Not just for a refrigerator anymore


October 1, 2019

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Today, SoftBank is in the hot seat and college athletes in California may finally make ends meet, but first…

The Hustle Daily Email

The future of financing comes in the form of just three easy installments

The layaway plans of yesteryear are baaaaaack… sort of. Fintech firms like Affirm Inc., Afterpay Touch Group Ltd., and PayPal Holdings Inc. have started offering plans that allow people to pay for purchases in installments.

While this financing model used to be reserved for big-ticket purchases like TVs and washers, it’s becoming more common for smaller goods like clothing and home decor.

Being middle class is more expensive than ever

The costs of middle-class markers like higher education, cars, and home ownership have shot up in recent decades. Wages, meanwhile, have remained relatively stagnant.

For many people, a large chunk of their take-home pay is immediately spoken for… and more people are relying on borrowing for everyday purchases. Consumer debt — which doesn’t include mortgages — has topped $4T.

But having lived through a major recession, many young adults balk at carrying credit card balances. This makes installment plans a more appealing option. 

How is this different from using a credit card?

The big difference is that consumers typically know upfront exactly how much they’ll be paying for each item — say, four monthly payments of $32.

With credit cards, consumers pay off the amount by their next billing date or carry a balance, which can last indefinitely and rack up big interest if they make only minimum payments. 

That’s not to say installment plans don’t come with their own costs. The “easy” monthly payments are sometimes calculated to include super-high interest rates, and some firms charge hefty fees for missed payments. 

Look for installments to take off

By showing that an item is attainable through payment installments, retailers hope to coax customers into spending more.

A recent survey showed that more than half of retailers offer or plan to offer installment plans by next year, including Walmart and Urban Outfitters.

Meanwhile, the fintech firms powering these transactions are seeing big paydays. Affirm’s point-of-sale loans doubled to $2B last year, and it expects to double them again this year.

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Lag in the wag: Wag’s big funding round from SoftBank has failed to pay off 

Wag, and its network of pup-loving independent contractors, were introduced in 2015 as the Uber of dog walking.

With much fanfare, the company quickly grew to 100 US cities and, after leashing $300m from Softbank’s deep-pocketed Vision Fund in 2018, the company was poised to be the global face of pet care tech.

But, since the investment, Wag’s rise has been stifled by multiple rounds of layoffs, dwindling market share, and a number of bad reviews, highlighting yet again how hard it is for a company to navigate the waters of expansion at warp speed — even with boatloads of SoftBank dough.

What they’re saying…

According to CNN, former employees claim that Hilary Schneider, the veteran tech exec who took over for Josh Viner as Wag’s CEO shortly after the SoftBank investment, is failing to grasp issues like growth, pet safety, and customer service.

The company has reportedly struggled to keep the safety of its customer’s dogs on a tight leash. In the past year, there have been at least 5 allegations of dogs being abused or dying while in the company’s care.

Plus, the company’s anticipated global launch has yet to take off — moving in to only 10 US cities since SoftBank took its 45% stake.

SoftBank’s thick wallet may not be the answer

Uber and Slack, which have also received funding from SoftBank, have underperformed on the stock market since going public this year, bringing SoftBank’s big money strategy into question.

With Wag’s woes, SoftBank’s spend lots, ask questions later mentality has taken another hit, leaving many to wonder whether it’s a recipe for market disruption — or business destruction.

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Turns out Xbox and PlayStation aren’t into a little friendly competition

In a new study, faculty from several universities found that anti-competitive product recommendations might not be limited to search giants, according to Recode

The study shows that Xbox 360 and PlayStation — owned by Microsoft and Sony, respectively — have the power to decide which companies and games succeed. 

It’s like playing against the computer…   

…in that you never win. 

When you use an online video game marketplace like Xbox 360 or PlayStation, chances are, the recommended products and games aren’t visible because they have the best ratings or the highest sales. They’re there because the platform thinks they’ll help it win. At capitalism. 

Featured games are typically pay-to-get-played: They cough up some cash to get on the platform. They pay more for better visibility (which leads to higher sales). And even though they owe a percentage of their revenue to the Microsofts of the world, these games are selling way more than they would if they were on their own.

Anti-competitive behavior is like an MMO 

The biggest online marketplaces (cough Amazon, Google, Apple cough) have been called out and investigated for this kind of anti-competitive behavior. This study shows that they’re not the only ones playing the game.

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What Else…

Ed O’Bannon’s crusade has finally paid off. The NCAA has long kept its students from earning compensation through college sports, despite some bringing in hundreds of millions of dollars to elite programs. But a new California law will allow students to get paid for the use of their name, image, and likeness — and hire sports agents to help them navigate the path to the pros.

The NCAA bars players from earning money off their reputation as athletes. At Central Florida a kicker couldn’t even monetize his own YouTube channel.

Not wanting a century’s worth of cartel behavior dismantled, NCAA President Mark Emmert has called California’s new law, set to go into effect in 2023, an “existential threat” to the organization. But he could have a fight on his hands, as other states are mulling similar legislation.

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Turns out, your “indestructible” bike lock was no match for steel bolt cutters. Now what?

First things first, call the bike shop and tell them “I told you so!” 

Next, check your renter’s insurance. Your ride may be long gone, but a good policy (like the ones offered by Lemonade) may mean you’ll get enough money back to buy the perfect replacement — and hopefully a better lock, too.  

Big-time peace of mind at a teeny-tiny price

And that’s not the only thing that makes Lemonade special. 

It takes less than 2 minutes to get a policy, plus you can easily manage everything from within the Lemonade app

The cherry on top? It costs as little as $5 per month — so low, you might not even notice you’re paying for it. 

If you’re missing coverage, or just want to straight up pay less, give Lemonade a look. Because that bike is your baby, and baby needs to be safe.

Better safe than sorry
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