Quin

Back when movies started to add sound the consolidation of movie production companies started, leading to the Hollywood studios we all know today. Before that consolidation, agents used to work for the production companies. But, as the studios grew (and grew), movie stars lost their ability to negotiate. This led to the creation of the Hollywood agent to represent the Hollywood star. We have enormous financial services companies today. It is difficult if not impossible for the people to negotiate with them. But the equivalent to the Hollywood agent, advisors and salespeople, still work for the companies and not for people. Data from the Bureau of Labor Statistics shows 547,000 insurance sales agents making $32 billion in annual income, 321,000 personal financial advisors making $31 billion in annual income, and 513,000 financial services sales agents making $39 billion in annual income. "We are outgunned (What?) Outmanned (What?) Outnumbered Outplanned (Buck, buck, buck, buck, buck!)" #fintech

Just a reminder...

Most of us are investors 24/7/365. But we do it passively. On the one hand, those of us who own airline stocks want costs kept under control, more revenue, etc., etc. On the other hand, when those people travel they can't help but be struck by poor service, bad food, expensive tickets, etc., etc. This applies to so many industries where our passive role as investors has overwhelmed our active role as traveler, consumers, internet users... Financial services is no different, no matter what the marketing says. It's time for a new model that is more in line with what we want and need, as investors and as users of the financial system.

Private equity firms sometimes pursue a "roll-up" strategy. They pick an attractive industry (e.g. vet offices) and they start buying small practices up so that they can create one big one with more pricing power, etc. One reason this works is that a lot of the information for the industry is well known and understood. It's risky to use a lot of debt to buy up companies in unproven industries where cash flow can be irregular or non-existent. Personal finance falls into the former category. There are tens-of-thousands of resources for almost every piece of this conversation - authors, blogs, websites, financial institutions, advisors, apps; you name it, there is one. Rolling these up is impractical. But taking all of this knowledge and concentrating it so that all of those resources become irrelevant... that is much easier to do.

Two factors seem to intimidate people about owning their finances and being financially independent. The first is financial literacy. We've been given a homework assignment to learn the mechanics of financial products and the ways they interact. The second is responsibility. If we are truly the owners of our finances they we also own the results. Better to be able to blame someone if we don't get what we want. But that ignores the fact that these companies (like most others) are lawyered up and the fine print will do you in. JPMorgan's Private Bank recently prevented a couple from taking them to court, after reducing their fortune from $50 million to $1.5 million. We already own the results more than we understand. Technology, both existing and emerging, will give anyone the power to take hold of this important part of his life and brush these two challenges aside.

Financial literacy is the homework assignment nobody wanted. The annual spend on it totals ~$670 million, most of it coming from non-profits. Meanwhile, data from the Bureau of Labor Statistics shows that financial advisors, insurance advisors/salespeople, and securities advisors/salespeople were paid $120 billion in aggregate in 2022. $120 billion to fill in a hole $670 million can’t get people to fill themselves!

PayPal was a huge company, but it didn’t build Venmo Ford was a huge company, but it didn’t build Tesla Sony was a huge company, but it didn’t build the iPod or iPhone It’s never game over against the big boys - you can hide an entire company in their shadows alone

A crack in the clouds 🍐

You are alone in your commercial and financial life: When your insurance company asks you how much coverage you want When your lender asks you which structure you want for your mortgage When you investment advisor asks you how much risk you can handle When your favorite merchant asks you where you want your package delivered There is one single-source of truth that can answer all of these questions… You 🫵🏼 And it looks like you could use some help 😉

DTC / B2C / Consumer-focused If you’re not generating the (vast) majority of your revenue from #consumers themselves then you can’t really call yourself any of the above. Importantly, as consumers ourselves, we don’t have a seat at the adult table if we aren’t paying the bill. The old “if it’s free then you’re the product” quote. Truly consumer-focused companies are out of favor these days among #entrepreneurs and #venturecapital alike. That trend is either right (uh oh) or we are in building something for you, yes… You 🫵🏼