Saturday Cup of Joe: a lending and tech(ish) newsletter

Friends & Colleagues,

SCOJ #96. One exciting part of my time recently has been the feeling of engaging on a variety of fronts. Leading a team. Answering legal questions. Brainstorming product and pricing ideas. Writing the Cup of Joe. Spending time with family and friends. Making it to the gym. Listening to podcasts. Meeting interesting people in the city. #InTheD. It’s funny. I’m often guilty of thinking too much about the future. Trying to think about how I can build the perfect day. The perfect life. Then one day you look around and realize that it’s all happening. It’s all happening.

Enjoy the weekend and have a wonderful, productive week ahead. As always, I continue to be inspired by helping colleagues, former colleagues, and friends in the industry accomplish their goals. Let me know how I can help you accomplish whatever you are trying to do right now, whether that’s a small change in your career or a big rock at your company.


Thursday was International Women’s Day. How did you celebrate? I’ve known more inspiring women in my life than I could possibly list here. My mom is at the top of the list. She’s an entrepreneur and physical therapist. My parents managed their own PT practice while raising us, coaching us, and creating interesting experiences for us. Fiercely loyal to our family and always thoughtful and protective, our mom built a life for us. She was a momma bear when she needed to be and an incisive critic when we were being foolish, and I have always looked up to her. She recently endured ovarian cancer and the treatment. Holly is to be celebrated and I know so many women that I wish I could have celebrated with on Thursday.

I admire my classmates at UConn Law, who are incredible lawyers and even better people. I have learned valuable lessons from the strong lawyers and leaders that work on behalf of our industry. Women I’ve worked with in the past and those I currently work with. Our legal team has some of the most amazing women in the company. The senior leader on my current team and several others, including two friends we were able to toast on Thursday.

My wife is someone I need to celebrate every day, not just International Women’s Day. She keeps me grounded and consistently invests in her friends and our daughter in creative and thoughtful ways. Here in Detroit, she’s planning a business with two of our closest friends. They celebrate each other’s ideas, take care of each other, and love our family & friends. I am forever in their debt. Meredith’s birthday is on Monday, so we’re gearing up for days and days of celebrating.

I am lucky to be surrounded by amazing professionals and people who constantly challenge and inspire me.

Thank you.

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Source: Cheryl Sandberg on Facebook (where else?)


Today wraps up FTC’s National Consumer Protection Week. My question — did anyone hear about this? Did your company do anything specific or highlight any events?

Here are some takeaways from FTC’s fraud report:

· Reported fraud losses exceeded $905 million in 2017

· Median loss was $429 overall. Interestingly, that is $500 median loss to imposters, $720 median loss to phone scams and $1,170 median loss during travel, vacations and on timeshares.

· Based on per capita reports per 100,000, top fraud states were FL, GA, and NV and top identity theft states were MI, FL, and CA. Bottom line: be careful in FL.

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Included this week:

· Of Interest — Fake news, mobile tech risks, and drawing lines between convenience & liberty

· Power of storytelling — The Bank of Amazon

· Talking Fintech — 3 big stories of the week

· Next Belt — #NextBelt could be the next value pick for boot-strapping innovators

· Millennial Minute — Millennial isn’t about age, it’s about values

· Quirky content — Condo on Mars? Might not be that far off.

· Today’s Thought & the Quote


Of Interest: Do you care if advertisers know where you are, where you’ve been, and where you are shopping? If so, why? I’m always interested in articles planting seeds of fear when it comes to tracking location and shopping from cell phones. The Wall Street Journal published a story in the tech section about location tracking. Can we articulate why we worry about this?

If these services can offer products and discounts in the exact neighborhood where you are looking, are we worried a hack reveals daily patterns? Risk physical danger to you or your family? If so, why?

I think we’re missing the real risk here. The hyper-personal nature of social media is clouding our judgment on what is or isn’t a risk. Sure, ads are annoying. Technology that actually alters facts and perception is much more dangerous. What if conspiracy theories stopped being outliers and became the norm?

You may think I’ve gone off the deep end with all these questions and alarmism, but why worry when you can panic? Charlie Warzel writes about a future where slick, easy-to-use technologies are so good at manipulation that a machine can read all your emails and then craft one sounding just like you to send to your friends, family, or colleagues. My bigger concern is that tech companies, not to mention our lawmakers and policymakers in D.C., have no idea what to do about it.

Here’s an interview with Charlie Warzel that digs into the threats, the benefits and the future of Internet news and advocacy.

Unfortunately, this is not an easy, one-size-fits-all solution.

Until now, social media platforms and tech companies have been largely independent and free under the theory that Internet is unregulated, for the people, by the people. That development, however, has unintended consequences that we’re now dealing with. I hope we’re just willing to acknowledge that and catch up in the most thoughtful, empowering way; instead of reacting out of fear.

What does your organization do? How, as leaders, are we responsible for our activities and our company’s activities online? Are we part of the solution?


Power of storytelling: It’s been the low-hanging fruit of the financial services prediction business to predict that Amazon would like to get into consumer financial services. The Bank of Amazon. The predictions usually take one of two angles: “Jeff Bezos is taking over the world” or “they already have all my money I might as well just send it right to them to start with.”

If banking goes the way of retail, the big banks might go the way of Wal-Mart unless they find a way to intervene. For banking, local banks were once the norm. Services from direct deposit to mobile deposits to online application for loans increased cost and sophistication. Many people went to the big banks for convenience but struggled to connect with customers. Now those banks are susceptible to brands like Amazon, Paypal, or even Facebook who have higher loyalty among consumers.

In this case, the Amazon proposal seems to be a partnership with a big bank. That brings up an interesting question if you were running JP Morgan Chase’s strategic partnerships: Would you brand a checking account as the Amazon Bank? Is this like letting a fox in the henhouse? On one hand, you can control the relationship (i.e. Amazon won’t go elsewhere and people are still depositing with Chase ultimately). On the other hand, as Amazon gets the experience, institutional knowledge and consumer awareness as a trusted financial institution, as opposed to retailer, are you risking the long-term health of consumer banking at your bank?

Often big tech brands like Amazon and others want all the benefits of being inside a consumer’s wallet without the infrastructure and regulatory burden. For now, the back end and compliance are expensive (and complex) enough to ensure banks remain in control of market. How long will that last? My hunch is the next generation is not concerned with traditional institutions or “supposed to’s.” Brands like Amazon and even Starbucks have the loyalty, at least for now, but I guess we’re about to see how real that really is.


Talking Fintech: This week Colin Darke and I started our podcast, Talking Fintech, about marketplace lending. As we move through topics, we anticipate getting to blockchain and cryptocurrency. For now, we’re finalizing our first few episodes and I look forward to sharing the link with you when we publish.

At the Benzinga offices in Downtown Detroit recording “Talking Fintech”

In this week’s fintech stories, I wanted to pass along the “big story” of the week. Politico published a long but eye-opening story on bitcoin mining in Eastern Washington. Based on the physical environment, including the access to the Columbia River, the river valley has attracted cryptocurrency mining. Check out the story for a description of what it takes to unlock, otherwise known as “mining,” cryptocurrency.

In Japan, regulators identified two cryptocurrency hacks. The Japanese government identified two losses of almost $1B and moved swiftly to require a review of internal and process management. This story underscores the fact that these new innovations are not without risk. At the same time, the market responded and “corrected” at least for the moment. Hat tip to Jim Czpiega at CATIC for the story.

One curious aspect of the cryptocurrency market and what attracted or still attracts many investors is the autonomy and extra-governmental freedom of the market. Yet, when issues arise, consumers still turned to the CFPB. Official complaints jumped 100% in January.


Next Belt: Value. The Midwest, like the next generation of entrepreneurs and consumers, measures value in new and innovative ways every day. There is value to having a full, engaged life. Living in a place where that’s possible. An authentic life.

It’s only natural, then, that quality of life, cost of living and sense of community have value and can be evaluated as such. This week the story of a recent bus tour that hosted venture capitalists, founders and entrepreneurs looking at the Next Belt as a third option between the two coasts made news again as some people in the tech industry claimed to be leaving San Francisco. That came as admittedly welcome news for someone experiencing the value of Detroit and the Next Belt first hand. I am not overreacting to this story. There is backlash to the backlash to the backlash these days. For all I know, the stories like this are planted by someone just to prank their SF friends.

My only point was that the traditional value proposition might be changing in favor of cities like Detroit. We’ll see.


Millennial Minute: For 96 weeks, I’ve been writing about understanding millennials and finding ways to build businesses and teams around the next generation. I appreciate the larger “story” between cultures, between generations, and even between industries. For me, the “millennial thing” has always been about telling better stories and building better organizations. But, as this article points out, “understanding societal phenomena through the lens of groups of people born around the same time has always had its limits.” While I appreciate the author’s point, it was the article’s closing thought that stuck with me — it’s about collective values, regardless of age, that defines who we are, and finding your “tribe” is as important for making a difference as the year you were born.


Quirky Content: My team got into an interesting conversation yesterday about space travel, the value of research in outer space and the future of theoretical science — I know, an unlikely discussion for a mortgage company, but that’s our specialty. Defying expectations. This article describes a future where Mars is not only a back-up plan for Earth but actually accelerates travel technology in the process. If the (hypothetical) future does not interest you, there is value in thinking about something complex (and interesting). As leaders, it is important to connect with our teams and understand what they enjoy talking about. There is real value there. It can also give your mind something else to focus on and much like a jog or workout, will allow for new discoveries and ideas when your mind returns to the work at hand. I’m working hard to be a leader invested in my team without allowing that to distract us from the important work we do.


As seen in John E. King Books in Detroit, MI.


Today’s Thought: Always market the problem more than the solution. I found this theory this week and liked it for a few reasons. Whether you are leading an organization that sells a product, offering clients a service they need or simply trying to persuade a team to action on a project, the problem is the fundamental ‘why’ that will spark the buy(-in). Marketing the solution focuses on what’s good for you (the presenter). Marketing the problem aligns your experience with theirs. You understand them. Finally, marketing the problem allows the other person to come on their own to the solution you are offering. When they connect the dots, the buy-in is that much more powerful.


Quote: “The women whom I love and admire for their strength and grace, did not get that way because shit worked out. They got that way, because shit went wrong, and they handled it. They handled it in a thousand different ways, on a thousand different days, but they handled it. Those women are my superheroes.” — Elizabeth Gilbert


Bonus Content: Peter Thiel, of PayPal and Palantir fame, and now of financing the Hulk Hogan lawsuit against Gawker fame, is an interesting and enigmatic character. Gawker media outed Thiel as gay and Thiel never forgave the media company for this invasion of privacy, waiting almost 10 years to exact his response. I read an amazing (and dramatic) recounting of the dinner that led to the Gawker lawsuit and highly recommend it.

He’s a tech entrepreneur from the Bay Area who supported now-President Trump in 2016. An avowed libertarian, he funds scholarships that encourage students to drop out of college and recently announced that he’s living SF for LA. This WIRED profile goes deep on Thiel’s story and speculates as to what his next move might be.

Continued success,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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