From disrupting tech to disrupting finance, Apple is leading the way

Apple has been at the leading edge of the consumer technology industry for decades, earning itself a reputation for creating the “new normal” in product areas ranging from personal computers to mobile devices. This week Apple announced a foray into a new category: credit cards. Once again Apple has positioned itself as raising the standards of what consumers can expect in convenience, quality, and security – the Apple trifecta.

Apple has long branded itself as a prescient company, one that knows how to “skate to where the puck is going, not to where it is” – a Wayne Gretzky quote Steve Jobs loved to borrow. This meant defining what consumers want for them more than with them. In the early 2000s, Apple was the first to do away with CD ROMs in favor of USB drives. Consumers transitioned with external CD drives and soon did not miss massive CDs at all – and PCs quickly followed suit. In the last ten years, having a sleek phone that responds to gestures via a touch screen became a standard rather than a luxury, also thanks to Apple’s influence. And now, in a new sector, notorious for high fees, high security risk, and general opacity, Apple is busting up the old model with a clean, user-centric option: Apple is brining virtual credit cards to consumer finance.

Apple has cleaned up several pain points for consumers with the Apple Card in one fell swoop: complexity, hidden costs, and vulnerability to theft. Standard credit cards offer complex points systems, with varying thresholds for earning and redeeming benefits that require a fair bit of math to evaluate the value of. Apple provides a simple, real-time cash back system based on your spending. It also removed ATM and other fees, and is entirely transparent about interest rates. It promotes consumer health by visualizing the distribution of your weekly spend. And because it produces a randomized card number for each transaction, there is little risk of card theft.

Many companies have tried to provide these services in a piecemeal fashion to consumers. While Apple is increasing convenience by bundling all of these services together, the real disruption to the industry is Apple’s challenge to the standard business model of countless fees and selling consumer data. While you may love Mint’s free breakdown of your spending and credit status, you may not love that they package and sell your data to hedge funds. Simple, a banking and budgeting tool similar to Apple Card’s financial management tools, helps consumers contain their spending with recommended spending limits – but it does so at a premium to other banks. Apple is offering more for less: a comprehensive service that doesn’t cost you a pound of flesh or your privacy. Like Apple’s aesthetic, its revenue model is clean, based on simple, low transaction fees.

Much like the CD ROM sunset, there will be a period of transition. For example, hotels will have to figure out how to charge a reservation across multiple card numbers, from the time of booking to the time of checkout. Websites requiring the last four digits of your credit card to validate a transaction will also pose a problem. Yet the alternative is the wildly complex fee system and data selling of modern banks that we’ve all grown to know and hate, limited only by regulatory oversight. Surely Apple’s full service, low-fee offering will be refreshing to consumers. As a non-bank, Apple is unencumbered by bad business model norms, and holds the potential to help the average American reduce its significant debt. With such aligned interests with consumers, Apple’s competitive offering is likely going to create a forcing function for traditional banks to stop milking consumers for all they can and instead pushing them to provide real value to consumers, regardless of income. Apple is well positioned to win consumer confidence and, once again, define a new normal that is higher quality than the dated standard credit card model.


The blurring lines between consumer retail and healthcare: the case of Mt. Siani

This winter, while perusing the subway marketing — which offers the longest impression a marketer can hope to achieve with New Yorkers these days — I noticed something new on the train walls. It wasn’t an ad for a one-year-old startup offering suitcases for your wanderlust or bed linens for the affordable luxury metropolitan market. It was something else positioned as cutting edge and innovative — the kind of place you’d want to work for or buy from. It wasn’t an ad from a snazzy millennial-run company, but from a hundred-and-seventy-year-old, massive hospital. As large companies are being disrupted by innovative start-ups, large hospitals are finding themselves in the same boat, fighting for market share as their primary path to growth. Now even the old hospital guard has decided to try out some new tricks.

Healthcare companies, primarily in the startup space, have been behaving more and more like CPG start-ups over the past few years. If tracked by subway ads alone*, one could say it started with Capsule, the prescription delivery service. Capsule has helped lead the direct-to-consumer movement in healthcare products. Followers in their footsteps include Hims, Inc. a “health and preventative self-care” company providing an erectile dysfunction product, and Hers, Inc., a birth control provider which advertises “without accessibility, there are no solutions.” Their ads are now plastered on the walls of West 4th St. station and the turnstiles of Times Square.

It appears that large hospitals like Mt. Sinai are feeling just as exposed to and inspired by competing startups as large CPG companies have been over the last decade. Taking a page from the consumer marketing playbook, Mt. Sinai is working to capture mindshare with subway ads. Notably, their ad featured services for the blind — in black-and-white print. You could guess a pragmatic motive, marketing to caretakers of the visually impaired. But with their other patient attraction efforts, it’s more likely they are trying to tap a new market – the millennial. Mt. Sinai is also partnering with a strong brand to win in another market segment: the male market. Through its recent partnership with Man Cave Health, Mt. Sinai is leveraging their unique market positioning – a sports theme – to attract men to it’s healthcare services – in this case prostate health education and care.

There’s another market local practitioners have noted Mt. Sinai’s active sales and marketing efforts in – the elderly poor, with Medicare and Medicaid benefits. And according to independent doctor’s, rather than posters and upgraded, sports-themed waiting rooms, they have used their own nurses and doctors to drive patient conversion. Several private specialists in Harlem have noticed a number of patients leaving for Mt. Sinai, sometimes at their front door. “St. Jude’s, a Mt. Sinai affiliate, used to park its van in front of our entrance,” one doctor noted, “and offered services to my patients.” Another doctor commented, “My patient was surprised when I was no longer covered by their insurance. It turned out on her last hospital visit, her doctor recommended switching from one Healthfirst insurance to the Mt. Sinai Healthfirst insurance. Now only Mt. Sinai services are in-network for her. She didn’t realize that was happening.” Mt. Sinai, it seems, is behaving like any large, mature company. To grow, it must reduce costs and take on new markets. Unfortunately, that means healthcare continues to become more of a business, where hospitals may focus on bringing in patients more than quality of care.

The business of health today increasingly resembles consumer retail, with a growing focus on consumer appeal and patient attraction and retention. But not all aspects of healthcare delivery benefit from business thinking. Perhaps consumers have come to expect slick marketing campaigns in other realms, but personally, I don’t want to be marketed to; I want quality care delivered.

*The measure of New York famous. Includes Dr. Zizmor, but also fast growth startups like FIGS scrubs.