GZV #1: The First Edition
Startups. Trends. News. All from a Gen Z view.
XX Partners Weekly: First Edition
XX Eyes: What we see in the news
What WSJ said: Visa to Pay $5.3 Billion for Fintech Startup
What XX sees: Fintech apps are geared toward making life easier; and Gen Z loves it
Gen Z has grown up in a world where we are accustomed to quick satisfaction, thanks to Amazon, not a ton of people like to wait more than 2 days for things. So when using other products and services we expect the same ease of use.
Let's dive into the Fintech ecosystem.
Most kids that I know, use Robinhood when starting to invest. It’s simple and easy, and when beginners see their stock drop 5% they can sell it easily in about 4 seconds. Yes, this describes a friend of mine. You know who you are.
The simplicity of signing up is one of the reasons the the app so popular. I've watched a kid make an account in under 5 minutes during class while my teacher was explaining the enterprise-value-to-EBITDA equation.
Now when sending money person to person, it's exclusively Venmo, except if you're the weird kid who pays in cash. To give you an idea, in the first 28 days of January I had transacted a total of $560 through my venmo alone. Generation Z is by far one of the most dominant users in the Venmo app, this is my own personal opinion, but to back me up, mediapost.com reports that 82% of users are between 18-34, so yeah my opinions aren't that bad, except when I though GoPro was a buy at $30 a share in 2015.
Whoops.
So, Where does Plaid come into this? Well it makes all these apps churn, one of its many products is an API that connects these apps to your bank account. The value of $5.3bil is a great play by Visa, fintech is the future and Plaid is by far the leader on the backend of these apps, and with Visa's massive reach, it is only going to grow.
What Business Insider says: Barstool Sports is selling a big stake to a casino company, in a deal that values the company at $450 million
What XX sees: A brilliant company followed by a cult-like audience.
This may or may not have been a text conversation between my recent co-founder and I two days before the Barstool-Penn deal was announced.
Two days later the deal was announced, and he texted me, "yeah you were pretty close". Um....... pretty close?
I was right on the f***ing money. I hit the target straight on. I hit the nail on the head. I pinned the tail on the damn donkey.
Anyways.
Barstool has by far been one of the best companies of the decade, they have built a cult-like audience of 66 million "stoolies". Just in the past few weeks at barstool, a golf podcast guy boosted "The Bachelor" ratings 13% and a camera man sold $1.5 million of merch in... wait for this... One Week. Name another company that can do that.
One of the reasons they are able to do it is through the people they hire. They hire people who, like they say are "the common man", they are some of the best characters in media. They are relatable, funny, and creative. This allows for them to build cult-like followings because they are people that the "common man" can relate to.
For gen Z, these personalities are figures that some people look up to, we are still in college and watching these guys and girls have fun doing what they love is a dream for us. So we associate with them, we buy there merchandise, we follow the content, we try to get as close to their lives as we can.
They also have a slogan of "unapologetically-authentic", which basically means how it sounds. For example, in the fall, founder Dave Portnoy, got into a twitter spat against AOC that involved a massive audience and people like Donald Trump Jr. The estimated marketing exposure of this spat was around $20mil, and remember this was just from a few tweets.
In the end, the content produced by Barstool is just entertaining. Like I said earlier, the people who produce content are some of the most interesting and funny people in today's media. Girls love the R rated podcast, Call her Daddy, and guys love the top-rated sports podcast, Pardon My Take. Beyond this, people love the ego of the $100-million-man, Dave Portnoy, and they love the stories that occur almost weekly with this company.
Featured Piece of the week
Tom Lombardozzi
Dear CashApp,
Congratulations, you just passed 30 million MAU’s in the US, beating out your competitor. But you’re missing something…
College Campuses. I polled 8 of my friends who each go to 8 different colleges and all said they exclusively use venmo.
And I’ll be honest, I think you should and COULD have a huge market on college campuses.
But why? Cashapp and venmo do the same thing, person-to-person payments, so why do I think Cashapp is better? Because Cashapp is way more than a peer to peer payment system. Cashapp combines every fintech app that college kids have on their phone, Venmo, coinbase, and robinhood, all in one. People can buy fractional shares of stock on cashapp, they can buy bitcoin so they can "get rich quick", and then they can pay the entry fee into a frat party. ALL IN ONE APP.
So here is my recommendation to improve your position in the college market.
Focus on younger generations.
Trying to get the market to change now is going to be tough. I would try to focus on targeting high schoolers when they are getting their first jobs and have income, this would probably be 16-18 year olds. I would use social media, especially instagram and tiktok, and just pepper them with ads. I would also look at making ads for youtube and hulu, our generation consumes a good amount of content through these platforms, take note of that. The key is to get them before venmo does, then they will bring CashApp into college and you can start to control from there.
Incentive programs
Partnerships with bars and greek life may be a great way to increase exposure on college campuses. I know some fraternities already use CashApp to pay dues, so try providing incentives to get more organizations. Maybe donating $200 to the organization's philanthropy if they get every member to make an account. This is just an initial idea.
On the bar side, I can say at Elon, closing your tab at the end of the night can be a huge hassle, so why not use CashApp to pay for your drinks? Students at bars will love this because they don’t need to worry about bringing cash to the bars and they don’t have to worry about closing their tab. CashApp is owned by square, the infrastructure is already there, so let's leverage it to make bars more efficient.
Those are my thoughts and recommendation. I am 19 and don’t work for CashApp, but I do have a feel for my generation.
The Startup Scope
"Like a hedge fund, for everyone"
I may be a little biased, but holy shit do I love this company. I mean I may have just been accepted to their ambassador program, but I have been recommending this app for months regardless.
You know how robo advisors have become a huge thing, with apps like Wealthfront and Betterment making around 5% annualized?
Well I’ll just say if you are still using these companies, consider taking your money out and investing with Titan, where they have made 15% annualized. Yes, that is way more than 5% so stop reading for a second and go invest some of your savings.
That’s my quick spiel. This app was made to be a hedge-fund for the common man and they have made it so easy to get hedge-fund-like returns for a low cost (1% advisory, yes you have to pay a little to be in bed with the best).
If you were ever interested in getting some money into the stock market, this is a great way to start.
Check them out here: https://www.titanvest.com
Get the app here: https://share.titanvest.com/DeZQoMTIA4
🌴After hours🌴
Brought to you by @vcstarterkit on twitter
If you're a Billions fan, you will appreciate this one. Brought to you by @finance_god on instagram
That's all for week one.
Reach out to thomas@xxpartners.co with any feedback or thoughts.
-XX