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THE MONETIZATION OF OPEN BANKING: How legacy institutions can use open banking to develop new revenue streams, reach more customers, and avoid losing out to neobanks and fintechs

Sun, 08/11/2019 - 6:02pm

Open banking has arrived, and it's transforming the UK's banking landscape — next up could be the world. Regulatory efforts in the UK are transforming retail banking, reshaping incumbents' relationships with customers, and easing entry for fintechs.

Regulators across every continent are responding with actions of their own. Underpinning open banking initiatives is the idea that ownership of transactional data belongs to consumers instead of incumbent financial institutions.

The implications of this change for established lenders in the UK are significant. For those that act, open banking presents substantial revenue-generating opportunities.

But the consequences of inaction are even more severe: Business Insider Intelligence estimates that by 2024, £6.5 billion ($8.4 billion) of UK incumbents' revenues will be under threat of being scooped up by forward-thinking companies like fintechs and neobanks. Yet even through the financial incentives to act are clear, many incumbents are struggling to determine the best path to monetization. In fact, some aren't even sure what their options are.

In The Monetization of Open Banking report, Business Insider Intelligence identifies monetization strategies incumbents have at their disposal, describes how they can determine the best approach for their specific needs, and outlines actionable steps they need to make their chosen open banking initiative successful.  

The companies mentioned in this report are: Allied Irish Bank (AIB), Bank of Ireland, Barclays, Danske Bank, HSBC, Lloyds Banking Group, Nationwide, RBS Group, and Santander, Monzo, Starling, ING, Yolt, Fidor, BBVA

Here are some of the key takeaways from the report:

  • Driven by regulatory action, open banking is transforming the UK's banking landscape, but it's also gaining momentum globally.
  • For incumbents, open banking entails a significant threat to their entrenched position.
  • But for forward-looking banks, there are substantial opportunities for revenue generation, both directly and indirectly.
  • To seize these opportunities — and avoid losing revenue to fintechs and neobanks — it's critical that legacy players focus their efforts in the right direction, including identifying their strategic priorities.

 In full, the report:

  • Details the UK's Open Banking regulation in depth.
  • Forecasts the size of the UK's Open Banking-enabled banking industry over the next five years.
  • Discusses the types of monetization opportunities available for incumbents, as well as non-direct revenue-generation opportunities.  
  • Provides actionable steps on how banks can best determine the best strategic approach from the options available.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of fintech.

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Intimidated by points and miles? Here are 8 steps for beginners looking to earn travel rewards

Sun, 08/11/2019 - 2:57pm

  • Points and miles can seem intimidating. There's a lot to learn, and sometimes it seems like it's impossible to ever use those hard-earned rewards.
  • If you're willing to put in a bit of effort and can boost your earnings with a rewards credit card, points and miles can be extremely rewarding. Think international first and business class and five-star hotels.
  • Even if you just want to dip your toes in the water, you can easily earn enough points and miles to cover domestic travel.

You've probably seen articles about seemingly average middle-class Americans using points and miles to go on trips that seem impossible — flying international business class to Australia, diving in the Maldives, or spending a week at a ski resort in Aspen — and you may wonder how you could do the same. Here are eight steps to get you started on your miles and points journey.

1. Decide what your priorities are

How many times do you travel each year? Do you want to add more travel, replace a trip that you usually take with something a bit more extravagant, or simply save some money on trips that you'd be taking anyway? Are you hoping to use points and miles to offset the cost of flights, hotels, rental cars, activities, or something else? (Flights and hotels tend to offer the best value, so that's what we'll focus on here.) All of these are important considerations to plan your strategy.

2. Do some research

Once you know where you want to go, find out what airlines fly there, what hotels exist, and how much their respective loyalty programs charge to redeem award flights or hotel stays. That will help you figure out which credit cards are the best fit for your needs.

Also, check out travel blogs to find out whether there are any specific issues you need to be aware of — for example, does the airline you want to book on only make first-class seats available seven days before departure? Does the hotel you're eyeing require that you stay at least four nights to be able to make a reservation with points? These are good things to know before you start accumulating points that may be more difficult to use than you'd hoped.

3. Choose one or more credit cards that align with your priorities, and apply

If you know a specific airline is the best way to get where you're trying to go, that airline's credit card might be a good place to start to pick up a lot of miles with a signup bonus.  

If you're looking at a specific hotel, check out the hotel chain's credit cards — typically they'll offer either free night certificates or bonus rewards points for signing up, plus extra benefits like elite status in the hotel's loyalty program.

And if you're not sure about your plans — or you've got several options — many banks have their own rewards programs whose points can be transferred to several partner loyalty programs. For example, American Express' Membership Rewards points can be transferred to 17 different airlines and 3 hotel programs or can be used to book cash tickets directly (so you don't have to worry about availability restrictions). You can earn Membership Rewards points with cards like the Platinum Card® from American Express and the American Express® Gold Card, and these cards also offer other benefits like annual statement credits for airline incidental fees.

4. Spend wisely

Having a rewards-earning credit card isn't an excuse to overspend — you won't save any money that way! The rewards you earn — even from a credit card sign-up bonus — aren't worth enough to offset spending beyond your means.

Rewards credit cards should be a way to enhance the benefit you're getting from your everyday spending, not a reason to justify extra purchases or spending beyond your means.

5. Plan ahead

Airlines typically start making award seats available to book 10-11 months in advance, and most hotel programs also make rooms available around the same time. The most popular routes and times of year tend to get booked quickly, so if you start planning well in advance, you'll have a better chance of getting the flight or room you're looking for.

Even if you're not vying for a super-popular date or route, booking flights in advance will save you some money (or points) —for example, American Airlines and United Airlines charge fees for award tickets booked less than 21 days before departure, while Delta Air Lines is known to require extra points for bookings in that time window.

6. Be flexible

This is the key to having a successful experience booking travel with miles and points. Can you leave a day earlier or later than you initially hoped? Are you willing to take an extra connection, a long layover, or an undesirable redeye flight? Can you fly out of an airport farther away from where you live, or into an airport farther from your destination? The more flexibility you have with your plans, the better chance you have of successfully booking your trip.

7. Pay attention to details

Airlines, hotels, and banks are able to offer generous rewards because they know a certain percentage of people won't take advantage of them or will allow them to expire. Take a look at the little benefits booklet that came with your credit card — there are probably a lot of things in there you didn't know you were eligible for! (And if the legalese gets a bit much for you, check out summaries on travel blogs to get an overview — just remember that little booklet is the ultimate authority.) Free tools like AwardWallet can help you remember to use your rewards before they expire.

8. Remember that there's no such thing as entirely free travel

Even if you're able to cover the cost of flights and hotels with your rewards points, there are always going to be expenses you need to pay for out of pocket like transportation, meals, activities, and souvenirs.

Most rewards credit cards have annual fees, typically starting around $90 and going as high as $550. And since your purchases could just as easily go on a credit card that earns cash back — at least 2%, if not more — by using a rewards credit card, you're betting that you'll be able to make better use of the points than you could with that cash in your pocket. So do the math, and make sure you're striking the balance you want between quality experiences and your budget.

Curious about which cards I use and why? Here are a few of my favorites:
  • Chase Sapphire Reserve, because it offers great rewards on travel and built-in travel insurance for when things don't go as planned. It also offers great rewards on dining (3x points).
  • Chase Freedom Unlimited, because it offers 1.5% cash back (1.5x Ultimate Rewards points) on all purchases. It's my top pick for purchases that don't earn a bonus with another card.
  • Chase Freedom, thanks to its quarterly rotating categories that earn 5% cash back (5x points) on up to $1,500 in purchases each quarter you activate. A great way to rack up some serious points!
  • Platinum Card from American Express, because it gets me access to American Express' wonderful Centurion Lounges and credit for Uber rides each month.
  • IHG Rewards Club Premier Credit Card, mostly for the one free night at IHG hotels every year (that costs up to 40,000 points) just for paying the annual fee.

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Bitcoin 101: Your essential guide to cryptocurrency

Sun, 08/11/2019 - 1:01pm

Bitcoin is everywhere.

The cryptocurrency is seemingly in the news every day as investors and businesses try to understand the future of this digital finance.

But what is Bitcoin all about?

Why is it suddenly on every financial news program?

And what does it mean to you?

Find out the answers to these questions and more in Bitcoin 101, a brand new FREE report from Business Insider Intelligence.

To get your copy of the FREE slide deck, simply click here.

Join the conversation about this story »

6 carmakers that are betting electric scooters and bikes — not cars — are the future of city transportation

Sun, 08/11/2019 - 12:51pm

  • Carmakers are investing in electric portable mobility transportation by creating either concepts or full-blown new products, including e-bikes and e-scooters, at an increasing pace.
  • While concept micro-mobility ideas like Volkswagen's scooters have an uncertain path to production, others, such as Peugeot, already sell a full line of products — and have for years.
  • Visit Business Insider's homepage for more stories.

Carmakers are increasingly looking towards new ways to move people around, including tapping into the rising trends of e-bikes and e-scooters.

Audi announced on Monday the development of its e-tron Scooters, almost a year after announcing its fully electric e-tron SUV. Other carmakers, like BMW and Ford, have already been exploring the electric personal micro-mobility market through collaborating with established players.

It's no surprise carmakers are looking towards the booming e-mobility market. E-scooter company Bird reached a $2 billion valuation in under a year of operation in 2018, according to Inc. Similarly, one of Bird's largest competitors, Lime, has a $2.4 billion valuation, the company announced in February.

Read more: These are 12 of the most innovative transportation products on Indiegogo right now, from hover shoes to AI-powered motorcycle helmets

Ridesharing companies such as Uber have also been exploring the space. Their e-bike share subsidiary, Jump, has already launched in several cities, including Providence, Rhode Island and Sacramento, California. Lyft also has a stake in the electric bike ridesharing community, although the San Francisco program was recently halted after two bikes caught on fire.

Whether it's electric scooters or bikes, here are all the car companies making moves into creating electric micro-mobility products. 

SEE ALSO: 11 of the most powerful fully electric cars money can buy, including the car James Bond may drive in the next '007' film

Ford Super Cruiser

The Ford Super Cruiser is the American carmaker's official electric bike. 

The $3,695 bike has a 48-volt battery that powers its 500-watt motor. It can reach top speeds of 20 mph and weighs 60 pounds, according to electric bike maker Pedego, which partnered with Ford to create the bike. The lithium-ion battery takes 5 hours to charge and has a range of 15-30 miles with its smaller capacity battery, according to the Electric Bike Review. 

Unlike many other electric bikes, the Super Cruiser has a twist throttle drive with no pedal assist. There is also no LCD display that could otherwise show information such as battery life or speed.

Audi e-tron Scooter

 Audi has developed its own electric scooter. The announcement came in August, almost a year after the automaker announced its first electric SUV.

Despite its name, the e-tron scooter is more of a cross between a skateboard and a scooter than a traditional electric scooter. Although it has handlebars, the bar is meant to be held with only one hand. Riders position their bodies sideways, similar to riding a skateboard or snowboard. 

The foldable, 26-pound scooter will have a range of 12.5 miles. Audi says it is considering selling it as an extra for customers who buy the Audi e-tron SUV, as the e-scooter can be charged in the car's trunk through a dedicated socket. Audi is also exploring the possibility of deploying the e-tron Scooter in fleets.

The scooter is set to arrive in late-2020 and will cost around 2,000 euros, or about $2,240.

Volkswagen's Streetmate and Cityskater concept scooters

Volkswagen debuted two concept electric scooters at the 2019 Geneva Auto Show in March.

The first is the Streetmate, which is a medium-range device designed as a cross between a bicycle and a kick scooter. The 2.7 horsepower motor allows the 143-pound scooter to reach 28 mph, and the 1.3 kWh battery can be recharged in a little over two hours and gives the scooter a range of 21 miles. 

The scooter has a Bluetooth option that allows riders to link their smartphone to the scooter to use as a digital key, security alarm, and GPS. There's also a weatherproof screen attached to the scooter that displays information such as the battery and speed levels.

The second Volkswagen scooter is the Cityskater, which is meant for last-mile trips. This foldable scooter has two front wheels and one rear wheel. The Cityskater is powered by a 0.5 horsepower motor that can reach top speeds of 12 mph. It also has a 0.2 kWh battery that gives it a nine-mile range and takes less than an hour to charge to 50 percent full.

The two vehicles remain just concepts, for now.

BMW E-Scooter

BMW is collaborating with urban mobility products maker Micro Mobility Systems to launch an e-scooter in September that will be fitted with a 150-watt motor, the company announced in May.

The BMW E-Scooter can hit speeds of 12 mph and has a range of 7.5 miles after a two-hour full charge. The 19.8-pound scooter can also be triple-folded with a locking mechanism for easier maneuvering and storage. The e-scooter will retail for around €799, or $896.


General Motors ARĪV Meld and Merge

General Motors announced in February a new line of e-bikes called ARĪV. The line includes the ARĪV Meld, a compact e-bike, and the ARĪV Merge, a folding e-bike. The Merge can be both folded and wheeled for easy handling when not in use.

The "ARĪV" name was developed after GM started a crowdsourcing campaign to name the bike.

The pedal-assisted bikes can reach speeds of 15 mph and have a maximum range of 40 miles after a full 3 hour and 30-minute charge of the 250-watt battery.

The bikes can be Bluetooth connected to the ARĪV app so riders can view bike information like speed, distance, battery level. They also come with front and rear LED lights and a smartphone mount with an integrated USB port so riders can also charge their phone on the go.

Unlike other traditional e-bikes, the ARĪV bikes have a "walk mode" that engages the motor of the e-bike to make for an easier walk up steep terrains.

The bikes are now available in Belgium, Germany, and the Netherlands. In Belgium and the Netherlands, the Meld has an MSRP of 2,800 euros ($3,135.40), and the Merge 3,400 euros ($3,807.27). Prices will be different in Germany, with the Meld retailing for 2,750 euros ($3,079.41) and Merge for 3,350 euros ($3,751.28).

No word on arrival in the US.

Peugeot eLC01 e-bike

French carmaker Peugeot was creating bicycles long before it was making cars — as far back as the 19th century. After going through periods of licensing out the brand to other manufacturers, the company brought it back in-house in 2010, according to the brand's website.

Since then, the company has developed a whole line of e-bikes.

The eLC01, for example, is designed for city bikers with an aluminum frame and a range of 18.6 to 43.5 miles. The nearly 50-pound bike is powered by a 400-watt battery and comes with integrated lights and an LED display.

The eLC01 also comes with an aluminum luggage rack that riders can attach a basket, baby seat, or bags to, as well as a USB port.

I talked to 6 elite matchmakers, and they all said there are 3 red flags they watch for when vetting millionaire clients

Sun, 08/11/2019 - 11:47am

  • I spoke with six elite matchmakers for Business Insider's monthlong series, "Dating Like a Millionaire." about what it's like to date when you're in the 1%.
  • All the matchmakers have vigorous vetting processes to determine whether they should take on a client, from house calls and simulated dates to interviews and investigations.
  • There are also three red flags they watch out for: a negative dating history, a bad attitude, and a resistance to the vetting process.
  • Visit Business Insider's homepage for more stories.

Money can buy a lot of things, but it can't always hire a matchmaker for a millionaire seeking love.

A millionaire must first meet a matchmaker's standards.

I talked to six elite matchmakers for Business Insider's monthlong series, "Dating Like a Millionaire," and they all said they have a vigorous vetting process before deciding whether they should play cupid for a potential client.

The matchmakers work with clients locally and globally, from royals and celebrities to entrepreneurs and CEOs, who have net worths ranging from the low millions into the billions.

The vetting process involves everything from conducting in-person screenings and interviews to background and social-media checks. Some matchmakers even pay a visit to the millionaire's house.

They've heard and seen it all, and they can spot a red flag a mile away. Here's a breakdown of what can make or break their decision to take on a millionaire as a client.

A negative history and dishonesty

Patti Stanger of Los Angeles-based Millionaire's Club told Business Insider her company has an intense screening process that looks through each prospective client's history. If any data indicates the person might put someone in harm's way, they won't approve them, she said.

Stanger keeps an eye out for restraining orders, lawsuits, institutionalization, and separations. "We don't take anyone who's not legally separated," she said. "They can't be living in the same house."

She added, "If they lie we revoke the membership."

Read more: The 3 biggest mistakes millionaires make when dating, according to 6 elite matchmakers who help the ultrawealthy find love

Likewise, Mairead Molloy of Berkeley International in London told Business Insider that when she vets prospective clients, she interviews them; asks for a passport, two household bills, and separation or divorce papers; pays a visit to their home; and runs a social-media check.

If she doubts any of the findings, she hires a private investigator — but gives the client warning.

Unlikeability and a bad attitude

Stanger, who turns down 80% of aspiring clients, said anger or bitterness is another red flag — as are unrealistic expectations.

She sees many people come in requesting dates with certain celebrities, expressing ageism, or acting shallow.

"They treat people like objects," she said. "Being a matchmaker is probably worse than being a human-resources director. We have to take the whole enchilada in."

Narcissism is also a turn-off, April Davis of New York City-based Luma Search told Business Insider.

"When someone says there's something wrong with everyone they've dated and everyone they're meeting — they find ways to 'disqualify' people and say they are all the ones with the problems," she said. "These clients think they can hire us and that we'll be able to produce the perfect person for them."

Ultimately, clients need to be likable. Janis and Carly Spindel of Janis Spindel Serious Matchmaking Inc. in New York take prospective clients, who are men only, on simulated dates to determine just that. That helps the mother-daughter duo get an idea of how much effort the clients put into it, how they treat dates, what their manners are like, and how they behave.

Read more: I talked to 6 elite matchmakers, and they said the biggest difference between dating as a millionaire and an average Joe is also the most obvious one

"We have to like them," Janis said. "If we're going to match someone, they have to be a good guy."

"Life is short," Carly added. "It's important to have clients you like and want to work with. We look for really nice men who would make a great husband and father and are emotionally available.

"They don't work too much and have time for a relationship; they are a gentleman and would treat a partner wonderfully."

Resistance to vetting process

Amy Andersen of San Francisco-based Linx Dating told Business Insider she has a multistep method that involves specific questions and in-person screenings. But resistance to the vetting process can be a huge red flag.

Prospective clients must complete a form detailing their ideal match.

"Someone who cannot complete that in the preliminary stage certainly doesn't have time to be a client or is not making it a priority, which it needs to be," Andersen said.

It's also a red flag when someone balks at the idea of coming in for a meet-and-greet, she said: "Either they don't feel it's necessary or they don't want to pay for my professional time."

She added that they need to see the value in the opportunity and that it has to be a "mutually synergistic agreement" to work together.

It makes sense — those seeking matchmaking services want a serious partner who is ready for commitment. If someone can't even commit to the vetting process, how can they commit to a person?

SEE ALSO: 2 elite matchmakers say they always make house calls before helping a millionaire find love — and they can tell a lot by what's in their fridge and closet

DON'T MISS: Newly minted Silicon Valley millionaires don't know how to handle their money and it's ruining their love lives, says an elite matchmaker known as the 'Cupid of Silicon Valley'

Join the conversation about this story »

NOW WATCH: The US women's national team dominates soccer, but here's why the US men's team sucks

Lisbon is the hottest travel destination for millennials in 2019. We asked 20-somethings for their best travel tips — from fairy-tale castles to buzzing nightlife, here's what they said.

Sun, 08/11/2019 - 11:39am

Millennials spend more on travel than any other age group.

And the place currently sparking the most wanderlust? Lisbon, Portugal.

It's the most popular travel destination for millennials, according to travel-planning site müvTravel, which created its Top 30 Millennial Travel Destinations for 2019 list by analyzing the most popular bucket-list destinations of müvTravel's millennial users. According to the site, millennials are most interested in places that offer "memorable and original moments," as well as "activities that focus on sustainable and personalized local experiences."

Lisbon's charm can be chalked up to its traditional architecture and cobblestone streets, but it also has a buzzing nightlife. Millennials have said they love the city for its close proximity to nearby destinations, like the resort town of Sintra and several beaches, which make for the ultimate day trips.

Business Insider spoke to two millennials who have visited Portugal's capital city over the past few years to get a sense of how they spent their time there.

Below, see what it's like to visit Lisbon as a millennial.

Are you a millennial with insider travel tips about a burgeoning, international hotspot to share? Email this reporter at

SEE ALSO: Seltzer is officially 'the drink of the summer.' Anyone who's surprised hasn't been paying attention to what millennials like.

DON'T MISS: Meet the average American millennial, who has an $8,000 net worth, is delaying life milestones because of student loan debt, and still relies on their parents for money

Lisbon is on the western coast of Portugal; the city borders the Tagus River to the south. According to a 2010 census, the city is home to 545,000 residents — and a New York Times article from 2018 put the city's annual tourist count at a whopping 4.5 million annual visitors. There are two windows of time that are considered the best time to visit the city: March to May, and September to October.

Source: Google Maps, World Population Review, The New York Times, US News and World Report

First stop after landing at Lisbon International Airport, which is a 20-minute drive from the city center: Going on a Sandeman tour, according to 27-year-old Nicole Berrio, who visited Lisbon three years ago. Sandemans offers free tours across 20 cities worldwide.

Source: Google Maps, New Europe Tours

"They're a great way to get your lay of the land on your first day in a new city," she told Business Insider. "If you get a cool guide, ask them for recommendations on local hotspots."

But one of the best ways to get around Lisbon is by aimlessly wandering the streets, which 26-year-old Caroline Josey did on her visit.

"My favorite aspect of Lisbon was getting lost and miraculously falling into these truly majestic sites or cozy restaurants," Josey told Business Insider.

According to Josey, Alfama is a must-see neighborhood. "Tram 28 takes you through the old streets that are the only part of Lisbon preserved from the 1755 Earthquake," she said.

Alfama was previously all of Lisbon, and as the city grew, it became the heart of the city, according to Time Out. It's also home to some amazing street art.

Source: Time Out, Metro UK

Another must-see, according to Berrio, is the LX Factory, an abandoned industrial site that has been turned into a creative, cultural, and gastronomic area.

Berrio also suggests paying a visit to "the best aquarium ever" — the Lisbon Oceanarium.

There's also the São Jorge Castle, Josey said. It's one of the most iconic symbols in Lisbon.

Source: Lisbon

Blogger Lauren recommended checking out miradouros, or viewpoints for panoramic views of the city, such as Miradouro de Sao Pedro de or Portas do Sol. Many of the sites have kiosks for drinks, she wrote.

Source: Cosmic Breakfast

For shopping delights, pick up a book at Ler Devagar, a paper mill that's been turned into a bookstore.

Source: Yelp

Lisbon comes to life after the sun goes down, according to Josey. "Locals flood the allies either going on an evening run or sipping some sparkling sangria along the Tagus River," she said.

Catch the sunset and a drink or two at PARK, a rooftop bar atop a parking garage in the district of Bairro Alto.

Source: Yelp

Berrio recommends eating at one of Michelin-starred chef José Avillez's three restaurants: Belcanto, Barrio do Avillez, or Beco. "Make friends with the waiters at Belcanto for a private kitchen tour and to garner a secret entry into Beco," she said.

Afterward, get cocktails at Double, "a great cocktail bar," according to Berrio. She recommends getting the Tales of Thailand.

In her blog, Lauren suggested spending a night out bar-hopping in Bairro Alto or on Pink Street.

Source: Cosmic Breakfast

For places to stay, there are plenty of options. Lauren raved about We Love F. Tourists, a Lisbon hostel. Its central location was great for walking everywhere, she wrote.

Source: Cosmic Breakfast, Hostelworld

For a hotel experience, there's also Pestana CR7 Lisboa, a modern hotel with speedy Wi-Fi geared towards millennials.

Source: Time Out, Pestana CR7

You'll also want to make time for a beach day. Situated along the coast, Lisbon is close to several beaches, from Praia do Ouro (Beach of Gold) to Carcavelos Beach.

Source: The Culture Trip

Both Josey and Berrio recommend taking a day trip to Sintra, a resort town directly northwest of Lisbon in Portugal's Sintra Mountains.

Sintra is about a 30-minute drive from Lisbon.

Source: Google Maps

"Sintra is constantly a solid 10 degrees cooler [than Lisbon] amid lush vegetation and misting clouds that continuously roll into the town," Josey said. "This makes you feel like you’ve entered a fairytale and a town that’s truly magical."

Sintra is known for the Pena Palace — a "modge-podge" of various Moorish, Roman, and Medieval architectural influences "that looks like it brought Disneyland to Europe," Josey said.

But that isn't Sintra's only fortress. Berrio also recommends checking out the Castle of the Moors.

But no trip to Portugal is complete without picking up a Pasteis de Nata from a local pastry shop, a Portuguese custard tart dusted with cinnamon.

Source: Trip Advisor

The Great Recession created a domino effect of financial struggles for millennials — here are 5 ways it shaped the generation

Sun, 08/11/2019 - 11:05am

The Great Recession affected many Americans, regardless of age, but it hit millennials particularly hard.

It's one of the key events that shaped the generation, Jason Dorsey, a consultant, researcher of millennials, and president of the Center for Generational Kinetics, previously told Business Insider. During this time, millennials were coming of age, meaning they were kickstarting adulthood amidst the financial crisis and its post-recovery period.

Read more: The Great Recession split the millennial generation down the middle, creating 2 groups with very different financial habits

The ongoing fallout of the recession is a key part of the Great American Affordability Crisis that millennials are experiencing, in which they struggle to afford staples like housing and healthcare.

The recession ultimately created a domino effect that put millennials financially behind and on a slow path to wealth accumulation. Here's how it affected the generation.

SEE ALSO: Millennials have been called the 'brokest' and the 'richest' generation, and experts say both of those are true

DON'T MISS: Meet the average American millennial, who has an $8,000 net worth, is delaying life milestones because of student loan debt, and still relies on their parents for money

The Great Recession created a millennial generation gap.

The Great Recession has divided millennials into two distinct groups — those who took the greatest hit from the recession and dealt with a tough job market, and those who experienced the recovery period, entering a better job market. In a nutshell, the oldest millennials went through the eye of the storm, while the youngest millennials caught the tailwind, Dorsey said.

Dorsey called the Great Recession an "extremely formidable and difficult event" for the oldest millennials. Older millennials are still recovering from the recession, while younger millennials have more time to plan financially, he said.

It put older millennials at risk of becoming a "lost generation" in terms of wealth accumulation.

Because they're the slowest cohort to recover from the Great Recession, millennials born in the 1980s are at the greatest risk of becoming a "lost generation" for wealth accumulation, according to a 2018 report by the Federal Reserve Bank of St. Louis. As of 2016, people born in this decade had wealth levels 34% below where they would most likely have been if the financial crisis hadn't occurred, the report found. 

"The Great Recession led to a very tough job market, wage stagnation for those that had jobs, student-loan debt that was increasingly hard to pay, and rising costs of living around the country," Dorsey said. 

By watching the recession unfold, younger millennials became risk-averse.

Since younger millennials didn't experience the financial crisis directly, they were able to observe it — and learn what to do and what not to do, financially speaking.

According to Dorsey, they got the benefit of learning from older millennials without having to go through some of the economic pain the older cohort experienced — and from which that cohort is still recovering. This has made younger millennials more aware of the risks of a bad economy and more practical when it comes to money, from saving for emergencies to contributing to a retirement account, Dorsey said.

In 2014, the investment-banking company UBS found that millennials were the most financially conservative generation since the Great Depression. And 93% of millennials are  wary of investing, Rebecca Lake of SmartAsset reported, citing a 2015 Capital One study.

Because the financial crisis put millennials behind, they're delaying major life milestones.

Regardless of age, millennials are working hard to catch up financially. Northwestern Mutual's Planning & Progress Study 2018 found that millennials are more likely than other generations to say they're "highly disciplined" or "disciplined" financial planners.

But it's taking time to play catch-up. As a result, millennials are delaying major life milestones. Millennials are renting longer and buying later — millennial homeownership was at a record low in 2017, Business Insider's Akin Oyedele reported. It doesn't help that those buying their first home will pay 39% more than their parents did nearly 40 years ago, according to Student Loan Hero

Millennials are also waiting to prioritize financial success before getting married, causing them to marry later in life than previous generations did. And the US birthrate is at its lowest in 32 yearsBill Chappell for NPR reported, citing a new report from the Centers for Disease Control and Prevention. 

The recession has contributed to the rise in crippling student-loan debt.

According to Jillian Berman of MarketWatch, the financial crisis helped fuel the rise in student-loan debt, which currently exceeds $1.5 trillion nationally.

The crisis "created a perfect storm of high unemployment, stagnant wages, and the declining value of American homes [which] meant that families had fewer resources to use to pay for college," she wrote. 

Millennials in the graduating class of 2018 have an average student-loan debt of $29,800. The weight of this debt is further hindering millennials' ability to save and also contributing to their delay in life milestones. In fact, more than half of indebted millennial respondents in an INSIDER and Morning Consult survey said attending college wasn't worth the student loans.

What Rupert Murdoch's life is really like: How the mogul grew his media empire and $7.35 billion fortune, weathered scandal, and became engrained in international politics

Sun, 08/11/2019 - 10:52am

  • Rupert Murdoch, 88, is one of the most powerful men in media.
  • Beginning with a regional Australian newspaper that he inherited from his father, Murdoch built a media empire that spanned three continents. At its height, the empire included The Wall Street Journal publisher Dow Jones & Company, 21st Century Fox, and Sky Television.
  • Murdoch used his media holdings to sway elections in Australia, the UK, and the US, an April 2019 investigation by The New York Times found.
  • Murdoch's sons James and Lachlan fought a nasty, decade-long battle over who would succeed their father, according to the same report.
  • Murdoch has a net worth of $7.35 billion, per Bloomberg.
  • Visit Business Insider's homepage for more stories.

In 1952, Rupert Murdoch owned one regional newspaper in his Australian hometown.

He went on to build a media empire that, at its peak, included newspapers, television stations, and film studios on three continents and was powerful enough to sway elections, an April 2019 New York Times investigation found.

Murdoch sold 21st Century Fox, one of his largest assets, to Disney in 2019 for $71 billion, Business Insider previously reported. But while his empire may not be as large as it once was, it has arguably never been more powerful on a global scale.

Murdoch's holding company, News Corp, owns The New York Post, The Times of London, and The Wall Street Journal publisher Dow Jones & Company, among many other assets. Murdoch, now 88 years old, currently spends his days at the helm of another News Corp property, Fox News. The media mogul also reportedly has a close personal relationship with President Trump and calls him frequently in the Oval Office, according to The Times.

Murdoch and his family have also never been richer, with Forbes putting their collective net worth at $20.9 billion. Even after splitting his fortune among his six children, Murdoch himself has a net worth of $7.35 billion, according to Bloomberg.

Read more: Rupert Murdoch's 6 children are set to become billionaires many times over thanks to a $71 billion deal with Disney

Murdoch did not respond to requests from Business Insider for comment.

Keep reading to learn how Murdoch built his media empire and how he now spends his fortune.

SEE ALSO: What George Soros' life is really like: How the former hedge-fund manager built his $8.3 billion fortune, purchased a sprawling network of New York homes, and became the topic of international conspiracy theories

DON'T MISS: Bernard Arnault just joined Jeff Bezos and Bill Gates in the 3-person club of people worth more than $100 billion each. Here's how the French billionaire makes and spends his fortune

Keith Rupert Murdoch was born on March 11, 1931 in Melbourne, Australia.

Source: Bloomberg

His father, also named Keith Murdoch, was a war correspondent and ran several newspapers across the continent during the course of his career. The younger Murdoch took over the Adelaide News when his father died at age 67 in 1952. It would prove to be the beginning of his media empire.

Source: The Melbourne Press Club

Before entering the media business, Murdoch earned a degree at Oxford. As a student, he supported the Labour Party.

Source: BBC News

At 22, Murdoch moved back to Australia to run the Adelaide News (known to be one of the elder Murdoch's less prestigious papers). He quickly got involved in every aspect of the paper's production. He featured stories about scandals, and the business began to grow rapidly.

Source: BBC News, Bloomberg

Murdoch purchased several other newspapers across the continent. Eventually, he controlled almost two-thirds of the Australian media market.

Source: The New York Times

In 1964, he founded the country's first national paper: The Australian. "I'm rather sick of snobs who tell us they're bad papers, snobs who only read papers that no-one else wants," he said when confronted about his tendency to publish lurid news in his papers, according to the BBC.

Source: The New York Times, BBC News

Murdoch stretched his empire even further. He expanded to the United Kingdom in 1968 and purchased The News of the World, a weekly tabloid, that year.

Source: BBC News

The next year, Murdoch also purchased The Sun, a daily tabloid.

Source: The Guardian

According to The Times, Murdoch used his newly acquired newspapers to praise Margaret Thatcher, who at the time was campaigning to become Prime Minister. This marked a shift from The Sun's previous support of the Labour Party.

Source: The New York TimesThe Daily Beast

Thatcher's government assisted Murdoch's growing media empire by not alerting antimonopoly regulators when he purchased The Times of London or started broadcasting Sky Television into the UK from Luxembourg in February 1989.

Source: The New York Times, The Guardian

Around this time, Murdoch had started to spread his empire even further. He bought his first US paper, the San Antonio Express-News, in 1973 and purchased The New York Post three years later.

Source: The Guardian

Much as he did with Thatcher in the UK, Murdoch used The Post to drum up support for Ronald Reagan in New York during the 1980 presidential election. According to The Times, Reagan's team said Murdoch helped sway voters in that state.

Source: The New York Times

Reagan's administration later dropped FEC select regulations, which allowed Murdoch to buy television stations in cities where he already owned newspapers, despite this being prohibited at the time.

Source: The New York Times

Continuing his expansion, Murdoch first invested in film studio 20th Century Fox in 1985. He went on to build Fox into an entertainment empire comprised of local television stations and a broadcast network.

Source: Bloomberg, The Guardian

Later that year, Murdoch became a naturalized US citizen. This move allowed him to take full ownership of American television stations. At this point, he'd been living in the country since 1973.

Source: The Los Angeles Times

In 1996, Murdoch and Roger Ailes launched Fox News, a right-leaning 24-hour news network.

Source: Rolling Stone

According to The Times, Murdoch was inspired by CNN founder, Ted Turner, who he considered a rival.

Source: The New York Times

Murdoch is known for his neoconservative views and used both his own media outlets and others to push for the War in Iraq. "We can't back down now, where you hand over the whole of the Middle East to Saddam," he told Australian magazine the Bulletin (which he doesn't own) in February 2003, according to The Guardian.

Source: The Guardian

By 2010, a major scandal had come into public view. The Guardian broke the story that Murdoch's News of the World had been hacking into the voicemails of British politicians, royals, and celebrities creating what The Times called "the biggest crisis of [Murdoch's] career." The organization faced repeated hacking allegations in the several years prior to the scandal unfolding.

Source: The Guardian, The New York Times

In 2011, News of the World admitted to the hacking, offering up an official apology. Later that year, Murdoch was forced to testify at a public hearing in front of Parliament.

Source: CNN

A judicial inquiry followed. The Inquiry's report, published by Lord Justice Leveson in 2012, stated that when discussing policy with Murdoch, "politicians knew that the prize was personal and political support in his mass-circulation newspapers."

Source: CNN,

Murdoch also publicly supported Brexit, calling the vote a "prison break." He was later seen celebrating the referendum's result at a party with British politician Nigel Farage, former leader of the UK Independence Party and current Brexit Party leader.

Source: The New York Times

In early 2015, Trump told Murdoch over lunch in the Fox News building that he was planning on running for president, The Times investigators found.

Source: The New York Times

The Murdoch and Trump families had been close for years prior to this. Ivanka Trump was one of five people chosen to oversee the trust for two of Murdoch's daughters. In February 2017, a spokesman for the president's daughter told the Financial Times that Ivanka had stepped down from her position as a trustee.

Source: Fortune

Despite the ties between their families, Murdoch didn't initially throw his sizable support behind Trump. In fact, the newspaper baron donated $200,000 from his personal funds to a super PAC for Gov. John Kasich in the last half of 2015.


But Murdoch softened toward Trump as the election grew nearer. "If he becomes inevitable, party would be mad not to unify," Murdoch tweeted in March 2016.

Source: New York Magazine, Twitter

Meanwhile, things within Murdoch's sprawling media empire took a turn for the tumultuous. Fox News CEO Roger Ailes resigned in July 2016 after facing allegations of sexual harassment from female Fox News hosts including Gretchen Carlson and Megyn Kelly.

Source: CNN Business

Instead of finding a replacement, Murdoch took over Ailes' job himself. He referred to the position as "my retirement job," according to The Times.

Source: The New York Times

Under Murdoch's supervision, the Fox News lineup became more overtly pro-Trump. Hosts that were critical of the president, including Megyn Kelly and Greta Van Susteren, were replaced by vocally pro-Trump hosts like Tucker Carlson.

Source: The New York Times

After Trump was elected in November 2016, he and Murdoch began to talk frequently over the phone. In April 2017, The Independent reported that, per sources close to each of the men, the two were speaking "every week to discuss strategy."

Source: The New York Times, The Independent

Faced with increasing competition from tech giants, Murdoch began meeting with Disney CEO Bob Iger to discuss the sale of 21st Century Fox.

Source: The New York Times

Murdoch and Iger announced their deal (which was initially valued at $52.4 billion) in December 2017.

Source: The Walt Disney Company

In early January 2018, Murdoch tripped while vacationing on his son's superyacht. He was flown to a hospital and underwent surgery for broken vertebrae and a spinal hematoma. Sources classified the hospitalization as "serious."

Source: The New York Times, Vanity Fair

The severity of Murdoch's fall prompted all of his adult children to gather around his hospital bedside in case he didn't make it.

Source: The New York Times

There's been discord between the wealthy Murdoch children over the years. As of now, eldest son Lachlan, 47, is considered Murdoch's heir apparent. Lachlan currently serves as the CEO of the Fox Corporation.

Source: The Washington Post

According to The Times' investigation, Murdoch's younger son James, 46, had unsuccessfully vied for his father's favor over the years.

Source: The New York Times

Murdoch also has two daughters, Prudence and Elisabeth, who are less involved with the family business.

Source: The New York Times

While he recovered from his fall in early 2018, Murdoch ran the company from his home: Moraga Estate.

Source: The New York Times, Vanity Fair

The Tuscan-inspired Bel Air estate is a working vineyard and winery. It's valued at $28.8 million, according to The Times.

Source: The New York Times

The estate was threatened by wildfires in 2017 but survived.

Source: Business Insider, Moraga Bel Air

Read more: Rupert Murdoch's $30 million Southern California estate is under threat from wildfires

Murdoch bought the property in 2013.

Source: Business Insider

While Murdoch recovered at Moraga, 21st Century Fox received a competing bid from Comcast for $65 billion — over $12 billion more than Disney's offer.

Source: Markets Insider

Murdoch still preferred Disney to Comcast, reportedly because of his affection for Iger. Disney eventually bumped up its offer, purchasing Fox assets for $71 billion.

Source: The New York Times, Markets Insider

Read more: What Disney buying Fox means for movie and TV consumers — from Marvel to Hulu

The deal grew Murdoch's fortune. When it closed in March 2019, Murdoch became roughly $4.3 billion richer than he was before the deal was initially announced in late 2017.

Source: Forbes

Murdoch's net worth is now $7.35 billion.

Source: Bloomberg

The media titan shares his fortune with wife Jerry Hall.

Source: The Guardian

Hall, 62, is a former model who was previously in a long-term relationship with Mick Jagger. The two had a wedding ceremony in 1990 that was later declared invalid.

Source: The Washington Post

Hall and Murdoch tied the knot in London in 2016.

Source: The Guardian

Hall is Murdoch's fourth wife. He was previously married to entrepreneur Wendi Deng, who is reported to have been unpopular with his children. According to The Times, Lachlan and James had attempted to convince Murdoch not to marry Deng prior to their 1999 nuptials.

Source: The New York Times

In early August 2019, following the mass shootings in El Paso, Texas, and Dayton, Ohio, that left 29 people total dead, the Post featured a front page calling on President Trump to "ban weapons of war." The Murdoch-owned paper's headline was noteworthy, considering the media tycoon's conservatism and previous support of Trump.

Source: The Hollywood Reporter

Here are the biggest risks Uber's facing, according to Wall Street analysts (UBER)

Sun, 08/11/2019 - 9:32am

  • Uber's stock price fell more than 6% in trading Friday as investors digested a less-than-stellar second-quarter earnings report. 
  • The company lost $5.2 billion in the three-month period.
  • Things could get worse, too, Wall Street analysts warn. Here's what they're worried about. 
  • Visit Business Insider's homepage for more stories.

Uber just reported yet another quarter of growth.

Despite some massive, one-time charges related to its IPO, Uber continued to grow its "gross bookings" segment, a closely watched measure that accounts for receipts from taxi rides and Uber Eats orders.

Wall Street remains bullish on the company, with an average price target of about $51 — about 27% higher than Friday's close — but there's plenty to worry about, too.

Here are the biggest concerns on analysts' minds following the company's less-than-stellar second-quarter earnings report:

SEE ALSO: Uber spent $5.2 billion in the second quarter. Here's where all that money went.

Slowing revenues

"Ridesharing and Eats revenue growth has slowed sharply in recent quarters, and, in 1Q'19, increased ~10% and ~31%, respectively, on an adjusted basis," Tom White, of D.A. Davidson, told clients.

Revenue from taxi rides has also been effectively flat for three quarters running, he continued.

"We believe this recent slowdown reflects a combination of "defensive" moves (i.e. UBER responding to competitor pricing changes/promotions "offensive" moves (i.e. UBER tactically lowering take-rate to gain share in select markets and mix-related factors (large-volume restaurant joining Uber Eats, geographic expansion)," White said.

Tougher regulations

New York City, the US's largest and busiest ride-hailing market, is considering even more regulations on the for-hire vehicle industry after extending its cap on new vehicle licenses this month.

On their respective earnings calls, both companies railed against the rules, which are designed to relieve congestion and increase driver pay.

"The new rules could potentially restrict where, when, how drivers can work and we just don't think that's good for New Yorkers,"  Uber CEO Dara Khosrowshahi said  "Anyone who thinks that the changes in New York City are good, [that's] malarkey frankly."

Lyft's president, John Zimmer, echoed those remarks:

"Any increase in prices can lead to a decrease in driver work opportunities because of less rides," Zimmer said. "That's the point that we're trying to get across."

It may never turn a profit

Uber is far from turning a profit. In fact, the company lost more than $5 billion in the second quarter. 

"Our long-term profitability outlook for UBER is rooted in the idea that, at their core, UBER's two primary businesses (Ridesharing and Uber Eats) utilize low-capital intensity online marketplace business models which, as we've seen with other companies in our coverage universe, tend to be solidly profitable for the #1 (and often #2) player in a given large market," D.A. Davidson's White said.

"Additionally, we tend to agree with UBER's claim that the company with the leading category position/market will likely enjoy higher profit margins than its smaller competitors. In the meantime, however, UBER is operating a geographically far-flung business against a relatively crowded competitive set (several of which have considerable funding and appetite to consolidate market share)."

Daniel Ives, an analyst at Wedbush, echoed those concerns.

"This stock remains a glass half empty name due to its lack of profitability and much skepticism about the ride sharing space," he said in a note to clients.


Japan's Softbank, a current Uber investor, is raising a second Vision Fund. Depending on where the company decides to deploy that capital, more Uber competitors could gain traction.

"While Softbank has invested in Uber, its second Vision Fund is expected to raise substantial capital that could enter the space and compete against Uber," Deutsche Bank's Lloyd Walmsley warned.

A key metric keeps falling

"Core platform contribution profit," a metric that Uber defines as its rides and eats business, is under pressure from tricky markets where the company is losing money, like Latin America.

"UBER asserts that this non-GAAP GAAP profitability metric reflects the strong unit economics for its business, but, 1H'18 looks set to be a high-water market for this metric for at least the next few quarters, as it's slid steadily since and turned negative in both 4Q'18 and 1Q'19 due to take-rate pressures in the U.S. and Latin America," White of D.A. Davidson said.

"Additionally, in its S-1, UBER indicated said that it "expect(s) Core Platform Contribution Margin to remain negative in the near term."


Self-driving cars are hard — and expensive

Uber's self-driving car program took a hit in 2018 when one of its autonomous vehicles killed a pedestrian in Arizona. The program is back on track, with heavy spending in research and development on Uber's latest balance sheet, but it could be behind any of the many competitors in the field.

Uber "trails Waymo and others in next-gen autonomous driving," Ives of Wedbush listed as a risk to his bullish thesis.

Insiders will soon be able to sell their shares

When a company goes public, shareholders aren't allowed to sell their stock immediately. Instead, they must wait for a "lock-up" period to end. That's coming soon for Uber, and could be a negative for the stock as supply increases, according to Goldman Sach's Heath Terry warned.

The 29 best books to read if you want to disrupt US healthcare, according to top young leaders in the $3.5 trillion industry

Sun, 08/11/2019 - 9:27am

Learning about the US healthcare system can be a daunting task.

From caregivers to health insurers, to drug companies, to patients, the $3.5 trillion healthcare system in the US is filled with players whose priorities can differ a lot from one to the other. 

We asked the nominees for Business Insider's list of 30 leaders under 40 who are working to transform US healthcare for book recommendations. In particular: What book would you suggest to anyone who wants to understand healthcare better so that they can try to change it? 

The books they suggested range from memoirs to textbooks to deeply reported investigations. Here were their top picks. 

Additional reporting by Clarrie Feinstein and Zachary Tracer.

"Understanding Health Policy" by Thomas Bodenheimer and Kevin Grumbach

Recommended by Sara Vaezy, 36, chief digital strategy officer for Providence St. Joseph Health.

Buy it here.

"The American Health Care Paradox" by Elizabeth H. Bradley and Lauren A. Taylor

Recommended by Dan Brillman, 35, CEO of Unite Us. 

Buy it here.

"America's Bitter Pill" by Steven Brill

Recommended by Toyin Ajayi, 38, chief health officer at Cityblock Health. 

Buy it here.

"40 Chances" by Howard G. Buffett

Allison Baker, 29, director of nutrition at Kroger, recommends this book for those in healthcare, even though it has to do with agriculture.

"This book talks about how a farmer over the span of their career and most of their life will have 40 chances to grow a crop," Baker said. In particular, the book gets into all the decisions that happen that lead to food at our tables.

From where she sits, agriculture has so much to do with healthcare. As the lead of the registered dietician program at Kroger, she has instituted that every year the dieticians go through agriculture training. 

"I want them to know that in many ways healthcare starts from the farm, from the field," Baker. 

Buy it here.

"Where Does It Hurt" by Jonathan Bush with Stephen Baker

Recommended by Gil Addo, 33, cofounder of RubiconMD and Ben Wanamaker, 37, head of consumer technology and services at Aetna.

Buy it here.

"Evicted" by Matthew Desmond

Recommended by Iyah Romm, 35, CEO of Cityblock Health.

Buy it here.

"The Butchering Art: Joseph Lister's Quest to Transform the Grisly World of Victorian Medicine" by Lindsey Fitzharris

"It's a fascinating story of vision, persistence, and determination of a Victorian era 'free radical' who challenges the status quo to usher in the modern era of surgery," said Joshua DeFonzo, 39, the chief operating officer at Auris Health.

Buy it here.

"Being Mortal" by Atul Gawande

Recommended by Ambar Bhattacharyya, 36, managing director at Maverick Ventures. 

Buy it here.

"Better" by Atul Gawande

Recommended by Ben Wanamaker, 37, head of consumer technology and services at Aetna. 

Buy it here.

"The Checklist Manifesto" by Atul Gawande

Recommended by Aziz Nazha, 35, director of the Center of Clinical Artificial Intelligence at Cleveland Clinic.

Buy it here.

"Outliers" by Malcom Gladwell

Recommended by Hadiyah-Nicole Green, 38, assistant professor at Morehouse School of Medicine. 

Buy it here.

"The Goal" by Eliyahu Goldratt

Recommended by Kimber Lockhart, 33, chief technology officer at One Medical. 

Buy it here.

"Rigor Mortis" by Richard Harris

Recommended by Blythe Adamson, 34, senior quantitative scientist at Flatiron Health.

Buy it here.

'Market-Driven Health Care: Who Wins, Who Loses In The Transformation Of America's Largest Service Industry' by Regina Herzlinger

Recommended by Carlos Reines, 34, cofounder of RubiconMD. 

Buy it here. 

"Who Killed Health Care? America's $2 Trillion Medical Problem - and the Consumer-Driven Cure" by Regina Herzlinger

Recommended by Ambar Bhattacharyya, 36, managing director at Maverick Ventures. 

Buy it here. 

"When Breath Becomes Air" by Paul Kalanithi

"'When Breath Becomes Air' is a powerful biography that weaves together the practice of medicine with the journey of a terminally ill patient," Kristen Park Hopson, 39, director of oncology research at Moderna Therapeutics said. "This is an amazing perspective of the healthcare industry from both provider and patient points of view."

Paul Coyne, 33, president of health-tech startup Inspiren, also recommends the book. "Before understanding the industry, anyone looking to truly know healthcare should see it through the eyes of a brilliant physician during his own final days on earth," Coyne said. 

Buy it here. 

"The Phoenix Project" by Gene Kim, Kevin Behr, and George Spafford

Andrew Schutzbank, 37, senior vice president for development at Iora Health, recommended this book about technology for those working in healthcare.

"The book is an allegory for the inexplicable problems of every company (and how to approach them), whether you realize you are a technology company or not," Schutzbank said. "It will open your eyes to a better way of work."

Buy it here.

"The Price We Pay" by Marty Makary

Recommended by Angela Profeta, 37, chief strategy officer at CityMD. 

Preorder the book here.

"The Emperor of All Maladies," by Siddhartha Mukherjee

Recommended by Emily Drabant Conley, 37, vice president of business development at 23andMe and Gerren Wilson, 38, who works with pharmaceutical giant Genentech on its own research, collaborations with physicians and healthcare groups, patient communities, and government representatives, all in the aim of advancing more inclusive research.

Buy it here.

"Accelerating Health Care Transformation with Lean and Innovation: The Virginia Mason Experience" by Paul Plsek

"That was one of my first books that I read more around how do we start transforming things," said Chris Esguerra, 39, a senior medical director at Blue Shield of California. "Underneath, the lessons there are about how do we change a system with strategy and storytelling, and in a way that people are able to move through it."

Esguerra said that change that's a "flash in the pan" demoralizes people in the system because they see it as another unsustainable thing.

"And this is a good book that talks about how do you make it sustainable," he said.

Buy it here.

"Orphan: The Quest to Save Children with Rare Genetic Disorders" by Phil Riley

"I am big fan of a good story, and Phil basically lays out the therapeutic potential of medical genetics through the stories of patients and the clinician/scientists who dedicated their careers to developing therapies for them," said Jonathon Whitton, 36, the director of clinical development at Decibel Therapeutics. 

"One of the key things that I took away from this book and conversations that I have been fortunate enough to have with Phil is the importance of listening to and learning from patients and their families as our partners in developing medicines."

Buy it here.

“Priced Out: The Economic and Ethical Costs of American Health Care” by Uwe Reinhardt

"I see healthcare at an inflection point driven by disruptive technologies, empowered consumers, regulatory changes and unsustainable economic models," said Mariya Filipova, 35, vice president of innovation at Anthem, who recommends the book. "In this time of transformational change, the best way to ensure lasting change and unleash the true potential of exponential technologies is to rethink our business model as Uwe suggests."

Buy it here.

"An American Sickness" by Elisabeth Rosenthal

Vinay Prasad, 36, a doctor who treats cancer at Oregon Health and Science University recommended this book because it "accurately goes through some of the perverse incentives" that can exist in healthcare.

Buy it here.

"Essentials of the US Health Care System" by Leiyu Shi and Douglas Singh

Omada Health CEO Sean Duffy, 35, recommended the book because it breaks down concepts critical to understanding healthcare, like "managed care," "HMOs," and "PPOs."

Buy it here.

"The Immortal Life of Henrietta Lacks" by Rebecca Skloot

Recommended by Emily Drabant Conley, 37, vice president of business development at 23andMe. 

Buy it here.

"The Social Transformation of American Medicine" by Paul Starr

Recommended by Ariane Tschumi, 35, general counsel at Galileo. 

Buy it here.

“The Black Swan: The Impact of the Highly Improbable” by Nassim Nicholas Taleb

"'The Black Swan' provides practical guidance against 'our blindness with respect to randomness' in financial markets with parallels to highly regulated industries," said Mariya Filipova, 35, vice president of innovation at Anthem, who recommends the book.

"I see healthcare at an inflection point driven by disruptive technologies, empowered consumers, regulatory changes and unsustainable economic models. In this time of transformational change, how do we recognize and connect the seemingly unrelated dots before a 'Black Swan' surprises us."

Buy it here

"Deep Medicine" by Eric Topol

Recommended by Sara Wajnberg, 36, chief product officer at health insurance startup Oscar Health, and Aziz Nazha, 35, director of the Center of Clinical Artificial Intelligence at Cleveland Clinic.

Buy it here.

“The Moral Corporation" by Roy Vagelos

Recommended by Christos Kyratsous, 38, vice president of research for infectious diseases and viral vector technologies at Regeneron.

Buy it here.

This fintech CEO who's gotten nearly $13 million from Silicon Valley's top VCs reveals his Number One tip for fundraising

Sun, 08/11/2019 - 9:01am

  • Edrizio De La Cruz, CEO of the buzzy fintech startup Arcus, said what's helped him more than anything while raising nearly $13 million in funding has been his ability to tell a good story about his business. 
  • "I think a lot of times entrepreneurs are so busy in the weeds of operating their business that they forget that storytelling is part of the process," he said. 
  • The Dominican Republic-born entrepreneur credits the prestigious startup incubator, Y Combinator (YC), for instilling such emphasis on storytelling as a part of the fundraising process.
  • Click here for more BI Prime stories.

Some startup founders may say the key to fundraising is knowing the right investors and landing the right meetings. Some may say it's all about "hockey-stick" growth metrics (think, up and to the right). 

But according to Edrizio De La Cruz, CEO of the buzzy fintech startup Arcus, who spoke to Business Insider in a recent interview, what's helped him more than anything while raising nearly $13 million in funding from Silicon Valley's top VCs has been his ability to tell a good story about his business. 

"People undermine how important storytelling is — being able to very specifically describe what you're building, who you're building it for, and why it's valuable," De La Cruz said. "I think a lot of times entrepreneurs are so busy in the weeds of operating their business that they forget that storytelling is part of the process." 

De La Cruz says he believes some founders go out to fundraise and don't get the results they desire because they're not able to break out of their "operating mindset." 

"It's a completely different skill set," De La Cruz said. "Operating is a more analytical, pragmatic, practical, and day-to-day aspect. Fundraising is much more artistic." 

Having spent time as an investment banker, the fintech founder tells us the idea of fundraising being less analytical was initially counterintuitive to him. The numbers still play a role in the fundraising process, he says, but De La Cruz likens having buttoned up metrics for an investor meeting to having a shiny resume for a job interview. 

"The resume will get you the interview, but your interview skills will get you the job," De La Cruz said. "A lot of people spend 80% of their time on their resume and 20% on their interview skills when it should be the inverse." 

The same is true for fundraising, according to De La Cruz. Ahead of meetings with VCs, founders should spend most of their time on their pitch — being able to tell a compelling story about their business that can "influence or 'seduce' an investor," he said. 

Read more: The buzzy fintech startup Arcus has raised nearly $13 million. Here's the pitch deck that's helping it woo top VCs like Andreessen Horowitz.

The Dominican Republic-born entrepreneur credits the prestigious startup incubator, Y Combinator (YC), for instilling such an emphasis on storytelling as a part of the fundraising process. Having gone through YC in the spring of 2013 with his original company, Regalii — which provided easy and secure ways to pay bills across borders — De La Cruz said he also learned the importance of knowing when and when not to be in "fundraising-mode." 

"They would tell us, don't even spend time on pitching until two weeks before demo day because it's a different skill set. It's a different part of the brain you have to access to develop that skill," he said. 

In 2016, De La Cruz pivoted his business to become what Arcus is today — the digital payments infrastructure behind some of the most popular banking, fintech, and retail applications across the US and Latin America. Specifically, Arcus makes reoccurring payments easier.

"We see recurring payments as the wedge into financial health for the average American and Latin American consumers," said De La Cruz, whose fintech startup of just over 60 employees has duel headquarters in New York City and Mexico City.

To date, Arcus says it has raised nearly $13 million from investors like Day One Ventures, Winklevoss Capital, and Andreessen Horowitz. Pitchbook, a database that tracks venture capital funding, pegs the company's total funding at $19 million. Arcus says this is a mistake, and that including convertible notes and traditional equity funding, the total amount it has raised is roughly $13 million.

Moving forward, De La Cruz said that Arcus has signed some of the biggest banks in the US and Mexico, and so the company, in the near term, will be focused on successful launches with those partners. The chief exec also said Arcus plans to raise "a big round" of capital to "more aggressively" help support those larger partners.

SEE ALSO: The inside story of how Robinhood, a $6 billion investing app for millennials, blew a huge launch so badly that Congress got involved

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This 29-year-old CEO is the youngest member of the US space council. Here’s how he raised $45 million in three years to 3D print rockets.

Sun, 08/11/2019 - 8:57am

  • Tim Ellis is the CEO of Relativity Space, a company that 3D prints rockets with the objective of going to Mars. 
  • Relativity owns what it says is the largest metal 3D printer in the world and has raised $45 million in venture-capital funding in three years.
  • "I don't think our age was a factor for investors. This is such new technology and we're trying to lead in it," Ellis told Business Insider in an interview.
  • Click here for more BI Prime stories.

"You can always be relentless."

That's the key takeaway for making it as a startup founder according to Tim Ellis, the 29-year-old CEO of Relativity Space, a company that 3D prints rockets with the objective of going to Mars.

Relativity Space has raised more than $45 million in venture capital investment since the company's founding in 2015. Convincing investors to put money towards a business in a new area of technology is always tricky but Ellis ascribes the company's success to never taking "no" for an answer. 

"You've got to be creative to get in front of the right people, there is research that shows the more relentless you are the more successful you are likely to be," Ellis told Business Insider in an interview. "You can't take 'no' personally, you have hustle wherever possible to make people believe in you." 

Ellis notably secured seed funding from billionaire investor Mark Cuban, at age 26, but also managed to get a meeting with Kleiner Perkins' John Doerr, an investor in Google, Twitter, and Uber, simply through being persistent. "You have to work out the connection chain to get to someone through friends of their friends of their friends and go for coffee with them to get on the radar," Ellis said. 

Beyond that, hard work and passion are understandably essential, too. The psychology of fundraising is often cited by founders as being mentally taxing with even very successful companies having been through rejections. 

"You work 80+ hours a week on fundraising and of course it's tough when people pass on you but it's important to not let it get to you and learn the lessons from that," Ellis added. Following Cuban's investment in 2015, Relativity Space has raised $45 million from Y Combinator, Social Capital, and Playground Global. 

Stacking up investor meeting after investor meeting might be exhausting but Ellis believes that routinely tricky questions — plus the need to explain the company's technology — has made Relativity's pitch rock solid. 

"You think deeply about why you're building the company and that helps walk people through disruptive opportunities," Ellis told Business Insider. "You refine your pitch over time and alongside that you can show better data sets and all the milestones you've achieved in that time." 

SEE ALSO: This 26-year-old emailed Mark Cuban asking for an investment in his 3D Martian rocket startup. Cuban replied in 5 minutes and soon after gave a $500,000 commitment.

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Tesla's go-private debacle was a year ago — but there are still good reasons for the company to leave the stock market (TSLA)

Sun, 08/11/2019 - 8:29am

A year ago, Elon Musk tweeted his now-infamous "funding secured" message, announcing a failed bid to take Tesla private at an inside-joke price of $420 per share. 

What followed was jeers from critics, baffled enthusiasm from fans, and an investigation by the US Securities and Exchange Commission that cost Musk his chairmanship of the Tesla board and installed a protocol that would have him pre-approve tweets that might affect investors.

In retrospect, the entire episode was tinged with madness and could have been interpreted as Musk cracking, after years of jousting with Wall Street short sellers and a media that was equal parts booster-ish and hostile.

Somewhat lost in the chaos was a still-important question: "Would Tesla be better off as a private company?"

The answer is actually yes. Here are five reasons why:

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1. Tesla's actual IPO was relatively modest.

Tesla went public in 2010, raising about $226 million. The stock price went nowhere for a few years, trading around $20 until 2013, when shares took off and Tesla started to sell more vehicles.

Tesla's initial offering raised enough money to keep the tiny company going for a while, but the all-electric automaker would now blow through that meager amount of coin in a few months.

Long-term investors have been delighted, booking a mega-return. But the scale of the IPO actually predicted the potential of the electric-car market quite well. Even as early as 2010, Tesla was a big player — but the pond was, and still is, small. A decade on, EVs make up just about 1% of the global market. The idea that, in this context, Tesla is worth $50 billion is sort of hard to square with reality.

It would be much easier for the company to nurture the EV market if it could operate away from quarterly financial scrutiny.

2. Tesla attracts too much attention as a public company.

The key problem here is that much of the debate around Tesla doesn't involve cars — it revolves around the stock price. 

Those who follow the stock closely often treat Tesla as a technology company — it is based, after all, in Silicon Valley, and Musk is part of the so-called "PayPal mafia," entrepreneurs who have have transitioned from the sale of PayPal to eBay and become influential businesspeople.

Tech companies are understandably fascinating, as personal computers, smartphones, the internet, search engines, and social networks didn't exist 116 years ago when Henry Ford founded the enterprise that bears his name. 

But they're also financialized undertakings, dramas written in venture capital and the constant thrum of valuations and stock-market chatter. Car companies are more boring operations. The major automakers that are publicly traded plod along, raking in mountains of revenue every quarter (cars are expensive) but posting relatively modest profits. 

The combination makes for appealing dividends and periodic stock buybacks, but little in the way of big stories. 

Tesla should fit into that paradigm, but it doesn't, for obvious reasons. New car companies always suck up the public's attention span, because cars are cool. But making them is all about steady, plodding execution.

3. Musk wanted Tesla to be private before his "420" tweet.

We should have seen it coming. 

"I wish we could be private with Tesla," he told Neil Strauss in a Rolling Stone interview in 2017. 

The struggle of being a public-company CEO was obviously weighing on Musk then, and the difficulty later burst into view when he railed against Wall Street analysts' questions in 2018 and began to taunt short-sellers on Twitter.

The take-private scheme would have pulled Tesla and Musk out of this toxic dynamic. Unfortunately, Tesla was by then a victim of its own success: With a market cap that challenged General Motors, the little car maker that could would have been a very big financial bite and a struggle for bankers to move from the stock market to private ownership.

4. Musk is ill-equipped to lead a public car maker. But he'd be brilliant as a private-company leader.

Auto CEOs tend to be conservative, circumspect executives who carefully manage their messages. Not since the late Lee Iacocca, who steered Chrysler through a near-bankruptcy in the late 1970s and early 1980s, have we seen a leader as outspoken as Musk. 

Nearing 50, also serving as CEO of another company — SpaceX — that has the modest ambition of colonizing Mars, Musk isn't likely to moderate his personality. His swashbuckling style would be perfect for a sheltered private enterprise, lavishly funded by major investors with long-term visions. 

But pitted against modern Wall Street short-termism, his leadership style is a poor fit.


5. Tesla has become a stock trading vehicle.

Musk personally owns over 20% of Tesla, while big institutional investors own much of the rest.

That ownership structure shouldn't lead to the kind of volatility that Tesla's stock is known for. But it does. That's because enough traders, long and short, can shift in and out of the stock to cause the price to fluctuate wildly within defined ranges. Swoons and spikes of $100, adding or subtracting billions in value over weeks or even days, aren't unusual.

Managing a company that runs on a car maker's cost structure (read: cash-gobbling) and on a car maker's timetables, in that context, is deeply difficult. Auto companies need years to design, develop, test, manufacture, and market vehicles. 

Constant market exposure is the enemy of that requirement. If Tesla were private, it could align its developmental needs with the logic of its cash flows.


An American teenager just won $3 million playing video games. The founder of an esports ETF told us why it might be a turning point for the exploding industry.

Sun, 08/11/2019 - 8:05am

  • The $3 million top prize at the Fortnite World Cup in New York went to a 16-year-old American, and it might attract more attention to the rapidly expanding field of esports.
  • Will Hershey, cofounder of investment adviser Roundhill Investments, recently launched an ETF of companies involved in the sector. He compares esports to new versions of both traditional sports and social media.
  • Some on Wall Street think this part of the video game market has enormous potential but isn't getting much attention given their popularity with younger people.
  • Click here for more BI Prime stories.

The days of video games being seen as a waste of time might over just like the days of 25-cent arcade games.

In late July, the Fortnite World Cup awarded million-dollar prizes to eight gamers in their teens and 20s. The solo champion was a teenager from Pennsylvania who brought home $3 million. Almost as remarkable, the two-day event was held at 24,000-seat Arthur Ashe Stadium in New York.

Video games are a gigantic business where some of the biggest companies in the world play starring roles, but there's a growing consensus on Wall Street that esports are overlooked and just starting to break through.

"A 16-year-old winning $3 million is going to get parents to be more on board," said Will Hershey, the cofounder of Round hill Investments, which launched an esports-themed exchange-traded fund in June.

He says the win by American Kyle "Bugha" Giersdorf will help wake people up to the immense popularity of the games among younger people.

"You have a generation that really is growing up with gaming being a very much so important and relevant part of their life," Hershey said in an exclusive interview with Business Insider. "It's almost kind of a social media 2.0 type of vehicle."

A NewZoo report found that worldwide esports revenue will hit $1 billion this year, while also estimating the audience for the games will grow to 453 million people. In a note to clients in July, HSBC economist James Pomeroy underlined the popularity of esports with a reference to gamer Tyler "Ninja" Blevins.

"His YouTube videos receive more views in a week than most hit TV shows, with his most popular video being watched 40 million times," he said.

Both of those views conflict with the notion of online gaming as a solitary activity.

Read more: A top-rated wealth manager for celebrities and the mega-rich told us her clients are bracing for higher taxes. Here's how that's changing their approach to investing.

If your first thought after reading about the prize money is that you should quit your job and try becoming a highly-paid professional gamer, good luck. If that seems like a long shot, you can try investing in the sector.

Roundhill's BITKRAFT Esports & Digital Entertainment ETF — which launched in June — is the newest of a handful of options in the space, which also include the VanEck Vectors Video Gaming and eSports ETF and the ETFMG Video Game Tech ETF.

The ETFs include a mix of game publishers and console-makers, as well as chipmakers, and Hershey's fund adds a number of streaming and esports live-event companies. That said, the funds are still small, and their high exposure to Asia has made life difficult during the trade war.

What they don't include, perhaps surprisingly, are Apple, Microsoft, Amazon, or Google — all of which are involved in the industry in various ways but get the vast majority of their revenue elsewhere.

Hershey says that for younger people, esports have grown into an alternative to traditional sports. At least a few colleges agree, and they're now offering scholarships for video gamers.

The business implications could be huge: While a basketball or soccer player doesn't need much more than a ball and a field or court, there is an enormous amount of infrastructure, technology, and intellectual property built into any gaming setup.

"You and I could start up a pickup basketball league tomorrow," he says. "You and I can't go ahead and start the Overwatch league tomorrow. Activision owns that IP."

That means a lot of businesses can benefit from the growing popularity of these games and investors have a lot of avenues to make money from them in ways that don't apply to other sports.

And if these sports do take off in the US the way it has in other developed countries, Hershey says it's going to require enormous growth in gaming cafes and giant playing-and-practice facilities. He says there are hundreds of those in South Korea, which has one-sixth the population of the US.

"Kids are growing up desiring to be professional gamers and that infrastructure is in place," he said.

SEE ALSO: A 28-year old wealth manager who oversees $450 million shares her biggest tips for millennials planning for the future — and reveals her own savings strategy

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How MoviePass burned through millions, JPMorgan's power players, and Instagram's privacy practices

Sun, 08/11/2019 - 8:02am


In a break from the usual format, I wanted to highlight a selection of our best reporting from across the newsroom, rather than focus on a specific theme. The range and depth of our reporting this week showcases what we're working to deliver for you, our BI Prime members. This recap should take not much more than four minutes to read. 

First off, Jason Guerrasio on our media desk had the definitive account of how a controversial Florida businessman blew up MoviePass and burned hundreds of millions. For those of you who haven't heard of MoviePass, it sought to shake up the tired movie-theater business by starting a subscription service.

Enter Florida businessman Ted Farnsworth, who injected much-needed cash into the company and introduced the risky idea of lowering the monthly subscription price to an impossibly low $9.95 a month. The price change helped MoviePass become a sensation, but it also led to the ousting of cofounder Stacy Spikes — and the use of questionable tactics to keep the company afloat. You can also listen to the story here.

On our finance desk, Dakin Campbell worked with Shayanne Gal from our graphics team to create an interactive org chart featurng the 70 most influential people at JPMorgan. We're planning to create more of these org charts, and I'd love to hear from you on which companies you're most interested in.

Also in finance, Casey Sullivan, Callum Burroughs, and Dakin spoke to seven insiders on the $27 billion Refinitiv-LSE deal to find out how one of the biggest data deals of the year came together.

According to one person who was there, there was an unusual guest at the law firm offices where the final negotiations took place. On at least two separate nights, a mouse was seen scampering across the floor of the Freshfields office, located just a few blocks from the River Thames, the person said.

"We wondered whether this was a new M&A tactic to get us to not read the documents so closely," the person joked.

From our tech team, Rob Price revealed that Instagram's lax privacy practices let a trusted partner track millions of users' physical locations, secretly save their stories, and flout its rules. The situation highlights how Facebook is still struggling to protect users' data and oversee developers accessing its platform, more than a year after the Cambridge Analytica scandal revealed important privacy lapses. You can also listen to Rob's story right here

And Ben Pimentel profiled 12 of the most important executives leading Oracle's big push to take on Amazon, Microsoft, and Google in the cloud. Oracle is a top vendor in cloud software, but in the broader cloud market it has struggled. The push to gain share is so critical that many of the executives on Ben's list report to founder Larry Ellison.

Lastly, Lydia Ramsey, Emma Court, and Erin Brodwin on our healthcare team profiled 30 young leaders who are transforming the future of healthcare and disrupting a $3.5 trillion industry in the process. Among those included: a physicist tackling cancer, a lawyer who guides startups, and a pharmacist changing how patients are cared for.

As always, I'd love to hear from you. What would you like to see more of? Get in touch.

-- Matt

Quote of the week

While some may see this as risky, I think quite the opposite. By being candid with investors from the outset we have been able to find the right strategic investment." — Mike Massaro, CEO of Boston-based payments company Flywire, explains why he has a slide in the pitch deck he shows to potential investors with the title "Why you shouldn't invest in us."

Finance and Investing

A $1.5 billion credit trade, a seismic market change, and a brand-new trading desk: How Bank of America learned to stop worrying and love the bond ETF.

Earlier this summer, a trader in Bank of America's fixed income, currencies, and commodities division got a mammoth request from a client: They needed to execute a bespoke $1.5 billion bond trade — a combination of buying and selling hundreds of securities across sectors. Price and efficiency, as always, were paramount.

Seduced by WeWork's sky-high valuation, coworking firms have multiplied. A shakeout could see them merge, shutter, or specialize.

By any measure, the growth in coworking is staggering. WeWork, the nine-year-old company known for providing tech-enabled, millennial-friendly office spaces, has ballooned to 500 locations and is reportedly planning an initial public offering as soon as September

'Not investing in China is very risky': Billionaire investor Ray Dalio explains why he's still all in despite recent trade-war fireworks

The US's relationship with China isn't exactly all rainbows and sunshine right now. In fact, it's the opposite.

Tech, Media, Telecoms

Microsoft handed Amazon and Google a new reason to go after Microsoft customers, and they are doing so with gusto

Last week, Microsoft announced a change that essentially raises prices on its customers when they use Microsoft software on competitors' clouds. Now those competitors are fighting back.

There's a boom in VC funding for fertility startups. But female founders say they still have a hard time getting men to invest.

Fertility is booming, and investors aren't leaving any man behind.

A new advertising pitch deck from Disney shows its plan to change how media buyers approach live TV

Disney, the proud new owner of the TV networks FX and National Geographic, is on the road unifying its ad sales operations and inventory across all of its TV networks and digital platforms, including ABC, Freeform, and ESPN, which used to be sold to advertisers separately.

Healthcare, Retail, Transportation

A top leader using tech to tackle cancer told us how to get through the challenges of a career switch

Emily Silgard, 36, began working at Fred Hutchinson Cancer Research Center in Seattle as a programmer seven years ago.

'It's a once in a decade opportunity': How top VC firms like Greycroft and Lerer Hippeau are cautiously opening their doors to the cannabis industry

When Luke Anderson and Jake Bullock were trying to raise money for their THC-infused beverage startup, Cann, they found it easy to land meetings with top VCs but hard to get checks signed.

Join the conversation about this story »

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TECH COMPANIES IN FINANCIAL SERVICES: How Apple, Amazon, and Google are taking financial services by storm (AMZN, AAPL, GOOGL)

Sun, 08/11/2019 - 8:01am

Tech giants are set to grab up to 40% of the $1.35 trillion in US financial services revenue from incumbent banks, per McKinsey. Three of the largest US tech companies — Apple, Google, and Amazon — are particularly encroaching on financial services and threatening incumbents with their size and ability to attract massive, loyal user bases.

Apple is deepening its financial services play as a means of invigorating revenue, and its expertise could make it a legitimate threat to legacy players. Google's platform-agnostic approach, wide international penetration, and top talent position it as a hub with unrivaled global reach beyond just consumer payments. And Amazon — which has eaten up market share in every industry it's touched, and now has its sights on financial services — could swiftly undercut legacy players.

In The Tech Companies In Financial Services report, Business Insider Intelligence will examine the moves that Apple, Google, and Amazon are making to gain a larger foothold in the global financial services industry. We will then detail each tech company's threat to incumbents and outline potential next steps based on their existing moves in the financial services sphere.

The companies mentioned in the report include: Apple, Amazon, Google, Goldman Sachs, Mastercard, Barclaycard, Citi, Chase, Capital One, Paytm, and PhonePe.

Here are some key takeaways from the report:

  • Apple's expertise in consumer-facing tech products makes it a legitimate threat to legacy players. Its next move could be a debit card or PFM app, both of which would be cohesive with its existing offerings.
  • Google's money movement and commerce services form a payments hub with unrivaled global reach. Google could pursue global expansion by modifying its offerings in other markets like it did in India, pursuing Europe, and even delving into digital remittances.
  • Amazon is an expert disruptor — and it has its sights set on the financial services industry next. Amazon could develop checking and savings accounts, bring Amazon Pay in-store, and white-label its Amazon Go store technology to deepen its financial services footprint.

In full, the report:

  • Outlines the threat posed by Apple, Amazon, and Google to legacy financial players.
  • Identifies each tech giant's strengths, weaknesses, opportunities, and threats moving further into financial services.
  • Discusses each company's moves in financial services and their anticipated next steps in the space.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of tech companies in financial services.

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7 reasons why McDonald's, Chipotle, and Shake Shack are embracing meal delivery — and Olive Garden isn't

Sun, 08/11/2019 - 6:11am

  • McDonald's, Shake Shack, Chipotle, and other restaurant chains are embracing delivery as a way to reach more customers, gather more data, and make more money.
  • However, Darden Restaurants — owner of Olive Garden — argues the higher costs can eat into profit margins.
  • Watch McDonald'sShake Shack, Chipotle, and Darden Restaurants trade live.

McDonald's, Shake Shack, Chipotle, and other restaurant chains are embracing delivery as a way to reach more customers, gather more data, and make more money.

However, implementing delivery can be expensive and disruptive. Darden Restaurants — owner of Olive Garden — also argues higher costs can eat into profits.

We've outlined five reasons why restaurants are pumping cash into meal delivery, and two reasons why others have reservations, below.

SEE ALSO: McDonald's went from testing delivery to offering it at 5,000 locations across America in less than 2 years, and it represents a massive shift in the fast-food giant's strategy

Delivery can boost sales and profits.

Restaurant chains' main reason for embracing delivery is the potential for higher revenues and profits.

A key question is whether delivery leads to their customers ordering in rather than eating out, cannibalizing their existing business. 

McDonald's has found more than 70% of its delivery revenues are incremental to existing sales, CEO Stephen Easterbrook said at a forum in March. The dollar value of its average delivery order was twice as large as a standard order, he said on an earnings call in April.

Sandwich chain Potbelly's has found delivery orders to be additive too, while the average delivery check at Jack in the Box is "consistently higher" than those for other orders, CEO Leonard Comma said on the chain's earnings call in May.

Denny's, which has rolled out delivery to around 90% of its restaurants, has found delivery orders boast healthy profit margins as well. Meanwhile, Popeye's — owned by Restaurant Brands, which also owns Burger King — has found its restaurants offering delivery outperform those that don't.

It can attract new customers.

Introducing delivery can help restaurants to reach new customers.

"Two years ago, we could not imagine that we would have a customer that had never ever gone to a Burger King restaurant, although a huge fan and a frequent consumer," Burger King's Brazil CEO luri Miranda said at Restaurant Brands' investor day in May. "How? A delivery guest."

Delivery can also address changes in consumer behavior.

"People are not eating out as often as they were," McDonald's CFO Kevin Ozan said at the forum in March. He pointed to ageing populations, wider availability of delivery, and more people working from home. "That's why delivery has exploded as quickly as it has recently."

McDonald's has found delivery customers tend to be younger and a large proportion make repeat orders. Its restaurants close to college campuses tend to do especially well at night. "I won't surmise why that is or what they're doing prior to ordering McDonald's," Ozan said.

Similarly, Popeye's views delivery as a way to introduce young people to its food and convert them into regular customers. Bloomin' Brands, owner of Outback Steakhouse, has found delivery helps it reach new customers who are loyal to third-party delivery platforms such as Uber Eats rather than its brands.

The typical timing of delivery orders is also enticing. McDonald's receives 60% of them in the evenings, which is "really helpful for us from a capacity standpoint" as there's less drive-thru and in-store traffic and workers have time to fill orders, Ozan said at a conference last year.

Popeye's, Burger King, and Jack in the Box have also reported most orders arriving during non-peak periods, such as after 4pm on weekdays.

It's a mushrooming market.

Restaurant chains are eager to grab a slice of the burgeoning meal-delivery market.

The segment is growing 20% annually and could be worth nearly $50 billion by 2022, Burger King's Americas president Christopher Finazzo said at an investor day in May. The maker of the Whopper plans to offer delivery in more than 5,000 restaurants by the end of this year, he added.

Similarly, McDonald's earns as much as 10% of its revenue from delivery in markets such as the UK, Australia, and France, Easterbrook said on an earnings call last year. Delivery has generated between 20% and 40% of sales at some of its restaurants in China too.

It can capture customer data.

Restaurant chains can gather personal information such as names, addresses, phone numbers, and social media details from delivery orders, allowing them to track customers' orders and garner insights into them.

For example, McDonald's can combine delivery-order data with drive-thru and in-store transactions to build profiles with customers' favorite menu items, average spend, usual order times, and so on. Armed with that information, it can craft individualized promotions and use them to drive bigger, more frequent orders.

Delivery data is "incredibly valuable for us to make ourselves more relevant and more interesting to those customers and, from a customer perspective, just make the experience smoother and more enjoyable," Easterbrook said on an earnings call earlier this year.

Similarly, Popeye's plans to collect more data to "better interact with our guests," brand president Felipe Athayde said at an investor day in May.

Meanwhile, Wendy's wants to allow customers to order delivery via its mobile app, improving their experience and generating "more insights to enhance our relationship with our customers as well as improve our overall delivery times," CEO Todd Penegor said on the fast-food chain's earnings call in May.

Delivery partnerships can pay off.

Restaurant chains often partner with Uber Eats, DoorDash, and other third-party delivery companies to avoid the cost and hassle of hiring drivers and leasing vehicles.

Partners can also share advertising costs and promote restaurants on their websites and apps. Bloomin' Brands expects "pretty good marketing and advertising support" from its new delivery partner, CEO David Deno said on the company's earnings call in July

Similarly, Shake Shack expects to do "some really great marketing" through its recent nationwide delivery partnership with Grubhub, CEO Randall Garutti said on the burger chain's earnings call this month.

In fact, McDonald's and Burger King have found multiple delivery partners can generate additional sales as there's limited overlap in their user bases. Chipotle has also found "very little guest overlap" between its app and partners' apps, CEO Brian Niccol said on the fast-casual Mexican chain's earnings call in July.

However, delivery can be expensive.

Some restaurant chains have balked at the risks and costs of delivery.

Last year, Shake Shack said its burgers and fries were "not intended to be eaten half an hour after they were cooked" and delivery didn't "necessarily fit really well" with its brand, according to Bloomberg.

The chain just struck a deal with Grubhub, but Garutti cautioned that "delivery is a hard business" and Shake Shack's food is "hard to deliver and we need to do it really, really well" on its last earnings call. He added that delivery orders are more expensive to fill due to the commissions it pays to delivery partners and higher paper costs.

Launching a high-quality delivery service isn't simple either. One challenge is "working out all the operational kinks" including "when to fire off the order," a Dunkin' Brands executive said at a conference in June. "Obviously a cold coffee, if it's meant to be hot, it's not a very satisfying experience."

Shake Shack is going as far as designing restaurants with separate pick-up areas for digital and in-house orders to "honor our guests who continue to come to Shake Shack," Garutti said on the call.

Meanwhile, Yum Brands — owner of Pizza Hut, KFC, and Taco Bell — is closing stores and reopening them in more appropriate locations for delivery. It expects the repositioning to boost sales, reduce costs for its franchisees, and improve its customer experience.

Launching delivery can also mean higher packaging costs. The Cheesecake Factory recently rolled out containers that ensure its food can "travel at the appropriate temperature" and "retain the integrity and the look and feel of the food" customers receive in its restaurants, company president David Gordon said on its latest earnings call.

Luckily for Chipotle, it has largely avoided those costs thanks to its foil-wrapped burritos. "Our food travels really well off-premise," Niccol said at a conference in June.

Meal delivery may not be the best option either.

Some restaurant chains question whether meal delivery is right for them.

Darden Restaurants, owner of Olive Garden, dislikes passing delivery costs onto customers. Dunkin' Brands admitted "the fee is actually all on the consumer," at a conference in June.

Darden is also skeptical of the delivery market's growth prospects, wary of the added costs, and unsure whether delivery complements its brands. "We continue to offer great value without having to have any destruction to our overall margins," CEO Eugene Lee said on its earnings call in June.

Instead of delivery, Olive Garden is expanding its catering business. The minimum order is $75, and the average order comfortably exceeds $300. "We want to focus on that more so than trying to move a $15 entree," Lee said.

'We are worried': Bank of America lays out the latest warning signs that a recession is approaching — and explains why the next crisis will be a lot harder to fight

Sun, 08/11/2019 - 6:05am

  • US economists at Bank of America Merrill Lynch warn there is a "heightened risk of recession." 
  • They updated their recession outlook after the recent escalation of the US-China trade war and the ensuing market volatility. 
  • The bank's chief investment strategist also offered investing recommendations for this period of uncertainty.
  • Click here for more BI Prime stories.

Investors have reckoned with the threat of a recession over the past two weeks. 

Within a day of the Federal Reserve's July 31 rate cut, President Donald Trump announced that the US would slap new tariffs on nearly all Chinese imports.   

This trade-war escalation and the ensuing market chaos prompted economists at Bank of America Merrill Lynch to update their recession outlook.

Their main conclusions were two-fold: the risk of a recession is now higher, and a key tool to combat the next one has lost some of its efficacy.

With these findings, they published their third primer on recessions since November 2018.

"And this time, we are worried," said Michelle Meyer, the bank's chief US economist, in the note.

She continued: "We now have a number of early indicators starting to signal heightened risk of recession. Our official model has the probability of a recession over the next 12 months only pegged at about 20%, but our subjective call based on the slew of data and events leads us to believe it is closer to a 1-in-3 chance."

Read more: Morgan Stanley scoured 100 sets of data and warns we're 'just outside the danger zone' of the next recession. Here's how it says to prepare.

Here are the highlights of what their recession model is showing: 

  • The yield curve, which shows the relationships between long- and short-term Treasury yields, continues to send an ominous recession signal. This week, the spread between 3-month and 10-year treasuries fell to -32 basis points, its worst inversion since 2007
  • Recent data on auto sales, industrial production, and aggregate hours worked have worsened. 
  • And although their model is unable to fully capture the threat of the trade war, they view it as the biggest downside risk to the economy. 

On the plus side, the level of initial jobless claims — among the earliest warning signs of trouble — is still very low and not sending a recessionary signal.  

'Easy growth' is over

Meyer noted that the economy's next slowdown will be harder to deal with than the most recent scares in 2012 and 2015.

Neither of those episodes was severe enough to end the record-long expansion. However, the economy is now further into its expansion and more vulnerable to shocks, Meyer said. The era of "easy growth" has passed because the economy has returned to full capacity, she added. 

In addition, the two scares occurred before the Fed started raising interest rates and shrinking its balance sheet. The central bank now has a more limited set of tools to fight the downturn.

Finally, the yearlong trade war has raised the overall threat level of a global recession. 

What BAML's chief investment strategist recommends

Investors' concern about a recession reached a fever pitch on Monday, when the stock market suffered its biggest sell-off of 2019.

Michael Hartnett, the chief investment strategist at Bank of America Merrill Lynch, observed some notable flows that also occurred. 

On Monday, investors pulled $12.4 billion from global equities in their 12th-largest daily drawdown on record, Hartnett said in a recent note. They yanked $6.2 billion from emerging-market stocks last week — the largest weekly depletion since China devalued its currency in August 2015. Meanwhile, gold recorded its fourth-largest weekly inflow on record. 

The flows data, combined with the price action in bonds, suggest that traders were shedding riskier assets in favor of safer ones.

Read more: 'The greatest bubble ever': One market expert warns that a relentless bull market is on the brink of crashing and explains how to profit from its demise

But Hartnett recommends staying bullish through the end of the third quarter while keeping an eye on two developments: China's economy, and how the trade war is affective the job markets in key battleground states for the 2020 election.

In the interim, he offered a few "contrarian" trades for bullish investors.

They could "trim very overbought bonds" and buy stocks that are global, cyclical, and high-dividend payers.

He also recommends buying South Korean stocks and betting against Treasuries, as improvement in Korea's economy is often used as a bellwether for the global situation. The iShares Core KOSPI 200 Index exchange-traded fund captures Korea's benchmark equity index.

SEE ALSO: Bank of America's playbook for investing after Fed rate cuts is already paying off. Here's what it says you should be buying now.

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The British pound could reach parity with the dollar after no-deal Brexit, warns former head of UK civil service

Sun, 08/11/2019 - 3:00am

  • The pound could hit reach parity with the dollar in the event of a no-deal Brexit, the former head of the UK civil service Lord Kerslake has told Business Insider.
  • In the event the UK crashing out of the EU with no deal, he said "you could reasonably expect that it will carry on falling, potentially to parity with the dollar."
  • Prime minister Boris Johnson has repeatedly pledged that the UK will leave the EU on October 31 with or without an agreement, a commitment which has helped drive down the value of the pound.

The pound will continue to fall in value and could reach parity with the dollar for the first time in history in the event of a no-deal Brexit, the former head of the UK civil service has warned.

Lord Kerslake, who led the civil service between 2012 and 2014, told Business Insider that the British pound could drop to $1 in the event of a disorderly exit from the European Union on October 31.

"You could reasonably expect that it will carry on falling, potentially to parity with the dollar," he told Business Insider.

Read more: 'Britain has no leverage. Britain is desperate. Britain has nothing else': Trump will exploit the UK in trade talks, former US treasury secretary says

New prime minister Boris Johnson has repeatedly pledged that the United Kingdom will leave the European Union on October 31, with or without an agreement. The growing risk of Johnson delivering no-deal has driven down the value of the pound since he took office in July.

Sterling has dropped more than seven percent in the last three months, the worst performance of any major currency. It fell 0.6% to $1.2056 on Friday, its weakest since January 2017, adding to its 4.5% fall over July and August.

Official figures revealed on the same day showed that that the UK economy shrunk by 0.2% in the second quarter of this year — the first time it has experienced negative growth in seven years.

Kerslake also said the Bank of England would be forced to consider hiking interest rates to prevent a prolonged run on the currency in a no-deal scenario, a move which would drive up inflation, consumer prices, and mortgage rates.

"The normal response, if you face a major run on a currency, is to raise interest rates," he said.

"But that's immensely damaging to the economy, and to people's real incomes because it results in higher mortgage rates. So we could face a very, very difficult dilemma."

Rupert Harrison, a fund manager at BlackRock, and analysts at Morgan Stanley have also predicted that the pound could trade level with the dollar in the event of a no-deal Brexit, although a Bloomberg survey this month estimated the pound would slide less far to $1.10.

"The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome," Harrison told Bloomberg.

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Audi created a sleek-looking $2,000 electric scooter to make getting around cities easier — take a look at how it works

Sat, 08/10/2019 - 2:48pm

  • Audi is releasing an electric scooter that combines the handlebar function of a scooter with the rider positioning of a skateboard.
  • Its one-handed operation means riders can look around and signal their intentions to pedestrians and motorists, potentially making the vehicle safer to ride.
  • Audi says it will offer the e-tron Scooter for sale in late 2020.
  • Visit Business Insider's homepage for more stories.

Audi is exploring the urban electric micro-mobility trend with a sleek new offering.

It has developed what it calls the Audi e-tron scooter, which is intended to be a cross between a scooter and skateboard, the company announced on Monday. While there's a handlebar intended to be held with one hand like a scooter, riders control it by shifting their weight like a skateboard.

Audi says it will offer the e-tron Scooter for sale in late 2020.

The announcement comes almost a year after the German company unveiled its fully-electric SUV, which also uses the e-tron naming scheme.

Read more: These are 12 of the most innovative transportation products on Indiegogo right now, from hover shoes to AI-powered motorcycle helmets

Audi says it is considering offering the scooter as an extra option for customers who purchase the e-tron car models. Owners would be able to charge the scooter through a socket in the rear hatch of the car, allowing them to park and then ride the scooter to their ultimate destination.

The company is also exploring the idea of offering it to specific user groups, like "residents of modern urban quarters."

Customers will be able to purchase the e-scooter at the end of 2020 for about 2,000 euros, or about $2,246.20.

SEE ALSO: 11 of the most powerful fully electric cars money can buy, including the car James Bond may drive in the next '007' film

Audi says the e-tron Scooter can reach speeds up to 12.5 mph in a straight line, but can also handle "unusually tight curves" due to the movable axles and four wheels.

The handlebar is intended for gripping with only one hand, allowing riders to give hand signals to others with their free hand. Most electric scooters require two hands, but the skateboard-like movement design allows for safer operation.

Audi claims the riding style is similar to "surfing waves." The handle allows riders who aren't expert surfers or skateboarders and easy way to ride.

The 26-pound scooter can be folded and towed like a trolley. It has a 12.5-mile range, which is archived through regenerative breaking.

There are multiple options for the LED lights on the front and rear of the scooter: a headlight, daytime running light, rear light, and brake light.

Riders can connect their devices to the scooter via Bluetooth, providing protection against theft and allowing riders to adjust ride characteristics.

The scooter is being designed with decks made of either wood or carbon, each with black and grey designs.

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