• Alumni

Activity Feed

On November 1, 2015, DD1 commented on SoFi: Crowdfunding Student Debt :

I wonder how sustainable and advantaged this company’s business model is outside of the very specific top MBA market.

To your point, what is preventing users from multihoming, or better yet, what is preventing competitors from instituting a price match? “Show us paperwork from one lending platform for a certain rate and we’ll match it”

Definitely see this as an interesting opportunity, especially if the initial focus is on partial funding of a film as opposed to the entire budget.

I believe most studio blockbuster movies currently get funded in groups of a dozen, or twenty, or thirty films (someone correct me if I’m incorrect)? This is an effort to reduce risks associated with the home run nature of the film industry. This seems like a great option for lower budget films.

Interesting company. I wonder if multi homing is actually an issue for businesses in this space. they should all be charging their customers a lower fee as a % of AUM as an individual customer increases their AUM.

I suppose a major question is whether motifs are going to perform well over time or if they are just going to induce more momentum trading for retail investors.

On October 5, 2015, DD1 commented on Just Venmo me. :

Yes, they currently capture interest on user’s Venmo balances. More frustratingly, if you have pay a charge that is higher than your venmo balance, they pull the entire amount out of your bank account rather than eliminating your venmo balance and then dipping into your bank account for the residual amount.

To the point below about Apple Pay crushing Venmo: This is a potential threat but isn’t it highly likely that a peer to peer payment network through apple pay will only available to iOS users (same for google wallet / android)? In that case, Venmo has the benefit of working across platforms. Multihoming is kind of a pain, in my opinion, and I wonder what kind of incentives apple pay or google wallet can provide to convince users to multihome.

On October 5, 2015, DD1 commented on The Knot : Maximizing Value in an Evergreen Industry :

I like XO’s business and do agree that content is key in providing a differentiated service vs. Amazon or other larger e-commerce platforms. One aspect that shouldn’t be downplayed is the viral factor of the registry business. Each couple that signs up leads to dozens if not hundreds of new leads, as the couple’s registry invitees provide their information when they purchase gifts.

Where I do worry about XO’s core business is in providing the highest quality offering. Good content is available across many platforms and at the individual product level the Knot is far from the best place to find peer reviews. Ease of use, reliability, and technological innovation (for example being able to use an app to manage the registry, using your phone to scan items at any retail store and add them to your registry, or being able to pin any item from any website to your registry) will be the keys to gaining or maintaining market share.

I also think that different couples with different tastes and economic means will gravitate to the offering that fits them best. I see an opportunity for multiple players in the industry who cater to different customer cohorts. Said another way, I don’t necessarily believe the network effects are strong enough to justify dominant market share by a single platform.

Is this a winner take all type of business? What will prevent users (both lenders and borrowers) from multihoming. If the answer is simply “better interest rates” then I could see this being a volatile, low margin business. Can they capture value outside of what is effectively an origination fee? I wonder if better algorithms for assessing credit are truly a sustainable competitive advantage because 1) the incremental improvement in loss ratio from better algorithms will likely diminish rapidly and 2) existing players, like banks, have a lot more data.

@Julie: Betterment is more of a full stack business (i.e. vertically integrated) as compared to wealthfront, which may allow it to have a lower cost structure long term.

I like the concept of low cost beta investing (although there’s really nothing THAT special going on here and the “technology” is not a true barrier to entry as evidenced by Wealthfront and Betterment both pretty much having the same capabilities) but I worry about customer acquisition costs, which is where I bet these companies are spending the vast majority of their money (read: cash is being burned and not necessarily on technology). I like that Betterment has supplemented their B2C model with Betterment Institutional, which is focused on providing technology to financial advisors (at both independent firms and large firms). This is a more sustainable business model in my opinion.

As an aside, I think a real opportunity is in retirement income, a problem which neither firm is ready to tackle at this time (Betterment is trying but they only work with single accounts. Retirement income is an optimization problem that must occur across several accounts).

On September 14, 2015, DD1 commented on Does Best Buy live up to it’s name? :

I think Best Buy has a few things going for it, namely scale and dominant market position (implies importance to vendors and customers) as well as the omni channel consumer experience (brick and mortar and online) as mentioned in comments above.

Interestingly, the company has been doing quite well over the last two years under new management. They have been able to do a few things:

1) invest substantially in price to maintain market share
2) begin a mix shift of products to things like home appliances which aren’t as easily sold online
3) development of store-within-a-store concepts with companies like Samsung
4) improving their supply chain / rationalizing costs and figuring out where they may have a competitive edge

also, who would have guessed that they’d still be selling so many TVs??

In terms of long term sustainability, I think Best Buy will have to change the consumer’s mindset from a single transaction focus to a more long-term relationship. Not sure how they do it.