David Feldt Proud father. Entrepreneur. Builder. Catalyst. Accelerator. Guide.

14Nov/110

Rethinking (Online) Payments In A Post-Credit Card World

In a sea of startups with non-existent or ill-defined business models and me-too ideas, here's a wonderfully simple idea that has huge revenue and profit potential.

Dwolla was founded by 28-year old Ben Milne in Des Moines, Iowa.

After paying an exhorbitant amount of fees to credit card companies, he and his team decided to rethink (online) payments and build something to bypass the credit cards companies.

He has created a disruptive payment platform linked to the existing ACH payment network that all banks use.  Dwolla has the potential to dominate e-commerce, m-commerce and s-commerce in the years to come.  Unlike Paypal and Square, which sit on top of existing credit card platforms, he enables payments between consumers and merchants without the oppressive credit card fees.

Dwolla charges 25c - yes, a quarter - on every transaction regardless of the amount of the transaction. Not your typical 2.9% of total amount sent plus $0.30 per transaction that others charge.

Ben's focus is clear: "To maximize the value of every electronic financial transaction."

Why do I like Dwolla so much? Here are 7 reasons:

  1. Rethinking an industry - there have been many mobile payments solutions since PayPal but they all utilize the same credit card network, including Square. Here's a small team in Iowa who have rethought global payments and created something unique and smart.
  2. It's about revenue, transactions and money - this startup is focused on making money from the get-go. It's not just another trendy social media photo sharing app with no business model. Its focus is to maximize the value of each financial transaction that's made online. It takes a tiny transaction fee and allows its customers (merchants and consumers) to keep more of their money. Simple. Powerful.
  3. Serial entrepreneur who has had financial success - Mr Milne is only 28 and has had proven success before.
  4. Multi-sided platform with API and tools to allow explosive network growth - Dwolla is a multi-sided platform and it provides a seamless API which allows developers and third-party companies to build an extensive ecosystem with great ease.
  5. Smart investor choice - Dwolla chose a major financial services company as its investor and has leveraged the connections, knowledge and footprint of this investor to test and grow its platform.
  6. Smart distribution strategy - Dwolla doesn't just rely on the typical social network effect to sell itself.  It is selling itself as a financial product via its financial services investor network
  7. Exceptional user experience - Easy, well-designed user experience ensures adoption.

 

 

19Oct/110

Scary Apple Chart?

Business Insider just posted the chart below and labeled it:

"Here's The Chart That Should Scare The Heck Out Of Apple Investors..."

 

Well, "market share" and "units shipped" aren't the metrics that has driven Apple's stock price to North of $400.

Innovation, or more importantly,  Apple's ability to monetize innovation has. Simply put, Apple generates vast PROFITS.

How does its profitability compare to the other players in the mobile phone space?

Here's a more instructive chart (courtesy of Asymco.com) that continues to make Apple investors very happy:

 

 

 

5Oct/111

Return

UPDATE: I wrote the post below earlier today before hearing of the tragic news of Steve Jobs' passing. Steve was a mentor that I never met.

My first Apple product was an Apple II and I remember the wonder of creating my first computer program in BASIC. Since then I have owned the following Apple products that have enhanced my (technology) experiences:- Macintosh, Powerbook, Macbook, Macbook Pro, iMac, iPod, iPod Touch, iPhone, Mac Mini, Apple TV.

Here is one of Steve's famous quotes that says it all:

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

This blog post is in your honor Steve as you return to the Creator. You will be missed. Your vision and contribution to the World was incredible. You are the DaVinci of our time.

=====================

During the buildup to the High Holidays, there are several core themes to help us reboot ourselves and the world around us.

One theme that resonates most strongly with me this year is that of "return", especially during the period between Rosh Hashana and Yom Kippur.

What do I mean by "return"? I'm not referring to "return on investment" but rather to a more fundamental personal return.

It's a time to return to one's individual essence and to reconnect with the universal source of life.

It's a time for self-reflection and self-analysis.

It's a time to look back on the past, recognize the errors one has made and commit to changing oneself for the future.

It's a time for forgiveness.

Most importantly for me, it's an opportunity to reconnect to one's true essence, to be re-energized and to ensure that one is on the correct path. In computer vernacular, it's the opportunity to reboot the system, remove the viruses and restart.

It's important to return before once again running forward on the journey of life.

I can't believe it's been two years since I founded JazLabs - I am so happy and lucky to be doing what I do every day at JazLabs.

It would be so easy during this current time frame, that is so filled with uncertainty and market volatility, to simply focus on survival and self-preservation.

At JazLabs, we're focused on the exact opposite ...

Growing and building a company from the ground up has allowed me the opportunity to create an entity that integrates my personal beliefs and values with my business culture and leadership style.

This has attracted customers, clients, partners and employees who share these beliefs, values and culture to collaborate together to build and grow some wonderfully innovative products and services.

We've certainly experienced the entrepreneurial cycle of ecstasy and despair during the past  two years and continue to learn, pivot and iterate every day to push forward. That experience has been so fulfilling and I'm looking forward to the next 20 years!

 

   
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