??Brain Food - 12th July 2020

Fintech never sleeps. In my more than 11 years in fintech, there has never been a more exciting time than right now. Here are 4 Fintechs you should check out, 2 podcasts as well as some tweets, blogs and commentary. This is basically notes from the week :)

4 Fintech's ??

• Braid ?? - Is the debit card for groups. Combining messaging and money into one. Users create "groups" which is a shared account where you set rules, invite friends and then spend together. Holidays, camping trips, buying a big present? Many uses. I can hear the "that's not a product it's a feature" crowd already, but incumbents say that about everything new. There's really something to a specific group context that needs to be better.
• Rippling ?? - Is an "employee platform", HR, benefits, payroll, device management and app integrations all in one place. So it's Bamboo HR, Zenefits, Jumpcloud and a little bit of Zapier. This "COO / CFO" tech is becoming a hot space. One to watch with Kleiner Perkins as investors. (Side note, love that the CEO and co-founder's Linkedin title is "Customer support at Rippling" ?? )
• Digits ?? - Real time cashflow analytics that sits on your existing accounting package. So if you have Quickbooks or Xero you integrate Digits, and it sets about finding trends, anomalies and can alert to any recent activities. Making spend searchable, or identifying which vendors a business is paying is way harder than it should be (just ask your COO). Very cool, came out of stealth in April with a $10.5m Series A and Benchmark and GV in the cap table. Brilliantly packaged and done. Learn from this.
• Airwallex ?? - Not a young company by any stretch, Airwallex is an account and payments platform for merchants who transact globally. Like if Transferwise borderless account, Currency Cloud and Brex had a baby ??. Sequoia, Tencent and DST Global (among others) have invested $362m to date. If you hadn't heard of them... well now you have :)

2 Podcasts ??

Invest like the best - Charlie Songhurst - Lessons from 483 investments ??

• Team Cohesion mechanism: Get people to stack their vices and virtues. It's a way of finding people who like the same things. Three virtues, work with people you like, working on amazing problems, impact. Three vices rank power, money and fame. Someone is more interested in money, tends to be more interested in capital efficiency (will watch costs), Power motivated tend to be better at execution etc. ??
• Why startup's succeed or fail. Dominant failure mode for startups, at seed it's usually the team doesn't work well together. Series A, failure to get product market fit is the biggest failure mode. Series A / B, managerial economies of scale are a thing. There is a declining curve of each persons productivity as a business scales. Great startups when they go from 10 people to 100 people, output per person drops 10%. For bad startups, output per person goes down 90%, now your costs have gone up and your productivity has not. ???♂?
• More senior hires scale well but create their own problems. You can ask a senior exec to "build a product division" or "open a geography" and they can. But the chance of them bringing politics with them is high. A great company spends only 25% of it's time in politics. The job of a founder is to dampen inter departmental politics. ??
• People study greatness when they should study failure. The cult of the genius CEO Founder ignores the journey. If you were to meet Jeff Bezos in 1997, it's not the same person you'd meet today. There are so many common mistakes in startups (e.g. a bad capital raise, not exiting first employee that doesn't fit fast enough). Focus on avoiding common mistakes to allow greatness to emerge. ??
• People hire too quickly when they get funding. Entrepreneurs have a desire to move fast and for speed, hiring bulges around a capital raise. Hire slower. Much slower. What's the chance you can find 8 of the 10 people you need in 90 days who are exceptional? Your chances are lower if you try to bring them in. In addition, bringing in 5 mediocre people creates that culture of it being ok. ????
• Everything looks over priced because everything is changing. Investors thought Apple was over valued because they compared it to Nokia. Investors so often miss the value of tech because they look for precedent. VC and west coast investors look for things without precedent.
• Highly boring, highly complex subjects are hard to find entrepreneurs in. The problem with Space tech is because it's very interesting, so there's insane competition. Audit software doesn't have that competition. Therefore your chances of success is higher. And yet, the impact you can have something like Audit is probably outsized to what people realize. ??
• The rule of 1975, people born before that never had computers at school. Age is highly correlated with opinion on tech. Video game was seen as only for kids until those kids grew up and had kids. The physical tangible emotional experience of physical goods does gradually erode as habits reform around digital.
• Crypto is the most interesting study of the observer rather than the subject. It is an ink blot test. Typically younger people view it as more intuitive, older people struggle with it not being tangible. There are exceptions to this rule, but it speaks to your world view. ??

Fintech is still the biggest problem to solve with the potential for many trillion dollar market companies in the coming decades. ??

20 Minute VC - Joe Lonsdale - Company Building and Investing??

• History teaches us a massive amount about investing. History shows processes of how the world evolves. The forms of government that emerge over the last 1000 users are influenced by the types of warfare that emerge. (Simon's note, physical military and nuclear war, USA does well, cyber war, China?) ??
• Rule: If Mckinsey could have written this, it's not good enough. ???????? If it's consumable by anyone then it's probably not right for an investment or to push a product forward. Challenge the status quo, if you end up in the same place, at least you did so with rigor.
• To grow talent help them over find and then over emphasize what they're great at. Leadership is about giving great people confidence and really seeing them, and why they're unique ?????

Great Tweets ??

Social Commerce: It took a moment for me to really get the gravity of what Allison is saying in that thread.

But when you consider WeChat. WeChat has so much more user context, where a celebrity can do things like give an offer to people who just bought their new album. Coffee shops can give out offers based on the weather in your local area and your preferences.

This one speaks for itself...

Big tech's are slowly becoming incumbents, and here is how it will play out..

That's all for this week. What did I miss?

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