chinese company will go after non-Chinese customers. The strained relationship between the US and China resulted in a blocked acquisition of MoneyGram and increased scrutiny on all US based activities (at least on the consumer side). My guess is an increased focus on offering technology products to Western financial institutions - they’ve certainly got enough clout to fend off the government’s inquiring eyes.
Random Tidbits
“State Capture”: How the Gupta Brothers Hijacked South Africa Using Bribes Instead of Bullets
Turn off the TV, put your phones on DND mode, pour yourself a cup of coffee and get comfortable - you’re going to want to read this one. Novelist Karan Mahajan travels to India and South Africa to understand how three small-time investors fleeced an entire country—aided by some of the world’s most respected consultant—in one of the most captivating reads I’ve come across in a long while.
Actresses, Business Leaders and Other Wealthy Parents Charged in U.S. College Entry Fraud
The major story this week was the ‘side door’ that rich and wealthy parents took advantage of in order to get their children admission into colleges and universities. The sheer absurdity of some of these tactics, and the fact that they worked, are beyond me. However, the part that I find the most insane about the whole thing: the way this whole plot was discovered. A parent of one of the children was under investigation for securities fraud and tipped off investigators to the scandal!
As Costs Skyrocket, More U.S. Cities Stop Recycling
Unfortunately for all of us, many of you who question whether separating recyclables from trash from compost actually does anything may turn out to be right. Due to rising costs and China now rejecting US recycling (if you’re wondering what I’m talking about, click that link), a lot of your recycling is ending up in land fill, or worse still, getting burned.
Quote I’m thinking about: “Get comfortable with being uncomfortable.” - LeBron James