Coin Is Pulling a Netflix
How baby steps go further than giant leaps.
There was once a magical place called Blockbuster. It was a great American pastime for families to go to there to find the perfect movies to watch on those cold winter evenings. It was a personal pastime to con my family into renting a heaping stack of video games and a mountain of candy that only a Himalayan sherpa with a jet pack could summit.
At any rate, it was our little piece of paradise.. until Netflix came along, driving our beloved, albeit technologically myopic Blockbuster out of business.
To be fair, Netflix was awesome — you could get any movie you wanted delivered to your door weekly, and no late fees! There was nothing else like it. But what was really incredible about it was its long term product strategy.
Reed Hastings could have very well made Netflix into the online video streaming platform that it is today when he founded the company in 1997. But he was keenly aware that for a generation that was still buying DVD/BlueRay players and driving to the video store, watching movies on the Internet was too much of a leap.¹
Instead, he made a more incremental move, building Netflix into a video delivery service first. For the movie renter, Netflix was a significantly better experience than Blockbuster, but it also wasn’t that far beyond its time. Reed Hastings knew that by only requiring incremental behavior change of his users, he could gain mass adoption.
I think Kanishk Parashar, CEO of Coin, knows this too.
Baby Steps > Giant Leaps
A lot of ambitious startups seem to strive to be the Google of something. For mobile payments, there are quite a few contenders: Square, PayPal, Clinkle, and… well, Google among others. Despite some serious investment and activity, no overall leader has emerged.
- Square is leading on the offline merchant side of things, but seems more poised to replace the POS than your wallet.
- Clinkle raised a massive $25M in the largest seed round in history, but seems to be better at firing employees than launching a product.
- Google is Google, but seems to be prioritizing other things above mobile payments.
Coin is a dark horse that could pull a Netflix and become the Google of mobile payments.
Alright, that was an obnoxious sentence, but seriously; what it comes down to is people are still more comfortable using credit cards at physical store-fronts than their mobile phones — Coin looks and feels like a credit card, while Square, PayPal, etc. do not. Instead of going directly into mobile-phone-based payments, Coin is taking a more incremental step away from traditional cash and credit cards with the credit-card-like hardware they have built. Coin is undercutting the competition by requiring significantly less behavior change of its users while still making it an improved experience over the status quo, putting it in an advantageous position to have some massive growth and gain significant market share.
And just as Netflix evolved past its core video-delivery service it started with, Coin could inevitably evolve past the hardware that it is known by today. Since all data from the Coin card — like credit card information and transactions — necessarily passes through or is held on the mobile app, Coin has the potential to take their product in many different strategic directions in the future. By expanding the features of the app as well as the overall platform, they could pursue opportunities like peer-to-peer payments, budgeting tools and coupons, and even iBeacon integration for seamless mobile payments to merchants.
Let’s not get too hasty. Coin has plenty of bigger issues to tackle before they can light the cigars, like building an affordable, working product and a scalable production line for it. Assuming all goes well on that front, I have no doubt that they can take the (baby) steps necessary to be a leader in mobile payments.
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- I might be making Reed Hastings out to be much more of a brilliant mastermind than he actually is in assuming that he had this product strategy all along for Netflix, but I hear the guy is pretty damn smart, so I’ll stick with it. Reed, can you confirm that you did have this plan all along?
