Can Apple or Amazon become full stack banks?

In a blog post titled Full Stack Startups, Chris Dixon wrote:

Suppose you develop a new technology that is valuable to some industry. The old approach was to sell or license your technology to existing companies. The new approach is to build a complete, end-to-end product or service that bypasses existing companies. Prominent examples of this full stack approach include Uber, Tesla, and Netflix. Most of these companies had partial stack antecedents that either failed or ended up being relatively small businesses. The problems with the partial stack approach include: 1) bad product experience; 2) cultural resistance to new technologies; and 3) unfavorable economics.

The full stack approach lets you bypass industry incumbents, completely control the customer experience, and capture a greater portion of the economic benefits you provide. The challenge is you need to get good at many different things. The good news is that if you can pull this off, it is very hard for competitors to replicate so many interlocking pieces.”

Most Fintech Startups are Partial Stack

Dixon’s articulation of ‘full stack” versus “partial stack” startups helps explain why so many fintech startups–many of whom claim to be disruptive–are anything but disruptive. Plain and simple, they’re partial stack companies.

 

continue reading »