Why Apple Pay’s Slow Start Doesn’t Mean It’s a Failure


From my opinion piece in MIT Technology Review:

A year after Apple Pay was announced, the mobile wallet built into the iPhone doesn’t look as if it will “forever change the way all of us buy things,” as Apple CEO Tim Cook said it would.

Only 13 percent of people with phones that can use Apple Pay have tried it, according to a June survey by consumer research firm InfoScout and the payments industry site PYMNTS.com. The survey also found that only a third of iPhone 6 consumers who were in a store that takes Apple Pay actually used it, down from almost half three months earlier. On top of that, Apple Pay still accounts for only 1 percent of physical store transactions in the U.S.—a “microscopic” amount, says David S. Evans, founder of payments consultant Market Platform Dynamics.

What happened?

Exactly what we should have expected, actually. It was never a secret to those close to the payments and retail businesses that usage of Apple Pay would be slow to build. … But it’s too early to write the post-mortem on Apple Pay. In the space of a year, Apple has managed to make more headway than any other mobile wallet contender has to date. And several developments suggest that in the next couple of years, Tim Cook might be proved right after all. …

Read the rest of the piece.

Pingpad: A New Social Network For Getting Things Done

Pingpad CEO and cofounder Ross Mayfield

Pingpad CEO and cofounder Ross Mayfield

From my Forbes blog:

There’s no lack of apps to communicate and collaborate with friends, family and colleagues. You use messaging apps such as Snapchat, WhatsApp or Facebook Messenger to ping friends, and maybe team collaboration darling Slack at work. You’ve got document sharing apps and services such as Google Docs, Quip or Microsoft Office Mobile, Dropbox for storing files, maybe Evernote for quick notes, and oh-so-many calendars for your job, your family, and your kids’ soccer teams. And of course there’s still email.

Whew. And therein lies the problem, says Ross Mayfield. The 44-year-old serial entrepreneur knows collaborative software, having co-founded Socialtext in 2002 to commercialize the seminal group-edited Web pages called wikis. Now, he believes that precisely because of the explosion of communications, collaboration, and productivity apps since then, there’s a need for a much more simple way to bring them all together. When Mayfield and his future wife were planning their wedding, for instance, he needed to use a wide array of apps and Web services to keep track of catering and location options, as well as arrange activities such as a wishing tree that required help from friends. The scattered nature of all those tools made it difficult for multiple people to use, especially on the go.

Today, Mayfield’s year-old startup, Pingpad, is launching a free app on Apple’s and Google’s app stores and a connected service on the Web that aims to elevate messaging into a way for people to get things done–and not just at work. Unlike at Socialtext and largely unlike most collaboration services all the way from Lotus Notes to Yammer to Slack, the nine-person company isn’t chiefly aimed at businesses. “We had a lot of innovation around collaboration in the 2000s,” he said in an interview in the makeshift upstairs office at his newly rented house near downtown Palo Alto. “But very little of it reached consumers.” …

Already, messaging has started to become something of an atomic unit of many kinds of apps. Even non-messaging apps such as Uber, Instagram, Meerkat, Facebook, and Twitter are appealing in part because they have short messages at their core to make their services quick and easy to use. That has some experts comparing the impact of messaging to that of operating systems such as Microsoft’s Windows that serve as platforms for many applications. “We see messaging as the new OS–all sorts of activity will happen inside of it,” says Marc Canter, co-founder of Cola, a messaging startup not quite ready to announce its service. …

Read the rest of the story.

Billions Of Online Ads Are About To Die A Well-Deserved Death

From my Forbes blog:

Businesses that run annoying ads on your smartphone and laptop are about to get a rude awakening.

Not only are online ad blockers quickly gaining in popularity, now two very big companies will soon offer us new ways to avoid in-your-face video and animated ads, pop-ups, and other intrusive ads that plague our online existence.

Today, Sept. 1, Google will start blocking ads that use Adobe’s Flash software, employed widely by video advertisers, in its Chrome browser. And as early as next week, Apple is expected to release its new mobile operating software for iPhones and iPads that will allow the installation of apps that keep ads from appearing in its Safari Web browser.

These developments suggest a new era in which you’ll finally be able to zap annoying ads like those in the video above. For a variety of reasons, it’s unlikely that ad blocking alone will cause advertisers and publishers a big problem. But the fact that the two biggest forces in mobile phones are both cracking down on annoying ads means the online ad business is about to change in a big way. …

Read the rest of the post.

In Conversation: Stripe CEO Patrick Collison On The Limitless Potential Of Payments

Headshot - Patrick Collison

Stripe CEO and cofounder Patrick Collison

From my Forbes blog:

When Patrick Collison and his younger brother John were developing ideas in 2010 for new apps to create, they kept running into a seemingly basic problem: Even as it was getting easier to tap cloud services to create startups faster and cheaper than ever, one thing was still a pain in the app: accepting payments online from customers.

So the pair, already entrepreneurs from Ireland who sold their first company in their teens for $5 million, decided to turn that problem into a business. They set up a system that allowed developers to add a few lines of code to their app and start taking payments from anyone anywhere, for a small fee per transaction.

Today, their company, Stripe, processes billions of dollars a year for tens of thousands of companies, from other startups to the likes of Facebook, Salesforce, and Lyft. With a recent funding from Visa and other partners such as Apple and China’s Alibaba, Stripe is now valued at $5 billion. But CEO Patrick Collison and the company’s investors alike think that’s only the start. Hemant Taneja of investor General Catalyst says that when Stripe reached its first $1 million in transactions processed, the elder Collison said, “Only five orders of magnitude left.”

Taneja thinks Stripe indeed could be valued at $100 billion in the next few years if it plays its cards right. Just as Google turned search into an advertising empire and Amazon’s Web Services enabled the creation of many thousands of online businesses, he says, “There’s an opportunity for someone to create a platform that’s all about payments and commerce.”

It’s a heady possibility for someone who still hasn’t turned 27 years old, and who faces competitors from PayPal and Google to big banks. In an interview I conducted with Patrick Collison for a story in MIT Technology Review’s annual list of Innovators Under 35, the Stripe CEO had a sore throat, so he spoke softly, in a distinct if muted accent befitting his upbringing in Ireland’s Shannon region.

But his ambition–and a firm belief that Stripe and the sometimes controversial startups it enables are good for society–were apparent as we talked on a balmy late June afternoon at Stripe headquarters, a 106-year-old trunk factory in San Francisco’s Mission District. Following is an edited version of our conversation:

Q: What spurred your interest in technology early on?
A: I grew up in very rural Ireland. The Internet was kind of a connection to the greater world. It had a lot of significance. Maybe if I grew up in New York, I’d have already felt it. It was very clear if you grew up in the middle of Ireland just how potent a force the Internet was and could be. I was always seduced by the potency of computers and the possibilities for which they could be leveraged.

Q: When did you and John realize you needed what Stripe now provides, and when did you realize it could be a business?
A: We started working on it as a side project, while I was at MIT, and just being baffled at how convoluted and awkward this appeared to be. It seemed like a prevailing ecosystem designed to reduce the number of Internet businesses. …

Read the rest of the interview.

Innovator Patrick Collison Aims To Make Money Flow Easily Online


My story in MIT Technology Review:

“I grew up in very rural Ireland. The Internet was a connection to the greater world. It was very clear just how potent a force the Internet was and could be. While my brother John and I were tinkering with some new apps in Ireland and then in Boston and Silicon Valley, we experienced firsthand the difficulty of accepting online payments. We were just baffled at how convoluted and awkward the process appeared to be. The ecosystem seemed designed to reduce the number of Internet businesses.

“The same way Google exists as a foundational component of the Internet around information retrieval, it felt like there should be a developer-focused, instant-setup payment platform. Many people in financial services told us it couldn’t work.

“Stripe now processes billions of dollars a year for thousands of businesses, from startups to publicly traded companies. There’s a ton of database and distributed-system work that has to be done to make that experience possible. We have a 10-person machine-learning team that works on compliance, risk, fraud, identity verification, all of those things behind the scenes.

“Making it so easy to participate in the online economy has a far larger effect than one might imagine. We’re enabling new business models, like crowdfunding. And mobile marketplaces, like Lyft, Postmates, and Instacart. That enables more people in society to take advantage of these services. My youngest brother is disabled, and for him it’s not just a convenience. He can now do grocery shopping in a way that he could not before.”

—as told to Robert D. Hof

As Mobile Video Ads Soar At Facebook, Big Brands Pile In

Facebook CEO Mark Zuckerberg

Facebook CEO Mark Zuckerberg

From my Forbes blog:

Facebook’s second-quarter results today didn’t thrill investors, who knocked shares down more than 3% in after-hours trading. They don’t like to hear about an 82% jump in expenses to get revenue growth of half that much–even less so when Mark Zuckerberg, CEO and founder of the social network, says that spending won’t slow down much anytime soon.

But advertisers were a different story–in particular, big brand advertisers like Procter & Gamble and Under Armour that are looking to reach people via the mobile devices they carry with them all the time. Mobile ad revenues shot up 74% from a year ago, considerably faster than ads overall, which rose 55% after taking out currency impacts, and it’s now 76% of ad revenue.

In particular, Facebook is starting to become a must-buy for big brands that still spend the most on television, because it has the reach and the impact they want. Now, according to ad agency executives, they think Facebook is finally poised to capture more TV ad dollars that Chief Operating Officer Sheryl Sandberg has spent years pursuing.

“We see Facebook at a core pivot point,” says David Hewitt, VP and mobile lead at the digital agency SapientNitro. “It’s now a safe bet to put a lot of money into.”

In the last six to eight months, he says, brands have started to understand the reach Facebook has among smartphone users–some 844 million people each day. “It’s hard to get reach on mobile,” he says, but now “Facebook checks that box” in a way that few others online besides Google can. …

Read the rest of the story.