California Is Our Only Hope

Brian: [00:01:40] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Brian.

Phillip: [00:01:45] I'm Phillip.

Brian: [00:01:47] We've got another great show ahead for you here on Episode 84.

Phillip: [00:01:51] Yes, we do. Love it. I couldn't possibly be more excited than I am right now.

Brian: [00:02:00] Couldn't possibly be more excited.

Phillip: [00:02:02] I feel like I open most episodes with that right now. I lost out on one of the hypest shoe drops of the year because of bots, because of stupid stinkin robots who bought it all out and then sold the shoes for seven hundred bucks on resale. So I'm super excited about our first story, Brian.

Brian: [00:02:24] Yes. That's true.

Phillip: [00:02:24] It's like the most exciting thing ever.

Brian: [00:02:26] Wait, wait, wait. Weren't you... You were so excited about this shoe drop. Like, I feel really bad for you.

Phillip: [00:02:34] Give it three weeks and there will be another hype shoe that I'll be upset about, so don't worry about it.

Brian: [00:02:38] All right.

Phillip: [00:02:38] This one was really cool, though, because I love the color teal. It was... Anyway, it doesn't really matter. This show won't age well, if I go into specifics. But California is once again protecting our republic by enabling the rest of the country to have to abide by its own liberal agenda. What I love about this is that, you know, how we were talking about California setting precedent with GDPR? They just enacted a network neutrality law that they were just sued by over from the Trump administration. A lot of cool things happening out of California right now.

Brian: [00:03:22] Not only that, not only are they being sued by Trump, they're being sued by the Internet industry in general.

Phillip: [00:03:30] Oh, yeah.

Brian: [00:03:32] The second law suit just came in. It just came in.

Phillip: [00:03:37] People don't want this. Oh, my gosh.

Brian: [00:03:38] Yup.

Phillip: [00:03:41] But the news this morning was great to see, which is that effective July 1st, 2019, any automated account would have to disclose itself as an automated account when interacting with customers. And it would ban automated accounts, a.k.a. bots, from pretending to be real people in order to incentivize a purchase or sale of goods or services in a commercial transaction or to influence a vote in an election.

Brian: [00:04:15] Thank goodness.

Phillip: [00:04:16] Yes. So I mean, one thing that I thought was really interesting was the tactics like the lengths of which people are going to to prevent bots right now. I actually talked about this at Connected Commerce. I gave the keynote a few weeks ago at the Connected Commerce Conference in New York. And in that talk, I talk a lot about how a fashion retailer, Kith, who has, you know, is known for doing a lot of, they partner a lot with Nike and some others for selling street wearing shoes, very cool brand. But they tricked bots and trained bots into a purchase behavior. And then when they launched a new shoe a few weeks ago, they changed their platform the day of the launch, so that the shoes that the bots were trained on like the actual user path, they bought the wrong thing. And so what happened was they made a bunch of people really angry because people were buying a bunch of shoes that weren't worth anything, which I just think is hilarious.

Brian: [00:05:24] But they were bots. They're buysing shoes for people.

Phillip: [00:05:26] So what it turns out, though, is that right, the bots are being employed by humans who are trying to get the actual product that they want because they can't purchase, because they're human, because bots are the only ones who ever get the inventory. So you're still hurting your customer no matter what you do. You're trying to help your customer. You're hurting your customer because your customer is having to use bots because bots are running the world. So anyway, thank you, California. I don't think this is actually going to change anything.

Brian: [00:05:56] Probably not.

Phillip: [00:05:57] But it's nice to have a law.

Brian: [00:05:59] Yeah, I know. It is nice. I don't think that bots are going to go away as a result of the law. I mean, maybe eventually, but like it's going to take a while. And like all of the sketchy bot stuff... Like influencing elections, with Russian hackers, you know, using bots and all kinds of stuff like that. That's what's going to happen anyway. Like the people that are going to use bots nefariously are not going to stop using them like in that way just because there's a law passed. But it will prevent more reputable businesses from starting to go down that path, that no one wants to go down what you were good. And as Google's services like Duplex, you know, starts to really take off, which is their chat bot. AI chat bot that's supposed to like actually be able to hold a conversation for you with a while and then it'll switch to a human and it'll be seamless. You'll never know the difference. Now, it'll probably have to start with something like, "You're talking to a chat bot."

Phillip: [00:07:13] Yeah, for sure. I mean, I really think we know when we're talking to a chat bot today. There's a famous quote... No, no, no. I know. The Turing tests. But the... I'm trying to remember who it was that said it's like, "I don't fear the bot that that passes a Turing test. I fear the bot that fails it on purpose." And that's I think that's the future that we have to look forward to. Wouldn't that be nice if there were if bots were only ever employed for good. But as we've seen with elections and all the rest, they can be employed for bad. I guess "bad" is what you are on, I suppose. Anyway, we don't want to spend all our time on this particular subject. But thank you, California.

Brian: [00:08:14] Yeah, no, it's great. And it does affect commerce a little bit. I wonder how like granular that will get.

Phillip: [00:08:19] Oh big time.

Brian: [00:08:19] Even like you're initial, when your chat pops open, and it's like, "How can I help you?" Is it going to have to say, "This is not a real person yet?"

Phillip: [00:08:37] It's like everything, right, like Proposition 65 in California and the EU privacy cookie notices and now GDPR. It doesn't ever actually amount to anyone changing any behavior. It winds up being one more thing that's plastered that I have to click okay on on a web site.

Brian: [00:08:57] I know, right? You have to just click an X. That's what GDPR is to us.

Phillip: [00:09:01] Proposition 65 didn't actually reduce any cancerous materials in anything in California. What it did was it made everybody put posted placards outside of everything. And now it's so pervasive, and it's on every single food label, you can just ignore it. Nobody really cares.

Brian: [00:09:16] Totally. Yeah. I wonder if that actually kind of creates a worse situation because now, as you know, well, cigarettes are the same thing as eating, you know, meat like.

Phillip: [00:09:29] Yeah it does.

Brian: [00:09:29] No, no, no. One thing is worse for you than the other.

Phillip: [00:09:34] Yeah. Meat eating is the new standing is the new sitting is the new smoking.

Brian: [00:09:42] All the warnings on them with no differentiation as to how bad they are for you.

Phillip: [00:09:47] We're conflating so many things here. But it's interesting. I love this. I love when we go on these tangents. Speaking of tangent, Walmart continuing its acquisition of apparel brands. So great article over on Forbes from Deborah Weinswig that Walmart has gone and acquired plus sized apparel brand Eloquii.

Brian: [00:10:10] I love this.

Phillip: [00:10:10] It's really cool.

Brian: [00:10:11] That's another...

Phillip: [00:10:12] I love it, too.

Brian: [00:10:14] Yeah. It's another acquisition by Walmart in a string of really smart acquisitions that have led to really smart leadership within Walmart making good decisions about their general eCommerce strategies per category. And I think, I would imagine that this is probably a bit of an acquihire as it is an acquisition of another channel, because they've just been acquiring so much great like startup and like thoughtful digital native talent. I love it.

Phillip: [00:10:54] Yeah. So aside from the really great overview that Deborah wrote on Forbes, one thing that I really liked was the CoreSite research graph of apparel retailers by average shopper profile, age, and household income shows how outsized Amazon really is among lower income older audience. And I feel like really the four or five big players here are Kohl's, Amazon, Target, Old Navy and Walmart. And I'm really impressed that Walmart continues to make really smart decisions around... They're really well positioned against Target, who I felt like they couldn't compete with in fashion for the longest time. They had older brands. Their in-house brands were very... They just they weren't really on trend. They were always seen as low quality. They were always seen as, you know, sort of behind the times. And it's impressive how much they've breathed new life into Walmart as a brand. While these are tertiary properties, and I'm not sure how much they're influencing the actual in-store retail purchase, I can only imagine that, you know, Moose Jaw, Bonobos, ModCloth and now Eloquii find their way into racks inside, you know, a Walmart near you as soon as, you know, sooner rather than later.

Brian: [00:12:32] I doubt it. I don't see that happening. But I do see Walmart introducing new up market experience. Some at some of these brands do have brick and mortar already. I think we see them introduce additional brick and mortar, maybe. Maybe they can into doing some try on, like digital try on, or sorry... In-store try-on stores like the Nordstrom store in California in LA and maybe they combine some of these brands together, so you can try on stuff from across their selection of brands. That would be really interesting. Maybe not. Maybe they keep them separate. I mean, I could see that too. Like Bonobos has such a strong brand, and so does ModCloth.

Phillip: [00:13:26] Sure.

Brian: [00:13:26] Maybe they don't want to put those two together.

Phillip: [00:13:28] And see, you have huge fans of those brands, which I don't know if it goes into in the Forbes article. Bonobos just announced an expansion of their product line to big and tall as well. Which I don't know if we've covered yet on the show.

Brian: [00:13:48] I don't think so.

Phillip: [00:13:48] And like truly big and tall sizes up to size 52 pant. So we're talking like actual investment into true plus size. And Eloquii certainly fits that bill as well. So it's very, very interesting. And also, by the way, it listen, if you haven't read this article, we'll link it up in the show notes. You need to go check this out. But CoreSite mentions that revenue growth or actual sales comparison of plus sized clothing was up 23% between 2012 and 2016, according to the NPD Group. And so and by comparison, U.S. sales of all clothing was only up 9.9% in that same period. So you're talking about a two and a half X growth in plus size women's clothing. It seems like, you know, a perfect time to be in that position, to be able to capitalize on a growing market segment.

Brian: [00:14:49] Yeah. What I love about this market segment as well as I think they're finally kind of giving it the attention it deserved.

Phillip: [00:14:56] Oh yeah.

Brian: [00:14:57] Before, big and tall brands and plus size brands were... I mean, I think there was a little bit of shame involved and not anymore. It's very right clear that people are different sizes and that's just the way they are.

Phillip: [00:15:11] Right.

Brian: [00:15:11] Everyone should be marketed to. I mean, that's the honest truth. Like everyone. Every market should be marketed to well, and that's I think, you know, that's where a lot of this growth is coming from. It's like, oh, wait a minute, there's tons of options and things that fit properly and look really good and are really fun. And so there's just I think more places to spend. So it is a really good time and a place to be in in this market. I think it's awesome. Great job, Walmart.

Phillip: [00:15:47] Very cool. Speaking of having infinite amount of choice...

Brian: [00:15:53] {laughter}

Phillip: [00:15:53] You and I got into a heated Twitter debate yesterday.

Brian: [00:15:57] It's probably the most heated Twitter debate I've ever had, I want to say.

Phillip: [00:16:01] You need to argue on Twitter a little more apparently.

Brian: [00:16:04] I do.

Phillip: [00:16:06] So we all found out yesterday that Brian not a fan of choose your own adventure books from the 80's.

Brian: [00:16:12] No, they're stupid. When I was a kid, it was like, this is dumb. This isn't even a real story. This is like, first of all, they weren't good stories. Second of all, there was no meaning to them. I was a pretty reflective child. I was like, "This is stupid."

Phillip: [00:16:28] Yeah. So Brian, not a big fan. I, however, loved them. I love the idea of having... It's like a video game. You have to sort of take the road less traveled seven or eight times to find the path through the woods to find, you know, whatever... To find the canonical ending you had to make a bunch of mistakes.

Brian: [00:16:52] Just play a video game, man. I love video games.

Phillip: [00:16:53] Well, video games are exactly what you're... Anyway. Okay. So it's the analog video game.

Brian: [00:16:59] Exactly.

Phillip: [00:16:59] Here's the story. Netflix has agreed to create, I think it's one episode of Black Mirror. Because they have the ability and a digital first delivery to allow you to have interactivity in one of their original programming that will allow you to choose the ending. And I sort of boldly stated that I felt like this is the future of content. And a lot of the conversation sort of steered toward what does Netflix's evolution look like into things like VR and potentially things like, you know, you being able to influence the narrative? Brian hates this idea.

Brian: [00:17:53] Just play a video game. Just play a video game. Context is everything. Like, I believe in story as a thing. I don't think that choosing your own ending is good storytelling. It's a cheap storytelling. That's how I feel about it, at least. It's like you're watching The Sixth Sense and you get to the end and it's like Bruce Willis is dead or Bruce Willis is not dead or Bruce Willis is not real or the kid's dead or... It's like, No. Bruce Willis is dead.

Phillip: [00:18:28] Boom, that happened. It's a thing we can all reference, right? Shared experience.

Brian: [00:18:36] Yes.

Phillip: [00:18:36] That's what Brian prizes.

Brian: [00:18:37] Not just shared experience, but actually making a point and having a stance and making it be art.

Phillip: [00:18:46] I love that The Sixth Sense is your... You use that related to art. But okay.

Brian: [00:18:52] Fine, I'll use a better one. All right. Nose Dive from Black Mirror needs end the way that it did to be good art. It was great art. It was an unbelievable episode. And if the end was like, you know, anything other than... Skip for a second if you haven't seen this. Spoiler alert... Anything other than them like in jail cussing each other, I think I would hate the episode any other way. I don't know. Now that I've seen it that way, it's like the whole point is so good. It is so well made at the end. It's so perfect.

Phillip: [00:19:28] And more spoiler alert. I think what what you're saying is the arc of Heisenberg in Breaking Bad isn't what it is if you can influence it along the way.

Brian: [00:19:43] Yeah. Perfect.

Phillip: [00:19:43] I agree with you to a point. I do think what I'm saying is that there is... I love the idea that an art form cannot exist without the medium. Until canvas and gesso. You see what I'm saying? Like you have to be able to... Oil paints are fundamentally different than acrylic paints, and you create different pieces of art with the two. And sculpture is not like painting. They are art, but they are different mediums and they express and evoke different... They have different purposes. They do both pull... They have emotional components to them. And they are works of art and expression. They're cast in different mediums. And so my point is that I love the idea that there is a type of content that can only exist in this world in a platform like Netflix. It could not really be done in the way that Netflix could do it. We've had kitsch like this in DVD in the past.  DVD was supposed to be interactive. Blu ray was supposed to be interactive. No one's really used that medium in that way. However, Netflix is uniquely positioned, especially in the fact that they're not relying on third parties to create the content they deliver. They have they have control over both the delivery mechanism, meaning the app, and they create the content. I think they're uniquely positioned to be able to do something creative with this. Whether that's going can be successful or not, I don't know. I do think it is innovation. I don't think you could say it's not innovation. I think it is. Whether it's successful, I don't think Netflix can influence other than to try to do it well, and the example I used is this will be Pong, and we have to get to Super Mario Brothers, and it's going to be a long time before we get there. It's going to be a decade of of fits and starts before we have that moment.

Brian: [00:24:34] Yeah, I just don't see it in this context. That's where I'm going with this. I get what you're saying. And I think the context that we'll see in the scene is definitely more immersive video gaming because I definitely think that video gaming with different outcomes and like different choices along the way is super interesting, especially with more advanced AI. It would be very interesting for a narrative to be built as you make decisions in the game, and the AI is smart enough to, you know, have some sort of meaningful interaction and storytelling as you go. I just don't see that... I don't see the narrative of Netflix being the place to create that level of innovation. And, you know, maybe I'm wrong. Maybe it will come from that range. But it seems like video games are a lot further down the path of having your choices result in interesting narratives that's unique every time you play or has a lot of different outcomes.

Phillip: [00:25:39] Right. But I think that there are... That has been done really, really well in video gaming. Like, for instance, Oblivion or Morrowind or what's the modern one? Skyrim, The Elder Scrolls series.

Brian: [00:25:58] Not that modern anymore.

Phillip: [00:26:00] Fine. I mean, Skyrim is now like seven years old. But the point is, is that those games live for a decade because people want to re-experience them in different ways over and over and over and effect different change and follow different paths.

Brian: [00:26:15] Yes.

Phillip: [00:26:15] And there's sort of an infinite discovery there. Now, those are more open world with like locked in to a canonical story, if you want.

Brian: [00:26:24] I love that. Yeah.

Phillip: [00:26:24] And that is very video game like. I think the thing I'm thinking of is something like Mass Effect where there is a canonical story and whether you are a humanoid male or a lizard alien female, you shepherd the hero of the story. It's not gender role based. It's not even humanoid based. The outcome in the end will be a canonical story. You influence the what it means to you with your decisions along the way. And I feel like if we can do that in video games, there must be a way to do that and content. Really, there's only a couple people in this world that can do that. We see Netflix, who is owning content and delivery, and HBO who's kind of right behind them. And the only other one I can think of is Disney, whose new streaming service is imminent. So we see a few players.

Brian: [00:27:25] I could see Amazon doing something like that.

Phillip: [00:27:27] Well, that's true. Amazon. OK, fine. Yeah, yeah, yeah, fine. Amazon too.

Brian: [00:27:31] So four.

Phillip: [00:27:31] There's really only a few.

Brian: [00:27:32] Yeah.

Phillip: [00:27:33] And I think if one does it well, it'll be an arms race to try to capitalize on on something new and exciting.

Brian: [00:27:42] Yeah. I mean you're probably right there probably is some sort of a market for this somewhere but I'm not that market. I can tell you that right now. And I find it annoying. {laughter}

Phillip: [00:27:53] I love that. This is not for... This is engaging content. That's the other thing. Aside from Stranger Things, I can't think of the last thing that I didn't second screen. I second screen a lot. I passively consume a lot. I don't like that about myself. But I do. And something that's more immersive and visually captivating and requires my investment of my attention... I'm all in for that. Anyway.

Brian: [00:28:26] By the way, Netflix already did something really similar to this with Puss in Boots. I don't know if you saw that.

Phillip: [00:28:34] Really? No.

Brian: [00:28:34] Yeah, they did some some decision tree interactive video or movie...

Phillip: [00:28:41] What?

Brian: [00:28:41] Yeah. With Puss in Boots. And I did it with my kids, and it was really lame. And they were bored.

Phillip: [00:28:49] Okay. Well, we just talked about a whole lot of stuff that's already been done. Awesome. That's how future we are.

Brian: [00:28:55] No. It was breaking all over the place. I mean, I think Puss in Boots might've been the only place that did it. So it must've been like a little pilot. But interesting. Interesting stuff that is not interesting to me at all.

Phillip: [00:29:09] Well, here's the deal. Like, yeah, I guess doing it... Okay. Yes. Now I'm reading about it. Okay. All right. We're gonna cut that whole part of the episode. Thanks, Brian, for waiting until the very end of the conversation to trump me.

Brian: [00:29:23] That was my final card. Like no one really like the Puss in Boots experience. So, you know...

Phillip: [00:29:31] The Verge seems to be hype on it.

Brian: [00:29:33] The Verge seems to be hype on everything.

Phillip: [00:29:33] Here's the deal first. You do that in the right medium... It doesn't make any... I mean, it makes sense in a children's storybook model. I guess that makes a lot of sense. It also makes sense in Black Mirror. You do that in Black Mirror. That in and of itself becomes part of the narrative.

Brian: [00:29:48] Yeah, I agree with that. Like, I think it's fine. I think it's fine in certain contexts and like certain episodes of Black Mirror I could see this being kind of fun to look at all the different possible endings. But again, I just don't see it as the lasting contact form. I see it as like a fun thing that you did one time on Black Mirror and maybe some comedy shows allow for this. And it's fun getting a gimmicky. Like in the middle of some, you know, rom com it's like, "Well, what would happen if she actually went with this guy?" Or vice versa or whatever. You know, it's a.. I see it as being a little fun little gimmick thing along the way.

Phillip: [00:30:33] Our thirty five minute episode is stuck on on our third bullet point. So I will unstick us.

Brian: [00:30:39] I really didn't like Choose Your Own Adventure Books. That's why I can talk about it so long.

Phillip: [00:30:43] I can tell that. We got it. We got it, Brian.

Brian: [00:30:45] All right. Let's move on. What else is going on?

Phillip: [00:30:49] How about you never own anything ever anymore, ever.

Brian: [00:30:52] Oh yes. Good one.

Phillip: [00:30:52] It's not yours.

Brian: [00:30:54] Yeah.

Phillip: [00:30:54] This world does not belong to you. There's nothing that's durable. There is a story that was out on Twitter, which I think it hit our social, but we never actually talked about it.

Brian: [00:31:05] A while back, yeah.

Phillip: [00:31:05] There was a Anders DaSilva tweeted not so long ago and to say, what is this like a couple weeks now? A few weeks ago? Basically that iTunes support had basically removed three movies that he had purchased and was in the iTunes library. And they basically said, "Oh, yeah. So yeah, our content providers decided that these movies are no longer available in Canada, and so therefore they're no longer available in Canada iTunes, which means that even though you bought them, you're no longer allowed to have them and to make up for your trouble, here's two movie rentals."

Brian: [00:31:55] You know what's interesting about this?

Phillip: [00:31:57] What?

Brian: [00:31:58] It's kind of going to apply to even like physical goods soon. We've already...

Phillip: [00:32:02] Yeah.

Brian: [00:32:02] There are so many things that we don't own. We share cars. We share homes. We share clothes. We share, well maybe not clothes as much yet. But like the second hand market is getting so big and there's going to be a future where people are just trading in clothes, and it's part of a service. I mean. Yeah. Rent the Runway.

Phillip: [00:32:19] Sure.

Brian: [00:32:19] You know, we don't own anything. You could actually live without owning just about most like everything. You could just live in the sharing economy and the rental economy and in the streaming economy and not own anything.

Phillip: [00:32:43] But I find this very troubling from a content perspective in that you can't access content that you paid for, and that you probably paid a premium for, so that you could have it. There's the license that you understood that you had that you were entering into a financial negotiation for, it wasn't that you could just have it and watch it once or for a limited time as long as Apple maintained a content relationship with that company. No, no, no, no. That wasn't what you paid extra for. It was not to experience it once. It was to have it forever. That is your understanding and the fact that that can be... Obviously Apple somewhere in their terms of service... Let's all reference the CentiPad Southpark episode... Somewhere in the Apple terms of service in the iTunes agreement, you've agreed to this and this is your own fault. But it's frustrating because we're gonna see more of this, a lot more of this, like a lot lot more.

Brian: [00:33:54] Yep.

Phillip: [00:33:56] Yeah, and more things are moving to digital, right? More things are moving more than ever. One day, one day your homeowner's association is going to be able to keep you from opening your garage and parking your car and your front door because you have August locks and a Chamberlain automatic garage door opener. And you haven't paid your HOA dues. Like that is the world that we're about to live in. It's all happening. It's all coming..

Brian: [00:34:29] That's part of your homeowner's association agreement.

Phillip: [00:34:33] Yeah. Oh, yeah. Yeah, exactly.

Brian: [00:34:36] Oh my gosh.

Phillip: [00:34:36] We've now taken it... You go to log to Netflix, all of this shows our Choose Your Own Adventure Puss in Boots.

Brian: [00:34:42] Oh good heavens.

Phillip: [00:34:42] And it says...

Brian: [00:34:47] This is the bleakest future that I've ever heard you talk about.

Phillip: [00:34:50] Yeah. And the Puss in Boots will continue until morale improves. You must pay your HOA dues. You're no longer allowed to access your home. You're not allowed to access your Black Mirror episodes. You have to pay your HOA dues. Shocking. In fact, you know what? Your face isn't even yours anymore.

Brian: [00:35:12] Yeah your face isn't even your own. That's right.

Phillip: [00:35:14] Yeah. This is where we're heading.

Brian: [00:35:16] JetBlue just introduced some biometrics for passports. Now they're kind of building out their own kind of like clear sort of experience, right?

Phillip: [00:35:31] Yeah. Yeah. But it's like instead of this just being... I don't know what bothers me more about this story, the fact that it's sort of a throwaway line in how they're going to compete and grow and be a bigger, you know, grow up into a major U.S. carrier. Or if it's that to compete with Delta, they're investing in biometrics, so that they can just scan people's faces for passport control. I don't know. Competition breeds some interesting innovation. I don't know if it's creepier that JetBlue does this or if, like our U.S. government's been doing this forever. This is, by the way, this is also tied to a story about the FBI using face unlock on an apple to gain access to a device without explicit permission from a suspect recently. So your face doesn't even belong to you anymore. Like JetBlue is going to use it to allow you to board a plane.

Brian: [00:36:41] Well, it's just like the warnings on food. Right? You're going to just sign away your face all the time.

Phillip: [00:36:55] Eventually.

Brian: [00:36:57] You're gonna to think about it. You're just going to do it because in order to go board your plane, you're gonna have to sign away your face.

Phillip: [00:37:03] I mean, you walked into the building and there was a sign outside that said, "By walking into this building, you're giving us your face forever." I mean, it said it right there.

Brian: [00:37:13] Posted on the door. In small letters.

Phillip: [00:37:17] And here's a video of you looking at that sign. So we know that you agreed to it.

Brian: [00:37:22] We tracked your eyes, and it's clear that you're ready. And so therefore, you've agreed it since you walked in.

Phillip: [00:37:30] I love that it used to be that we were worried about Big Brother from like as a government entity. It's amazing how much of this actually comes from private industry.

Brian: [00:37:42] Right.

Phillip: [00:37:42] And it actually leads us into our next story, which is Pedal, which is a Fintech startup. They've raised 34 million, and they're basically launching a credit card for people that don't have credit. And what I really loved about this story was that they're using big data and machine learning to basically, you know, you log in with your Chase account, and it will data mine your bank activity to create a financial profile of you in a way that is probably way more accurate and goes deeper and learns more about you than your credit rating ever will. And so it's like the privatization of credit rating, which is interpreting actual activity and and then using something called cash flow underwriting to understand how, you know, how you spend money, how you use money, and that's how they qualify you, which I think is really innovative.

Brian: [00:38:49] It is super innovative. It's really interesting and cool and it gets around the credit bureaus, which are, you know, can be challenging to work with. And so I don't know. Part of me likes this and part of me hates this.

Phillip: [00:39:07] If anything, put all the technology aside, at least they're doing something innovative with the design of this card. It's really pretty. {laughter} It's a very different looking credit card. It defies the norms. Early investor is Peter Thiel's Valar Ventures and now SVB, a Silicon Valley bank, is in.

Brian: [00:39:35] Supposedly they have more than a hundred thousand people already on the waiting list, which is crazy.

Phillip: [00:39:40] Yeah, it was a really interesting sort of soft launch. I kind of love this. I also like the idea that they're simplifying it into well, it's not about interest rate. We can be flexible with you. We're gonna allow you to decide how much you want to repay and how much interest you'll sort of accrue and we'll do that and a really sort of beautiful user interface, and we'll take the focus off of fees and the focus off of like I have to repay this and more into the like how do I make this work into your life since I can already see into your bank and I know what how much money you have. And I know that you bought all those movies on iTunes that you're not gonna be able to watch anymore. So maybe you should be paying a little extra this month. It's crazy.

Brian: [00:40:40] Just imagine Amazon releasing something like this.

Phillip: [00:40:43] Oh, yeah. No, that's... Don't worry. I mean, Amazon's now in the mattress business. It's a matter of time before they also have a credit card. They're competing with everybody everywhere all the time. That's their new strategy.

Brian: [00:40:55] No, it's true. No. I'm just thinking Amazon will know what most of your purchasing looks like simply by history. And imagine if they're asking you for like salary history or something along those lines, like how easy would it be for them to quote unquote help you make wise decisions about your purchases. And I mean, the fact is, maybe they actually could. But, you know, it's just an easier and deeper way to wrangle someone into the ecosystem without any reason to ever leave it really.

Phillip: [00:41:43] I mean, this actually brings... Okay. You just broke my brain. Hold on. There is an incredible thing hiding in what you just said, which is there is probably an opportunity here for somebody where if you don't have the discipline to manage your finances, and you need extra accountability, a service like this that might make financial decisions for you and manage it for you...

Brian: [00:42:14] Yeah just hand over your money.

Phillip: [00:42:14] Just like I could tell, I don't know, TD Ameritrade, I want to be a really aggressive investor and put me in a bunch of risky positions. I could totally do that. And they'll do that for me. If I tell Pedel or let's say Chase, I want you to be really conservative with the way I manage my finances the next time I go on the Nike app to go buy the hype sneaker drop, their machine learning is going to say, "You have 40 pairs of shoes that you bought in the last year. You don't need another pair of shoes. We're going to decline this transaction. It's for your own good."

Brian: [00:42:56] Yup.

Phillip: [00:42:56] Right? And to be honest with you, that might be really helpful and assistive. "Oh, you need to budget because six weeks from now or every six weeks or so, you wind up having to buy some extra cold medicine because you've been eating like garbage. You keep going to McDonald's." Like there's so much insight that could be gleaned from your purchase histories that a financial institution could help you live a better life. Oh, God, this is not like me to say these sorts of things. I've got to stop. Never mind. I take it back. I take it back.

Brian: [00:43:34] {laughter} No, but that's exactly where I'm seeing the settings, exactly what I'm talking about. It's exactly what I'm talking about.

Phillip: [00:43:40] Un real.

Brian: [00:43:40] In fact, this is me... I've been thinking about this for years, actually. But why wouldn't Amazon or Walmart or some big conglomerate who has the ability to essentially service your entire life say, "Tell us a little bit about yourself. What kind of money do you want to spend? What kind of money do you want to save? We will furnish, clothe, feed your entire family based off of your income level." And like essentially it would be life subscriptions.

Phillip: [00:44:19] Yes.

Brian: [00:44:20] Where you don't have to worry about it. You know you're gonna have these things come in at this time. Like all of your basic food, all of your interesting food kits, meals, clothing that's refreshed on a basis that you can afford. And it's interesting clothes, and you have some level of choice in determining what kinds of things come in. And it's going to refresh every season. They're going to make sure that you're dressing warm in the winter and cool in the summer and everything. You don't have to think about any of it. You just buy into the service and you can adjust your level at which you live in a smart way, thoughtful way, as you make more money or make less money or whatever it is.

Phillip: [00:45:07] I mean, yeah, it's sort of the dream of what Sears wanted to do in the 20s, 30s and 40s with the kit homes.

Brian: [00:45:16] Yeah.

Phillip: [00:45:17] We're gonna make a bunch of smart decisions for you when it comes to building a house and all the stuff that goes in it. Amazon's probably literally already doing this for the neighborhoods around HQ 2, wherever that might be. But you're right. That is probably a future that, you know, you might want to do that. You might. Like I might want to do that.

Brian: [00:45:43] You don't have to think about anything. You don't have to worry about your finances at all. Like it's all just going to work. You don't have to think about.

Phillip: [00:45:50] Yeah.

Brian: [00:45:51] Of course, until it doesn't. And of course, until something breaks prematurely or, you know, of course, there's probably a way to solve for that. But like until things start to get dicey or you start to make bad decisions outside of your plan.

Phillip: [00:46:08] I mean, this is the beginning of a Black Mirror episode, because in the thing that I just referenced, one day I get home, I can't get in my front door and I can't open my garage. And I'm like, "Why can't I get in my house?" I use my phone. I call the bank and I'm like, "I can't get into my house." And they're like, "Well, you really you don't own your home anymore." "What are you talking about?" "Well, you see, the city no longer has an agreement with our land ownership partnership. And so you technically don't have a home anymore. But we've given you two months free rental down the street." And that's the future that we're all barreling towards.

Brian: [00:46:46] Man, you just went a little step further than I was hoping to go.

Phillip: [00:46:49] {laughter}

Brian: [00:46:49] Yeah. I mean, the future that I'm talking about, I actually think that a service like this will pop up at some point soon. And maybe it already exists. This is the thing. I come up these ideas and then I go look for them and they already exist.

Phillip: [00:47:03] Yeah That's why VentureBeat exists, right?

Brian: [00:47:08] Look for them before I go talk about them on the podcast.

Phillip: [00:47:10] I love that. I think that's a great place to stop.

Brian: [00:47:14] Oh my gosh, we have so much more to talk about that though.

Phillip: [00:47:16] There's so much more to talk about. We'll cover it. We'll cover it on Episode 85.

Brian: [00:47:24] We've got some great interviews coming up in the next month or two, too.

Phillip: [00:47:30] Holy cow.

Brian: [00:47:30] So just stay tuned because lots more good content. We didn't even touch all the things we need to talk about.

Phillip: [00:47:37] We didn't even cover it. We didn't even tell you the half of it.

Brian: [00:47:40] We talked about Choose Your Own Adventure way too long.

Phillip: [00:47:46] Love it. Well, thanks for listening to Future Commerce. If you're as frustrated as we are right now, take that fire and that passion, and tell us what you think about the show. We'd love to hear it. Go over to FutureCommerce.fm, and leave your feedback on today's episode and also scoot on over to Apple podcast, Google Play, Stitcher Premium or Spotify or anywhere else that you consume podcasts, and leave us a rating. Leave us a five star. Give us some feedback. We want to hear from you. Anyway, thank you for listening. Until next time...

Brian: [00:48:20] Retail tech's moving fast...

Phillip: [00:48:22] And Future Commerce is moving faster.

Brian: [00:48:23] Thanks, everyone.