Having my dumb opinions challenged

What Scatter Brain guests taught me about direct deposits, relocation, RVs, fungibility in marketplaces

December 12, 2022

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In my chats with people on Scatter Brain, I do not ask opinion-less, neutral questions. I optimize to be highly opinionated. The questions you see in the final piece are much more refined, crisper, shorter versions of what I actually ask. My perspective is more often than not woven into how I raise topics with guests. I don’t intend to be objective. This has multiple benefits :

  • It forces me to do my research and have views. I hate sounding too dumb.

  • It gives the guest something to react to. They may agree or disagree. It forces them to share a view and not default to soundbites or hedged views.

  • It helps people open up. Not everyone can come up with interesting ideas unprompted. It’s easy for them to take their insights for granted or forget unglamorous ideas.

  • It encourages people to go beyond the surface level and go deeper than they are used to when talking with external parties.

There are obvious downsides to my approach:

  • I could ironically come across as a dumb or arrogant person. Im talking to someone who has spent 100x more time on topics at hand than I have. Having a certain view can hurt my credibility. Who am I to challenge them?

  • I could be leading the guest! I could influence what they say by framing my question a certain way and miss out on the perspective they might have shared if I hadn’t been too opinionated.

I think there’s far more upside than downside because the approach increases the surface area for disagreements, surprises, and learnings.

Today, I want to talk about a few things I got wrong or surprised me (of course, I come off dumber than I would have liked, but that’s the cost of learning) :

Holy Grail in Fintech

The conventional wisdom in fintech is sitting in the critical flow of funds movement is highly desirable and durable strategic assets that lead to adjacent opportunities.

In chats involving B2C and B2B2C plays, I have always brought it up.

Here’s an excerpt from my chat with the Cofounder of Column Tax, which helps low-income Americans file income taxes by embedding their offering in apps people already use :

Sar: So you don’t have a direct payment relationship with the taxpayers?

Gavin: We don't transact directly with the taxpayer. We want the right incentives to align the taxpayer, the partner, and us. Our partners pay us and decide how they monetize. We see our job as making our partners look amazing. The IRS mostly pays tax refunds through direct deposits. We're helping facilitate that for our partners, who want to be in the flow of funds. The IRS pays directly to the bank account.

Sar: I assumed you touched the refund money.

Gavin: Our Tax Refund Unlocks product is strictly about optimizing the amount you get in refunds. We work with a payroll API company like Atomic to pull the income information of W-2 workers. We help people understand whether they're over-withholding because we can see how much is being withheld in their paychecks. If they have been over-withholding, the payroll API partner writes back a new W-4 to their payroll system with updated inputs. It’s similar to a Direct Deposit switch. The changes come in future paychecks due to revised inputs.

ColumnTax is well-positioned to go down the path of taking over the deposits the government makes in tax refunds. Still, it has chosen not to because Gavin believes that would put them directly in competition with its partners who host their embedded experience and often want to own direct deposits by offering bank accounts to users.

Deployment of solar energy panels

In my issue on US-based XPonent Power, the founder Rohini sold me on the virtues of having compact, lightweight, intelligent solar panels to get around the physical constraint of space to unlock new applications or surface areas for energy production.

I was very skeptical of RVs as the best wedge market. That made her make a comprehensive case for why RVs can be an attractive market for the new kind of solar panels she had designed.

Here’s what she told me :

“11 million households own an RV. 1 in 12 US households own an RV. Over 500,000 new RVs are sold every year. Many owners spend over $100,000 to purchase a vehicle.

Every home has a grid, so solar for a homeowner is optional. That’s why solar is sold to homeowners more as a financial instrument with a good ROI, which is what it really is. Hence there is tremendous price pressure on residential solar. The average installed price for residential solar is around $3/W compared to $6/W for RV solar systems.

A typical RV has a lot of appliances - TVs, refrigerators, microwaves, cooking ranges, etc., all need power. People like to run their AC when camping, which consumes a lot of power.

Most people use generators when they are off the grid. Generators are loud, polluting, and require constant refueling. California’s Air Resource Board (CARB) is taking notice. They just enacted a regulation that will ban the use of generators in an RV starting in 2028. 12 other states are considering similar bans.”

That’s a compelling case!

Fungibility in marketplaces

The vast majority of at-scale consumer marketplaces have a high degree of fungibility on at least one side. Airbnb hosts don’t quite care about who the guests are as long as they meet some basic expectations. Riders don’t care about who their Uber drivers are.

In my issue on Power, which is a marketplace for clinical trials, I said there is no fungibility on either side of Power. I expressed skepticism about the scalability of a marketplace where patients have unique medical conditions and trials are differentiated supply units.

He disagreed and explained why I was wrong :

“I don’t agree with fungibility being a requirement of at-scale marketplaces. Long tail matching problems are where marketplaces create a ton of value because supply/demand isn’t commoditizable: Craigslist is still around because there’s such a long tail of supply and demand to match.

For the supply side, demand is fungible as long as patients are qualified to participate. For the demand side, patients want to feel comfortable knowing they’ve selected the best trial for themselves. We need to allow them to browse, filter, compare, etc.

The patient side differs by condition/category. Less severe conditions are more local. Patients with more severe conditions are willing to travel further. On the supply side, it differs by stage of the trial. The earlier the research, the more likely it is to be contained in one geography. But later stage and larger trials are inherently national/international. We already have trials asking us if we support multiple countries.”

Coexistence of remote work and relocation

In the post-pandemic world, the rise of remote work has caused a decoupling of where you live and work within the same country. The remote work advocates overstate the depth of change, and the critics underestimate the new, higher baseline.

In my issue on Germany-based Localyze, which enables companies to simplify relocation for their employees for work and helps people assimilate in new countries faster, I was skeptical about the market opportunity in our new world.

What I didn’t grok as well as I should have is that the decoupling of work and life could actually increase travel and relocation outside the home country and within similar time zones.

“I see people as the main driver for relocations - because no one will move to a country they are not interested in living in. Pre-pandemic, a PwC report said that 80% of millennials want to spend part of their career abroad. That would mean a massive increase in people needing visas and relocation support. I believe the number of people motivated to live abroad is still the same. With more location flexibility, those people will not only relocate once but live across five different countries in 5 years.

We work with companies in very different setups; some are fully back in the office, some work remotely, and some are hybrid, so I believe the company’s setup is secondary. Cross-border mobility will continue to be driven by people because traveling has become more accessible. The next rational step is to combine working with exploring the world. If I think about the world in 10 years, I believe that people will heavily use their 20s and 30s to live abroad, spend a year in Italy, and another in South Africa. Then move on to New Zealand. Some companies started supporting their employees to move wherever they want, even on digital nomad visas, and I think that’s the future.”

Whether and how right the founders will be with their insights and conviction is for the market to decide. I liked that all of them pushed back and generously gave me detailed explanations. My takeaway is to not fall for assumptions or lines of thinking that sound smart, reasonable, and uncontroversial.

The alpha is in it being counterintuitive and right!

Eden is the all-in-one hybrid workplace software suite to make your flexible office run easily and efficiently. With tools built for desk and room booking, a better lobby experience for office visitors, managing deliveries, and more, Eden is used daily by great companies like Wealthsimple, IDEO, and Noom. Learn more by signing up here.

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