A few things to explore ahead of today’s Apple announcements:
- Mobile tech indicators
- How the internet has woven itself into American life
- Expert predictions on the rise of wearables
As of January 2014:
- 90% of American adults have a cell phone
- 58% of American adults have a smartphone
- 32% of American adults own an e-reader
- 42% of American adults own a tablet computer
Note that tablets have the fastest rise of any of these innovations (and ebook readers could be considered as a minimal subset of tablets, which would make the rise of tablets even more steep).
I’m attending Techcrunch Disrupt in San Francisco this week, and my expectations are hedged by my experiences. Yes, for every Yammer — a company whose value proposition was immediately obvious to me, and who went on to a $1.3B acquisition by Microsoft — there are dozens of would-be world beaters that attend and fall from sight.
Max Levchin, the founder/CEO of Affirm, and founding CTO of Paypal, was the hands down most human person in the morning’s interviews. In a oddly cadenced interview by Alex Wilhelm of Techcrunch, Levchin’s desire to embrace the notion of disruption — in Affirm’s case, the financial services market — clearly came through, but more importantly it’s clear that he’s focused on providing value for users, and not just valuation of his business.
Affirm is trying to help millennials and other individuals that may have less access to low cost credit, and to do so at the point of sale, when buying from affiliated online commerce companies, a product called Split Pay. Affirm determines credit worthiness, presents the individual with clear monthly payment options, and then makes the payment to the ecommerce site in full on behalf of the individual. Levchin believes this may drop the interest paid by as much as half, from 29.95% on average to 16%, or so. Then the users pay the company in monthly payments, by check, credit cards, or other means.
A few snippets from the interview, offered by Levchin:
I measure my success by whether my products are used by hundreds of millions of people happily.
Your social security number has sort of been replaced by your mobile phone number b/c it carries so much info.
Basically, Levchin’s goal is to be able to assemble a picture of the creditworthiness of individuals with little credit history — a ‘thin folder’ — because they have little credit history. They are able to do this by amalgamating information from non-traditional sources:
Affirm’s credit model is based on 70,000 to 80,000 pieces of data describing each potential customer, including everything from the operating system on his phone to his social media presence.
The Affirm algorithm crunches in a way that traditional banks don’t. So Levchin is starting to disrupt banking with modern technology, and building a company that could be used by millions.
I wonder about other products that Affirm may roll out in the future that might be similar to split pay. One other obvious area is loans to small businesses, particularly start-ups, which suffer the same problems of millennials: the thin file.
Levchin stated that the company has loaned somewhere between $1M and $10M in Start Pay loans, and projects that $100M would be loaned in the next year. At that rate, small businesses might be borrowing from Affirm in the next few years, disrupting the banks from another angle.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.
Thomas Pynchon, Is It OK To Be A Luddite?, NY Times 1984
The Motorola Hint is an earable, not a headset http://t.co/3G4UPmOfv6 a wireless earbud to control your smartphone— Stowe Boyd (@stoweboyd) September 5, 2014
Gov. Jerry Brown, during last night’s gubernatorial debate with Republican rival Neel Kashkari, talking about a law that would make California the first state to impose a statewide ban on single-use plastic bags. (via latimes)
An algorithmically curated Twitter will look more like television - Zeynep Tufecki http://t.co/naGW8hGV1K What advertisers like— Stowe Boyd (@stoweboyd) September 5, 2014