People don't understand how certain things function

I've observed that a lot of people do not understand how some things work. Take it for an example a micro-dopler sensor, which is an ordinary radar to me that analyzes changing electromagnetic waves and taking them at STFT through an RF oscillator an antenna and a mixer. To another person its just a little circuit or a box or as a funnier example that I saw on rick and morty just springs and gears.

Same could apply to anything really. Some people just don't understand the global consumer motion and how it directly affects their products. They see the object, but not the machinery behind the object.

A smartphone is semiconductor fabrication, logistics, intellectual property, energy consumption, labor markets, software ecosystems, monetary policy, consumer demand, geopolitics, and an enormous number of tiny engineering decisions compressed into something that fits inside your hand. People understandably don't think about any of this when they pick it up.

The world has become too complicated for any individual to maintain a complete mental model of it. Instead, we develop abstractions.

But I think there is an interesting difference between using an abstraction and believing the abstraction is reality.

A network of incentives, institutions, credit, liquidity, trust and regulation that you can see through the revenue that you're receiving is what paints a better picture of the demand.

A neobank for example on the outside, it is an application. There is an app, a card, some wallets, transfers, perhaps an exchange, perhaps a business account. You can measure users, transactions, deposits, revenue and a dozen other metrics.

The product exists inside a much larger system of consumer behavior and financial incentives.

A customer does not wake up wanting to use a neobank. They have some underlying reason for moving money. They get paid, receive money from another country, pay a supplier, buy something, save, borrow, speculate, exchange currencies, or simply try to avoid some BS imposed by the traditional financial system.

If you do not understand the behavior, you can build an incredibly sophisticated mechanism for something people do not particularly want. A feature can be perfectly engineered and still have almost no economic value.

This is why I increasingly think that revenue is not simply a number on a financial statement. It is a measurement of a system.

Revenue is the visible output of millions of individual decisions.

Someone decided to download the application. Someone decided to trust it with their money. Someone decided to make a transaction. Someone decided to use the card instead of another card. Someone decided to receive their salary through it. Someone decided not to leave.

Those decisions are the actual machinery producing the revenue, well no shit.

And if the revenue is weak, adding another feature to the application does not necessarily fix the problem.

Consumer banking is one of the worst places to fight if you do not already have enormous distribution. You spend money convincing someone to download an application, verify themselves, trust you with their money, move their salary, change their spending habits, and then hopefully generate enough transactions to justify the cost of acquiring them.

And for what?

You are competing for the same customer who already has a bank account, a card, a payment app, and perhaps three other financial applications.

If you actually focus on the problems you can see that a neobank for instance solves the problems of FX, well maybe start selling payroll infrastructure to companies that struggle with FX for their employee's abroad would lead to stop spending $50 on a Somali scammer who can not pass the KYC.

That is a much more interesting business than trying to convince another 22-year-old that they need a prettier banking application.

That's what happens if you go one level deeper, user -> app -> transaction -> revenue.

A micro-Doppler sensor isn't fundamentally a little PCB with an antenna. It's a way of extracting information from changes in electromagnetic radiation. The physical device is just the implementation.

Likewise an app containing wallets, cards, accounts and payment features is a system for detecting, routing, and monetizing flows of economic value. A single salary through that bank could trigger an effect that can be traced e.g.

employer -> payroll payroll -> employee employee -> family abroad employee -> merchant employee -> landlord employee -> FX conversion employee -> savings employee -> another country

And every time the money crosses an institution, currency, jurisdiction, or financial product, there is potentially another economic layer.

So how do we become unavoidable infrastructure in a specific economic flow? Because once you're embedded in the flow, you don't need to manufacture demand. I think bad fintech tries to create financial behavior. Great fintech inserts itself into existing financial behavior.

Now leading with my prediction framework, I bet in 10 years:

Humans will still want things.

They will still compete.

They will still get sick.

They will still have limited time.

They will still seek status.

They will still form relationships.

They will still take risks.

They will still want to make money.

They will still try to avoid losing money.

They will still be afraid of death.

They will still be susceptible to persuasion.

You can easily derive industries and usecases of technology within these frameworks, now the task is to be positioned within this flow.

The true alpha of course lies in short-term realistic predictions that are obfuscated and actionable. Prediction markets made a lot of things that were not actionable actually directly actionable. If you know the alpha bet on that shit. Well of course that violates obfuscation. But for instance if you knew that in 15 months an X market would introduce a Y regulation that has in the past led from Z event occurring in the T market it is quite directly actionable and hopefully obfuscated enough for it to be the alpha that you're seeking. The real skill is finding the edges that remain partially illegible to the median participant for long enough at a general view at the very least.

Some guy in a big firm gets paid 7 figures to calculate exact temperature of a fraction of the path from origin A to destination B of an oil tanker to perhaps conclude that more volatile hydrocarbons in vapor phase will be released. So if a 2 million barrel VLCC is predicted to experience 0.1% instead of whatever the average was e.g. 0.05% loss due to the heat that's a 2,000 barrels of oil lost instead of the predicted 1,000 barrels which is a $50,000 loss instead of the $25,000 loss for a single VLCC on that path that day that time by the time it arrives at the destination B.

And unfortunately people who think that it's just a fucking box full of gears and springs won't be able to do jackshit in assuming the right position and setting the right infrastructure with the right target and abusing the knowledge of the alpha.