Utopia Talk / Politics / Mortgage industry going to be Netflix'd?

earthpig GTFO HOer	Tue Mar 20 02:27:59 I'm not crazy right? That's coming in a year or two? As was Blockbuster Video, so shall go retail mortgage origination operations. "Why go to my local mortgage broker, bank, or credit union, when I can just go to amazon.com?"
earthpig GTFO HOer	Tue Mar 20 02:30:51 http://www...rmed-mortgage-lending-division
earthpig GTFO HOer	Tue Mar 20 02:32:13 "We can say that if you look at the top 10 HMDA lenders and pick out the nonbanks, that’s where Amazon is recruiting their talent." I am at one of these nonbanks.
Seb Member	Tue Mar 20 08:02:47 Amazon is looking at banking and retail finance
Seb Member	Tue Mar 20 08:06:47 ...as your link says. Been expecting this for a couple of years. If you are interested getting ahead of this sort of thing, follow @swardley on Twitter.
Sam Adams Member	Tue Mar 20 09:44:33 Why would an amazon bank be any diffetent from a regular bank? Netflix crushed blockbuster because it was a totally different... and cheaper... delivery method.
Rugian Member	Tue Mar 20 09:47:00 Earthpig's career in a few years... "Reports the Times, “Workers [at Amazon] are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are ‘unreasonably high.’” An apparently popular mind-set within the company is that “Amazon is where overachievers go to feel bad about themselves,” and a former staffer explained, “Nearly every person I worked with, I saw cry at their desk.”" Brace yourself bro.
Seb Member	Tue Mar 20 12:41:44 Sam: Oh good grief. Map it out.
Sam Adams Member	Tue Mar 20 12:59:07 Why would you need a map to answer a simple question? Lol no wonder buzzword beurocrats never get anything done.
Seb Member	Tue Mar 20 13:10:00 Sam: It's a simple question with a complicated answer. Understand retail banking business model, then the target operating model of banks, add why the data, structure and capabilities of Amazon translate to giving it a competitive edge. So yeah, value chain mapping is the best way to understand this. The same way an equation and graph is the best way to understand a physics issue. But the short answer is: Retail banks are a bit shut, huge redundancies in systems and processes. Amazon business architecture and customer profiling kick the shit out of whatever retail finance has. Plus Amazon has adjacent capture points to cross sell.
Sam Adams Member	Tue Mar 20 13:31:17 Oh so you think amazon has an edge in corporate structure, something poorly defined and often fleeting, as well as a decent dataset on low end customer spending habits(but not important things like cars and homes). Seems like amazon could have a minor advantage over incompetent bureaucrat banks, but no fundamental tech advantage the way netflix pwned blockbuster.
Sam Adams Member	Tue Mar 20 13:37:34 Besides if amazon spreads too far from online sales and gets too big they will get antitrusted hardcore. So it might even be in their best interest not to try too hard at banking.
Seb Member	Tue Mar 20 14:03:24 Sam: Corporate structure as in holding companies etc. is not what I am talking about at all. Business architecture is how they have organised their capabilities for re-use across many different business lines. You want to read up on Service Oriented Architecture etc. In terms of data, you are not remotely thinking broadly enough. Asside from data that they have bought for targeting, they have your consumption patterns, they have your credit card and other payment mechanisms. They have your product preferences. They have you address history. They know the devices you use and your IP addresses, and they probably know your location data too. That means they can find out about your browsing history, and a bunch more stuff from social engineering and link it. And because they know your CC numbers, they can do everything from data mining that a bank can, but lots of stuff banks can't. They know WAAAY more about you, your risk profile etc. And unlike a bank, they can be popping up "hey, want to buy this shiny thing on amazon credit with one click, no need to enter your card details". And of course, like Apple and Google etc they are sitting on a $9bn cash pile spread over a number of jurisdictions which they'd like to put to use. That's only scratching the surface, because hey, it's what we pulled off the top of our heads. So what else can they do? They can almost certainly operate the business model of retail finance better and cheaper than AN Other bank or CC company, and they have some cross selling opportunities. But why will people bank with them? They have excellent product development and software delivery - so they can cut out a bunch of annoying crap that make banks a pain in the arse to deal with. Look at Monzo's uptake. The industry is ripe for disruption. I have no interest in convincing you, because basically you are basically just going to argue the toss.
Seb Member	Tue Mar 20 14:32:32 Roll out looks something like a pay by Amazon credit service that's easier and convenient compared to CC. Their fresh and other services mean folks using those start to drop off grid to credit agencies. Expand the service to cover paypal offer. Then start to issue physical cards. With mortgages and car finance then - I expect at some point they'll move into the kind of online realtor platforms (like rightmove in the UK).
Sam Adams Member	Tue Mar 20 14:50:57 All that is basically what banks already do. Sure amazon can compete, but there is no fundamental tech advantage. There is very little info that amazon has that banks dont already have, especially in regards to bigger purchases. Google might have a bigger edge, but again not in terms of bigger items. But google cant go much further without getting antitrusted either.
jergul large member	Tue Mar 20 15:13:49 Sammy The edge is in offering complete financial services similar to what banks do, but locking customers in on the retail side in addition. IF you buy at Amazon, then you should have an Amazon credit card. IF you have an Amazon credit card, then you should have an Amazon mortgage. IF you have an Amazon mortgage, then you should have Amazon insurance. Its a pretty big edge to leverage.
Seb Member	Tue Mar 20 15:25:46 Sam Adams: Again, you are missing some point. Ok, a bank can buy data from facebook and see what they can infer from that. But they face two major challenges: 1. How do they link it? Largely, they can't - not with the same precision. Is Joe Blogs in this social media data the same Joe Blogs as in my customer data base? Fuzzy matching is fine but these business models at scale a few percentage difference is key. 2. Amazon knows your IEMI number, MAC address and IP address *and* you bank card number and home address. That can let them join a whole bunch of data much more effectively than the bank can. They are going to be aggregate and stick data together with higher accuracy. Furhter, in terms of analysing that data and figuring out what it means in terms of sale opportunities and risk, they have much better big data expertise than Banks. And Banks are working from their customers and trying to up sell products. Amazon can target pretty much anyone to sign up for their product. Sure, we've all seen those credit card add with a relaxed guy on a beach saying "hey, treat yourself". Amazon can do that, for sure, but targeted to whatever it is you might really be wanting to buy. But it can also just make it easier, quicker, safer and more convenient to not enter your credit card details at all when making online purchases. And if you have been paying attention, and what you clearly didn't get from my roll out plan there, they have the potenntial to greatly reduce the level of financial information available to third parties about purchasing patterns etc. which disrupts the business model of CC companies. And that is where they generate their lock in. In fifteen years time when Earthpig is trying to get Experian to give him a credit score for a guy for which there is very little footprint because he lived his entire adult financial life making online payments with his Amazon money wallet, and that guy is getting pissed off; Amazon can be offering him a mortgage at a much higher rate. So, basically, their business model is going to be better. But even if it wasn't, just on a tech basis they are going to kick banks arse. Retail banks technology is almost exclusivedly decades old, held together with string and yogurt pots, with levels of redundant functionality, systems and duplicated projects to fix things. Banks, basically, behind the scenes, are a total fucking mess. Starting greenfield with a highly efficient operations capability and a compsable set of microservices that can be stitched together scalably with little investment, plus a really good user centered product design team... that on it's own (see Monzo) is a winning combination. Banks are still struggling with basic shit like tools that let me easily see where I'm spending my money, automatic alerts, giving me an API so I can get third party services (e.g. price comparison websites). As for larger items, I think the areas they don't cover are largely limited to Cars and Houses. White goods and electronics and anything else, they already do.
Sam Adams Member	Tue Mar 20 15:40:56 Cars and homes are a pretty massive part of the banking industry. Sure amazon can play well with consumer goods financing... but every big consumer goods store has done that too and it didnt really give them an edge in the past.
Seb Member	Tue Mar 20 15:42:21 Jergul: Worse than that, say you have an Amazon credit card now and you are 18. In fifteen years time, will you even be able to GET a mortgage with anyone else? Only if Amazon decides to sell you credit history or provide a credit rating service. Which of course they will - in the same way they let other onto their e-commerce platform, onto their digital services platform, and onto their logistics platform, and when it's up and running, their fresh goods distribution network. This push into CC is a step on their path to getting into consumer credit ratings. Amazon isn't trying to own the world, they are trying to take a cut in every single part of the economy on the supply chain side. It's also part of their corporate stratgegy. Bezos turned a book company into a logisticcs company with his API edict - this is the bit Sam doesn't think matters. Every part of Amazon is constructed as a modular, reusable, service capability so new services can be composed BUT, crucially, it means the bit of the company that is providing that service is open to competition. They can be swapped out if something better and cheaper comes along. So all those little bits of capability are all furiously trying to be the best they can be because if not, then they can be replaced. For that to work though, this means not trying to seek a total monopoly of an industry, but rather enter it and be a dominant player while facilitating other people running rivals at the top of the value chain. Over time, competition drives the products and services that represent the top of that value chain towards comodities > i.e. as the market matures the customer demand tends to stabalise to and the nature of the produce or service becomes more fixed. And then someone will come along, turn the comodity into a utility (which is basially Amazons MO), drive it ruthlessly into a low margin business, and other people come along and build a service on top of that utility... and then Amazon will move into that space, and so on and so on. So Amazon need competitors at the top of the value chain to let competition dynamics to drive things forward. They just want competitors to be building on their underpinning services so they can know more about when the products/services at the top of the value chain have basically evolved to maturity and are ripe for being absorbed into the area where they are a "benign" monopoly in the sense that they just do it so much better than anyone else and at such scale you'd never go anywhere else. Seriously, though, check Simon out. He's awesome. Sam would like him too if he wasn't such an obstinate arsehole as to hate anything I think is worth looking at. https://www.youtube.com/watch?v=NnFeIt-uaEc Sam would like the bit about Business Level Abstractions for Health Strategy at 2:20. https://www.youtube.com/watch?v=Ty6pOVEc3bA&t=339s This is a bit longer and probably less a good intro, but the bits in this one on Thermistoclese at 4.10 and Chess world before are informative. http://blog.gardeviance.org/2016/08/on-being-lost.html
Seb Member	Tue Mar 20 15:44:45 Also the other thing about Amazon is that they are a top grade business strategy function. FFS, it's a book selling company that outcompeted Google, IBM, Cisco and Microsoft who had the history, expertise, engineers and patents to become the predominant public cloud provider. That didn't happen by accident. It's because Amazon management is just lightyears ahead of anyone else. The real competition to Amazon is Alibaba.
Seb Member	Tue Mar 20 15:51:39 Sam: "Cars and homes are a pretty massive part of the banking industry." And Amazon will end up owning that market too. Like I said, they can buy all the info they need on those things. And as I pointed out, they know the physical address and address history too. What is it here that you think banks have as a competetive moat that would stop Amazon entering their industry? Simple fact is: payments and loans are a near comodity, and if you own the top of the value chain - retail - at scale, then you can cut payments services and loan providers out. "Sure amazon can play well with consumer goods financing... but every big consumer goods store has done that too" Pfft, they had nothing like the scale to make that play work. Even WallMart didn't have the range of SKUs here, partly because Amazon has been clever enough to allow loads of other retailers to use their platform. I really wonder how car financing and mortgage lending is going to work for people in ten years time who have a hugely reducced credit footprint because 60% of their spending has been via Amazon and doesn't turn up on CC or bank accounts. But hey, we will see.
Seb Member	Tue Mar 20 15:55:59 Microsoft, Google and Cisco: hah, Amazon is a book seller. Nom nom nom. Oh. WallMart: Hah, Amazon is a tech comany. Nom nom nom. Oh. Everyone thinks their industry is a special snowflake which Amazon can't eat. And then Jeff Bezos spins a dial on the wheel of fortune and helps himself to their industry; because most companies don't have a fucking clue about strategy.
Sam Adams Member	Tue Mar 20 15:59:07 "And Amazon will end up owning that market too. " Not a chance in hell. if they ever were able to start gaining in that market by the technique you suggest, they would be using their dominant position in one market to bundle products in another... i cant think of an easier antitrust case to prosecute. Amazon would get completely assfucked.
Seb Member	Tue Mar 20 16:40:33 Sam Adams: "in that market by the technique you suggest, they would be using their dominant position in one market to bundle products in another... " It's not bundling. Bundling would be forcing you to buy one product as part of a purchase for another. That's not the case. I'm not saying Amazon would not permit you to pay with CC, bank card or paypall. But like 1-click, you are just going to end up clicking "charge to my amazon account". Particularly if there are a bunch of whizzy tools and personal level export feature for the data. And of course nothing stops AN Mortgage provider or CC provider offering services to these people - but there is no obligation on the rest off the world to serve up data to make it really easy for AN Mortgage provider or CC company make a good estimate of their risk. Are you suggesting that the market / competition regulator is going to impose an obligation on Amazon (and every other company) to sell details of the transactions you have made through it to a third party such as Experian just so lenders business models can remain viable and profitable? I rather think the direction of travel is the other way around. In the EU, it is getting harder and harder to sell data in that kind of way. See for example GDPR etc. Plus, their fall back option is that the user is free to download their transaction data and upload it to a credit agency if they so wish. Of course that means it will take a couple of months for the credit record to get updated... unless of course Experian etc. pull their fingers out of their arse and build the technical infrastructure to handle this kind of real time data ingestion and matching. Nom Nom Nom. That is the sound of Jeff Bezos helping himself to a slice of the industry.
McKobb Member	Tue Mar 20 16:46:22 Rocket Mortgage ap is all over tv these days. And now zelle person to person money transfer ap is saturating the waves.
Seb Member	Tue Mar 20 16:54:17 Amazon ain't stupid, they are never going to blunder into the kind of anti-trust issues Microsoft had. Microsoft wanted to dominate the world by eliminating the compeititon. Amazon wants to be the market place that everyone else operates through and the infrastructure it runs on. And it is smart enough to know it needs to harness competetive dynamics, not try to stifle it. Hence the SOA structure. And interestingly, if you did break it up, it wouldn't really help because it is pretty easy to carve out segments because of the modular structure. So you'd still end up with dominant players in that industry segment, just built on top of services from the other area, in the same way Netflix is built on top of EC2. Because the strength isn't from cross subsidy, it's from efficiency and competetive advantage. So say you came along and said "Amazon credit card must be different from Amazon market place". Well fine, easy enough to split the business appart in the same way that Paypall is a separate company right now. But you will still be in a situation where everyone will be buying their data from Amazon market place to build credit profiles, and Amazon's personal finance offer will be a major player. It'll probably offer a better customer service and be open to other people building products and services on top of it. Master Card will be still trying to work out how to punch API's with that degree of flexibility and online IDAM features to even enable that into their creaking systems build in the 1980's which they simply can't move away from due to the sheer weight of technical debt. And Amazon Market place will be taking a slice out of every finance company, job done.
Seb Member	Tue Mar 20 16:55:18 McKobb: I would not be surprised if shortly Amazon aquires a company like that as the first step in their move into this space.
Sam Adams Member	Tue Mar 20 17:14:53 "Amazon wants to be the market place that everyone else operates through and the infrastructure it runs on. " Too big, too powerful, antitrusted in a second.
Dukhat Member	Tue Mar 20 17:43:49 Amazon is announcing it's getting into everything. It will be far more hated than Wal-Mart ever was at this rate since most of it's business model is using machine learning and data analysis to get rid of mid-tier workers. I don't think Jeff Bezos has that much magic sauce though. Alexa is worse than Google Home by a lot and a lot of their tech products have failed (remember the Amazon phone? lol). Bezos is not as infallible as some make him out to be. I'd rate Amazon's programmers as slightly above average. They've developed a bad reputation as a meatgrinder and fewer millenials want to sacrifice themselves on the altar of Bezos. So yeah, Amazon can investigate it and prod or whatever. But there are limits to analytics.
Seb Member	Tue Mar 20 18:22:50 Sam: Big, yes, powerful, yes. But not in a way that is illegal. You need new class of regulations. Because it isn't bundling, and it isn't anti-competetive. Dukhat: The secret sauce is in the business architecture and how they approach moving into other markets - data analytics etc. are a tool in a broad toolkit. But we shall see. But when I started to cotton on to just how powerful it's rigorous approach to SOA was around 2015, its market cap has what, quintupled? Watch what they do with Lamda though. They are going to eat the software industry. And you know what? It's going to be great - there will be an explosion of creativity and product development off the back of it.
Seb Member	Tue Mar 20 18:24:03 Sure, Google has it's google functions thing, and the whole "cool fun place to work" vibe. And yet Amazon has kicked their ass on cloud.
earthpig GTFO HOer	Tue Mar 20 22:10:47 Amazon will have your ENTIRE financial profile (anyone that's gotten a mortgage in the US in the last 5 years feel free to comment on that), and even an appraisal report for you new home. So not only do they know how much you have to spend, everything you've purchased in the past, etc etc, but they now even have a copy of the floor plan for your home. Color pictures of every room, and they know that after down payment and closing costs you still have $40k in a savings account and the balance of your 401k. This can translate to being able to offer a rate advantage, since they're also going to pitch you 4 different couches that would exactly fit your living room, etc.
Rugian Member	Tue Mar 20 22:12:53 Can we all take a step back and wonder why Seb is shilling Amazon so hard? Is the British Civil Service trying to tie down a contract or something? Jesus.
earthpig GTFO HOer	Tue Mar 20 22:26:06 " Earthpig's career in a few years... "Reports the Times, “Workers [at Amazon] are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are ‘unreasonably high.’” An apparently popular mind-set within the company is that “Amazon is where overachievers go to feel bad about themselves,” and a former staffer explained, “Nearly every person I worked with, I saw cry at their desk.”" Brace yourself bro. " You just have to make sure your employer pays you $0 per hour and a salary of $0 per month, then you can tell them to fuck off when they talk about 'mandatory' meetings or whatever. But, yeah, if Amazon (or whatever the Netflix is) tries to insist on paying me a so-called "living wage," I don't think that'll be a good fit for me. This is why you had the Department of Labor a few years back suing a place very similar to my current employer, demanding that the employer pay wages/overtime/etc, with the trade group representing the employees siding with the employer, against the DoL's position that there should be hourly pay, wages, and overtime pay. Self employment with a W2+bennies FTW.
Seb Member	Wed Mar 21 02:26:15 Rugian: Very very simple. I took a good long look in 2015 in operational delivery of services and came to the conclusion we should be structuring government service delivery and operations in a similar way. At the moment we are structured by policy. So say Dept for environment, food and rural affairs is responding to horse meat scandal. We maybe produce some additional regs, determine we need to track horses to stop them entering the supply chain. That ends up with documentation and processes etc. (Horse passports) implemented with an IT system, digital front end, team to handle edge cases etc. It ask gets delivered, it has a positive NOV Happiness abounds. Only because of scabies, avian flu, something in pigs, and BSE; we have a tracking system for each. Each with a separate process designed by policy peeps, each with its own operating model. Each with its own bespoke IT. If instead we were structured like Amazon, your policy teams would be assembling interventions based on a pallet of modular capabilities implemented by teams providing that capability across govt (whether automated,semi automated or fully automated). Because you keep these functions small in scope and standardised, it's easy to slot them in add out to build a wide range of different service lines. You can also easily and cheaply outsource their provision and change supplier with minimal disruption. So, for example, the way health checks are done for over 70s driving permits are actually pretty similar for how less it's done with shotgun licenses. So why invest in the overheads twice? You can keep the data segmented by service line to avoid panopticon and use an identity hub with third party identity providers to permit fact checking. You can boil away about 60% of admin costs and save billions.
Sam Adams Member	Wed Mar 21 09:32:05 Lol seb is such a bureaucrat. Sad.
Seb Member	Wed Mar 21 09:53:49 Sam: I just proposed cutting 60% of government roles. Not accounting for the additional spillover in slashing policy, analyst and managerial roles that would become redundant. You say bureaucrat. I'm not sure what you think a bureaucrat is.
Sam Adams Member	Wed Mar 21 10:08:54 Someone that talks a lot. Especially about process and planning. I think we should form a commitee to talk about your plan. Lol.
Seb Member	Wed Mar 21 10:53:48 SamAdams: For someone that criticised agile on the ground there was not enough planning that's rich. Yeah, let's have a tax system without any process. The sheriff will just rock up, have a guess, and give you a bill. Don't pay it, go to jail. In any case, I got it a budget and into delivery, and the first element has been running for a couple of years now. So, hey, action. What have you done Sam?
Sam Adams Member	Wed Mar 21 11:52:38 "criticised agile on the ground there was not enough planning" Rofl. Your memory is poor. "What have you done Sam?" I play with cool toys and get results, generally rapidly, and everyone loves me. I avoid talking, instead focusing on actually doing. Fortunatly im the best at what i do so i rarely get questioned by talkers in meetings. Its great. "In any case, I got it a budget and into delivery, and the first element has been running for a couple of years now. So, hey, action. " Congrats. Here is a golden stapler. Dont be late to the morning standup tomorrow.
Seb Member	Wed Mar 21 16:23:34 So, you come across as basically being a quant that operates in an enabling environment who probably couldn't get anything done to create that environment for himself.
Sam Adams Member	Wed Mar 21 16:40:09 "to create that environment " Bwahahahahahahahahahahahahahahahaha. What a silly bureaucratic thing to say. To "create" an "environment". Lol.
Seb Member	Wed Mar 21 17:50:19 Unless you are self employed... who pays for your cool toys and ensures you have access to them? Sounds to me like you are a bit of a cog in a machine.
Seb Member	Wed Mar 21 17:51:24 A happy cog though, that has someone else keep it well oiled.
Sam Adams Member	Wed Mar 21 22:34:18 "who pays for your cool toys" The customer. Duh. "that has someone else keep it well oiled" Its a team effort. the other scientists and engineers here know we are the best and act like it. Sure there are some talkers in the bureaucrat ranks that waste time and some complaints from the grunts when we tell them to do things, but overall it works and is great. But not because of buzzwords in meetings. It is because most of us are smart and do what needs doing without being told.
Sam Adams Member	Wed Mar 21 22:35:00 Oh and are well paid. That helps keep people motivated...
Seb Member	Thu Mar 22 04:26:53 " some complaints from the grunts when we tell them to do things" ... "Do what needs doing without being told." <raises eyebrow> Quant with delusions of grandeur. Why not set up your own business then?
Sam Adams Member	Thu Mar 22 09:45:05 Obviously there is a lower rank of grunts beneath us that dont get to think that are less happy(except for the pay i assume). Im not going to move gear in the rain am i? Lol. I guess theres a line that us engineers dont cross when there is work that needs doing :p "Why not set up your own business then?" Cause then i would have to talk to more bureaucrats, fill out more paperwork, and otherwise do unfun shit.
Nimatzo iChihuaha	Thu Mar 22 10:46:25 Sam is correct. The advantage of Amazon is not even close to what Netflix had pver blockbuster. That was a paradigm shift. Amazon is simply doing what other non bank companoes have done before. I mean ffs ICA in Sweden, a large grocery store chain, went into banking years ago. Yes their large customer base was an advantage, but nohing earth shattering happened. The end.
Seb Member	Thu Mar 22 12:16:42 Sam: So, basically, you are in an enabling environment to let you perform the taks you perform well, that is sustained and made possible by other people. My job is creating those environments where people can get shit done, and getting rid of the shit. You can call it bureaucracy if it makes you feel happy, but I think of it as the reverse: getting rid of process, overheads and shit that is unneccssary to delivering outcomes. For you, the cool shit is what, trades? Last I recall you worked in finance. For me, it's ensuring the public services deliver high quality service quickly, impactfully, and above all cheaply and efficiently. My cool toy is a largish OECD states public service delivey. It's a hell of a trainset.
Seb Member	Thu Mar 22 12:31:10 Nimatzo The advantage Netflix had over Blockbuster was that it built a robust global streaming service on Amazon's EC2 platform (now it has data from that and moves into commissioning). And remember it started with a dvd in the mail model. Blockbuster *also* went into both of those areas, but lost to netflix. The main reason Blockbuster lost was not because it couldn't operate those models (it could have hired engineers to build a streaming service on EC2, it could certianly have done dvd in the mail). The reason Blockbuster lost is because, tied to a legacy business model and infrastructure and a poor business architecture meant that it couldn't readily re-purpose existing parts of it's business to serve the new model; and the new teams it set up to try and compete using these new models were viewed as canibalising the existing business. The management failed to get a grip on the rivalary and office politics, and failed to focus on the small bits of the business that were the future (in part because as always, these look like huge cost centres on the company balance sheets due to investment), and instead focused on protecting the large legacy business that was responsible for the bulk of revenue. Incidentally, this is the same thing that affected Microsoft vs Google and Apple. Microsoft produced e-readers, smart phones, tablets and browser based office clients. However, anything that was seen as a competitor to windows/office/desktop was either shoved to one side, under valued, or hoplessly crippled by the need to somehow contribute to the windows business. E.g. early e-readers produced by microsoft had a kindle style UI, but were forced to adopt a UI more reminiscent of windows. And the initial browser based office client was killed off as undermining the more lucrative business model of "buy a box/license". Google brought out their offer and 365 didn't catch up for years. So I would say Blockbuster is *exactly* a good example of why retail finance is going to fail to push off Amazon. Sure, super markets etc. have got into finance and banking. Tesco and Sainsburies do it here. Amazon on the other hand has the advantages I laid out earlier: 1. IT's SOA approach to business architecture means they will do it effiicently. 2. They have better cross and upselling options 3. Their scale and ownership not just of a store but entire marketplaces mean they are fundamentally in a different position than any store to start pushing the consumer credit rating agencies and data aggregators out of the market (which is where they are really going with this) - which are integral to retail finance. 4. Supermarkets and big retailers have nothing like the track record of strategic success that Amazon has. I remind you, agian, Amazon was a tiny online book retailer that somehow managed to beat IBM, Microsoft, Cisco and Google to being the predominant cloud provider. Those companies had all the supposed advantages - far more than you ascribe to netflix vs blockbuster. And they've done this in three industries allready: Online retail market place (eBay) Public cloud computer Logistics and fullfillment Three times is not a coincidence. But we shall see :)
Seb Member	Thu Mar 22 12:33:34 N.B. Netflix has good strategists too. Note that this is one area Blockbuster has tried to get into and not been able to because Netflixes strategy is strong and they have first mover advantage so there is no realy angle to move in and disintermediate and disrupt its model. But I do not see any retail banker displaying the kind of innovation over it's peers that Netflix did over Blockbuster. Amazons biggest advantage is that it has a very strong strategy capability, and most other businesses don't.
Seb Member	Thu Mar 22 12:36:46 Incidentally Sam, the reasons for MS and Blockbuster losing out in key market areas is exactly why you need an enabling environment. If in Blockbuster there had been really good managers and strategists forcibly carving out the space and investment and explaining the importance and value to the top level of management that these small, irritating cost centres that were competing with the established bricks and mortar franchise model; they'd both have produced equivalent products and services to Apple and netflix respectively years ahead, rather than declining. Your mistake is to think your bubble is somehow natural and not being maintained.
Nimatzo iChihuaha	Thu Mar 22 12:43:18 ”It is because most of us are smart and do what needs doing without being told.” lol what does this even mean? Does what needs to be done come to you in dreams? The holy ghost? Input comes from somewhere, then there is a variation in the operational freedom that comes with the specific job/task. Judging by what you have written you are working in a fairly common environment, where certain functions have operational freedom, while others, ”grunts” do not. This could apply for an entire company or parts of it. This type of set up is ideal in certain environment/tasks, but a disaster in others. Does not work in mass production or processes that are continous, even where robots are doing most of the work. You are relying on deliveries, servicing and shipments. Things work according to a much more rigid schedule, many more parties with their own goals are involved. The one man operation approach works well when you are to some degree selling consultancy hours. Where novelty is part of the game, where projects starting and ending _is_ the main process. If I do not do something on my table, noone else will, because noone else can. Not so in manufacturing, someone better do it now, the shipment leaves tomorrow. In very simple terms, to deal with the unexpected in a place where 100 people work, you need a system and clearly defined procedures, chain of command etc. In highly efficient manufacturing environments, you will reach a level where the managers are collecting data from the workers/production on what is basically non conformities. No one is telling the workers what to do, even when unexpected things happen. In this place, the workers are to some extent ”telling” the managers what needs to be done. Such a place requires a lot of effort to be put in maintaining and improving the system. Now what are the components in such a system? Competent workers for the tasks, clear leadership (clear as in what is expected), bottom up approach. From there you can in theory build a system that works great. Also you need something that people actually want to buy. I have worked in a place where the system was great...at producing shit people didn’t buy :-) but that is another story.
Seb Member	Thu Mar 22 12:49:42 Also worth noting: Netflix launched streaming services in 2008 IIRC. So by that point google had Youtube for two years.
Nimatzo iChihuaha	Thu Mar 22 13:00:10 Ok seb fair enough. I know too well how legacy can ruin even the most basic attempts of change. And I totally forgot that Netflix started out as a mail rental of dvds. Fair enough. Banking is a stale and traditional, I have no idea how much of that is due to regulation, which is extensive when you are dealing with government issued mint. More now after global war on terror and cryptos. Godspeed Amazon, godspeed.
Seb Member	Thu Mar 22 13:00:38 *Note that this is one area Blockbuster has tried to get into and not been able to because Netflixes Brainfart, that should read Amazon.
Seb Member	Thu Mar 22 13:02:59 Nim: Regulations will be the bigger barrier. But having worked with a lot of people who have seen the back end of banks systems... hundreds of duplicated systems and processes tightly integrated to really old, inflexible IT dating to the 80s. I don't think they can change if they wanted to. And I think Amazon getting into finance is really about them getting into credit ratings. Then they can do something really disruptive which is become the market maker for retailers offering in store credit.
Sam Adams Member	Thu Mar 22 13:38:41 "but I think of it as the reverse: getting rid of process, overheads and shit that is unneccssary to delivering outcomes. " Good for you if you actually do that. My experience is managers who claim to be doing that usually just talk a lot.
earthpig GTFO HOer	Fri Mar 23 01:37:47 " But having worked with a lot of people who have seen the back end of banks systems... hundreds of duplicated systems and processes tightly integrated to really old, inflexible IT dating to the 80s. I don't think they can change if they wanted to. " Eh, I was at a place that switched from a super legacy software platform to a less legacy one. It wasn't the end of the world. This is the ubiquitous "Microsoft Excel" of mortgage loan origination: https://www.elliemae.com/encompass/encompass-overview They use all the buzzwords, but as a user if you change one little thing that changes one other number, it crunches like it's doing algorithms from 1992 that were rendered obsolete in 2002 but are still hard-coded in. There's no Linus T saying "this is a shit solution, we're not doing this until it looks good and is elegant, patch rejected"... instead using it feels like the software development is more "the sales guys want it, implement it right goddamn now, I don't give a fuck, do it."
earthpig GTFO HOer	Fri Mar 23 01:42:33 I actually pitched a pair of software entrepreneurs on re-inventing the wheel. I screencasted me pulling one of their credit reports. They were both laughing uproariously by the time I was done with that simple task that should take no more than 90 seconds. And our implementation of Encompass is actually faster than most (you ask to play with their LOS whenever you interview a company), since our folks threw a disproportionate shit ton of hardware and bandwidth capacity at it. But it's still slow as shit compared to all software I use when not at work, that is often doing more complex things (like rendering a zillion polygons at 60fps, which *you would think* is more complicated than adding up one set of numbers, adding up a second set, and dividing them).
Sam Adams Member	Wed Mar 28 10:17:46 Amazon stocks plunge on antitrust, tax concerns. https://www.axios.com/trump-regulation-amazon-facebook-646c642c-a2d7-454b-a9a9-cdc6e4eaef2c.html Lol@seb
Seb Member	Wed Mar 28 10:53:08 Plunge on back of mad trump obsession. Let's see what happens. Tax issues I can see, but anti-trust? Europe's been far more robust on anti trust rules than US regulators and Europe hasn't found an angle.
jergul large member	Wed Mar 28 12:55:33 Crap. I think the post was a duplicate.
Seb Member	Wed Mar 28 13:26:56 The latter had my assessment of the calamitous fall of 6% (compared to a 90% rise over the last year). Looks more like a correction after a bull run.
Sam Adams Member	Wed Mar 28 13:35:05 In amazons current form they are generally safe from antitrust concerns in my opinion. But they do not have much room to spread further, which is my point.
Seb Member	Wed Mar 28 14:36:57 Sam: I don't think you understand anti trust laws. And Amazon's explicit strategy is to stay modular and incorporate competition and competitors. It embraces market dynamics and retains a pure platform business model rather than e.g. uber which pretends to be a platform, or e.g. Google and Microsoft that exploit platform business model to push dominance in other categories via cross subsidy and bundling. Because Amazon has adopted SOA with by function pricing they can demonstrate no cross subsidy.
Sam Adams Member	Wed Mar 28 14:45:07 Antitrust laws, in their broadest sense, is when the people and government think an entity is too powerful. This is a pretty nebulous region full of grey areas and talking lawyers, and new legislation. Bottom line, the antitrust hounds are sniffing at amazon. Theyll bite hard if amazon gains too much strength outside of their current dominion.
Seb Member	Thu Mar 29 06:49:20 Sam: Can you think of a specific law that would apply if they went into finance? Generally anti-trust laws target behaviour that's anti-competitive. Bundling your browser free with your OS to try and kill a rival company is anti competitive. Entering a new market with a new product isn't.
TJ Member	Thu Mar 29 13:47:30 The Bank Holding Company Act prohibits companies in commerce from engaging in banking activities. Amazon already has a foot into the lending business. Until the act is eliminated they will be prohibited from being fully invested into the banking system. In the United States lobbying pressures will be sizable against Amazons complete vision into the banking system. One does need to consider the digital age being paramount in any decision process. It all depends on how fatalistic the banking industry feels about the Amazon threat. When you engage into a fully functional operation you've entered into a monopoly status that anti-trust laws protect against. The battle will be interesting. I don't believe I've strayed far off the mark if at all.
Sam Adams Member	Thu Mar 29 15:49:57 "Can you think of a specific law that would apply if they went into finance? " By your previous suggestions bundling and failure to share would be the obvious ones.
Seb Member	Sun Apr 01 02:00:15 What do they bundle?
russian Member	Sun Apr 01 10:20:31 More data better risk management. Banks deal with it by getting you or your mortgage broker to fill in as much of your income and expense details in order to approve a loan. Amazon doesnt need to it, has way more info than that on hand. More importantly with that info will see trends way faster than banks.
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