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Sunday’s 60 minutes piece about the stock market being “rigged” was a travesty. It might as well have been a 20 minute infomercial for Lewis’s book and a startup stock exchange. You know it’s shoddy journalism when you don’t even get ONE quote from anyone on the other side.

So here is the…

Why Bitcoin loses to Amex

I’ve seen a lot lately about Bitcoin.  To be clear, before I start… I think Bitcoin is an amazing phenomenon, amazing technology, and will probably end up being a historically significant failed first step at a truly digital currency and serve as a beginner’s blueprint for future governments (or other organizations whose primary function is the application of force).

Now… onto the nonsense.

Claim:  Bitcoin could help small and large businesses save TONS of money on credit card fees!!!  It’s nearly free!

Nonsense.

The “transaction cost” of a credit card transaction is damn near zero.  Do you REALLY think it takes Amex or Visa a lot of effort to say “OK subtract $40.56 from this guy and credit $40.56 to this guy”?

Of course not.  The transaction is already digital.  The currency is already digital.  There is no cost.  Don’t believe me… open a Venmo account and pay me $5.  I’ll send you $5 back and it won’t cost either of us a dime.  

This is digital debit/credit without the overhead of miners having to verify the work.

OK then Andy… if the transaction doesn’t cost CC companies anything, then why am I paying 1.9%+.25 to accept a credit card??

Because it ain’t about YOU, son.  You see, you’ve flipped things all upside down.  This is about your customer…who also happens to be American Express’s customer.  

To prove this is simple:  When is the last time you heard someone say “please pay me with credit card rather than cash?”  Right— never.

Now… when is the last time you heard someone say “do you accept Amex?”  Probably every single day if you’re a successful small business.

CC companies do ALL of these things for your customer that Bitcoin does NOT :

1.  Allow your customer to pay you with debt.  Note:  This is extremely beneficial to you as well, as it makes your goods a multiple more affordable without YOU becoming a creditor to each customer.  Think about that.

2.  Provide your customer with an INSANE level of highly sophisticated fraud prevention and recovery that makes your customer more likely to purchase from little old unknown YOU.

3. Rewards your customer for using their payment method.  Bitcoin bonus points that let me go to Paris next year might be in the future, but they won’t come free.

Credit cards make your customers happy.  THAT is why they win, and you pay them to participate.

Big Brand vs Smaller, Focused brands

So last weekend I had what I honestly believe is my biggest, best and simplest startup idea yet.

We’re going to do it.

It’s definitely in the stock market.

It definitely appeals to younger people.

It definitely is mobile first if not mobile only.

Now what I’m struggling with (prematurely, I admit)… is whether or not this is a separate effort/brand/company, or if it should fall under the existing (and growing!  and awesome!) LikeFolio brand?

Easier to market and build one big brand with multiple functions and larger scope, or separate functions = separate brand?

I’d really enjoy some comments from you guys… or if you prefer to keep your 2 cents private, you can email me at andy@andyswan.com

Any resources, experience or opinions on this sort of thing.

Is it better to keep brands narrow and focused?  Or better to go for the big brand?  

Let me know what you think.

p.s.  The only reasons I’m considering the “big brand” route is because 1) LikeFolio has great traction and distribution already and 2) the new idea is focused on the same demographic and industry as LikeFolio… but it would be a substantial expansion in scope.


One of the more striking graphs I’ve seen lately. Stripe’s revenue history as of Oct 2012, and now. pic.twitter.com/Pplki4HuiZ
— Paul Graham (@paulg) November 20, 2013

This is what we build for.  Up and to the right.  You never know how much further you can go.  
What seems “parabolic” today might look like a “good start” in the rearview mirror if you keep building, keep levering, keep promoting and keep forward.
Win.

One of the more striking graphs I’ve seen lately. Stripe’s revenue history as of Oct 2012, and now. pic.twitter.com/Pplki4HuiZ

— Paul Graham (@paulg)

November 20, 2013

This is what we build for.  Up and to the right.  You never know how much further you can go.  

What seems “parabolic” today might look like a “good start” in the rearview mirror if you keep building, keep levering, keep promoting and keep forward.

Win.