Today we will be diving into Visa. Starting in 1958 as a BankAmericard credit card program in Fresno, California, it then became a non-profit consortium of banks that operated the Visa network. Over the first few decades of its existence, Visa became the protocol layer that allowed essentially all the banks in the world to communicate with one another. In 2007, Visa completed a corporate restructuring that took it public and now boasts a larger market cap than all of the banks that previously owned it as part of the consortium. In this Breakdown, we set the stage with Visa's role in a card transaction, describe the lifeblood of Visa’s revenue, interchange, and then dive into its unique history as a consortium turned multi-hundred billion-dollar public business. We then explore Visa’s unique moat and network effect, how Visa makes money today, and look at the potential threats from other businesses and macroeconomic forces. Visa is a fascinating business, and I recommend you check out our website at JoinColossus.com, where we provide additional articles, books, and podcasts for those who want to keep unpacking the Visa story. To help me break down Visa, I'm joined by Alex Rampell, a general partner at Andreessen Horowitz, where he focuses on investing in financial services. Prior to joining Andreessen, Alex co-founded multiple companies, including Affirm and TrialPay, which was acquired by Visa in 2015.  For the full show notes, transcript, and links to mentioned content, check out the episode page here.-----Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss Show Notes[00:03:20] - [First question] - Key players and functionality of a credit transaction[00:05:50] - How $3 would be split up amongst the network after a $100 purchase is made[00:10:55] - How Visa came to be a central player and why banks don’t talk to each other[00:16:26] - Other businesses that have dominating protocol effects in fragmented sectors[00:19:47] - What the internals of a business like Visa looks like and [00:24:48] - Visa’s topline revenue is almost entirely exclusive to transaction fees[00:26:11] - Thinking of Visa as a tax and simultaneous enabler of commerce writ large[00:30:48] - Why concentration poses a risk to their business model[00:34:56] - How international standards may play a role in Visa’s future[00:41:52] - Would it be worth it for merchants to build something competitive [00:44:33] - Thoughts on new value transfer tech companies and their relevance to Visa[00:48:59] - Plaid’s role in the payment ecosystem and as a potential competitor[00:50:40] - Parallels between the crypto space, their protocols, and open-source payments [00:52:54] - Business lessons for entrepreneurs when studying Visa’s history[00:54:44] - Lessons learned that can be applied to investing when studying Visa’s history[00:55:37] - Books to learn more; A Piece of the Action, One for Many  

My guest today is Alex Rampell, General Partner at Andreessen Horowitz. Alex has a long history in fintech, having co-founded six companies in his career, including Affirm and TrialPay. During our conversation, we cover Alex’s framework for positive selection in investing, why the best investments are often operating systems or systems of record, and Alex’s views on the future of fintech. For those that have listened to our Business Breakdown on Visa with Alex - you know the intellectual horsepower he brings to every discussion. This conversation is no exception.    For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   ------   This episode is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors.   With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more.   ------   This episode is brought to you by Hall Capital Partners. Hall Capital is always looking for exceptional investment talent at any stage and size, so if you are raising capital or looking for a career change in the San Francisco or New York areas, you should check them out at hallcapital.com or e-mail at invest@hallcapital.com.    ------   Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.    Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @patrick_oshag | @JoinColossus   Show Notes [00:03:32] - [First question] - Lean into positive selection and avoid adverse selection [00:07:48] - Thoughts on growing capital formation in private markets [00:14:01] - Why it’s useful for investors to think in terms of bonds and call options instead of equity [00:18:39] - Doing more with less and hunting for operating systems to invest in [00:28:08] - His views on infrastructure and the presentation layer conundrum [00:33:32] - The sequencing involved in building an operating system over time [00:40:11] - Rise of the creator class and the coming tailwind post-cloud technology; the rise of the solopreneur  [00:43:32] - The pig joke and his thoughts on the FinTech space [00:47:47] - Big financial services functions that will be embedded in non-financial businesses [00:51:07] - Deciding which functions and financial services models are most attractive [00:57:01] - What a shift towards data and FinTech might unlock for the world writ large [01:02:40] - How to improve payment profits by reducing credit rates [01:04:12] - The threat that Buy-Now-Pay-Later companies pose to Visa and Mastercard [01:12:17] - How the struggle between distribution and innovation continues to change [01:15:04] - The kindest thing that anyone has ever done for him 

This episode features two relevant but previously recorded episodes, discussing the relevance of the Paycheck Protection Program (or PPP) from the Small Business Administration and the role of government stimulus/ pandemic relief for the economy as well as where tech comes in. It combines 2 separate episodes, beginning with one recorded much earlier this year (on our show 16 Minutes), which outlines a useful analogy of "eminent domain" for government-mandated shutdowns of certain businesses and technology considerations; and then is followed by an episode (recorded later this year) on preventing fraud and the role of fintech. Both episodes feature in common a16z general partner in fintech Alex Rampell, who also wrote about how Small Businesses Depend on the Stimulus Package, and The Stimulus Will Depend on Fintech, which you can find at: a16z.com/pandemicstimulus

This episode examines the potential for misuse and fraud among those applying for the Paycheck Protection Program (PPP)—and how fintech and software provide overlooked tools to stop it.  On March 27th, the government enacted a $2.2 trillion dollar stimulus package called the CARES Act, the largest aid measure in history. The act provides more than $500 billion for the Paycheck Protection Program, or PPP, a low-interest, forgivable loan program designed to help small businesses and self-employed individuals retain workers and stay afloat during the pandemic. Since March, the Small Business Administration has approved billions of dollars in PPP loans. But it is also estimated that U.S. losses from coronavirus-related fraud and identity theft have reached almost $100 million. According to the New York Times, the Small Business Administration’s fraud hotline has received 42,000 reports about coronavirus-related cheating and misuse; by comparison, last year it had less than 800.To date, the Department of Justice has charged more than 40 cases of PPP-related schemes, from claiming non-existent employees or non-existent businesses to identity theft, kickback schemes, fake tax documents, and multi-state fraud rings. Most of those cases have alleged fraud of more than a $1 million. But what about the countless others that may be cheating taxpayers out of smaller—but not insignificant—sums? How does the government decide who should get money and who shouldn’t among millions of applications from businesses of all industries and sizes—and what role do banks play? How does the program then distribute that money quickly and accurately—or not, in many cases? And what tools are at our disposal to catch those who cheat the system? Host Lauren Murrow is joined by Bharat Ramamurti, the original member of the COVID-19 Congressional Oversight Commission, which is tasked with evaluating the impact of coronavirus relief loans; Naftali Harris, the CEO of SentiLink, a software company that builds technology to detect synthetic fraud; and a16z fintech general partner Alex Rampell.

This episode is the first in a two-part series that examines the pandemic’s impact on real estate. Part 1 focuses on prospective home buyers, sellers, and existing homeowners. Part 2 (streaming on 6/17) addresses renters and landlords.How has social distancing shaken up the market to buy? What’s the ripple effect of eviction freezes and a record number of homes in forbearance? And how can tech streamline the inefficient process of renting, buying, and selling a home?Led by host Lauren Murrow, the conversation features a16z general partner Alex Rampell, who has invested in a number of real estate companies; Malloy Evans, Fannie Mae’s senior vice president and single-family chief credit officer;  and Tushar Garg, CEO of Flyhomes, a company that helps buyers in competitive markets by purchasing their desired house in cash, then selling it to that buyer at the same price.The discussion starts with the impact on home prices and volume, as well as the rumored exodus from densely populated cities. Then we shift to focus on existing homeowners. Finally, we talk about ways tech can improve the system, from hard tech to fintech.For more a16z content on real estate and proptech, visit a16z.com/realestate.

Alex Rampell, co-founder of Affirm, and Martin Casado, former CTO of Nicira, delve into the complexities of B2B2C models. They explore who truly 'owns' the customer in these relationships and stress the importance of direct sales in successful startups. The duo also shares insights on navigating channel strategies, highlighting the risks associated with B2B2C dynamics. Lastly, they discuss how startups can effectively compete against established incumbents dominating distribution channels, emphasizing the need for proactive marketing.

Frank Chen, an AI expert, Vijay Pande, a healthcare innovator, and Alex Rampell, a fintech specialist, dive into pressing tech policy debates. They tackle the implications of the American Health Care Act and discuss how tech can improve risk pooling in healthcare. The conversation shifts to the ethics of AI, addiction, and the opioid crisis, questioning whether technology can offer solutions. They also explore the weighty effects of Dodd-Frank on startups and the future of self-driving tech, revealing the intricate relationship between innovation and regulation.

In this discussion, Alex Rampell, a general partner at Andreessen Horowitz; Eddie Lim, CEO of Point; and Atif Mian, an economics professor at Princeton, explore the complexities of homeownership in America. They highlight how current financing models can leave homeowners trapped in debt. The conversation delves into innovative solutions like fractional equity, aimed at making home ownership more accessible. They also discuss the role of policy in shaping a fairer housing market and the potential for new investment strategies to empower both homeowners and investors.

Join Vijay Pande, a general partner at Andreessen Horowitz focusing on biotech, and Alex Rampell, a fintech specialist also at Andreessen Horowitz, as they dissect the fascinating world of data network effects. They explore how mere data quantity isn't enough; it's all about actionable insights. The duo tackles ethical data usage, the challenges of pooling data in fintech and health, and shares strategies for startups to build meaningful network effects. Expect engaging insights on navigating the complexities of data-driven innovation!

Alex Rampell, a General Partner at Andreessen Horowitz specializing in fintech, and Eileen Burbidge, a Partner at Passion Capital and government special envoy for FinTech, engage in a dynamic discussion on London's fintech scene. They debate whether fintech is a genuine evolution or merely a buzzword. The conversation highlights the impact of past financial crises, the significance of user experience, and the unique challenges startups face in gaining market traction against traditional banks, while navigating the complexities of consumer trust.