A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig of Lightspeed.

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A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig. I am a partner at Lightspeed in Silicon Valley.

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Drinking from the Firehose #115


A decade ago, I started using a service called Mint to track my income and expenditures. It worked for a little while. But, as my financial life got more complicated, and as Mint started to show its age, its limitations became easily apparent.

First, Mint's categories break all the time. Second, the user interface is slow and requires actions that are super tedious. Third, it regularly screws up inter-account transfers (e.g. I move savings to a brokerage account), making them look like extra income or expenses. Fourth, it lacks intelligence in budgeting and gives no context on what a "reasonable" expense is in a certain category. Fifth, Mint earns revenue from lead gen and, as such, constantly hawks financial products you don't need.

My biggest problem with Mint, and every other product that competes with it, however, is that it only looks at your P&L on a cash basis. A proper set of financial management tools would run on principles similar to GAAP. You should simultaneously have a cash and accruals view of your personal P&L with any granularity you wish. You should also have a balance sheet and cash flow statement, completing the classic "3 statement model" any first year investment banking analyst knows how to produce.

My principled position is that I should apply the same set of financial rigor to my personal finances as my portfolio companies apply to their own at the board level. I need a software service that I can count on as my personal CFO.

From what I can tell, nobody has built this yet, but the timing would be particularly good for someone to start.

For one, Plaid and services like it have commoditized the pipes that connect to your accounts. Machine learning has also come a long way since Mint's time and can be applied rigorously to classification of expenses. A new service could also make reasonable projections based on provided goals, extrapolations of past behaviors, and what is typical for similar users. Assuming user data can be anonymized and shared securely, this product would benefit from significant economies of scale in data and network effects.

People will pay for this product. An ad-driven business model like Mint's is no longer necessary. Americans already spend $44 billion annually on tax and financial accounting services, nearly $284 per tax filer. If such a service could save consumers a couple hundred dollars a year by re-allocating investments or identifying ways to optimize taxes, a $9.99/month price point would be reasonable.

Another option for this product to exist is for one of the robo-advisor or stock trading apps to build it. I would love to see Wealthfront, Betterment, Robinhood, SoFi, or others bundle such a product for free. Such a move would build loyalty, drive engagement, and reduce churn.

I shared my viewpoint on Twitter this weekend and kicked off an energetic discussion. Here are some of my favorite suggestions:

@scottbelsky: "tons of 👌🏼@airtable templates for this stuff. don’t mean to talk my own book, but you can create a well organized and somewhat automated personal finance system with it"

@FaheemSiddiqi: "Agreed for the most part and I use google sheets but problem is that you have to manually manage it and it’s time consuming. I wish there was a tool that could link my bank accounts, CC transactions and automatically categorize them to then show me a “personal P&L”"

@lilibalfour: "I’d love to see this! As someone who spends all day in company personal finances should be a breeze but they’re not. Solution needs to consider medical insurance, taxation, charitable giving, retirement, etc."

@DanGrover: "Need a way to have multiple people share access (without having to make a separate shared email account), and some way to tag who spent what. :-)"

Is there a product out there I'm missing that magically solves this problem? Please let me know by replying to the Twitter thread below. 



Early indicators.

I'm not an economist, but I do know that inverted yield curves are scary. Nine of the last economic recessions were preceded by a 3-month T-bill rate greater than the 10-year Treasury bond rate. We just fell into that territory again this week.

Life capital.

I attended a conference in SF this week hosted by my friends at Slow Ventures. The topic was Income Sharing Agreements (ISAs). ISAs are a novel mechanism for personal finance that seem to be gaining commercial traction over the last few years. Erik Torenberg wrote a digestible overview of the space and discussed how ISAs could change consumer finance for the better.


Baby steps.

Netflix is slowly building into a powerhouse of kids' content. It is estimated to spend over $1 billion this year to develop this category alone. 60% of its subscribers streamed kids' titles in the last month. Remarkably, Netflix is avoiding the "universe" strategy of Disney. It also eschews the consistent methodology and style of Pixar. Instead, it plans to draw from a breadth of creative styles and stories -- all guided by Netflix's proprietary user data.

You lost the map?

The Blair Witch Project was the ultimate movie sleeper. The "found footage" film cost only $35,000 to shoot, but grossed nearly $250 million at the box office. A recent article in The Ringer asks the question, "What can modern movie marketers learn from this cult, turned mainstream classic?"

TL;DR: the creators authored an online "extended universe" to blur the line between reality and the fictional world in which the narrative exists. The internet rumor mill did the rest of the work.


Apple gets carded.

Apple announced a credit card with powerful security features and meaningful improvements in spend tracking (see my One Big Thought above). I'm excited to see this product hit the market with the usual Apple spit and polish. TechCrunch wrote a helpful explainer that talks through some of the product's most important details.


Tyranosaraus recked.

A breathtaking The New Yorker article describes a landmark paleontological study, which reveals the very the moment that nearly all life on Earth was snuffed out by a stray asteroid.


Losing my religion.

The most popular religion in America is "no religion" for the first time. 23.1% of Americas today lack a religious affiliation vs. only 5% in 1972.

Disclaimer: * indicates a Lightspeed portfolio company, or other company in which I have economic interest. I also own stock directly in AAPL, ADBE, AMZN, CRM, FB, FTCH, GOOG/GOOGL, NFLX, SPOT, SQ, TSLA, and TWLO.

Lightspeed Venture Partners, 2200 Sand Hill Rd, Ste 100, Menlo Park, CA 94025 USA Sent to — Unsubscribe