Welcome to The FR. Sesquicentennial is actually a word. It means 150th anniversary.
In this edition:
Helix Edge Holdings acquires The Financial Revolutionist
Amazon’s HQ2 circus comes to an end
Blockchain gets a few big backers
Where VCs find value
Building a technical hiring process
Big tech loves economists
Insurtech trends to watch in 2019
Helix Edge Holdings acquires The Financial Revolutionist
150 issues. We couldn’t have done it without you, our loyal readership. And on this anniversary, we’d like to announce the next step in our journey as we strive for even greater heights: Helix Edge Holdings, a company dedicated to delivering timely insights, actionable intelligence and marketing services, acquired Financial Revolutionist Holdings Corp., which was founded by Gregg M. Schoenberg and Robert Jaeger. Gregg, who will remain as a contributor, said: “Helix Edge represents the ideal company to broaden the depth and reach of The FR. It will continue to be provocative and challenge readers to think in revolutionary ways.”
How much should a government pay for a $150,000 job?
Recently, we had been referring to Amazon’s sweepstakes as its “HQ3 contest” to poke Big Orange for pulling a fast one by leaking that not one but two new “headquarters” would be chosen. But perhaps HQ3.5 would have been a better description, given that Nashville will also partake in the bounty by way of a new retail operations center that will be located near The Gulch.
Time will tell if the “winners” of HQ3.5 will come out ahead vs. the hard costs imposed to taxpayers, often without their knowing. But here are some figures we got from the press release, which reiterates four times that the new 50,000 jobs will pay an average of $150,000 per head: New York, Virginia and Tennessee entities had to cough up $1.85 billion, $819 million and $230 million, respectively, to secure 25,000 jobs each in the first two cases and 5,000 in Nashville’s case. That means that each juicy job directly “cost” New York $74,000 vs. $32,760 in Virgina and $20,400 in Tennessee. But that doesn’t mean New York is “losing,” as both it and Virginia will get $2.5 billion in investments vs. Nashville’s $230 million. Even more interesting are the estimated tax revenues that are projected for the three regions, which see New York taking in over $10 billion and Virginia nabbing $3.2 billion over the next 20 years. Low-tax Tennessee, meanwhile, will see an additional $1 billion over the next ten years. (Why were the projections not apples to apples?) Add it all up and it seems clear to us that, notwithstanding Amazon’s typical sleight of hand in the final weeks, it’s hard to know if the long-term outcome will be a win-win-win-win. In fact, the only thing we know for sure is that if a big company waves $150,000 jobs in front of cities/regions, preening politicians will beat a taxpayer-funded pathway to their door.
What does HQ2 mean for fintech?
While the economic benefits (or lack thereof) to the new homes of HQ2 will be watched closely over the next several years, there are other things to keep an eye on as well. For those of us in the fintech space, it will be interesting to see if there will be a wider ripple effect on tech start-ups in Silicon Alley and other areas. Despite many attempts to woo fintech firms to parts of the country outside the San Francisco Bay Area, the fact remains that Silicon Valley is still king in this regard. But we’ll be watching closely over the next several years to see how these areas may be transformed due to Amazon’s presence.
More uses for the blockchain.
Blockchain technology has been mooted as a solution for countless inefficient processes: from powering faster payments to transferring land deeds and even to making voting more secure and convenient. Now the energy industry is looking at how the blockchain may help run things more smoothly, with an idea that has some big backers. Oil industry giants Shell and BP are among a group of firms that announced this week they are planning to launch a blockchain platform to automate post-trade processes in the energy industry by the end of 2018.
Blockchain remains a technology that has inspired more theoretical uses than actual real-world success stories. But success here could spur wider applications in the financial services industry, in areas such as B2B contract settlements and cross-border payments.
Google’s healthcare ambitions take shape.
In July, Google’s Nest purchased health monitoring start-up Senosis with the idea that Nest devices could be incorporated into senior living facilities to help detect calls for help and turn on lights for seniors. Fast-forward to last week when Google scooped up Geisinger Health’s CEO David Feinberg to bring greater strategic coherence to the company’s assorted health initiatives under the newly created Google Health umbrella. As part of that effort, news hit this week that Google DeepMind’s UK-based health subsidiary will be folding into Google Health. Known for its Streams app, which assists doctors in detecting signs of kidney failure, DeepMind’s 100+ strong healthcare team has deals in place with a handful of UK hospitals. But, of course, when it comes to Google, trust and privacy will be an issue, particularly as patient data and Google’s global healthcare ambitions take on greater shape.
VC value investing.
When the recession comes, we expect that there will be ripe opportunities for investors to scoop up fallen angels that couldn’t raise more capital or turn the corner of free cash flow quickly enough. For those preparing for that day, we suggest reading a recent piece by Brendan Burns, an early-stage turnaround expert who scooped up an artist platform named Boomboomprints and another one named See.me. The outcome is a two-sided marketplace that, according to Burns, is akin to a LinkedIn-meets-Spotify for art and culture.
Building a technical hiring process.
Ammon Bartram is a co-founder of Triplebyte, which is seeking to improve technical interviewing and the probability of hiring the right person for a technical job by identifying interviewing signals. In a recent Software Engineering Daily podcast, Bartram discusses the benefits of a structured interview and why the contract-to-hire model is problematic for engineers. He also broaches why customizing interview content for a firm’s culture should not be a guiding principle and the science of choosing what questions to ask during an interview.
Economists are all the rage in Big Tech right now.
And speaking of hiring, our interest was peaked by a recent article written by Roberta Holland that discussed why large technology firms are snapping up “digitization economists” on a “remarkable scale.” Projects these economists work on include determining the role and ranking of incentives and the proper design of reputation systems. But perhaps most notably, advertising topics seem to have taken center stage as many tech companies struggle with ad design and measuring the returns of campaigns.
FOCUS ON INSURTECH
What’s hot in insurtech in 2018 and beyond
It's certainly an exciting and changing time in the insurance industry. Like other sectors in financial services, insurance is undergoing a significant digital transformation. New technology is helping remake the customer experience, as consumers demand quotes generated quickly and digitally, speed, variety and ease-of-use when interacting with insurers.
Meanwhile, innovative software is also helping streamline the back-end systems for insurance companies and brokers, helping to reduce paper-based processes, enhance automation and streamline workflow.
With that in mind, here are some of the hot insurance technology topics to keep an eye on in 2019.
AI technology is all the rage today, but it’s not just about telling Alexa to reorder you toilet paper. AI technology is changing the way insurance is delivered and managed as well. In particular, it relates to the general explosion of data and insurers making sense of that to know clients better. This is already starting, as some insurers are already using wearables to give customers a wide range of benefits.
Quote of the Week
“But a man’s reach should exceed his grasp;
Or what’s a heaven for?”
Note: We’ll be taking a publishing break next week due to the Thanksgiving holiday. We’ll be back with the next edition on December 1st.