🦄 vol. 2
claude and matt chat about democratisation and the space industry
here’s a drinking game for you: every time you read the word “democratise”, take a (ginger) shot.
debunking democratisation 🗣
"Democratising" is considered an overused buzzword, generally applied to startups who claim to enable users within a particular industry by removing traditionally high barriers to entry.
Graphic design previously required knowledge of complex programs, but now we use Canva
Creating e-commerce websites previously required a software team, but now we use Shopify
Trading stocks previously required access to significant amounts of capital and a broker, but now we use Robinhood
You get the idea.
Removing these barriers relates to improving the accessibility of the industry (ease of access and use) and reducing the skill required by the user. I would argue that to do this well, a company needs to do both.
Unlike Canva and Shopify, Robinhood does not lower the requisite skill to successfully trade stocks.
Robinhood's commission-free stock trading brought in $959 million of revenue in 2020 and a cumulative total of 18 million users as of 2021! 📈 But despite this, studies show that the average Robinhood user loses money. 🤕
50% of Robinhood users are first time traders.
Most Robinhood investors aren't diversified. On average, they hold just three stocks in their portfolio.
The simplified interface means that users are more likely to trade on intuition.
The average Robinhood user - from the onset - is not in a position to capitalise on the increased accessibility because there exists a skill gap that the platform is not bridging.
What am I getting at? 🤓
Impressive revenue numbers and a rapidly growing user base certainly validate customer demand. But in order to provide value across the full distribution of users there is need for further innovation. 💡
Canadian company WealthSimple has picked up on this. They offer a more closed-loop investment product that makes use of “money experts” to help its users build portfolios based on a user's risk appetite and financial goals.
With African fintech startups such as Eversend and ChipperCash following suit and launching similar open-ended stock purchasing features, I would really love to see more financial products providing deeper value for their users by addressing the missing skill component.
rocket science 🚀
Last week, Bezos made it back to Earth after an 11-minute trip to (the edge of) space. On returning, he was greeted by high-fives and calls to end world hunger. It left me a little confused, here's why:
Space travel is about more than just footprints on the moon
In some way, leveraging space, at present, is analogous to sea exploration in the 15th century: a hellishly expensive experiment, fraught with risk, fuelled by humanity's curiosity with no concrete promise of progress (or profits). But it seems that description may just stem from my naivety.
Lift off 🚀
Spearheaded by SpaceX, Blue Origin and Virgin Galactic, revenue generated by the global space industry will triple in the coming decades, and is set to tip $1 trillion by 2040 (🤯). Satellite broadband is projected to comprise almost 50% of that growth, with space tourism, media, manufacturing, logistics and asteroid mining (you heard right) contributing in smaller parts.
Satellite broadband for... the world? 🌍
Currently, around 52% of the world’s population lack internet access, with 90% of those in developing countries; of those that have access, only 20% of them have broadband. Launching satellites into orbit may change all of this for the better, by providing universal, equitable access to the internet for all at a fraction of the cost. Perhaps expectedly, Elon Musk’s Starlink is a leader in the space (pun intended).
Providing stratospheric internet access to underserved communities is not a novel concept, nor is it an easy task: X (Google's "moonshot factory") attempted (and failed) to do so via Project Loon. Some may argue that there may be simpler, albeit less sexy, ways of delivering the internet to the masses (it’s beyond the scope of this piece, but African players ikeja and poa! are worth checking out).
So what? 🤔
The power (and beauty) of the internet is its ability to democratise access to just about anything. Since its inception, the internet has accelerated economic and social growth across the globe. Serving the underserved connects everyone to the world, improves healthcare provision, democratises access to quality education, provides financial services to the unbanked and promotes community building. Leveraging space may drive the next societal and economic revolution and, to borrow from Buzz Lightyear, create opportunities to infinity and beyond.
claude revisited joel spolsky’s comparison of company growth strategies.
karl’s learning about how ai is helping diagnose patients in rural villages.
matt’s tweeting again - this time it’s about netflix branching out into gaming.
sash loved this podcast on early-stage financing.