Paul Wallbank – Brilliant Communications

Tag: business

  • Data driven lending

    Data driven lending

    Banking has always been a data driven business, understanding borrowers and the risks they present is one of the essential skills in making money from lending.

    The new wave of payment startups present a new way for lenders to analyse risks; with real time data aggregated across businesses and regions, lenders can quickly decide wether a borrower is likely to able to pay the money back with the conditions asked for.

    Payments company Square in its latest pivot has partnered with Victory Park Capital and claims to have extended more than $100 million in capital to more than 20,000 merchants writes the New York Times.

    Like other payment companies that have entered this market, Square uses their own deep understanding of their customers’ incomes to be able to make a data based decision on the creditworthiness of applicants.

    Square also offers ancillary data-driven products created for small businesses. The new instant deposit product, which is still in testing and will be fully available in the spring, will give businesses faster access to money they put into a debit account. And the company’s new charge-back protection service will cover some disputes between consumers and merchants.

    Those products also rely on data that Square has collected. They will be available only to small businesses that have a solid financial track record, based on a history of accepting payments with Square.

    Square is by no means the first business to do this, last year we wrote of PayPal’s move into small business lending and Point of Sale hardware manufacturer Verifone retreated from the market two years ago calling it ‘fundamentally unprofitable.’

    The competition in the space and the fact assessing financial risks isn’t exactly a core competence of Silicon Valley start ups indicate Square’s and other companies may find small business lending a tough business as well.

    Despite that, small business lending is a field that is overdue for disruption. With companies like Apple, Google and Amazon all offering payment services, the logical expansion is into evaluating risk and profit.

    It may not be Square, Verifone or PayPal who ultimately redefines the sector, but it will be one of today’s tech businesses that does.

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  • Why being a unicorn could be a bad thing

    Why being a unicorn could be a bad thing

    Andrew Wilkinson doesn’t want to be a unicorn. In Why I want to be In-N-Out Burger, not McDonalds, Wilkinson describes how he’d rather his business is a sleek racehorse rather than a beautiful, mythical creature.

    One of the misunderstandings in the current startup mania is the motivation of founders and proprietors; many haven’t gone into business with the aim of flipping the company to a rich sugar daddy for a billion dollars.

    In his great presentation “Fuck You, Pay Me” – essential viewing for anyone starting a business – San Francisco designer Mike Montiero describes “We wanted to pick and choose the clients we were gonna work with and we wanted to be responsible for what we’re putting out in the world.”

    For businesses like Montiero’s and Wilkinson, having a venture capital investor looking over their shoulder would be as bad as working for a corporation; ceding control of your work is exactly the reason they started their businesses in the first place.

    While the Silicon Valley venture capital model is valid for high growth businesses that need capital to scale quickly, most ventures don’t need those sort of large cash injections early in their development – for many, a million dollar cheque from a VC could prove to be a disaster.

    There’s myriad reasons why someone starts a venture and all of them pre-date the current startup mania, it’s why every business is different in its own way.

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  • Closing the video store

    Closing the video store

    The last video store in my neighbourhood is closing down. A few years ago there were six in the suburb.

    Last year the US Blockbuster chain closed down its disk rental business and now the same thing is happening in Australia as people move from playing DVDs to streaming or downloading from the internet.

    In a generation the video rental industry went from nothing to boom to nothing again; a classic case of a transition effect.

    The rise and fall of the video rental industry is a cautionary tale of how yesterday’s hot new industry can become a dinosaur within a couple of decades.

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  • Technology’s crisis of trust

    Technology’s crisis of trust

    Last night for the monthly ABC Nightlife tech spot we looked at Samsung’s spying TVs and some of the other aspects of security with connected devices.

    During the listeners’ calls it became very clear many are worried and scared by technology’s rapid progress. This is a challenge for the leaders of both the tech industry and governments.

    Trust in the tech industry isn’t being helped by the revelation Lenovo computers have been loaded with Adware that, among other things, interferes with secure website connections.

    Lenovo’s actions raise a serious concern for business as many of those home units may have been connected to office networks under corporate Bring Your Own Device policies and the spoofing of security certificates could cause no end of problems and risks for IT managers.

    Another concern Lenovo’s actions raise is about the Internet of Things; if various devices on a network are messing with data integrity, confidence in the information being generated is eroded.

    For the tech industry, it’s essential to regain the community’s trust. Equally however it’s essential for business and political leaders to have an honest conversation with voters and workers on how the structure of the workforce is changing.

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  • Adapting to a new economy

    Adapting to a new economy

    Taxis have gotten their ass kicked” says Hansu Kim, owner of San Francisco’s oldest taxi company.

    Kim’s company, DeSoto, is changing the name it has held since the 1930s to Flywheel in an agreement with the taxi hailing app of the same name. The San Francisco Chronical describes how DeSoto and the city’s other taxi companies are finding times tough now Uber and other services have moved into what was a safe, regulated business.

    DeSoto’s move is a sign of the times as older business models evolve; moving to an app based hailing service improves the experience for everybody in the cab industry and radically changes the economics of getting a ride across town.

    The main reason for Uber’s success is being able to identify both drivers and passengers which improved confidence in the system. In turn, this changes riders expectations and taxi’s fare structures.

    For companies competing with Flywheel the question will be do they participate in this service or do they create their own app. For the industry in general it makes sense to share the infrastructure but for uses it may well be in their interest to have competing apps with different levels of service.

    As the levels of car ownership continue to fall, how taxi hailing and car hire apps evolve will drive the development of our cities through this century. DeSoto and Flywheel’s experiment is the start of many as older businesses adapt to a changing economy.

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