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“What you choose to work on, and who you choose to work with, are far more important than how hard you work.”
Tools of Titans
Timothy Ferriss
What may be less obvious is why Fresno’s merchants might have been interested, particularly since Bank of America planned to charge them 6% of sales. Remember, this is before the network: it was not at all obvious, as it is today, that the increase in sales enabled by the convenience of credit cards would more than make up for credit cards’ attendant fees. However, it turned out that for small merchants in particular there was a major job-to-be-done; Joe Nocera explained in his 1994 book, A Piece of the Action:
Fresno’s shop owners knew for a fact that, on the day the program began, some 60,000 people would be holding BankAmericards. That was a powerful number, and it had its intended effect. Merchants began to sign on. Not the big merchants, like Sears, which had its own proprietary credit card and saw the bank’s entry into the credit card business as a form of poaching. Rather, it was the smaller merchants who first came around. Larkin remembers visiting a drug store in Bakersfield, hoping to persuade its owner to accept BankAmericard. “When I explained the concept of our credit card,” he says, “the man almost knelt down and kissed my feet. ‘You’ll be the savior of my business,’ he said. We went into his back office,” Larkin continues. “He had three girls working on Burroughs bookkeeping machines, each handling 1,000 to 1,500 accounts. I looked at the size of the accounts: $4.58. $12.82. And he was sending out monthly bills on these accounts. Then the customers paid him maybe three or four months later. Think of what this man was spending on postage, labor, envelopes, stationery! His accounts receivables were dragging him under.”
A store owner who accepted the credit card was, in effect, handing his back office headaches over to the Bank of America. The bank would guarantee him payment — within days instead of months — and would take over the role of collecting from the customers. As for the bank, in addition to taking its 6 percent cut, the card was a way to get its hooks into businessmen who were not yet Bank of America customers.
It’s easy to forget just how many things a business that takes credit cards does not need to do: it does not need to extend credit, it does not need to collect payment, it does not need to handle excess amounts of cash. It does not, as Nocera noted, need to have much back office functionality at all. Instead banks provide the credit, Visa provides the infrastructure, and merchants pay around 3% of their sales.
Visa, Plaid, Networks, and Jobs
Ben Thompson
computer programs can learn to play chess, drive cars, diagnose diseases and invest money in the stock market. In all these fields they might increasingly outperform old-fashioned humans, but will have to compete against each other. They will thus confront new forms of evolutionary pressures. As a thousand computer programs invest money in the stock market, each adopting different strategies, many will go bust but some will become billionaires. In the process, they will evolve remarkable skills that humans can neither rival nor understand. Such a program could not explain its investment strategy to a Sapiens, for the same reason that a Sapiens could not explain Wall Street to a chimpanzee. Many of us might eventually work for such programs, which will decide not only where to invest money, but also whom to hire for a particular job, whom to give a mortgage to and whom to send to prison.
Sapiens
Yuval Noah Harari
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