February 10, 2017
What We’re Reading This Week
A small part of me, a very small part, is of the mind that banks may be conspiring to do something scandalous every few months or so. Like after 2008 they all got together and asked each other if they should stop charging high fees and generally stop doing unscrupulous things. Then one guy asked this question: “What if we keep doing the same things and just trade the blame back and forth?” That sort of seems like the option they chose. SO! Chase Bank announced in 2014 that they would be exiting the prepaid debit card business. I did not find out from the news but from my in-laws because they called to ask me why their prepaid debit card was going away – even though I hadn’t worked at the bank in several years. Chase has been the go-to solution for many short-term pay solutions – the most local and prominent being Michigan Unemployment. The Chase unemployment debit card was the default selection for unemployed workers in the state and saw a surge during 2008-2010. Full disclosure, I worked at the bank during this time. Essentially, if you had the poor taste to be laid off during the recession, this debit card could serve as the insult to your injury. Any activity you can think of, ranging from withdrawing your money to participating in a Cinco de Mayo celebration came with a fee. You’re already bummed out because you lost your job, but at least you’ve been paying into the unemployment fund right? Well, here is a card that will charge you like $20 to withdraw your money and put it into your bank account. It’s hard to see why people really hate banks…I guess 2014 wasn’t soon enough though. The bank is being sued over these card and their fees, as it relates to jury pay. The article references this, “The funds become impossible to withdraw from an ATM once the balance falls below $20, and in at least one jurisdiction – Washington, D.C. – there are no Chase branches or ATMs within 90 miles.” I mean, there are lots of reason to avoid living in Washington, DC but no Chase Banks or ATMS for 90 miles seems like an advantage.
The historical model for innovative software development looks like this: build software to replace something that wasn’t digital (like word processors replacing type writers), sell it to people, listen to customers tell you about the features they want but don’t have, build it again only better and charge more money for it. Repeat. Sometimes software and technology becomes so advanced that it starts to tell us what features we want, even if we don’t really want them (think voice to text). These features are developed and implemented, but adoption is slow and projects get scrapped. There has been a trend lately in tech for companies to go straight to the part where they make something no one wants (self-driving cars) – these companies raise a lot of capital, but never really show much revenue. One answer to this problem is to focus on making things people want to buy. Another answer is to stay vague about what you make and sort of let customers imagine what your product will do. Magic Leap seems to have chosen the latter. The Magic Leap augmented reality device will cost anywhere from $1,000 – $2,000 and “will be the first step towards a really cool dream. Of flying squirrels and sea monkeys and rainbow powered unicorns. Of most anything you can imagine.” Millennials will probably love it.
What happens when a company that makes incredibly well designed hand held devices decides to make a building? Well, for starters, the construction team will tell you repeatedly that what you want is not possible. That probably only encourages a company like Apple, but having worked in construction I can also tell you that good builders will quit when the owner demands something that should not be built. Eventually the owner will find a company willing to build something stupid for money and they will pay too much for something that won’t work right. The first two contractors on the project left shortly after work began despite the large price tag. Apple eventually found someone willing to adhere to their strict rules for construction and here are some highlights: 30 pages of guidelines for the wood that needed to be used, 15 meetings on exit signs with the fire department, and the construction workers were often required to wear gloves to avoid marring construction materials. This is by far my favorite though: when designing the doorknobs for offices and conference rooms it took months to come up with a sample. “After months of back and forth, construction workers presented their work to a manager from Apple’s in-house team, who turned the sample over and over in his hands. Finally, he said he felt a faint bump.” Obviously, that bump was a deal breaker. “The construction manager who was so intimately involved in the door handle did not see its completion. Down to his last day, Apple was still fiddling with the design – after a year and a half of debate.” Yes, a year and a half of debate over the doorknobs. When I hear how hard they work on these things, I’m ok with paying $600 on an iPhone, but when they take $5 billion and several years to build their new headquarters I feel like I may be paying too much.
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