Weekly Briefing No. 123 | Goldman’s DJ Leader, Spotify’s UnIPO and LendUp’s Two-on-One

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Welcome to our 123rd edition. We urge you to wear green today, but not be green. Perhaps our features below can help:

  • DJ David Solomon rises at Goldman; Spotify’s UnIPO
  • Our two-on-one with LendUp’s Sasha Orloff and Jotaka Eaddy
  • Deals: Kroll, Mosaic and FIGO; L.L. Bean’s blockchain flop
  • YC’s brain start-up; Larry Kudlow’s new role
  • John Oliver slams Bitcoin; Regulatory capture; Social Security numbers
  • Comings & Goings: Alex Lopatine, Syed Fazli and Bernardo Martinez

OPINION

Who’s your Liquid Todd?

“I am a DJ, I am what a play,” is the refrain from David Bowie’s 1979 hit “DJ.” We thought about that song recently upon learning that another David, David Solomon, won the race to succeed Lloyd Blankfein as Goldman’s next DJ. Unsurprisingly, Solomon’s well known side hustle as a turntablist — who goes by the name D-Sol — created a golden opportunity for financial journalists to suggest that D-Sol is part of a master strategy for Goldman to position itself as an edgy, millennial-savvy firm. But our bigger takeaway involves the person Solomon, a former Drexel Burnham junk bond salesman, has collaborated with on multiple occasions. His name is Liquid Todd, of Disco Killerz & Liquid Todd fame. When D-Sol recently dropped his bootlegged, remixed house version of Fleetwood Mac’s “Don’t Stop,” it was LT who gave it a strong buy on Instagram. And when D-Sol recently appeared at industrial nightclub Schimanksi to open for legendary trance DJ Paul Oakenfold, LT shared the stage. Schimanksi doesn’t allow junk to fill its speakers, even if it’s coming from a rich guy. And Solomon appears to have qualified himself to take that stage by accepting the tutelage of a younger person with an entirely different set of influences. So what will Solomon play next? If his second life as a DJ is any clue, he’ll be a leader who knows that in our torrid technological environment, learning needs to be a two-way process, no matter who you are. It will be fun to see how Solomon’s double life plays out in the years to come, but for the sake of his club cred, we hope he doesn’t start donning a suit to gigs. After all, D-Sol’s got believers.

Spotify’s Direct Listing could be rocky. So what?

Those interested in the IPO market will be noting April 3rd, because that’s the day Spotify has picked to do its “offering” on the NYSE. Ahead of that, the company live-streamed an event this week, which appears to have served a similar purpose to that of a roadshow. It’s no longer available for viewing, but you can still watch the company’s foundational videos, one of which is creatively entitled “Why Direct List?” We’ve been asking ourselves that too and have concluded that while a Direct Listing doesn’t make sense for many prospective issuers, a consumer-facing company with Spotify’s cache may be well suited to avoid the guiding hand of a bookrunner. Still, we expect doubters to emerge ahead of the listing and choppiness to ensue subsequent to it. If you read these naysing opinions, though, just remember that Facebook’s 2012 IPO was a hot mess. In fact, the company settled a lawsuit tied to the offering just last month. But for early investors who kept their FB shares, the initial choppiness ultimately didn’t matter because the company wildly exceeded financial expectations over time. Spotify’s performance as a public company should be measured along a similar long-term time frame.

Kicking it old school doesn’t work with mobile engagement.

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Mobile engagement used to be easy. All you had to do was build an app or create a mobile-friendly site, then launch a one-to-many campaign. But today, that old-school strategy doesn’t cut it anymore. In order to get noticed in our attention economy, a mobile engagement strategy should take advantage of automation to deliver real-time messages that are personalized and proactive. But don’t take our word for it; check out the upcoming webinar being hosted by our friends at Relay Network. They'll cover the ten criteria for selecting a mobile engagement automation partner and provide every attendee with a copy of their mobile engagement solutions buyer’s guide, too.

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CONVERSATIONS

The FR’s two-on-one with LendUp.

“We’ve never seen ourselves as a payday lending company, or a payday alternative company, or a credit card company, or a financial education company. Rather, we’re building a savings and lending destination for the 56% who’ve been shut out or mistreated by mainstream banking.” That’s a quote from LendUp’s Sasha Orloff, who along with colleague Jotaka Eaddy made for a great company tag team in their recent conversation with The FR’s Gregg Schoenberg. Trying to get underneath the business model of a mission-driven company, especially one backed by leading investors, can sometimes be challenging. But in LendUp’s case, we came away convinced that this company’s pathway to continued success and traction will be in making sure it stays fully aligned with its target customer base. “We want to make money in ways we think are pro-consumer and fair,” says Orloff. We believe him.

FEATURED NEWS

Selected Deals: Kroll, Mosaic and FIGO.

You know you’ve made it when your company name doubles as a transitive verb, such as to Google, Venmo or Kroll someone. The latter verb (and company), which sees much more deeply into a subject than a Google search, will now be in the hands of Duff & Phelps. And speaking of seeing more deeply, this week, JP Morgan announced that it had taken a minority stake in fixed income start-up Mosaic Smart Data. The start-up, which completed JP Morgan’s in-residence program and has a partnership in place with the bank, helps fixed income professionals make better decisions. Finally, FIGO, a Chicago-based insurtech looking to gain share in the growing pet insurance market, announced that it has raised four million bones.

Blockchain firsts and lasts.

We stopped highlighting press release-driven blockchain announcements a while ago, but the news that the first national election using blockchain has been completed is a real thing. The African nation of Sierra Leone has earned its first-in-the-world distinction thanks to in part to Agora, a Swiss digital democracy lab. But when it comes to a still-misunderstood innovation like blockchain, the road to broader use cases will continue to be punctuated with setbacks. To that point, we’re noting that L.L. Bean returned its blockchain initiative this week to its partner, Loomia. Under L.L. Bean’s former plan, its garments would be equipped with data-collecting sensors that would be embedded into boots and coats. Although L.L. Bean emphasized that customers would have to opt-in to the program, it was nonetheless deemed to be on the wrong shore of Lake Creepy.

An insane in the brain start-up.

According to MIT Technology Review, YC 2018 Winter class member Nectone will be presenting during YC’s upcoming Demo Day(s) next week. The company aims to connect a dying person to a heart-lung machine and then embalm the brain with advanced chemicals. The process, known as a connectome preservation protocol, kills the subject. However, the company believes that within the current century, it will be feasible to reboot a brain preserved this way and recreate a person’s consciousness with their memories. Truly mind-blowing.

Larry Kudlow’s turn.

We like Larry Kudlow, not because we agree with his policies, but because: a) He has a lot of experience and is well studied on economic and business theories; and b) He is willing to engage respectfully with people who disagree with him. We hope the latter attribute will be on display now that the one-time anti-war activist known as “Kuddles” in college has been named as director of the National Economic Council. Because even though he’s become the dogmatic king of the trickle-downers, every now and then, we hear his rebellious but kind instincts peek through.

THE TROVE

Jon Stewart “cub” demagogues Bitcoin: We love John Oliver, but we didn’t entirely agree with his recent (oversimplified) crypto-conclusion equating Bitcoin to Beanie Babies. Still, it’s funny, and we liked his takedown of Google Glass.

No crypto for most endowments and foundations: In a recent survey of these two massive investor classes, only four percent expressed an interest in investing in Bitcoin and/or other digital assets this year.

2015 was Amazon’s flywheel year: Read how AWS, Prime and Marketplace all hit their stride around the same time.

The Social Security number needs to go: In 1938, a wallet maker decided to promote its product by putting a mock SS card as a placeholder in its goods. As a result, 078-05-1120 wound up being America’s most popular, real SS number.

COMINGS AND GOINGS

Alex Lopatine, Syed Fazli and Bernardo Martinez

Recently, NYMBUS founder Alex Lopatine joined Paladin fs to establish FinTech Advantage. This new division will work with banks and credit unions to help them select fintech solutions that can elevate their digital offerings. Also, Bloomberg Tradebook’s former CTO Syed Fazli has joined Celsius Network. Finally, Funding Circle has tapped Bernardo Martinez to serve as the company’s US managing director amid unconfirmed reports that it will soon go public.

QUOTE OF THE WEEK

“The duty of youth is to challenge corruption.”

~ Kurt Cobain