Money often costs too much – a look at Adyen (ADYEN:EN)

“Only two ways to make money in business: One is to bundle; the other is unbundle.” – Jim Barksdale

In the last post, I talked about the history of merchant acquiring and how the industry evolved. This post talks about the natural progression of the trend and the rise of the full stack acquirer.

A quick recap

The core jobs to be done for merchant acquiring is to enable a merchant to accept credit card payments. It started with one institution, the bank, and then unbundled into a plethora of entities. We now have a complicated ecosystem consisting of the card networks, issuing banks, acquiring banks, payment processors, and the alphabet soup of PSPs and MSP’s. Merchant acquiring transitioned to being a commodity business and scale became king. The need for scale caused the companies to grow via acquisition.Read More »

The history of merchant acquiring |Rise of the full stack acquirer

Ayden was the next pick for the Fintech PM guild’s next 10k session. As I dug through their financials, I realized that I wasn’t familiar with the history of the business they were in. Why does merchant acquiring exist as an industry? What is the history of this business, why does it exist the way it does today? Let us take a step back and take a walk through memory lane.
 
To understand any system it is useful to have a framework around the core jobs to be done in the system. In a payment system, money is the main asset exchanged between parties and there are three main jobs to be done.

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Writing strategies for the beginner

A compendium of the advice that I can impart to aspiring writers. None of this is rocket science! Take what is useful to you, whatever makes you write – go for it!

Dilbert: Maybe try writing something. | conversation is an engine
Credit: Scott Adams

Have a why that is inwards focussed

Channeling my inner Simon Sinek, the “why you want to write” is the most important thing to get right. Are you writing because you like writing? because you want to build a brand? because you want to learn something? My #1 tip is to focus on the inward reasons rather than the outward reasons. Most folks I talk to approach it as a brand-Read More »

Access to the central bank, the final frontier for fintech?

I’ve been spending some time thinking about the long term implications of increasing central bank intervention (primarily the US Fed), and how that changes the landscape of banks and fintech. What follows is an attempt to flush out an idea of how Fed intervention is good for fintech in the long run.

I have a simple framework to think about how banks work. Banks have two sources of profit, user profit, and risk profit. User profit is what customers are willing to pay for services that provide value. Some examples are, charging for managing your investments, the entire process of giving you a loan (origination fee), converting currency, processing payments, etc. Risk profit is what banks earn by the nature of providing maturity transformation and inventory facilities. Some examples are loans (compensated for taking credit risk) and market-making (compensated for taking inventory risk).Read More »

PM superpowers in these troubled times – coronavirus edition

First an announcement. I have jumped on the newsletter bandwagon and am on substack 🙂 It’s an easier way to consume content – you don’t need to come back to the blog week after week, my posts will arrive straight to your inbox. Subscribe here.

And now back to our regularly scheduled programming. Today’s topic: How should product organizations change due to coronavirus?

Executioncartoon
Credit: Scott Adams

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To travel is to live – A journey through Booking Holdings (NYSE:BKNG)

I’m a broken record on this topic :), reading 10ks is the best free learning tool if you want to understand how businesses work. We have a 10K a month group as part of the Fintech PM guild and this month we tackled the travel behemoth, Booking Holdings.

What is Booking holdings?

Booking Holdings is the holding company for a constellation of brands and is an Online Travel agent company (OTA) that primarily serves the international market (Ex-US). It was previously known as the Priceline Group, renamed to Booking Holdings in 2018, and is listed on the NYSE (BKNG). The founding of the company has its roots in the acquisition of booking.com by priceline.com in 2005. They are headquartered in Amsterdam with operations in multiple countries. Their main brands are Priceline, booking.com, Kayak, OpenTable, and Agoda. In 2019 they did ~$15B in top-line revenue and their current market cap is ~$62B. A majority of booking.com revenue is driven by hotel bookings.Read More »

No place like home – A look into Zillow (NYSE:ZG)

I’ve often talked about 10K’s as being the perfect way to get up to speed in a new industry. Once a month a few of us PMs get together and do a deep dive on a particular company via its 10k. We call it our “10K a month” club :). Drop me a note if you want to be added to the group, the more diverse viewpoints the better the learnings! Last month we researched and chatted about Zillow. Highlights from our conversation follow.Read More »

Dear Tech CEOs, start learning about the history of finance | History repeats edition

A16z’s Angela Strange has a very correct take on where financial services are heading. In the future, every company will need to offer financial services in order to compete. Complete vertical integration from click to purchase reduces the most friction for the user, which leads to the best customer experience which leads to a competitive edge. For companies, this is a source of extra high margin that can offset their low margin core business. It also makes the users more sticky – why go anywhere else? I recommend watching the entire presentation in full, very spot on where fintech is headed!

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