by George Barclay
Elaine’s in the bathroom crying again (or maybe she’s visiting her parents in LA, I don’t know). In any case, I thought it appropriate to repost this item from Matt Levine.
Ed. Note: It’s fine. I can appreciate when something is really fricken funny, even if it happens to be funny at my expense.
Tech is an industry of moving fast and breaking things. Finance is an industry of moving fast, breaking things, being mired in years of litigation, paying 10-digit fines, and ruefully promising to move slower and break fewer things in the future. My generic view of tech businesses trying to disrupt finance is that they tend to think that they are solving a technical or data or customer service problem, but the problems of finance are always and everywhere regulatoryproblems. The value of a bank is not that it can raise money from savers to lend to borrowers; it’s that it has special regulatory status to raise that money in the form of bank deposits. The raising-money-from-savers stuff can be replaced by a web page; the regulatory stuff is more complicated. Sand Hill Exchange found that out the hard way: It made a minimal product that some people liked, attracted users, iterated on the product, made it better and seemed to be on its way to building something useful and interesting. The Sand Hill kids thought that was what they were supposed to do. Now they’ve learned — no thanks to me! — that, in finance, it’s not so simple.
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