I think there’s an analogy with “purchase fuzzies and utilons separately” here that Levine misses. If you want to be trendy and have a bunch of investment return in the future, it’s probably more efficient to buy those two things from separate sources than to try and get both with a single product.
That’s true, but he’s talking from the company’s side. If the target market are those that wouldn’t invest at all, then the company could be providing real value overall.
I wouldn’t use such a company, of course; but the target demo is not “people who think logically about investments unless they get fuzzies”.
His argument is
Let people spend their extra cash however they want
This company seems likely to be a net utility plus for society
The fact that its users are still irrational seems irrelevant then, and it’s reminding me of the whole “Copenhagen ethics” post (to make the analogy explicit, the company is being blamed for the fact that its users aren’t perfect, even though they’re better off than without the company.
I think it’s legitimate to criticise a company for pretending to sell utilons when it isn’t. Yes, this company may well be a better use of your money than Taylor Swift tickets. But Taylor Swift isn’t marketed as an investment.
They’re selling hedons, which factor into people’s utility functions.
I’d also point to
Stash, which is going after younger and less informed investors, instead sees it as its mission to get people to start putting away some amount of money in to the market and then get them into a more optimized portfolio over time.
“We’re going to be able to provide really solid advice around their portfolio around making smarter investor habits,” Robinson said. And hopefully, for them, that’s what young people believe in, like, and want.
That doesn’t seem so objectionable. If they’re attracting people who wouldn’t be investing otherwise, that’s a gain.
Also, do you have examples of their marketing that you think are inaccurate?
I think there’s an analogy with “purchase fuzzies and utilons separately” here that Levine misses. If you want to be trendy and have a bunch of investment return in the future, it’s probably more efficient to buy those two things from separate sources than to try and get both with a single product.
That’s true, but he’s talking from the company’s side. If the target market are those that wouldn’t invest at all, then the company could be providing real value overall.
I wouldn’t use such a company, of course; but the target demo is not “people who think logically about investments unless they get fuzzies”.
His argument is
Let people spend their extra cash however they want
This company seems likely to be a net utility plus for society
The fact that its users are still irrational seems irrelevant then, and it’s reminding me of the whole “Copenhagen ethics” post (to make the analogy explicit, the company is being blamed for the fact that its users aren’t perfect, even though they’re better off than without the company.
I think it’s legitimate to criticise a company for pretending to sell utilons when it isn’t. Yes, this company may well be a better use of your money than Taylor Swift tickets. But Taylor Swift isn’t marketed as an investment.
They’re selling hedons, which factor into people’s utility functions.
I’d also point to
That doesn’t seem so objectionable. If they’re attracting people who wouldn’t be investing otherwise, that’s a gain.
Also, do you have examples of their marketing that you think are inaccurate?