Uri Pomerantz

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Public.com: One simple UX choice. A massive behavioral finance opportunity.

Posted on March 11, 2021 by uripomerantz

Public recently announced a massive new funding, and along with it, a commitment to drop payment for order flow.

This is a bold decision and sets Public apart from Robinhood and most other brokers, who generate significant revenue from payment for order flow.

Instead, Public will rely on tips from its customers to generate some of its revenue.

The key to making this work is setting smart UX defaults.

More specifically – Public will generate significantly more revenue by calculating a standard tip, auto-populating this for the user, and then requiring the user to “opt out” by changing or removing the tip amount.

This tiny UX decision – while seemingly insignificant – will have a massive impact on the feature’s success.

Why? The 401(k) industry has proven this out over many years, through the work of Shlomo Ben Artzi’s “Save More Tomorrow” research.

More specifically, smart defaults and automatic enrollment cause massive increases in 401(k) plan participation and total savings. Assuming a $100k income and typical 401(k) plan, by some estimates this could amount to over $400,000 in additional retirement savings.

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Source: James Choi, Harvard Economics, et al: “Plan Designs and 401(k) Savings Outcomes”

Public has a great opportunity to align itself toward the best interest of its customers and to build a great revenue stream in the process. 

About

I’m the co-founder and CEO of Local – a tech startup pioneering the concept of group buying and credit, starting in LatAm.

To learn more drop us a note at careers@mercadolocal.com

I previously worked in venture capital as a Venture Partner with Jackson Square Ventures.

Throughout my career, I’ve worked in fintech and entrepreneurship for two decades – as a founder and at Fortune 500 companies. 

As a founder, I’ve built a startup acquired by a Fortune 500 company (John Hancock), built a startup with the parent company (Twine), and founded a microfinance organization (Jozoor Microfinance).

With Fortune 500 companies, I’ve developed strategy (McKinsey), led strategic partnerships and new ventures (John Hancock), and in engineering and business development (Microsoft).

I studied at Stanford (symbolic systems and MBA) and Harvard (masters in international economic development).

All views are my own.

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