Tuesday, June 16, 2015

How Do You Solve A Problem Like Kaminska: Andreessen-Horowitz Edition

Over the course of the last year or so FT Alphaville reporter/columnist Izabella Kaminska has noted, en passant, three or four companies that happened to be investees of Andreessen-Horowititz, as she went on to make larger points.

One of those mentions, in "Mythbusting finance 2.0", garnered her one of Mr. A's coveted "Andreessen Smackdown Watch" tweets:
Anyhoo, after a late start yesterday I was going to do a post on the bird flu/egg shortage story and Mr. Andreessen came to mind:

bald man

So I decided to inquire what he was up to and saw Izzy had mentioned another of his portfolio companies and somehow all that mixed up in my brain to result in the Andreessen-Horowitz crew singing their version of the nun's song from The Sound of Music and I'm probably going straight to hell for making a burlesque of it for the headline but before I do here's the latest, from FT Alphaville:

Oh you want your FX to be instant? That’s extra
Dan Davies’ cynical guide to fintech was so good and made so many worthy points we’ve decided to launch a new FT Alphaville series to pay homage to it.

For those who didn’t read the original, Davies basically broke down the supposedly “disruptive” fintech models in the market into seven core categories (*only one of which is arguably innovative).
1. Reinventing past mistakes of the banking industry because you don’t know about adverse selection.
2. Thinking that a great big lump of transactions data is more valuable than it is.
3. Hoping that a load of people who actively mistrust each other will trust you instead.
4. Trying to use someone else’s network and only pay the marginal cost of doing so.
5. Assuming that the regulators will be more inclined to listen to your whining than to the incumbents’.
6. Giving customers a worse service for a lower price.
*7. Getting your act together with respect to an industry standard where the industry has conspicuously failed to do so.
In Monday’s inaugural “what is fintech?” series post, we look at retail FX and the business that is Transferwise.

Transferwise has made a name for itself as an innovative disruptor in the FX space — winning a multitude of industry accolades, including the Midas touch of Andreessen Horowitz funding.
But how innovative is the company really?

The company’s greatest achievement to date seems to be acquiring marketshare from incumbent retail players through the highly innovative strategy of spending shed loads on marketing — most of it focused on negative campaigning tactics against banks, cheap publicity gimmicks involving scantily-clad women and, most crucially, rebranding FX matching models as “peer-to-peer” businesses.

In terms of Davies’ fintech model taxonomy, the Transferwise model satisfies on at least five fronts...MORE
See also our:
Izabella Kaminska, Marc Andreessen and Satan Walk Into a Bar...

And FT Alphaville's "The real disruption at the heart of banking"