Downloading a Credit Card

Today Chase sent me an email about some suspicious transactions on one of my credit cards. After a quick 15 min phone call, we determined that the transactions were fraudulent, so Chase canceled my card. They told me a new one would arrive in the mail in a week or so.

Now the fun part. The agent told me that Apple Pay would update immediately with the new card number. While I don’t have a new physical credit card yet, I can use my iPhone to pay for transactions with the new card. In essence, I downloaded a credit card. This feels like the future. 

In a way, it reminds me of iTunes. You used to go buy a CD and then rip it to your computer with iTunes. Now you skip the physical media and download an album straight onto your computer over the internet. This is happening to credit cards. In the not so distant future, you will simply download a credit card much in the same way you download music. You will no longer need to scan your card into your phone. Eventually you won't even need the physical card.

Apple Pay will have to become more ubiquitous for this vision of the future to transpire, but look. It’s 2015, and I just downloaded a credit card.

iPhone 6 Plus Lessons

As far as I can tell, there are 5 main reasons to get the iPhone 6 Plus over the regular iPhone 6.

  1. Bigger Screen
  2. Better Battery Life
  3. Better Camera (Specifically OIS)
  4. More expensive (See: Veblen Good)
  5. Higher Pixel Density Screen

My biggest complaint with the iPhone 5 was battery life, so I went with the iPhone 6 Plus. I’ve been using the 6 Plus for about 2 weeks now, and the screen is sometimes too big. The thing is though; I’ll be keeping the Plus. My iPhone 5 couldn’t make it through a regular day of use without needing to be recharged. My 6 Plus finally can. The iPhone 6 Plus is the first iPhone with acceptable battery life.

My hope is that Apple learns why people bought the 6 Plus over the 6 and vise versa. I hope they don’t assume that everyone bought it for the simple reason of wanting a bigger screen. (Spoiler alert: they won’t.) Apple has to know how many people complain about battery life, and there must be a compelling reason why they don’t make the phones thicker to make room for a bigger battery. There is a real argument to be made that the bigger the phone is, the thinner it needs to be for the sake of ergonomics.

The iPhone 6 Plus’ battery life has been a godsend, but I hope Apple knows I bought the 6 Plus in spite of its big screen, not because of it.


Uber needs no introduction. In a short 5 years, the car dispatching platform has garnered its fair share of praise, scrutiny, and venture capital. With an impressive $258 million Series C round, the company has a significant war chest at its disposal. Before looking at why this capital is necessary to achieve Uber’s short term goals, let’s explore their long term ambitions.

When trying to understand what a company wants to do, it often makes sense to look at what its leaders have said in the past. Uber CEO Travis Kalanick has stated that he wants “to build a technology company that changes transportation and logistics in urban centers around the world.” See how he doesn’t call Uber a car dispatch company or a transportation network company? Travis is laying out his plans much in the same way that Jeff Bezos has done for Amazon in the past several years. Jeff has reprinted his 1997 shareholder letter in every annual report, spelling out his vision for the company. We no longer think of Amazon as a bookstore, and soon we will no longer think of Uber as a taxi replacement.

Early experiments with Christmas tree and Valentine’s Day rose deliveries have provided us with an early look at what Uber is truly capable off. They have further revealed their hand with the announcement of UberRush, on-demand bike messengers in NYC.

With the advent of driverless cars, Uber may no longer need to contract with thousands of drivers. (Now you see why Google led their Series C.) This would allow Uber to become a “full stack startup” and thus control the entire customer experience. Uber will move from a taxi alternative to a company controlling a massive army of on demand self driving robots (cars) around the world. What if Uber incorporates something like Google Now that can predict what you need or where you need to go based on your calendar, email, search history, etc? Skynet?

In the above quote from Travis, he implies that the target market for Uber is anyone in an urban center. The WHO states that 50% of the world currently lives in an city and this figure will be 60% by 2030. The 2010 census puts 80.7% of Americans in a city. With  America’s declining car ownership and the popularization of the sharing economy, Uber’s potential market is only going to grow.

That being said, it’s not all sunshine and roses. In cities across the world (Uber is in over 70), entrenched taxi lobbies and established black car companies are turning to lawmakers to keep out Uber. Being disrupted isn’t fun. Fighting the arcane fair minimums, fleet caps, and time requirements will eat up a substantial amount of this capital. Unfortunately for Uber, being successful in one city does not dictate success in another. Yes their experience and acquired expertise will help in future rollouts, but mindshare is very important. Every new city requires a push to recruit both drivers and riders. This too will eat up capital.

Another hurdle is the consumer backlash against surge pricing. As an economics major, I think surge pricing is a great idea, but it will take some explaining to customers. Nobody enjoys feeling like they were taken advantage of.

Right now Uber is a taxi replacement. Soon they will be able to use their drivers to move anything, including yourself, on command. Eventually Uber will have a fleet of driverless cars that will be able to predict when and where you need a car to take you around. The ever witty Box CEO Aaron Levie laid out Uber’s future quite plainly: “Now comes a steady march toward global domination.”

The iPhone 5C’s Raison D'Être

During Apple’s quarterly conference call, Tim Cook told us that they sold less iPhone 5Cs than expected. We don’t know the actual ratio of 5Cs to 5Ss, but we know that the 5S outsold the 5C.

Before explaining why this happened, we must first ask why the iPhone 5C was created. The 5C allows Apple to give price conscious buyers a better experience. Previously they would have bought last year’s old phone (the n-1 phone) and then keep it for 2 years. This is especially problematic given that the older phones have a 3.5” screen (vs 4”) and a dock connector (vs lightning). Apple doesn't want customers buying hardware that is already out of date.

There are two reasons why the 5C helps sell more 5Ss. The first reason, which Apple most likely understood, is that you can bring customers into your store with the allure of the cheaper 5C, and then upsell them to the 5S based on the premium feel and features.

The second reason is related to psychology, and I think this reason accounts for the inventory/production misjudgment on Apple’s part. The iPhone is still seen as a luxury/status item in many parts of the world. When buying the 5C, it says that you are too cheap to buy the flagship iPhone 5S. People may think, oh why couldn’t  he/she afford the 5S? I know this sounds arrogant/pompous, but people are constantly trying to impress random strangers that they don’t know. The old strategy of selling a year old (n-1) phone didn’t have these same problems. If I were to buy the n-1 phone, nobody on the street would have any idea if I bought it yesterday or one year ago. The perception issue didn’t matter. With the 5C, you are making a statement that you want an iPhone, but can’t/won’t pay for the latest and greatest. This perception issue helps explain why Apple sold more 5Ss and less 5Cs than they expected.

The 5C wasn’t created to sell more iPhones. It was created to provide a better experience to price conscious buyers. It just so happens to drive up the ASP.