Rishi Taparia - Issue #85
This week we look at Walmart’s secret weapon against Amazon (TL;DR: people…sort of), FIS’ “hold my beer” moment, the IPOmg filings of Zoom and Pinterest, the importance of kindness in dialogue and more. Enjoy!
Commerce
Walmart Builds a Secret Weapon to Battle Amazon for Retail’s Future
Last May we talked about Walmart’s launch of Jetlack, a personal shopping service trying to attract wealthier clients to the world’s largest retailer. This week more information about the service was released. The service costs $600 a year and currently has a few hundred shoppers in the New York market but is looking to scale nationally. Customers text shoppers who will buy anything other than fresh food (and not just from Walmart stores). Shoppers buy on average 10 items a week with an average of $300 a week for products “because the ease of the service encourages more frequent purchases.” The bold bet here is the labor-intensive and money-losing personal-shopping service will allow Walmart to develop artificial intelligence to compete with Amazon and support customer needs across both online and offline commerce.
Instagram Unlocks In-App Purchasing
instagram launched their shopping beta application, with brands including Nike, Burberry and Revolve as early users. Making posts shoppable has long been part of the discussion with Instagram, migrating from a discovery only, “link in bio” model to an actual “give me your money right now” model. The big question is with so much sponsored content and promotions from mega-influencers, will all the commercial focus drive users away from the platform? Sometimes all you want after a hard day is a bunch of cat videos and babies doing funny things. Is that so wrong?
Uber Eats rolls out confusing new fees — here’s what they mean
It makes sense that food delivery is big business both in the US and internationally - people are programmed to follow the path of least resistance and 3 clicks in an app + 45 minutes is pretty much as little resistance as you can ask for. The one thing that does cause some friction in the order flow is pricing. We as a society have a dynamic relationship with delivery fees, our willingness to pay changing based on how late it is and how many alcoholic beverages have been consumed. This week Uber Eats rolled out its new fees structure, and most people are confused about what the new fees mean.
FinTech
FIS to Buy Worldpay, an E-Commerce Payments Processor, for $34 Billion
Back in January fiserv bought First Data in a $22bn megadeal that propelled fiserv onto the global acquiring stage in a major way. This week FIS said, “hold my beer.” As expected, FIS went out and made a major move, acquiring Worldpay (fka. Vantiv) for a whopping $34bn. I’m a bit disappointed that they didn’t do something a bit more out of the box (I still maintain that Plaid would be a great acquisition target for either of these businesses) but it’s a safe bet that will likely yield positive return over the next few years as consolidation in payments continues. Meanwhile, FIG bankers everywhere are enjoying their weekends…
In India, Xiaomi joins the mobile wallet war
This week Xiaomi, India’s most popular smartphone brand, rolled out Mi Pay to customers. The wallet promises users your typical set of capabilities - cash transfers, phone credit top-ups, payments for utility bills and satellite TV, online shopping as well as in-store payments - using their ICICI or Pay U accounts, as well as UPI. India’s wallet ecosystem is massively competitive with Paytm, WhatsApp, Tez all trying to users’ capture hearts and minds. Xiaomi has some leverage in country though, making a phone every 3 seconds, and should emerge as a player in an already crowded market.
Square leverages Weebly acquisition to bridge offline and online commerce=
Square is overhauling two of its omnichannel merchant products, as the company continues to extend its reach beyond simple mobile payments. For anyone questioning Square’s acquisition of Weebly a year ago, question no longer. In one of their larger product redesigns, the company now allows businesses to sell products both online and offline in a relatively seamless manner “as it now promises access to real-time inventory; integration with Instagram sales; integrated shipping labels; in-store pickup service; support for Square gift cards; and — crucially — synchronization with Square’s in-store point-of-sale system, Square POS.”
Technology
Equity Shot: Pinterest and Zoom file to go public
Talk about IPOmg you did how much in 2018 revenue? Friday saw both Zoom and Pinterest drop their S-1 filings and man, talk about some interesting reading (well, only if you’re a nerd like I am). Now while I won’t go into the specifics of the filings (you can read more about Pinterest here and Zoom here), I will applaud both these tech companies (and the others that have filed and / or gone public) on building very real businesses. For all the (justified) discussion about the bubble in tech, valuations getting crazy, companies raising too much money before proving they can do anything and the like, very real businesses are being built. Zoom, as an example, ended their 2019 calendar year (they have a Jan 31 year end) having done $330 million in revenue (up from $151m the year before that and $61m the year before that!) and profitable. That’s no joke. Kudos to the teams on reaching this milestone.
‘It Takes Over Your Life’: Waze Volunteers Work for the Love of Maps
“In an era of the gig economy, Waze has found a better business model—unpaid labor.” Over 30,000 volunteers spend nights and weekends go through Waze and update roads, speed limits, HOV lakes and more in a game-ified system.
The volunteers—whom the company calls “editors”—accrue points for each map update, rising through the ranks and earning new avatars as they gain the ability to edit wider areas and more important roads. There are six levels of editors and people can also earn additional titles, showing they oversee a specific region.
A fantastic look into how an army of unpaid workers helps keep you in your car less and the motivation behind why they do what they do.
Oil Traders Are Now Watching Workers’ Phones to Spot Problems at Refineries
In the $40 trillion global oil-trading market, the smallest clue can be worth millions. Traders are using companies like Orbital Insights to track the locations of oil plant workers, trying to glean information like which plant is undergoing an outage for maintenance, for how long and how that information may impact pricing.
Random Tidbits
It’s Not Enough to Be Right. You Also Have to Be Kind.
“Reason is easy. Being clever is easy. Humiliating someone in the wrong is easy too. But putting yourself in their shoes, kindly nudging them to where they need to be, understanding that they have emotional and irrational beliefs just like you have emotional and irrational beliefs—that’s all much harder. So is not writing off other people. So is spending time working on the plank in your own eye than the splinter in theirs. We know we wouldn’t respond to someone talking to us that way, but we seem to think it’s okay to do it to other people.”
Emilia Clarke, of “Game of Thrones,” on Surviving Two Life-Threatening Aneurysms
The harrowing story of actor Emilia Clarke (aka. Daenerys Targaryen, Khaleesi of the Great Grass Sea, Lady of Dragonstone, Breaker of Chains, Mother of Dragons) tells the story of surviving two brain aneurysms that struck just as “Game of Thrones” was making her a star.
Ex-Enron CEO Skilling Plans Second Act
Former Enron Corp. Chief Executive and convicted felon Jeffrey Skilling is looking to get back into the energy business after serving more than 12 years in prison for his role in one of the biggest corporate scandals in history. Having just read “The Smartest Guys in the Room”, I was probably more interested in this story than most normally would be but man, you’d think he’d take some time to settle back in. Just weeks after getting out of jail the former Enron CEO is looking to start a new energy venture and “ has met with individuals who specialize in cryptocurrency, blockchain and software development in recent weeks.”
Quote I’m thinking about: “Let yourself be silently drawn by the stronger pull of what you really love.” - Rumi