Super Apps

In this post, I’ll touch upon briefly the definition of a Super App, give a few examples and talk about the business implications of these apps.

The term Super Apps is generally credited to Mike Lazaridi, the founder of Blackberry, who defined it as “a closed ecosystem of many apps that people would use every day because they offer such a seamless, integrated, contextualized and efficient experience”. In laymen’s terms, a Super App is an application that offers various services on one interface. While the mix of services offered by Super Apps varies from one to another, the common denominators of these apps are 1/ they are all two-sided networks popular with both merchants and consumers and 2/ they all began their journey by being excellent in one function before branching out to others. Merchants need to have access to a lot of consumers to join a network while consumers only find the network useful when there is a lot of utility, namely plenty of merchants. The chicken and egg problem of a two-sided network is hard. Therefore, the singular focus on a vertical in the beginning makes sense as start-ups can’t afford to solve this issue in multiple verticals. No-one can build a Super App right from the get-go. Once an app excels and makes a name for itself in a vertical, why not leveraging existing traffic and offering users more reasons to stick around longer?

Examples of Super Apps

WeChat

WeChat started out as a messenger app. An engineer named Allen Zhang alerted his employer Tencent on a threat of other competitors taking away its market share and app engagement. To stay competitive, WeChat transformed itself into an app on which users could do everyday things on a single interface including payments, social media, e-commerce, doctor appointments, hotel reservation or ride-hailing. The pivot was a hit as the new services surpassed even the apps that inspired WeChat in the first place. 

Facebook

Facebook and its founding story need little introduction. Over the years, Facebook has added several services to make itself stickier as a platform. Nowadays, users can shop on a marketplace or Facebook-native stores; create new connections with Facebook’s own Tinder version; make payments with Facebook Pay or consume exclusive content from creators. With its ambition and virtually limitless resources, it won’t be a surprise that Facebook or Meta will expand its offerings in the future.  

Grab

The title of grab.com reads “Grab: The Everyday Everything App”. Its status as one of the biggest Super Apps in Southeast Asia is so different from its humble beginning. Grab was founded as a taxi-hailing business in Malaysia in 2012 by two Harvard graduates. The company gradually expanded into other areas, such as other modes of ride-hailing, food delivery & nonfood delivery, travel bookings, bill payment and financial services. In Vietnam, almost everyone in big cities uses Grab for daily tasks from food delivery, ride-sharing or bill payments.

What Grab mobile app looks like in Vietnam
Figure 1 – What Grab mobile app looks like in Vietnam

Uber

Uber was founded in 2009 by Travis Kalanick and Garrett Camp as a ride-hailing alternative to taxies. The company’s meteoric rise saw it become a global phenomenon, but the company today is more than just a ride-hailing app. In 2014, Uber launched a food delivery service called Uber Eats, which was later rebranded under Delivery. While Covid-19 decimated the Mobility segment (ride-sharing) as riders were restricted by stay-at-home orders, the pandemic was a catalyst for the transformation of Uber as a whole. Delivery has been growing substantially due to consumers ordering food and grocery deliveries. Its gross bookings have repeatedly surpassed Mobility’s and now reaches Mobility’s pre-pandemic level. Second, the company has made strategic acquisitions to expand beyond food delivery. In June 2020, Uber acquired Cornership, a popular grocery delivery service in Latin America. A few months after, it added Postmates, which is very competitive in coastal cities and offers delivery-as-a-service for non-food items. In October 2021, Uber took over an alcohol delivery startup called Drizly. The company has been tinkering with marijuana delivery in Canada and waiting for the green light from the federal government before launching it in the U.S. Powered by the new capabilities, nonfood categories make up around 5-6% of Uber’s overall gross bookings and are expected to grow more in the future. Uber’s ambition is very simple: be the go-to app when consumers have a transportation need. 

PayPal

PayPal first made a name for itself by being a secure digital wallet and online payment system, especially as the primary checkout option on eBay. Since its spin-off from eBay in 2014, the company has added plenty of services to its mobile app and become a formidable two-sided network, due to relentless acquisitions and product development. End users can access various services on the current PayPal app, including paycheck deposit, high-interest savings, bill payment, remittance, credit cards, debit cards, in-store & online payment, BNPL, PayPal Credit, P2P payment, shopping deals and investing. PayPal’s end goal is to be the go-to Financial app for its users.

PayPal's offerings to consumers and merchants
Figure 2 – PayPal’s offerings to consumers and merchants. Source: PayPal

Cash App

Cash App started out as a P2P payment app in which users could transfer funds to anybody in the U.S. Nowadays, users can pay for purchases in stores and online with Cash App debit card and Cash App Pay; invest in stocks and cryptocurrency; or make deposits into checking accounts. In November 2020, Square bought the tax filing division of Credit Karma and subsequently added to its flagship app the ability to file taxes and receive tax refunds. In August 2021, Square paid $29 billion for Afterpay, one of the major BNPL players in Australia and in the U.S. It’s just a matter of time before Cash App turns on BNPL for its users and merchants. Cash App’s ambition is similar to PayPal’s; which makes it interesting to see how the two compete in the future.

Pros and Cons of partnering with Super Apps

Merchants stand to gain an additional payment option as well as more sales from Super Apps, but the story isn’t all rosy. Too much reliance on Super Apps means that merchants’d risk ceding the control of direct customer relationships. In business, few things are more valuable than that. Take Apple and Amazon for instance. Apple’s customer base is so loyal and attached to their brand that almost all developers or other brands take the back seat in negotiations . Amazon’s scale and iron grip on the valuable Prime base allows them to dictate terms over merchants. When you buy from a merchant on Amazon, do you feel more related to the former or the latter?

For banks, Super Apps can have adverse impact in a couple of ways. First, services such as PayPal in 4, Afterpay, PayPal Credit or PayPal/Venmo credit cards can reduce issuers’ credit card spend and subsequently balance as well as revenue. Secondly, it’s in their interest to have users maintain an in-app balance and keep funds away from banks’ checking accounts. Think about it this way: would you feel more poised to use PayPal when your PayPal balance was $20 or $0? That’s why Venmo credits dormant users $10 for downloading and logging into the app again or why Square wants users to keep tax refunds in Cash App balance. The reduction in deposits can raise banks’ cost of funds as well as threaten to cut off the most fundamental relationship with customers. 

On the other hand, Super Apps present a battleground for financial institutions vying for wallet share. Once the connection between checking accounts or debit/credit cards and these Super Apps is established, users often don’t want to go through the inconvenience of updating their default payment method. Hence, every financial institution wants to be the primary source of funds for consumers on these Super Apps to have a leg up over the competition. In this sense, Super Apps offer a business opportunity.

In summary, as you can see above, there are multiple paths towards the Super App status, whether an app’s starting point is to be in messaging, digital wallets or ride-sharing. I think all successful consumer-facing apps have ambition to gain the Super App status. If not, they’d do something wrong. It’ll be interesting to see how these Super Apps compete for mindshare as feature parity is established (meaning they all offer similar features). For merchants, working with Super Apps can be a double-edged sword. While the benefits these apps bring are very tempting, merchants need to keep in mind the risk of losing customer relationships. Like people usually say: don’t miss the forest for the trees.

Weekly reading 13th November 2021

What I wrote last week

PayPal’s Q3 FY2021 results

Good reads on Business

A very good Business Breakdown episode on MongoDB. Database can be very abstract and tricky to grab your head around. Hence. I appreciate folks taking the time to share knowledge and translate a tricky subject into laymen’s terms. Check it out!

2021 Retailer of the Year: Dollar General. “Food and consumables accounted for 77% of Dollar General’s annual sales last year of $33.7 billion. The expansion of cooler and freezer capacity at new and remodeled stores has for several years been described as the Goodlettsville, Tenn.-based company’s most impactful merchandising initiative. Dollar General began selling fresh produce at select stores last year, expanded the program to 2,000 locations this year, and its current plan is to add produce in up to 10,000 stores.” The refusal to call itself a grocer, in my opinion, is spot on. The name of the store is Dollar General, not Dollar Grocery. To change it to grocery would be a mistake as consumers would wonder: what kind of grocery am I getting for $1? Plus, the brand is about getting daily items for at a low price (may not necessarily be cheaper than at Costco, if you talk about unit economics). Hence, it doesn’t make sense to limit themselves to just being a grocer.

Why charging phones is a complex business. An interview with Anker CEO. A really interesting one in my opinion. They plan to avoid going into the phone business and stick to what they do best: accessories. Smart. Strategic.

Experts From A World That No Longer Exists. “Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.”

Facebook launches Shops in Groups and Live Shopping for Creators. The investments and focus on eCommerce, in my opinion, are strategically helpful to Facebook. Its giant cash cow has always been advertising powered by surveillance tracking which falls out of favor of many stakeholders. Politicians, lawmakers, more privacy-conscious consumers, powerful companies like Apple. Facebook has literally millions of people and thousands of brands using its platforms every day. It’s in a prime spot to be an eCommerce powerhouse.

Meta CTO thinks bad metaverse moderation could pose an ‘existential threat’. Boz wasn’t wrong there. What is interesting is that Facebook’s biggest challenge right now, before metaverse, is….moderation. In spite of billions of dollars and an army of technology plus human beings, Facebook still can’t crack the moderation code at scale, without pissing off a whole lot of people. Moreover, because its cash cow is advertising, Facebook has an inherent incentive to encourage engagement, whether it’s toxic engagement or not. I am not saying that moderation is easy. It’s super difficult and, like Boz said, almost impossible. But if your existential threat is impossible to solve, then it should give investors some pause.

Debit cards are hidden financial infrastructure. If you are interested in the U.S financial system, subscribe to this newsletter. I think the write-ups are helpful.

Stuff I found interesting

Hundreds of Ancient Maya Sites Hidden Under Mexico Reveal a Mysterious Blueprint. “In a new study, an international team of researchers led by anthropologist Takeshi Inomata from the University of Arizona reports the identification of almost 500 ceremonial complexes tracing back not just to the Maya, but also to another Mesoamerican civilization who made their mark on the land even earlier, the Olmecs.”

Brazilian Farmers Who Protect the Amazon Rainforest Would Like to Be Paid. “Governments, corporations and business executives are calling for a world-wide market to trade carbon credits so Brazilian farmers like Mr. Weis can be paid to help protect forests on their lands rather than cut them down to make way for more crops and cattle. Existing regional markets for carbon credits, from Europe to California to South Korea, show that the interest—and capital—is there for a global market. The value of carbon markets in Europe and elsewhere grew 23% last year to $274 billion, according to data provider Refinitiv Holdings Ltd. In a global market, carbon credits generated anywhere would be easily tradable anywhere else, just as a security issued by a Brazilian company can be bought and sold on the Nasdaq. Landholding farmers, indigenous groups, state governments and environmentalists could all sell credits.”

Spiders are much smarter than you think. ““There is this general idea that probably spiders are too small, that you need some kind of a critical mass of brain tissue to be able to perform complex behaviors,” says arachnologist and evolutionary biologist Dimitar Dimitrov of the University Museum of Bergen in Norway. “But I think spiders are one case where this general idea is challenged. Some small things are actually capable of doing very complex stuff.””

The nation’s last uranium mill plans to import Estonia’s radioactive waste. The tribes that live close to the U.S’ last uranium mill protest unambiguously and loudly the mill’s owner’s plant o import radioactive waste from Estonia since the water that feeds the tribes is ALREADY contaminated enough. Yet it seems that their concerns fall on deaf ears.

Perfecting the New York Street. “An achievable, replicable plan for a city that’s embracing public space as never before.” Yes, please. Fewer cars, less space for parking and more space for pedestrians

Stats

Cloud Computing Spend is expected to reach $848bn in 2025, according to Battery Venture

Vietnam is forecast to have 53 million online consumers by the end of 2021. The country has a population of 96 million people

“65% of U.S. consumers say they watch free, ad-supported video services”

PayPal Q3 FY2021 Results

The last quarter featured some great developments, acceptable numbers and a couple of concerns for PayPal, from my point of view.

The earning call started with the news that Amazon would let U.S customers check out on their website with Venmo. It’s a great win for the payment company as Amazon is the biggest eCommerce in the U.S, which is PayPal’s main market. The management team didn’t reveal much about the terms of the partnership, but given that Amazon has more bargaining power here, my guess is that PayPal has to offer some sweet economic incentives like a lower rate. In the 9 months ending September 2021, Amazon’s U.S sale was $197 billion, including hardware, physical stores, subscriptions etc. The company doesn’t break down the sale volume for its eCommerce, but for the sake of simplicity, let’s assume that Amazon.com generates around $200 billion in sales ever year. Even if Pay with Venmo processes 1% of that, it will still give PayPal a boost of $2 billion in Total Payment Volume (TPV). Not bad. You may ask given that Venmo TPV for this quarter is $60 billion alone, why is $2 billion lift a year not bad? Well, that’s because Venmo would actually generates money on this $2 billion lift in TPV while the reported $60 billion includes person-to-person (P2P) payments that earn Venmo almost absolutely nothing.

This kind of partnership is possible in the first place because PayPal is no longer constrained by legal obligations with eBay. Hence, we should see the company strike more similar deals in the future. Speaking of deals, PayPal also announced collaboration with Walmart, Booking.com, Fanatic, Phillips 66, GoFundMe and Everlane. At first glance, some of these deals make a lot of sense to me. Walmart is the biggest grocer in the country and a major retailer. Adding PayPal as a checkout option is huge and can help elevate PayPal’s TPV in the same way as Amazon would. 2/3 of Booking.com reservations are online. Since PayPal is already a checkout option, adding Venmo is a logical step to capture more of that payment share. Meanwhile, Everlane, as a fashion retailer, serves as a good case study for Happy Returns, which will be important to PayPal in acquiring and retaining merchants. Last but not least, offering QR codes at gas stations such as Phillips 66 and Valero facilitates seamless payments in a very familiar use case for all consumers.

PayPal Q3 2021 wins
Source: PayPal

BNPL has been an astounding success for PayPal. Launched in August 2020, the service already amassed $5.4 billion in transaction volume, $2 billion of which came in the last quarter alone, 9.5+ million users and 950,000 participating merchants. That’s about 2.5% of PayPal’s consumer base and 3% of its merchant base in only 6 markets so far. The potential growth is enormous. The company is introducing PayPal in 4 in Spain and Italy in Q4 2021 and planning new different flavors of its BNPL in the first half of 2022. I won’t be surprised if PayPal has $8-$10 billion in BNPL volume in the next 12 months (60% or 100% growth).

One of the biggest initiatives for PayPal is the launch of its new mobile app. It’s a major milestone towards being THE Super App for consumer financial needs. The early results, as reported by the company, were great. I don’t take much stock in them, though, because 1/ it’s still early and 2/ I don’t fully understand what all of the reported lifts mean. I’d rather wait for a couple of more quarters to see how the new app fares and hopefully the management team can give more color.

Early results of the new revamped PayPal app

On to the numbers. The last quarter’s TPV stood at $310 billion, a 26% YoY growth. Excluding $10 billion in eBay TPV, which is 3% of the total figure and trending down, the YoY growth is 31%. While eBay is gradually becoming the past for PayPal, Venmo is increasingly looking like the future. Its TPV last quarter was $60 billion, up 35% YoY, faster than the main app itself. Even though it’s only available in the U.S so far, Venmo managed to grow its TPV by more than three folds since 2018. In terms of active accounts, as of Q3 FY2021, PayPal had 413 million active accounts, including 80 million Venmo accounts and 33 million active merchants. Transactions per active account came in at 44.2. Transaction and total take-rates continued to trend down, standing at 1.88.% and 1.99% respectively in Q3 FY2021. As the reliance on eBay tapers off and the product mix is unfavorable (more bill volume or more volume from partners like Amazon that have lower rates), I expect this trend to continue for the foreseeable future.

The decrease in take rates will continue to heap pressure on revenue. Q3 FY2021 revenue growth already slowed down to 13%, much lower than what was reported in the previous four quarters. If we isolate the revenue from value added services which have little to do with the core business of PayPal, revenue growth is clocked at 10%. International revenue only grew by 2% YoY. This is particularly concerning if the management team wants to meet the goal set on Investor Day. To reach $50 billion in annual revenue at the end of 2025 starting with $25 billion in revenue this year, PayPal would have to grow the top line by at least 25%. Growth at the current clip is not going to cut it. On the Q3 Investor Update presentation, PayPal mentioned that the acquisition of Paidy would add 3 million new net accounts in 2021, but said nothing about revenue lift. I suspect that the company will continue to use M&A to aid with the growth numbers in the future. Is it a good approach? It could be, though every M&A carries a certain level of risks and you can’t fault people for doubting your own organic growth if you rely on M&A.

PayPal revenue and growth

Back in Q2 FY2021, PayPal made a major change to their pricing that went into effect on the 2nd of August 2021. Essentially, merchants will have to pay PayPal more in commission when consumers use the company’s branded mobile wallets such as PayPal, Pay with Venmo, PayPal in 4. On the other hand, when consumers key in card information without using PayPal’s wallet options, merchants will incur slightly lower rates. The assumption behind this move is that PayPal is confident in the attractiveness of its own mobile wallets. According to the latest 10-Q, the company claimed that the pricing changes didn’t meaningfully affect revenue. While it sounds encouraging, it has been only two full months. So we’ll have to wait a bit before rendering any verdict.

In summary, I’d give the quarter around 7 out of 10. The numbers aren’t catastrophic. We may just see the effect from a tough comparison from last year and the rule of big numbers. What concerns me more is that I don’t have enough information as of now to believe that they can hit the aggressive goal set for FY2025.

PayPal Total Payment Volume (TPV)
PayPal TPV YoY Growth
PayPal Active Accounts

Weekly reading – 23rd October 2021

What I wrote last week

PayPal in talks to buy Pinterest

Book review: Richer, Wiser Happier: How The World’s Greatest Investors Win In Markets & Life

Good reads on Business

Jokr and Personalized Instant Commerce. The article lays out useful data and information on Instant Commerce, especially Jokr. However, I am still a bit unsure about the unit economics of these delivery services. Last-mile delivery is hard and expensive, especially at scale. The consumer stickiness is naturally low and requires constant incentives to nurture. Competitors are everywhere. Plus, the good-old brick-and-mortar alternatives generally offer sufficient value and people, like myself, like to go out once in a while for some fresh air.

Netflix Loses Its Glow as Critics Target Chappelle Special. Netflix has started to encounter what the likes of Facebook and Twitter have for years: content moderation. The company can’t please everyone; so in this case, it’s natural that one or two stakeholders are disappointed with the Dave Chappelle show. The management team believes that the show brings net benefits to Netflix and acted accordingly. Agree with them or not, you should see where they are coming from. On the other hand, some employees reserve their right to disagree with that decision and be disappointed. That happens to even within families, let alone strangers that merely work at the same place. What remains to be seen to me are 1/ how would this affect staff turnover and talent management at Netflix; 2/ how would Netflix users think about the show?

Inside TSMC, the Taiwanese chipmaking giant that’s building a new plant in Phoenix. “TSMC makes key components for everything from cellphones to F-35 fighter jets to NASA’s Perseverance Rover mission to Mars. Earlier this month, it announced plans for a new factory in Japan, where it will produce chips with older technologies, for things like household devices and certain car components. TSMC is also Apple’s exclusive provider of the most advanced chips inside every iPhone currently on the market and most Mac computers. TSMC alone was responsible for 24% of the world’s semiconductor output in 2020, up from 21% in 2019, according to the company. When it comes to the most advanced chips used in the latest iPhones, supercomputers and automotive AI, TSMC is responsible for 92% of production while Samsung is responsible for the other 8%, according to research group Capital Economics. ”

How YouTube Makes Sure Its Hitmakers Don’t Stumble. YouTube spends tens of thousands of dollars on the top YouTubers to grow their content and ecosystem. Their in-house digital agency also offers guidance and consulting services to these personalities so that they can sustain attractive videos and high viewership. This kind of support, along with YouTube or its parent company’s resources, makes it difficult for other competitors to match.

Squid Game’ success shines a light on how cheap it is to make TV shows outside the U.S. “The total cost of making “Squid Game” was just $21.4 million. Episodes of Disney+’s Marvel shows, such as “WandaVision” or “The Falcon,” cost Disney $25 million per episode — more than all nine episodes of “Squid Game”“. I’d also prefer local characters being played by true locals to by Americans.

Is Best Buy undermining its storybook turnaround? I don’t think it’s a good idea to mess with a formula that works. Especially, that formula is around customer services and satisfaction. If I were a Best Buy shareholder, I’d send the CEO and the Management Team this article with a lot of questions.

Business Breakdown episode on Uber. If you are interested in gig economy and especially Uber as a business, have a listen. Whether you are a bull or a bear, I think it’ll be worth your time

How Many Users Does Facebook Have? The Company Struggles to Figure It Out. “A separate memo from May said that the number of U.S. Facebook users who are in their 20s and active at least once a month often exceeds the total population of Americans their age. “This brings out an elephant in the room: SUMA,” the memo’s author wrote, using an internal abbreviation for “Single User Multiple Accounts.” The author added that the issue could render Facebook’s ratio of users active each day “less trustable. Facebook said in its most recent quarterly securities filings that it estimates 11% of its monthly active users world-wide—which totaled 2.9 billion for its flagship platform in the second quarter—are duplicate accounts, with developing markets accounting for a higher proportion of them than developed ones.”

Other interesting stuff

Your Guide to the Third-Party Cookie. A very useful primer on the key factor in the digital advertising world. I have been on both sides of this issue. As a marketer, I can see why companies want to get as much data as possible to hone their targeting and make the best use of their ads dollars. On the other hand, as a consumer, I absolutely hate the feeling that somebody follows me everywhere across the Web. Privacy has been on the rise and will continue to be. iOS users now have a choice to voice their opinion on the matter with ATT. I don’t know how this all will shake out, but I would think that marketers would do well if they pivoted from 3rd party tracking.

Belgium’s shift from nuclear under fire as gas price surge strains Europe. It is baffling to me that countries are moving away from nuclear energy for gas-based power.

The Greek region too remote for maps

New Viking artifacts may mean that Christopher Columbus might not be the first one to discover the America continent. I guess it’s time to keep the holiday yet change the freaking name

Stats

Gas bills this winter can be at least 30% higher than last year

PayPal reportedly in talks to buy Pinterest

A couple of days ago, media outlets reported that PayPal was in talks to buy Pinterest for what could be a $40 billion deal. Per WSJ, “the talks are at an early stage and may not lead to a deal, some of the people cautioned.” If that went through, this acquisition would be PayPal’s biggest ever. But what does it mean for the iconic PayPal? Below are my thoughts.

Overview of PayPal & Pinterest

Before we go further, let’s recap quickly what PayPal and Pinterest do, how they make money and how their businesses are at the moment.

Formerly known as a check-out and Person-to-Person (P2P) function, PayPal has grown leaps and bounds in the last few years with grandiose ambition to be THE Super App for payments, consumer financial services and eCommerce. PayPal’s services now include almost all the things that consumers need such as debit card, credit card, BNPL, online & offline payment, P2P or remittance, just to name a few. On the merchant side, PayPal has added a plethora of Merchant Services and Marketing Tools in addition to its well-known payment processing. As a two-sided platform, PayPal needs to deliver value to consumers in as many ways as possible, including enhanced and seamless shopping at merchants, while appealing to merchants with tools to grow their business from both marketing and operations standpoints. Last month, the company took a big step towards their grand vision with the new PayPal mobile app.

There are several revenue streams for PayPal. First, a bulk of its revenue is from transaction processing. For each transaction that goes through PayPal, the company takes a cut. Hence, the bigger the volume, the bigger PayPal’s top and bottom lines. Second, PayPal also charges merchants on value-added services such as loans, inventory management or point of sale. Then, it also generates fees from other services such as remittance or credit card-related fees.

The transformation of the business is also evident in the numbers. PayPal’s number of active accounts grew from 244 to 403 million from 2018 to 2021, including 76 million Venmo accounts, while the merchant base expanded from 19 to 32 million. Its quarterly Transaction Volume exploded from $139 to $311 billion, more than $1.2 trillion in annualized volume. In Investor Day 2021, PayPal disclosed their target of $2.8 trillion in annual volume, 750 million active accounts and $50 billion in annual revenue at the end of FY2025. Quite an ambitious target.

PayPal's consumer and merchant services
Figure 1 – PayPal’s consumer and merchant services. Source: PayPal

The other side of the rumored deal, Pinterest, is a visual-centric social platform whose mission is to bring inspiration to people’s lives. “A photo is worth a thousand words” is essentially their value proposition. Every day, thousands of users & brands, called Pinners, post their ideas in the form of images or videos, called Pins, to the platform. Pins can be grouped together in personalized Boards that are accessible to others. Similar to other social media platforms, Pinterest deploys machine learning algorithm to personalize suggestions of new ideas to users, based on their previous activities. Meanwhile, advertisers can take advantage of the visual-centric experience, the global audience as well as data on consumer preferences calledTaste Graph on Pinterest to optimize advertising dollars and grow their business. Over the last couple of years, Pinterest has invested in features and partnerships to enable commerce on its properties. For instance, it launched Shop from Boards, Shop from Search and Shop from Pins in April 2020. The month after, it announced a partnership with Shopify that allows Shopify merchants to upload their catalogue to Pinterest seamlessly. Earlier this month, the company introduced a few new features to help merchants and creators showcase their hard work and generate more revenue/income.

Pinners saved nearly 300 billion Pins across more than six billion boards. We call this body of data the Pinterest taste graph. Machine learning and computer vision help us find patterns in the data. We then understand each individual Pin’s relationship not just to the Pinner who saved it, but also to the ideas and aesthetics reflected by the names and content of the boards where it’s been pinned. We believe we can better predict what content will be helpful and relevant because Pinners tell us how they organize ideas. The Pinterest taste graph is the first-party data asset we use to power our visual recommendations.

Source: Pinterest

According to the latest filings, there are 454 million Monthly Active Users on the platform, 2/3 of which are female and 80% of which are outside the U.S. Even though it makes up only 20% of the MAU base, the U.S generates 78-80% of Pinterest’s revenue which came in at $485 million and $613 million in Q1 and Q2 2021 respectively. Pinterest was operationally unprofitable in the last three years, but has turned in some profit in the first 6 months of 2021. As a result, their free cash flow (FCF) has improved markedly. The company had negative FCF in 2018 and 2019 before turning in an FCF margin (FCF over revenue) of 0.73% in 2020. Their FCF margin for Q1 and Q2 2021 was 55% and 17% respectively. To put it in perspective, PayPal’s FCF margin in the last two quarters was 25% and 17% respectively.

Pinterest quarterly revenue
Figure 2 – Pinterest’s quarterly revenue. Source: Pinterest

Would the acquisition be about increasing active accounts for PayPal?

I doubt it is the primary reason why PayPal entertained this move. At the moment, these two are completely separate apps. Having Pinterest under PayPal would provide absolutely no incentive for Pinterest users to become PayPal users. Merchants that are already on Pinterest have no extra incentive to work with PayPal just because of this alleged acquisition. If PayPal decided to force the issue and fold the red app into the blue app, it would be catastrophic for both and a value killer for shareholders.

Would the acquisition be about improving free cash flow for PayPal and padding the sheets?

While Pinterest indeed posted higher FCF margin in the last two quarters than PayPal, I don’t think improving FCF margin is the driver of this move either. Competitively, PayPal is in a far stronger position than Pinterest. The former is one of the most iconic brands globally with millions of users and merchants in its network and in the leading position in its field whereas the latter is no match in terms of advertising capabilities with the likes of Facebook, Instagram or Google. The remarkable turnaround in FCF margin only happened in the last two quarters; hence there is no telling what the future would be, given the lack of strong competitive advantages. Plus, the price tag is more than $40 billion. It’s unfathomable to think that PayPal’s board would authorize such a gigantic splash for this reason alone.

Would the acquisition be about the upper marketing funnel and closing the loop for PayPal?

At the bottom of the customer experience, aka the checkout page, is where PayPal excels with its breadth of both consumer and merchant services. What it doesn’t excel at, yet, is at the upper funnel where the interest seed is planted and where reach is generated. In other words, PayPal doesn’t have the capability or expertise yet to help merchants expand the customer pool. Last year, the company paid $4 billion for Honey, a browser extension that finds online deals and presents them to shoppers. To some extent, Honey helps PayPal address the issue of lead generation, but as a browser extension, there is only so much that Honey can do, especially on a global scale. At the time of the acquisition, Honey had 17 million active users. Not everyone who uses PayPal installs Honey on their browsers. Yours truly is one of those people.

With more than 450 million users across the globe, theoretically Pinterest could be the solution to this problem. However, the question is what the customer experience of PayPal + Pinterest would look like. The ramifications may have significant impact.

At the time of this writing, users can browse for ideas on Pinterest and be directed to merchant websites for further actions without even having to leave the red app if they choose to click on the hyperlinks that come with the Pins. The problem for PayPal is that this whole journey has nothing to do with them. Merchants choose which payment processor offers the best value, not which one owns Pinterest. If PayPal forced merchants to use their own product to use the social platform, it would backfire. In this scenario, there is no strategic value add for PayPal.

One possibility floated on the Net is that Pinterest could be PayPal’s eBay. Ironically, eBay owned PayPal from the early 2000s till their divorce in 2015 and since then PayPal has gradually reduced their reliance on eBay for transaction volume. I am not sure that PayPal wants to pay a mountain of money for something that they want nothing to do with any more. Even if PayPal wanted Pinterest to become their own eBay, running a two-sided global marketplace is a resource-consuming endeavor. After pouring $40+ billion in acquiring Pinterest, PayPal would have to spare valuable resources to help the acquired firm. Given the intense competition that PayPal faces and the head start in terms of marketplace that Facebook and Instagram have, this possibility, while not too wild, doesn’t sound appealing.

What I suspect is the crown jewel that might interest PayPal is the Taste Graph mentioned above. While the new PayPal app is definitely an improvement over its predecessor, the Shop tab is underwhelming. There are a bunch of offers on the tab, but there is little personalization. Hence, I don’t think at the current state, it helps merchants drive a lot of sale. In theory, PayPal could do a lot more personalization given the data on shopping behavior that it possesses. By mining transaction data, PayPal could know which merchants are one’s favorite, how often one shops at those merchants, which product categories (using Merchant Category Codes) are popular and even what items (SKU data) are shopped the most. By working with bureau agencies like Experian, PayPal could learn about financial status of its users such as how many trades are open, the total balance of all trades, the delinquency history and all that.

The Shop tab on PayPal's app
Figure 3 – The Shop tab on PayPal’s app

What PayPal doesn’t have is the interest data outside of the transactions processed on its platform. Let me give you an example. I am a huge fan of Manchester United and Scuderia Ferrari F1 team. But you wouldn’t know it if you merely looked at the transactions on all my credit cards, let alone only my PayPal account. PayPal could work with another company to acquire this data; however, this presents two challenges. If the data is not 1st-party data, it’s usually very unreliable. The Taste Graph is Pinterest’s intellectual property and 1st data. The reliability is certain. The other problem is that who has the global footprint that Pinterest has and available for an acquisition. Facebook, Google, LinkedIn, Twitter or even Snapchat isn’t available. I am sure PayPal could find another company with 1st party interest graph for the U.S market, but it’s not easy to find it for the global audience. If PayPal is serious about meeting their 4-year target, the U.S market alone wouldn’t cut it.

For good measure, PayPal likely doesn’t have the top of wallet share for its users. In other words, if an average person spends $1,000 a month, I don’t think that user will spend everything through PayPal. If I have to guess, PayPal only sees less than 30% of the wallet share. The implication is that they have no idea about the spending pattern and interest that lies in the other 70-80% of the wallet. So if they wanted to operate a serious deal-recommending engine on the PayPal app, they would want as much data as possible. As PayPal already strives to get users to spend as much as possible through their platform, increasing the wallet share organically takes time.

PayPal offers consumers all possible checkout options: BNPL, its mobile wallet, debit card, credit card and line of credit. It definitely wants the app to be the ultimate shopping app for consumers. Right now, a PayPal user like me doesn’t open the app unless I need to send somebody money. I figure that PayPal wants users to actually open the app and spend time there every day. To do that, they need to incentivize shoppers to visit and the best way is personalized deals. To grow its merchant base, the best way is to generate sales and leads for merchants. In my mind, the alleged acquisition of Pinterest could help with these two objectives. With that being said, $40+ billion is a huge price tag and acquisitions are generally challenging to pull off, especially expensive ones. I am also concerned about how much overlap there is between the two user bases. There is also a question of engagement of international users. Despite making up 80% of Pinterest MAUs, users outside the U.S bring only 20% of revenue. Is it because Pinterest isn’t popular among international advertisers? (I know there are Pinterest users in Vietnam, but I doubt there are brands and advertisers that actually use the platform) Or is it because user engagement isn’t high? While I can try to see the logic, I am not too comfortable with this major move.

Appendix

Shopping intent on Pinterest stats
Figure 4 – Shopping intent on Pinterest stats. Source: Jareau Wade
Consumer register preferences at the start of the shopping journey
Figure 5 – Consumer register preferences at the start of the shopping journey. Source: Thomas Paulson

Weekly reading – 25th September 2021

What I wrote last week

Is BNPL replacing credit cards?

My thoughts on Visa’s new benefits for U.S Signature/Infinite cardholders

Articles on Business

When to Buy Now, Pay Later, and When to Just Pay Now. “Affirm doesn’t report payments on its four biweekly payment zero-interest loans, it said, or when consumers are offered a three-month payment option with no interest. Afterpay doesn’t work with credit bureaus at all. Sezzle Up explicitly informs users that it will report on-time payments to Equifax and TransUnion. Affirm doesn’t charge late fees, but late or partial payments can hurt your credit score, and may prevent you from using the service in the future. Sezzle Up also reports delinquencies. Klarna and Afterpay revoke access to their platform until payment is made. Both companies also charge late fees, tacked onto your next payment. Afterpay charges $8, or 25%, of the purchase, whichever is less, while Klarna charges a maximum $7, or no more than 25%, of the past due amount. Klarna said it will contact users to collect payment before charging a late fee.

This delivery app went above and beyond for its workers. Then Uber took over. Cornershop’s original operating model was more beneficial and friendly towards workers. After the acquisition, life became more challenging for drivers. It remains to be seen whether the regulation in Chile will allow workers to unionize and force Uber to recognize drivers as full-time employees. This is a classic case of conflicting interests between gig companies and drivers as well as of the important role that governments play in this conversation.

Why the University of Florida gets a ~$20m cut of Gatorade profits every year. A fascinating story on a wildly popular drink.

The Most Important iPhone Ever. “What makes the iPhone and perhaps Apple special is that it seems to deliver things that nobody asks for but then everybody wants while eschewing overshooting a performance dimension that a few demand but most won’t use. The tragedy of overservice and disruption is that if you don’t shift the definition of performance eventually you run out of demand at the top of the performance curve. That opens you up to “good enough” competition from below. Instead you need to re-define the notion of performance: compete on a new basis, reset expectations. That the iPhone can find new dimensions of performance and hence demand is effectively a solution to the innovator’s dilemma.”

PayPal Introduces Customers to the Next Digital Payments Era with the New PayPal App. “The new PayPal app will introduce new features including PayPal Savings, a new high yield savings account provided by Synchrony Bank, alongside new in-app shopping tools that will enable customers to earn rewards redeemable for cash back or PayPal shopping credit and uncover deals with hundreds of merchants. Additionally, the new app offers PayPal customers a single place to manage their bill payments, get paid up to two days earlier with the new Direct Deposit feature provided through one of our bank partners, earn rewards and manage gift cards, send and receive money to friends, family and businesses, pay with QR codes for purchases and redeem rewards in-store, access and manage credit, Buy Now, Pay Later services, buy, hold and sell crypto, as well as support causes and charities they care about.”

Other stuff

The tangled history of mRNA vaccines

Stats that may interest you

“One in five consumers made a purchase using a “buy now, pay later” service within the last 12 months.

One in six consumers who made a buy now, pay later service purchase regret doing so, commonly citing high interest rates, a lack of options to build credit, or making unnecessary or unaffordable purchases.”

There have been 47 startup venture deals in Africa in 2021 so far with the average deal size of $21 million

CPC on Amazon ads is $1.27 in August 2021, up from 86 cents from a year ago, according to a survey

31% of online grocery shoppers use PayPal, according to a new study by ACI Worldwide and PYMNTS

Fuel Wasted Due to U.S. Traffic Congestion in 2020 Cut in Half from 2019 to 2020

14% of U.S consumers said they switched to an iPhone from another operating system in the last two years, a report said

Weekly reading – 11th September 2021

What I wrote last week

I did a quick review to show which remittance services you may want to use to transfer money to Vietnam or India

My reservation on PYMNT’s study on Apple Pay’s usage in stores

Interesting articles on Business

Why the global chip shortage is making it so hard to buy a PS5. In the silicon manufacturing process, for the most advanced tool inside a fab, typically you’ll have hundreds of different tools. Actually in a large fab, like one you might see at TSMC (Taiwan Semiconductor Manufacturing Company), you’ll have thousands of these tools. And these tools are big machines that process these wafers and do various things. And most tools cost, starting with a couple of million dollars, to the most expensive tools are in excess of 150 million euros. In Asia, they’ll build these things in a year. They’ll move in equipment in the second year, get it qualified, running, by the end of the year. In the US, or in the West, it takes a lot longer, because we don’t have the same mentality they have in Asia. We’re going to do all the permitting, all the hearings, and all that stuff. So it wouldn’t surprise me if it took 50 percent longer to twice as long. Now, let me tell you why that’s a problem. Because to your second question, a modern fab these days, one of the closer-to-leading-edge ones will cost you $10 billion-plus for the smallest efficient scale, and a really efficient scale will probably cost you closer to $20 billion. Think about how much depreciation that can generate. In Asia, the mentality is every day, every hour this thing isn’t running costs me tens of thousands, hundreds of thousands, sometimes millions of dollars. I’ve been in Asia on Christmas Day, and there are people out there with jackhammers and pouring concrete because it was like, “Man, every minute this thing gets done sooner, we can start generating cash.” We do not have that mentality in the West.”

Companies Need More Workers. Why Do They Reject Millions of Résumés? A gap on a resume should not be used to disqualify a candidate immediately. Many need to take a break, whether it was because a family member was sick or it was for their mental health. A less-than-stellar historical record shouldn’t disqualify a candidate either. We all make mistakes and we all deserve chances. Plus, if someone has the necessary skills, does it matter where they got those skills? Does it matter if they don’t have a degree? We use software to evaluate hundreds, if not thousands, of applications a year. It’s understandable. But I do believe that we can write better software to accommodate hiring needs and give people chances.

The surprisingly big business of Library E-books

PayPal To Acquire Paidy. PayPal agreed to acquire Paidy, a BNPL provider in Japan, for $2.7 billion in cash. Paidy reportedly has 700,000 merchants and more than 6 million users. As PayPal itself already has more than 400 million users, this acquisition isn’t likely about inflating the user base. The second reason is likely capabilities. Paidy, which shoppers can use without creating an account first or using a credit card, has a proprietary machine learning models to evaluate credit worthiness of consumers. In other Asian countries, it’s not uncommon for shoppers to pay cash on deliveries for online orders. Perhaps this is something that PayPal wants to replicate in other Asian markets.

Australia’s Top Court Finds Media Companies Liable for Other People’s Facebook Comments. The Court’s argument is that media companies post articles to stimulate conversations and engagement through comments. Hence, they should be liable for such comments. I don’t think that line of reasoning totally lacks solid grounds. I mean, a company’s Facebook page is essentially its property where it has the ability to curate (with Facebook’s help, of course) and it should have some responsibility for defamatory comments taking place there.

Source: CNBC

Stuff that I found interesting

This wildly reinvented wind turbine generates five times more energy than its competitors. This proposal, if materialized, can generate power for up to 100,000 households with one station while reducing the waste that is usually seen with the traditional turbines.

A great series on the study of obesity

Stats that may interest you

Mobile transactions in Vietnam are expected to increase by 300% between 2021 and 2025

Apple has around 52% to 57% of the mobile game transactions market (page 138)

Even though Apple doesn’t have a separate P&L for its line businesses, the Court found that the App Store’s operating margin is approximately 75% (page 145)

What remittance providers you should NOT use

For many immigrants such as myself, remittance is part of the life living overseas. We work hard here and send a bit of help back home whenever we can. In normal times, such assistance is a nice touch. In times like this when many parts of the world such as Vietnam are in strict lockdown because of Covid, it becomes even more critical and appreciated. In times like this, it matters more which remittance providers we entrust with our money to family and loved ones. In this post, I’ll tell you which ones I’d use myself, what I’d not and why.

When it comes to choosing a provider through which I can send money back home, these are the main selection criteria:

  • Are they reliable? This is money we’re talking about. Of course, we want it to be safe and secure. Luckily, the most popular services on the market have a good reliable track record. If not, they wouldn’t service in this business.
  • How long will it take for money to be deposited? Nowadays, it takes much less time for recipients to see money show up in their bank accounts than it did just a few years ago. A transfer can arrive at the receiving account in a few hours or within a day. My experience is that the top providers can transfer funds at pretty much the same speed.
  • How much does it cost in total? This is THE deciding factor. Influencing the net amount that recipients receive are the fees and the exchange rate. The best way to evaluate different services is to look at the final amount that will be credited to the destination account.

I conducted two experiments in which I looked at what would happen if I transferred $1,000 to Vietnam and India using the most inexpensive method through 6 select providers: Xoom/PayPal, Money Gram, World Remite, Ulink Remit, Western Union and Wise. Here are the results:

$1,000 from the U.S to Vietnam$1,000 from the U.S to India
Wise22,544,180 VND72,450 INR
Money Gram22,537,350 VND72,663 INR
Ulink Remit22,226,000 VND72,565 INR
World Remit22,140,076 VND71,930 INR
Xoom/PayPal22,348,000 VND72,034 INR
Western Union22,468,068 VND72,606 INR
Figure 1 – Net amount received when $1,000 is sent to Vietnam & India using different remittance services

In both cases, Wise, Western Union and Money Gram are very competitive. Ulink Remit should be considered if the destination is India. Both World Remit and PayPal should not be considered. I don’t know about the value of a few Rupees in India, but if I have to lose a couple of thousand Vietnam Dongs on every $1,000 sent back home, I’ll be put off. Personally for me, Western Union, Wise and Money Gram will be the go-to services to send money to Vietnam. What is yours?

Net amount received when $1,000 is sent to Vietnam through different providers
Figure 2 – Net amount received when $1,000 is sent to Vietnam through different providers
Net amount received when $1,000 is sent to India through different providers
Figure 3 – Net amount received when $1,000 is sent to India through different providers

Figure 4 – It’s weird to see WorldRemit is the recommended provider here

Weekly reading – 4th September 2021

What I wrote last week

Important investing lessons that I learned

Business

Google Pay team reportedly in major upheaval after botched app revamp. 92% of mobile wallet transactions in the U.S in 2020 were on Apple Pay. If I were an Executive at Google, I’d question why a firm with limitless resources, world-class engineering and ownership of Android couldn’t get Google Pay to be an equal competitor to Apple Pay. One can argue that Apple should have some credit with popularizing Apple Pay. If the driving force were the Cupertino-based company’s dominance and monopoly, why wouldn’t Google replicate that success with its own digital wallet?

How one woman helped build the #AppleToo movement at tech’s most secretive company. I never want to read about anybody being mistreated at their workplace. This #AppleToo movement is no exception. I am very disheartened to read about a group of folks being mistreated and disrespected, especially at a company that I long admire for other reasons.

PayPal is exploring a stock-trading platform for U.S. customers. It came as no surprise to me that PayPal is planning to launch a stock-trading feature. The ambition to be the Super App for consumers’ financial needs has been in full swing for a while. The company is putting the pieces of the puzzle together and this is one of them.

Affirm Holdings’ Moat: Why World’s Largest Retailers Want Affirm. I don’t necessarily agree with everything said in this piece, but that doesn’t mean it doesn’t have some good points.

Why Marta Ortega Pérez Is the Secret to Zara’s Success. This is one of the more interesting points in the article: Every morning after dropping off her son at school, Ortega Pérez gathers with the company’s CFO, Miguel Díaz, and other top staff around an industrial table out on the open floor to review global rankings for such bestselling pieces as a minimalist black spaghetti-strap summer dress, or a rococo printed pajama-style blouse with matching shorts. Orders heading to stores are constantly adjusted, an anomaly in an industry that typically plans merchandise drops well in advance. (Zara’s operations are supported by an in-house technology product team that uses  Netflix as a measuring stick for both consumer-facing and back-of-house innovations, including a mock fulfillment center floor set up to study the movements of a box-moving robot.)

To appease Japan Fair Trade Commission, Apple agreed to relax its anti-steering rules for Reader apps globally. What it means is that the likes of Spotify and Netflix should be able to sell digital goods to consumers without paying commission to Apple by adding a link to an outside webpage. Historically, Apple was vehemently against this, but the regulatory pressure has been piling up around the world so I guess this is Apple’s pre-emptive action to hopefully get some relief. I have seen some developers skeptical of how this change in policy will actually pan out. I mean, they have reasons to, but given the resources and clout at Apple’s disposal, this is a great step for developers. For consumers, this remains to be seen. One of the selling points of the App Store is that consumers feel safe whenever they make a purchase. Since Reader apps can now direct consumers to outside the App Store, it will depend on who will make the determination as to which app can qualify for the new policy. There remains a possibility that some developers with a harmful agenda can camouflage their app as a Reader App and commit fraud.

Apple Plans Blood-Pressure Measure, Wrist Thermometer in Apple Watch. Apple’s positioning of the Apple Watch is very smart. It’s not trying to compete with normal watches whose main function is to tell time or luxury watches whose main value is the bragging rights. By focusing on the watch wearers’ health, Apple sticks to its core value of providing hardware that is personal to consumers and its strengths, mainly the combination of hardware & software as well as its ecosystem.

How Disney and Scarlett Johansson Reached the Point of No Return. The legal debacle with Scarlett Johansson is unfortunate and worrying as it foreshadows what could be in store for Disney in the future if they didn’t learn from this lesson. According to the article, it could have been avoided, yet here we are. Plus, the pandemic, the interconnectedness of Marvel storylines, the pressure on the bottom line and the priority status imposed on Disney+ make release distribution a delicate matter. While Black Widow brought in $60 million in extra revenue and profit from the Premier Access, Kevin Feige, the Marvel boss, wasn’t happy about it. Putting “Black Widow” on Disney+ conflicted with Mr. Feige’s tiered approach—creating TV shows that complement movies on the big screen. He resisted plans for the movie’s simultaneous release, in part because he didn’t like the idea of having one of Marvel’s few female-driven movies demoted to the at-home streaming service, said people familiar with his thinking.

Other stuff I found interesting

Indonesia, More Majestic Than Ever by Boat. I have never been to Indonesia, but I’d love to. And of course, by boat, if possible.

These charts show which states will get the most money from Biden’s infrastructure bill. Regardless of the criticisms of this bill, I am pleased to see more investments in the embarrassing and decaying infrastructure in this country.

Can ‘smart thinking’ books really give you the edge? Makes you really think about it

Stats that may interest you

Vietnam saw $16 billion in remittance in 2020

52% of young adults in America lived with parents in 2020. The figure jumped to 71% for people aged 18 – 24

Cash accounted for 78% of transactions at Point of Sale in the EU in 2020

YouTube Music hit 50 million subscribers, up from 30 million reported in October 2020

Weekly reading – 21st August 2021

What I wrote last week

I came across a couple of posts from Afghanistan veterans on their experience there

My notes from the 2021 Debit Issuer Study

My thoughts on recent developments from PayPal

Business

Inside HBO Max’s Scramble to Fix Its Glitchy App. In the streaming world, the user experience is critical in keeping customers engaged and the churn down. HBO Max fumbled the ball terribly with their confusing brands, products and messaging in the beginning. I don’t think I am a dumbass, but I didn’t even know the difference between HBO, HBO Max or HBO Now. Then, they out together an app that was littered with bugs as summarized in the article. The reason, as reported, is that they merged the two legacy apps that were built for different purposes. One was built to offer ad-free content while the other featured commercials. It is not a surprise that bugs happened. What is a surprise is that an institution like HBO or Warner Media let it happen in the first place.

Amazon Plans to Open Large Retail Locations Akin to Department Stores. This move may be Amazon’s attempt to copy what other retailers like Target do. They fulfill online orders from their network of stores. It takes a lot of stores to cover the country and logistics management to figure out the inventory and the actual shipping. We’ll see.

Walmart’s e-commerce business is set to hit $75B in sales this year

Paying With a Credit Card? That’s Going to Cost You. If this trend is legit and merchants continue with the surcharge (which is not an uncommon practice in Vietnam), it and the growing popularity of BNPL will have adverse effect on credit card spend. Remember: BNPL is mostly funded through debit cards

How the Apple lobbying machine took on Georgia, and won. Apple is my largest position. However, I found the whole lobbying issue troubling. It’s nothing different from companies writing bills and lawmakers enacting such bills.

What I found interesting

‘Likes’ and ‘shares’ teach people to express more outrage online

China Passes One of the World’s Strictest Data-Privacy Laws

Another excellent post by Morgan Housel. In light of what happened in Afghanistan today, I can’t help but think about what small events in the past could have prevented this war in the beginning and what would happen to the people of Afghanistan in the future after the U.S pulled out

One is to base your predictions on how people behave vs. specific events. Predicting what the world will look like in, say, 2050, is just impossible. But predicting that people will still respond to greed, fear, opportunity, exploitation, risk, uncertainty, tribal affiliations and social persuasion in the same way is a bet I’d take.

Another – made so starkly in the last year and a half – is that no matter what the world looks like today, and what seems obvious today, everything can change tomorrow because of some tiny accident no one’s thinking about. Events, like money, compound. And the central feature of compounding is that it’s never intuitive how big something can grow from a small beginning.

Source: Collaborative Fund

Stats that may interest you

50% of surveyed Americans have no problem with false information online

Target’s Circle Rewards Program reaches 100 million subscribers