Inside FICO and the Credit Bureau Cartel, Apprenticeship Steps, and Entrepreneurship Insights
Weekender #2: Exploring the Dynamics of Credit Reporting, Steps to Effective Learning, and Insights from Successful Entrepreneurs
Welcome to the 3,000+ fellow entrepreneurs, business enthusiasts, and subscribers! This week, we're diving deep into four key insights that will ignite your entrepreneurial spirit. From credit bureaus to mastery, from the realities of startup life to the essence of entrepreneurship, we've got a treasure trove of wisdom to share.
A small ask: If you liked this piece, I’d be grateful if you’d consider tapping the ♥️ above! It helps us understand which pieces you like best and supports our growth. If you are not interested please unsubscribe.
🌟 This Week's Big Idea: The Prestige-Cash Paradox
Some people will tell you that if you’re ever prestige rich but cash poor, get out as fast as you can. That status is as fleeting as a tweet. Reputation, attention, audience are only as valuable as what you can convert them into — money or opportunity. — Anu Aluru, The Prestige Prosperity Gap
This quote resonated deeply with me this week. In a recent conversation with a fellow founder, we discussed the harsh realities of startup life in 2024: the grind, the challenges, and yes, the often-precarious financial situation many founders find themselves in.
My Take: While prestige can open doors, it doesn't pay the bills. As founders, we must constantly balance building our reputation with creating tangible value. Have you faced this dilemma? How do you navigate it? Share your thoughts in the comments!
💡 Four Key Insights for Entrepreneurs
1. The Credit Bureau Cartel: More Than Meets the Eye
In his newsletter Big, Matt Stoller, who I have referenced multiple times, recently unpacked the monopoly of FICO and the credit bureau cartel. As someone deeply involved in the data and financial services space, this piece was eye-opening.
Key Takeaways:
The lack of competition in the mortgage industry is staggering. The FICO tax is a real thing and they have been able to increase pricing during a high-interest rate mortgage market.
Equifax, Experian, and TransUnion have a toll on nearly every large financial transaction in the US.
This monopoly affects not just consumers, but also startups trying to innovate in the financial space.
My Perspective: Understanding these industry dynamics is crucial for any entrepreneur in the fintech space. It's not just about building a great product; it's about navigating a complex, entrenched system. How might we, as innovators, create change within such a system?
2. Mastering the Art of Apprenticeship
I've been diving into Robert Greene's Mastery, and his framework for apprenticeship has been a game-changer for how I think about skill development.
Greene's Three Steps to Apprenticeship:
Deep Observation (Passive Mode): Research and information gathering.
Skills Acquisition (Practice Mode): The tedious but necessary skill-building phase.
Experimentation (Active Mode): Putting skills to the test in the real world.
My Experience: I've found this framework incredibly relevant in my entrepreneurial journey and honestly I wish I read this book ten years ago when I started my journey. Whether it's learning to write compelling newsletters or mastering the art of fundraising, these stages ring true. The key is persistence through the "boulder-pushing" phase of skill acquisition.
Question for You: Where are you in your apprenticeship journey? What skill are you currently mastering?
3. The Spoon: Embracing the Grind
Scott Galloway recently shared a powerful metaphor on the MoneyWise podcast that he calls "The Spoon." Here's the gist:
You need to get out a big spoon and be willing to eat shit... When you are an entrepreneur, you've got to call people and ask for money. You've got to call people who don't want to work with you and convince them to come to work with you... And here's the thing, 99% of people are not willing to do that.
My Reflection: This resonates deeply with my experience. Entrepreneurship often means doing the uncomfortable, the tedious, the downright unpleasant. But it's this willingness to "eat shit" that often separates successful entrepreneurs from the rest.
Challenge: What's your "big spoon" moment?
Share a time when you had to push through discomfort for your business.
4. The Power of Persistence
Tying all these insights together, one theme emerges: persistence. Whether it's navigating the prestige-cash paradox, understanding complex industry dynamics, mastering new skills, or embracing the entrepreneurial grind, the ability to persist in the face of challenges is crucial.
My Mantra: Persistence doesn't guarantee success, but it's a prerequisite for it.
Introducing First Meeting AI….
Launch Your AI Product with Confidence
Struggling to launch your AI product without a large customer base? Our Launch Plan is designed for you:
5 monthly AI-analyzed pitch reviews by industry leaders
10 warm introductions to mid-market and Fortune 500 companies
Expert call with a decision-maker in your industry
Start your AI success journey today!
Streamline Your Verification Process
For businesses needing reliable, high-volume verification services, our Business Plan offers:
Up to 1,000 verifications per month
Flexible API integration
Top-notch security and consent flows
Boost your efficiency and verify with confidence!
Further Reading:
Anu Aluru: The Prestige Prosperity Gap
Matt Stoller: Inside FICO and the Credit Bureau Cartel
Robert Greene: Mastery
Scott Galloway on MoneyWise Podcast
🔗 Stay Connected
Subscribe to the ModernTax Monthly Newsletter
Coming Soon: Exclusive course for Founders. Complete the survey for early access!
Thank you for joining me on this entrepreneurial journey. Your engagement helps shape this newsletter – don't forget to tap that ♥️ if you enjoyed this edition!
Until next time, keep pushing forward!
Matt
P.S. What topic would you like to see covered in the next newsletter? Reply and let me know!