Weekly Briefing No. 102 | Banking’s Future, Universal Basic Creativity, Bitcoin Goes Berserk


Welcome to The FR. On our agenda this week:

  • Blumberg Capital’s new survey; UBI gains a new booster
  • Bitcoin madness; Enterprise fintech’s fate in a bear market
  • “Sandwich Generation” panic; Stealth fintech Domino’s Pizza “disappoints”
  • Jimmie Lenz on sales practices
  • Charity of Note: Sebastian Strong
  • Company of Note: Green Bits

A banking futurist or tunnel dweller?

The world’s oldest subway tunnel, the Atlantic Avenue Tunnel, lies underground near our office. Although sealed-off since 1861, a “secret room” that was part of the tunnel can be found at a neo-speakeasy in Brooklyn Heights. Ask nicely and the owners will seat you in this room, where you can ponder the passing of time, the legacy of outdated systems and the nature of rejuvenation. Recently, we joined colleagues there for a drink that turned to the topic of whether the US needs so many small banks in the digital age. We argued for the special role played by these institutions, despite our disappointment by this statement from a community bankers group decrying Square’s bank charter bid. The statement paid little mind to whether Square’s application would serve the interests of customers, and in that respect, felt backwards-looking at a time when smaller banks should be focused on digital renewal (especially if they receive regulatory relief). On a more positive note, some old enemies buried the hatchet as short-seller Marc Cohodes revealed a long position in Overstock because of its tZERO unit. Under the leadership of the eccentric Patrick Byrne, tZERO is using blockchain tech to create transparency in the clubby stock loan business, which could use modernizing. We were also happy to encounter Blumberg Capital’s new survey on consumer attitudes towards financial innovation. The unsurprising punchline: consumers want more innovative, inclusive financial services from banks. But the good news for incumbents: people are inclined to stay with a longstanding provider if it can deliver. The question, then, is whether incumbents are up to the task of truly building for the future, or if their tunnel vision will keep them drinking cocktails from yesteryear.

Universal Basic Creativity.

Even those who believe that AI will ultimately create gobs of jobs acknowledge the difficult transition from Point A, today, to Point B — that sunny tomorrow where the economy is awash in meaningful job opportunities. The thorny transition is fraught with risk and, let’s face it, the potential for rising societal instability. That’s why we’re interested to see how Sam Altman’s universal basic income (UBI) experiment in Oakland pans out, and have taken note (See below) that Richard Branson is now backing UBI. Still, creating a huge social program that comes with no strings presents massive challenges. Given the valid concerns over UBI expressed by many, we hope that other creative ideas also emerge to address the A-to-B challenge. For example, how about a Universal Basic Investment program to give non-dilutive dollars to aspiring small business entrepreneurs who can’t get a bank loan and don’t have an idea scalable enough to entice institutional investors? Or a Universal Basic Side Hustle program to supplement a low-paying day job with cash to invest in a side business? Finally, how about a Universal Basic Samaritan program for the legions of people raising kids, caring for sick relatives, or serving as volunteer firefighters or candy stripers ─ most of whom are doing valuable work that helps our economy but comes with zero basic income?

Want to join The FR team?

We’re looking to add a writer for our flagship newsletter. Knowledge of technology, finance, economics, history, politics, philosophy, music and pop culture are preferred. A sense of humor is required.


Bitcoin Goes Berserk.

It was another wild week for Bitcoin & the Family Crypto. Set against the backdrop of Bitcoin’s march to $6,000, Vladimir Putin blamed Bitcoin for Russia’s criminal problems, Jamie Dimon said he’s going silent on Bitcoin after issuing a final ominous warning, Larry Fink called Bitcoin an index of money laundering and researchers from an ad blocking firm asserted that 500 million people are unknowingly mining cryptocurrencies. Meanwhile, Coinbase announced that it was making it easier for customers to instantly purchase digital currencies in a US bank account. Is it possible for there to be a boring week in crypto?

Curb your enthusiasm (for the markets, but not enterprise fintech).

“It’s certainly puzzling… And it’s puzzles that attract my attention.” That’s the perspective freshly-minted Nobel laureate Richard Thaler offered on the pricey, low-volatility US stock market that’s shrugged off geopolitical tensions, tragic natural disasters and other troubles. Markets, of course, can stay irrational for a long time. Still, we have been thinking about how enterprise fintech spending will be affected when equity enthusiasm curbs and are keeping a particularly close watch on equity research. Our guess? Efficiency-enhancing companies like AlphaSense, Prattle and RavenPack (all former Companies of Note) could stand to benefit as the last vestiges of old-school equity research processes are washed away in favor of time-based pricing models.

“Sandwich Generation” panic.

This past week, CB Insights issued an informative report covering the 17 “secrets” of how the fastest-growing personal finance apps of all time managed to scale ahead of the huge cash wave coming their way. We just have one caveat: Gen Xers, a.k.a. “the Sandwich Generation” (Americans born between 1965 and 1984) aren’t going to croak anytime soon. And yet, this generation is in “bone-deep panic about money” (See below). So while it’s smart for start-ups to focus on the biggest generation in American history, we’re suggesting that at least some entrepreneurs think about the unique challenges of a generation that in many cases had children later in life and must now contend with kids and aging parents simultaneously.

Stealth fintech Domino’s Pizza “disappoints.”

Shares of Domino’s Pizza were sliced this week as the company failed to blow away sizzling expectations for its third quarter. As we’ve noted previously, Domino’s has been one America’s best performing stocks for a decade, not because of its pizza, but because it has been a true innovator that has pushed the envelope on payments. Still, it’s too bad that this fintech pioneer — which has built its own proprietary POS system, generates over 60% of sales from digital channels, has an enviable loyalty program and has devised several innovative ways to order pizza — let down its well-fed investors during National Pizza Month.

Digital sales and salespeople in the spotlight.

This week, China’s Tencent announced that it had secured a new license to sell insurance products through its WeChat and QQ messaging apps. Meanwhile in the US, buzzy insurtech benchmark Lemonade announced that it was launching an API that would enable third parties to sell Lemonade’s insurance policies through their own sites and apps. But technology’s ability to reinvent sales is obviously not exclusive to insurance-based products, and actual salespeople aren’t all going to vanish. However, according to FR contributor Jimmie Lenz, the time has come to leverage the power of technology to better measure sales techniques and understand the impact of incentives on outcomes. “Changing sales and business dynamics require that behaviors be reassessed for evolving conditions,” says Lenz.


Sebastian Strong.

Although nearly 16,000 children each year are diagnosed with cancer, few cancer drugs have been approved specifically to treat children. On November 4th, Sebastian Strong’s first annual run/walk will occur in Miami Springs, Florida, to address this problem. We’re proud that our advisor, Kelsey Weaver, is on the board of this organization, which was inspired by the amazing life of Sebastian Ortiz. Last year, Sebs passed away at age 16, but his family and friends have courageously transformed his memory into an initiative to fund research for childhood cancer cures. To donate or learn more, click below.


Green Bits.


The seeds for Green Bits was established by 2013’s Cole Memo, which essentially stated that the federal government wouldn’t harass states that legalized adult use of marijuana as long as they implemented transparent regulatory and enforcement systems. Today, Green Bits has emerged as a leading technology company in ensuring that dispensaries are adhering to state financial and compliance rules. That’s achieved through the company’s POS solution that manages seed-to-sale reporting, inventory management and customer sales data in seven states (with expansion planned in the US and Canada next year). Founded by Trae Robrock, Ben Curren and Andrew Katz, Green Bits represents the latest act for these entrepreneurs whose last company, Outright, was acquired by GoDaddy. In a recent discussion with The FR’s Gregg Schoenberg, CEO Curren recounted what led him to pick cannabis for his next venture. “Standard point-of-sale systems don’t work for the cannabis industry due to the regulatory frameworks governing the industry,” said Curren. “Given the industry's 20%+ 10-year revenue CAGR and an urgent need for solutions to help businesses operate legitimately and efficiently, we saw a massive opportunity to provide an industry-specific solution.”


“Adversity is the diamond dust Heaven polishes its jewels with.”

~ Thomas Carlyle