Processing Method

At Undercurrent over the past several months, I’ve been working with a few folks on the team toward an open-source, decompiled version of our operating system(s) that can be individually adopted, and improved in parallel (hopefully) by a large group of users. These are my notes. Comments open!

Processing Method

Used frequently by individual teams to kick-start work, this method functions primarily as a facilitation guideline for weekly status meetings.

Tours of Duty

According to Reid Hoffman, there are three types of “Tours of Duty” that function as time-limited, goal-based and explicit contractual agreements between workers and companies:

  1. Rotational – multi-year, used for training and rapid skill-building and functioning as an on-ramp from one world to another
  2. Foundational – multi-year, wherein the worker and the company become intertwined (my estimation without having read the book is that these are typically positions of management/leadership where an extended “stay” is desirable)
  3. Transformational – may be shorter, and are designed to be highly specific agreements between an individual and a company; where the first two may be generalized, Transformational tours have a particular mission that is designed to create mutual change for the company and the worker

Interesting stuff.

Read more: Tours of Duty

How We Transformed Marketing at Electrolux

Recognizing the need for integration, Electrolux’s digital, trade, brand and product marketers worked together to create a cohesive experience from pre-purchase, to the purchase itself, to post-purchase service and beyond.

To this end we eliminated silos between functions including marketing, sales, IT, consumer insight, and innovation and established “consumer experience teams” in each business and region. These teams include consumer insight, brand, product, retail, digital, social, and consumer care specialists who now closely work together to create integrated consumer experiences and launch plans. We also moved responsibility for the post-purchase experience into marketing — all of the services, onboarding, registration, and add-on purchases and support that people receive after they buy.

This is smart. Copy this.

Read more: How We Transformed Marketing at Electrolux

Bank Branches are Dying

…[there are] seismic changes in the British banking landscape, with a shift at a startling rate to conducting even complex transactions on smart phones, tablet computers and PCs rather than in physical branches. The study is expected to detail a remarkable set of statistics, including the fact that HSBC recently completed an online mortgage application in 24 minutes, and that spending on contactless cards has more than doubled. But it is the impact of the internet revolution on branches which will cause the most concern among groups such as the elderly and the less computer-literate.

It’s pretty common among large, retail banks to believe that the branches are an important asset, and that users want the security of a human helper during complicated transactions with banks (and with other institutions). I believe banking *can* be no more complicated than setting up and using a Dropbox account – this British Bankers Association report shows that users are moving in that direction.

Read more: Bank Branches are Dying


That raises the uncomfortable question of cross-subsidy. Borrowing from banks, especially if unplanned, can be very expensive – and the fees levied on overdrafts help raise the money needed to subsidise “free” banking for the majority. Those who enjoy free banking tend to be the better off, while those who pay large overdraft charges tend to be those who are struggling financially….Cross-subsidy is rife in financial services as it is in other walks of life. Banks can offer “introductory bonuses” on savings accounts because they pay derisory interest on many other accounts. Some borrowers can get low-cost fixed-rate mortgages because others are effectively trapped on more expensive standard variable rates.

Cross-subsidy will be eliminated by the unbundling of banks. And we’ll all be richer for it.

Also, after the click, there’s a good read on Wonga, a less-unscrupulous payday loan service.

Read more: Cross-Subsidy

14 Financial-Services Disruptors

Reading through the CNBC Disruptor 50 and it strikes me that there’s a ton of interest in financial services.

By my count, there are 14 companies that are peeling off portions of Banks’ core jobs (28% of the list). Worth noting that none of these are payments companies. If Facebook, Twitter, OTT apps, etc. are the unbundling of email, then this is the unbundling of banking…except there’s little regulatory capture going on in the email space.

Nine direct competitors for small portions of the jobs banks do for customers and businesses:

  1. Motif;
  2. Stripe;
  3. TransferWise;
  4. Personal Capital;
  5. Wealthfront;
  6. Lending Club;
  7. Coinbase;
  9. Betterment.

Four adjacent competitors and/or businesses that banks could do well:

  1. Palantir;
  2. Docusign;
  3. AngelList;
  4. Kickstarter.

Read more: CNBC Disruptor 50

Regulatory Capture

Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure; it creates an opening for firms to behave in ways injurious to the public (e.g., producing negative externalities). The agencies are called ‘captured agencies’.

For future reference.

Read more: Regulatory Capture

Disrupting From Above

Alibaba, a very ambitious company, was perhaps unsatisfied with users transferring small amounts of money periodically into their Alipay accounts. So they had the bold idea to launch a savings account alternative called Yu’e Bao. Yu’e Bao isn’t just a savings alternative, it’s a highly disruptive one that offers almost 200 basis points more interest than the rate most banks are offering. In a little over 12 months, Yu’e Bao has gathered 100mm investors and over US$87B in assets. Alibaba may be willing to forgo profits on savings accounts in order to grow assets, and that is wonderful for consumers. Isn’t that the exact type of competition we would love to see in the U.S?

The point of this article: banking will be disrupted by those who gather assets, not those who “fix” the transactional experience.

Read more: Disrupting From Above: Wealthfront

Apple & Operational Effectiveness

[Apple are] doing more not by changing their thousand-no’s-for-every-yes ratio, but by upping their capacity.

The turning point is clear. The headline of Apple’s October 2012 press release said it all: “Apple Announces Changes to Increase Collaboration Across Hardware, Software and Services”. It turns out that was not an empty bromide, meant to patch over run-of-the-mill corporate political conflict. Tim Cook wanted Apple to function internally in a way that was anathema to Scott Forstall’s leadership style. The old way involved fiefdoms, and Forstall’s fiefdom was iOS. The operational efficiency Cook wanted — and now seems to have achieved — wasn’t possible without large scale company-wide collaboration, and collaboration wasn’t possible with a fiefdom style of organization.

So much yes.

Read more: Apple & Operational Effectiveness

Origins of Venmo

One of the weekends we were getting together to work on this idea, Iqram was visiting me in NYC and left his wallet in Philly. I covered him for the whole weekend, and he ended up writing me a check to pay me back. It was annoying for him to have to find a checkbook to do this, and annoying for me to have to go to the bank if I wanted to cash it (I never did). We thought, “Why are we still doing this? We do everything else with our phones. We should definitely be using PayPal to pay each other back. But we don’t, and none of our friends do.”

Lots of good in this, but of particular note for any clients reading this: there’s a really clear description of user need/user story in the quote above, and a clear demonstration of “Experience Value”. Alex and I have been playing with this idea for a little bit – that there are billions of dollars of value that hang in a very nuanced, very hard-to-describe balance: WhatsApp is not that different than Facebook Messenger, and Venmo is not that different from PayPal, yet in both cases the former is worth something more to users than the latter. That’s Experience Value.

Read more: Origins of Venmo