A rare situation where everyone feels like they came out ahead. The us govt gets to say they clawed back 7bn in taxes. And rentec gets to keep the gains from having invested the 7bn for close to a decade at their absurdly high rate of return. Smart!
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Does anyone understand what goes into Ubers sales and marketing expense? It appears they are spending roughly 500mm a quarter on this line item which is enough to eat up most of their entire gross profit. Are their high Sales and marketing costs a function of their high driver churn?
I'd be shocked if RH can eventually launch this product in any form. People on HN seem to think its a marketing issue, but it isn't. The problem with the product is much deeper.
The core issue is that there is no way right now to provide savers with a 3% risk free interest rate. 1 year treasuries for e.g are at a 2.7% yield and that assumes you lock up your money for a year. Basically, their "novel" idea was to supplement the rate they would theoretically be getting from investing your money in t-bills with interchange revenue. But the interchange revenue wouldn't be a sure thing. It depends on the behavior of the customer. This in turn means that they would have to just pay depositors out from their VC money until they attract that type of customer that could support their interchange revenue assumptions.
There is a good reason that ideas like this are strictly regulated. If I could just set up a company and promise main street investors a guaranteed return based on my rosy view of the world, a lot of people could end up hurt. I'd be shocked if the product, after they finally launch it, offers any of the features that attracted people to the offering in the first place.