“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things. – Steve Jobs
Start with your point; don’t end with it. Focus is about saying no. Saying yes is a quick road to mediocrity.
The most perceivable whitespaces are filled in with mobile. However, there are still opportunities. The underlying platform in markets long resistant to innovation is now mobile first. Full-stack entrants are now able to penetrate markets like healthcare and financial services by building products and distribution native to mobile. Ultimately, they are crafting customer experiences orders of magnitude better than before.
It’s true that smartphone innovation has plateaued the top of the S Curve. What’s new is more incremental than transformative. But incremental advances are underrated. The commoditization of LBS and mobile app reliability spawned Uber. Instagram leveraged improved mobile cameras and increased bandwidth.
Face ID, AR Kit, and Neural Engine are major upgrades for the iPhone (and similar flagship Android devices): the ability to track facial expressions, augment and understand real-world surroundings, and compute powerful neural networks are all powerful new primitives for smartphones. These additions are all new compelling “why now opportunities” for startups.
I ended my thoughts in “Iatrogenics and Derivatives on the Blockchain” around market fundamentalism and the concerns I have over the implementation of CDS on the blockchain. 1 Applying sophisticated technology is not exactly a strength of the financial system. CDS should be banned.
The financialization of poorly understood assets that were complex, opaque, and fragile led to the 2008 Financial Crisis. Yet, there are those who are calling for derivate products in crypto markets along with a stablecoin to eliminate dry powder risk and streamline trading.
Many are advocating for crypto derivatives because new derivative products would legitimize the crypto market by increasing mainstream attention, liquidity, and trading. This is a pure liquidity play by those who do not have real skin in the game. It’s horrific to allow retail investors to be sold complex, volatile, and often leveraged financial products based on tokens with underlying market integrity issues, but also substantial technical and fundamental questions. 2 The ease of regulatory capture—particularly in areas that want to be the next Silicon Valley (whatever that means) —compounds this concern.
The idea that competitive markets create market efficiency is orthodoxy in financial theory. It’s become a metonym for how people in society act. However, efficient markets are false in my experiences investing and studying decades of market events.
George Soros (an idol and a teacher) first revealed to me the dangerous, destructive competitive politics within financial academia and modern portfolio theory. This broadened my horizons as an investor, trader, and thinker. My continued observation in markets ultimately hatched my cynicism towards our society’s obsession with competition.
For decades, banks have achieved distribution through physical locations. The historical business model of banks was to be a checking account and then up-sell products like insurance and wealth management products.
Bank traffic is in decline 30% year over year. The underlying platform for financial services is changing towards mobile and millennials. 60% of millennials want startups firms to change how banks work. As a result, new startups are leveraging mobile ubiquity, data, and new consumer behaviors to disrupt and unbundle U.S. Banking.
Big banks are constrained by legacy infrastructure. New players are targeting potential customers at their inflection points for efficient and effective customer acquisition.
With all the “democratization” and innovation in Fintech, half of Americans live in an alternate financial services world: check cashing, pre-paid debit cards, and payday loans. There are $320B+ transactions per year with alternative financial services.