Nikhil, I find this post unsatisfying, and I wanted to try to explain why. I've started startups, and read probably half a million words of posts about startups, and I find that over and over, the version of the story that gets reported in startups is more high-level, in terms of focus, than I would find useful. I have a million questions about Afterpay, but none of them are answered here. Sure, I can see how their initial insight -- millennials might like a more convenient form of credit, that doesn't evoke credit cards -- turned out to be fruitful. And I see how a geographic focus on a few cities in Australia provided a way to establish product-market fit, before expanding horizontally. But from my experience with startups, there were a hundred steps between idea and having success with a handful of retail business clients. How did they get past the challenge of the sale involving extensive point of purchase setup and waiting? How did they get past the challenge of clerks not being well versed in the details of how the payment system worked? I know not every reader is interested in these implementation questions, but I find them the most salient type of question in actually bridging the gap between good idea and billion-dollar company. Maybe your focus is more big-picture, but as a reader, I want to know the problem-solving process and insights, not the victory lap.
Thanks for the feedback, Ben! these are all interesting questions, and ones that I wish I could answer. Unfortunately I don't have any inside baseball on this story, so my 2-hour writing sprint focused on the observation that BNPL turned out to be an amazing wedge. There surely was a ton of execution from Team Afterpay that led to the great business they built, and lots of tactics and learnings if they could answer the questions you asked. I'll try to do better in future posts to go a bit more beneath the surface. Appreciate the feedback, again :)
A fantastic wedge indeed, Nikhil -- but any prescriptive thoughts on what makes some wedges "more equal than others," in the abstract?
What's your view on generalizing to say that there's something more powerful about wedges offering distinct value to multiple parties (e.g., merchants/consumers, senders/recipients) as opposed to primarily single-player wedges (e.g., stock trading or bank accounts)?
Great question, Emeka. I think wedges with network effects that lead to more lock-in over time are certainly better than ones without network effects. High frequency, AOV, and LTV can all be very important vectors. The challenge with a multi-sided wedge is you have to get product-market fit with all sides, but here again is where BNPL is a beautiful model, with a very clear value prop to both merchants and consumers. Let me continue to noodle on what makes some wedges "more equal" and perhaps it'll be a future post :)
Nikhil, I find this post unsatisfying, and I wanted to try to explain why. I've started startups, and read probably half a million words of posts about startups, and I find that over and over, the version of the story that gets reported in startups is more high-level, in terms of focus, than I would find useful. I have a million questions about Afterpay, but none of them are answered here. Sure, I can see how their initial insight -- millennials might like a more convenient form of credit, that doesn't evoke credit cards -- turned out to be fruitful. And I see how a geographic focus on a few cities in Australia provided a way to establish product-market fit, before expanding horizontally. But from my experience with startups, there were a hundred steps between idea and having success with a handful of retail business clients. How did they get past the challenge of the sale involving extensive point of purchase setup and waiting? How did they get past the challenge of clerks not being well versed in the details of how the payment system worked? I know not every reader is interested in these implementation questions, but I find them the most salient type of question in actually bridging the gap between good idea and billion-dollar company. Maybe your focus is more big-picture, but as a reader, I want to know the problem-solving process and insights, not the victory lap.
Thanks for the feedback, Ben! these are all interesting questions, and ones that I wish I could answer. Unfortunately I don't have any inside baseball on this story, so my 2-hour writing sprint focused on the observation that BNPL turned out to be an amazing wedge. There surely was a ton of execution from Team Afterpay that led to the great business they built, and lots of tactics and learnings if they could answer the questions you asked. I'll try to do better in future posts to go a bit more beneath the surface. Appreciate the feedback, again :)
A fantastic wedge indeed, Nikhil -- but any prescriptive thoughts on what makes some wedges "more equal than others," in the abstract?
What's your view on generalizing to say that there's something more powerful about wedges offering distinct value to multiple parties (e.g., merchants/consumers, senders/recipients) as opposed to primarily single-player wedges (e.g., stock trading or bank accounts)?
Great question, Emeka. I think wedges with network effects that lead to more lock-in over time are certainly better than ones without network effects. High frequency, AOV, and LTV can all be very important vectors. The challenge with a multi-sided wedge is you have to get product-market fit with all sides, but here again is where BNPL is a beautiful model, with a very clear value prop to both merchants and consumers. Let me continue to noodle on what makes some wedges "more equal" and perhaps it'll be a future post :)
Awesome -- I'll be looking forward to that post 💪
Thanks
Can't wait for a more "double-clicked" sequel to this post (or maybe 'top 10 B2C wedges of Web/Mobile).