3 Things: Liquidity Pool For Referral Codes, Premium Dubbing, Financial Literacy App

Happy Sunday and a very warm welcome to all the new subscribers! I’m thrilled and honored to have you as readers and truly appreciate your thoughts and feedback 🙏. Each edition of 3 Things will contain a dive into 3 rabbit holes I’ve found myself going down recently. Subscribe to get each week’s edition straight to your inbox and if you enjoy it, please share (I suck at self-promotion so can use your help)! This past week I’ve been thinking a lot about:

• Liquidity Pool For Referral Codes

• Premium Dubbing

• Financial Literacy App

1. Liquidity Pool For Referral Codes

How many times have you been in the checkout flow on an ecommerce site, see the field that says “promo code” and then immediately turned to Google, frantically trying to find a code that works. You’re not alone! In 2020, nearly ALL online shoppers (92%) searched for coupons and holistically 90% of purchasers, or a whopping 142 million US adults used coupons when shopping, with digital coupons surpassing paper for the first time. Digital coupons are a giant industry which is expected to surpass $91B in 2022. Well over half of all shoppers turn to coupon websites with Millennials leading the pack in terms of coupon-savviness. While offering coupons has shown to increase average order value by 24% which is great for brands, almost half of shoppers will abandon their cart if the promo codes don’t work which creates a massive leak in the conversion funnel and is often the result of visiting coupons sites.

After you purchase from a brand, you are almost always invited to refer your friends and receive a discount for you and also one for them. Despite referral programs being ubiquitous, the global average rate for referrals is only 2.3%. It’s awkward to spam your friends and family with referral codes and it’s also highly unlikely that you’ll happen to catch someone in your network at the exact moment when they have the intent to purchase from that exact brand. These referral discounts tend to be even better than the average promo code provided by the merchant, but there is a clear lack of matching going on between supply and demand. You might think that brands want the uptake rate to be low but in reality, they’d be thrilled to get a net new customer (the holy grail) and given the bump in AOV, it’s a double win! A company could allow purchasers to add their referral codes to a site and get matched with strangers looking for that exact code. You’d get the reward offered by the brand and could also earn points for uploading codes that could be redeemed for various things to incentivize you to add codes and return to the site. To ensure that one person’s code isn’t the only one used for a specific brand, after it’s used once, it would be rotated out and a new user’s code would be presented for the next demand creating a liquidity pool for referral codes. The company would earn an affiliate fee every time a purchase was made from one of the codes that went through the site. Given this could be across any brands, the volume could get huge fast and when you provide immediate time-to-value for both code publishers and requesters, you’ll start to see network effects kick in quickly.

2. Premium Dubbing

The subs vs dubs (or subtitles vs dubbing) debate has been raging for decades, starting originally with anime films. With the rapid rise of foreign language films and TV that has started to get popular on streaming services, it’s now top of mind again for many. Some argue that subtitles are favorable as it allows the viewer to get the actor’s full performance while still following the action and dialogue. Those in favor of dubbing (which involves voice actors recording the dialogue in a different language than it was filmed) claim that dubbing preserves the overall cinematic experience and can allow for all dialogue to be presented as a lot is not translated with subtitles so that it doesn’t overwhelm the viewer who is trying to keep up with reading. One of the main criticisms with dubbing, however, is that the vast majority of voice-actors are laughably bad. You often get what sounds like ridiculously over-the-top and extremely dramatized audio which can be hard to listen to. Until recently, there just wasn’t enough demand for dubbing to warrant high-quality services that also offer fast enough turnaround for streaming services.

Over the last few years, we’ve seen shows and movies like Lupin, Squid Game, Fauda, Dark, or Bordertown climb the charts on Netflix and become blockbuster successes. Last year 97% of Netflix subscribers watched at least 1 foreign language title. Similar dynamics are starting to emerge on the other streaming platforms and likely will only continue to grow. I know it’s quite controversial, but I am team dubbing all the way. I am always multitasking so when I’m watching a show, I’m also on my computer doing work or writing this newsletter. I’m a big fan of foreign shows but I struggle to read the subtitles and then end up missing a good chunk of the plot. Given the number of Americans now watching international shows and the very large existing pool of people outside the US who watch American TV and film, a company could focus on premium dubbing services and partner with the streaming networks. Hire top talent, treat dubbing as a craft in and of itself, and make the product 10x better than what exists today. The company can end up looking somewhat like CAA (Creative Artist Agency) where they focus on talent and match them with the right shows and movies.

3. Financial Literacy App

While there is no single definition for financial literacy, it is broadly defined as whether an individual has the ability to understand and effectively use various financial concepts, including personal financial management, budgeting, and investing. Only around half of the US adult population has basic financial literacy which leaves a lot of room for improvement. The statistics also skew heavily male and from higher income populations. Over 2/3 of adults understand the basics of mortgages and interest rates but when you start moving into areas like inflation, risk, investing, and compound interest, the numbers drop precipitously. When you start to add in more complex topics like options trading or now crypto, my guess is we get into the low single-digit percentages of people who actually have competency.

I personally find it horrible that the majority of states allow kids to graduate high school, let alone college, without ever taking a finance course. While there are many sites like Investopedia that provide a ton of information on pretty much any financial topic, I find them to be overwhelming, hard to navigate, and ultimately not helpful in truly educating since there is no guide that helps you figure out where to start, what to learn next, and breaks it down in simple, bite-sized chunks. Superhuman (the buzzy email app popular among tech people) does an amazing job at taking a product that has a ton of shortcuts and specific commands to learn and onboarding users in a way that makes it easy for them to learn slowly, retain the knowledge, and ultimately not churn from the product. In addition to their notorious 1:1 onboardings, they drip users emails that teach single new commands on a daily (at first), and then more gradual cadence. A financial literacy app targeting Millennials and GenZ can onboard users with a personalized quiz that tries to assess knowledge in a variety of financial areas (including crypto) and then creates a customized education journey for that user that is delivered in small chunks via an app. Each day, you could push a notification with a new term or concept to learn that gets the user back in the app. Use simple language and graphics to explain that single concept. Fun games or quizzes can help determine if the user gets it or not and when to move on. Sticking to one thing at a time and using gamification and repetition could dramatically improve learning and retention.

That’s all for today! If you have thoughts, comments, or want to get in touch, find me on Twitter at @ezelby and if you enjoyed this, please share with a friend or two!

~ Elaine