Sign up to get our best articles, latest podcasts, and news on our investments emailed to you. This is a massive opportunity in the US, but it’s an even bigger opportunity worldwide. Now, this may have been a highly anticipated move in fintech circles, but not that long ago Apple was just your computer company. That’s not really the reason, but a good end result of the shortened name. Marc Andreessen (founder of a16z, where Levin is a general partner) famously wrote that "software is eating the world." But a large percentage of it will come from existing companies that are adding financial services for the very first time. So, for instance, Mercury is a small business or startup bank. In recent months, he has used one of Andreessen Horowitz’s hottest new investments, the audio-based social network Clubhouse, to regularly host live A friend sent me the post referred to in the title. You’d buy some software licenses, write some code for a database, and hundreds of thousands of dollars—if not millions—later, you could finally start building the product that you wanted to bring to market. You can watch a video version on YouTube. Turns out that fake people take out loans at much different rates than real people. It’s already happening: Apple just launched a credit card. The companies both spend hundreds of dollars acquiring drivers. In this highly regulated industry, first you need to apply for a license, which could take years. Imagine if the founders had had to go to investors and convince them to give the company millions of dollars just to build the infrastructure to prove that yes, there’s a massive market where we all want to stay in strangers’ homes. First, let’s take a brief look at the state of the banking industry today. And even when it’s really hard to see the good in someone — and to be clear, sometimes it’s not deserved — he tries to keep the whole picture in mind. Why? This is easier to do than you might think. If they have student loans, that’s an entirely different set of integrations. I’ve now known Sriram for years, as have much of the firm. This is not just a consumer phenomenon. The content speaks only as of the date indicated. Key takeaways: That is a far cry from providing delightful products. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Chances are, you can find a lender that, for a high enough cost and a low enough dollar rate, will give you a loan. Sriram is a well-known and much-loved figure in the technology world of Silicon Valley and beyond. A survey by the World Economic Forum found that just 28 percent of the millennial and Gen Z generations trust their banks to be fair and honest. But now we have a company like Sentilink, which does it as a service. Hey, did you hear Elon Musk went on Clubhouse? In that time, I’ve grown to respect his optimism and ability to look for the good in people — which is critical in a job like ours, where most companies fail; teams may pivot many times on their journey to product-market fit; and where it’s hard to be focused on what can go right vs. what can go wrong. Even after the two years it typically takes to ink those deals, you still haven’t built the new product that you wanted to bring to market! As you might imagine, this results in many false positives (legitimate customers getting blocked), as well as a ton of manual reviews. In addition, Sriram generously shares understandings and insights broadening the world of tech through his media initiatives in the form of the “Observer Effect” interview series (I participated in the first one); “The Good Time Show” on Clubhouse (which I also join among others); and his new video channel as well. The first time, the lender will ping the credit bureau who will return “No, we’ve never seen this person.” But the next time you apply for a loan, the lender will ping the credit bureau, and the credit bureau will recognize that yes, there’s been an inquiry. of the stack. Ever wondered what it takes to start a bank? Download the slide deck here. Sriram always immediately responds with a detailed explanation of all the positive attributes I’ve been missing, and he’s usually right. But a large percentage of it will come from existing companies that are adding financial services. And it’s not just one company, it’s multiple companies, because financial services infrastructure is so complex. Turns out, all 13 of them had credit profiles! Not really, when you dive into it. Download the slide deck for this presentation. Startups will be able to launch companies faster and more cheaply. This was a big moment for me, and the result of a long relationship that began a decade ago, when Horowitz […] AWS dramatically reduced cost and complexity and unleashed thousands of experiments. It’s also happening in B2B. I am specifically referring to employees in the investing group that are post-MBA and past principal level. For Uber and Lyft, adding financial services has two benefits. I think we do a very good job [at a16z], but I am just thinking we could do more if you create this virtual group. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Meanwhile, the more than 50 percent of Americans who live paycheck to paycheck often experience an entirely different financial services system. It has a very complex infrastructure. There are multiple regulatory agencies that you need to comply with, likely driving more partnerships for KYC (know your customer) and AML (anti money laundering). Get more commentary, news, and analysis by the a16z fintech team in your inbox. There are at least dozens of integrations I’d need to build and maintain to have even mediocre coverage. This is a very difficult type of fraud to catch. Every company, as we saw with Uber, Lyft, Shopify, Mindbody, should be thinking about how to leverage financial services to better serve their customers, better retain their customers, and drive more margin. For startups, we’ve seen some of the examples of the new infrastructure companies that are being built, and there are many more opportunities. But a lar… Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. Andreessen Horowitz, a Silicon Valley-based venture capital firm with an eye for startups and up-and-coming tech, believes the pre-sales role just isn’t what it used to be. That is a far cry from providing delightful products. We would expect this innovation to come from startups and existing financial services institutions. Many industries are regulated—typically, if you don’t comply, you’ll get fined. You can pick almost any nine-digit number that doesn’t start with nine at random and it could be a legitimate social security number. They monitor hundreds of sanctions and terrorists lists around the world——as well as all of our transactions. Please see https://a16z.com/disclosures for additional important information.