Welcome to redesign mobile

1 Jul

We have built a great team to launch redesign mobile.

We are focused on big ideas that can change the world. We are also huge fans of great design.

In June, we had our first recruiting week.

Stay tuned for more.

In the meantime, follow @rakeshlobster@cdm57_2000@saranordmann, @vmarks.

redesignQuiz: Why is the back of the subway stairs protected with an enclosure?

25 Jul

The back side of the staircase

I take the subway every day, both out of necessity and because I love public transportation. The backside of the staircase in this subway station has a metal enclosure around it–what purpose does it serve? (Hint–the answer is not specific to this location.

Answer here.

redesignAnswer: The most fundamental flaw in @FICO credit scoring

25 Jul

Imagine two borrowers.

Borrower 1

  • Has a $20,000 credit limit on 1 card.
  • Is using $5,000 of that credit limit.
  • Makes $25,000 a year.
  • Has no assets to speak of; essentially a net worth of $0.
  • Has a mortgage and a car loan.

Borrower 2

  • Has a $7,500 credit limit on 1 card.
  • Is using $5,000 of that credit limit.
  • Makes $250,000 a year.
  • Has $300,000 in liquid assets.
  • Paid cash for car; mortgage is paid off.

Who is the better credit risk? Most humans would say borrower 2.

But the FICO scoring model would say borrower 1.

The fundamental flaw in FICO is that it doesn’t take into account the income or assets of the borrower. It focuses on things like credit utilization, recent inquiries, etc. Someone who makes $500,000 looking for a $25,000 line of credit is more likely to be able to repay that loan than someone who makes $30,000.

The FICO model has many, many flaws. Another significant one is that it often creates scenarios where doing the economically optimal thing reduces your FICO score. We’ll cover that in a later quiz.

My favorite answer to this quiz was:

they let Smedley influence credit denials to top tier CEO’s. the lies keep spreading even deep into financial institution models. i bet FICO will still let David Marcus have a First Progress secured credit card – Anuj hasn’t moved that deep!

redesignAnswer: If two 12-packs of Diet Pepsi cost $6.98, how much does one cost?

24 Jul

Like many marketing and pricing questions, this one doesn’t have a “right” answer. It depends on the philosophy of the company and what you’re trying to achieve.

Here, you’re balancing the consumer desire for “fairness” with the desire to maximize either revenue or margin.

The “fair” answer is $3.49, which is exactly half of the cost for two. The revenue maximization answer is $6.97, because it basically forces everyone to buy two.

There are other considerations, too:

  • Will you look like you’re forcing consumers into bad choices? Especially with health concerns, you might look dickish to regulators. A great example of this is when McDonald’s offered 1 pie for 99 cents and two pies for $1. This played into the notion that McDonald’s wants you to eat poorly. Bad for PR.
  • CPGs like PepsiCo offer a wide range of marketing incentives depending on volume.

In general, I find that stores like Target tend toward the “fair” end of the spectrum in unit pricing. Drug stores such as, Walgreen’s and CVS, and C-stores, like 7-11, tend toward the revenue maximization.

The picture in the question was taken at a 7-11. The price for two was $6.98. The price for one was “up to $5.99″ on the sign. I didn’t try to buy a single unit just to see what the actual price was.

photo (7)

redesignAnswer: A small change lets @penfed make a lot more money on credit cards

22 Jul

The question: why did PenFed send me a new Visa without asking?

photo (5)

 

The key to this puzzle is noticing the different words below Visa. In one case, it is “Platinum”. In another it’s “Signature.”

The interchange rates for Signature cards are substantially higher than for Platinum cards. The issuing bank can make a lot more on transactions simply by “upgrading” the customer to Signature. This is virtually no cost, aside from re-issuing the cards. There are a bunch of services that come with Signature status (like concierge), but these are low-use services of marginal value.

For people in the payments industry, this should be an easy-to-moderate puzzle. (1 person in the industry answered correctly.) For people outside of payments, this was a hard puzzle.

A few things that came up a lot in the answers:

  • Because Signature has the ability to charge above the limit people might be inclined to charge more. But the no preset spending limit thing is an attempt to copy AmEx cards. It’s also mostly marketing — you rarely get to charge much more.
  • Some others said that the lack of raised numbers is a security feature and the reason for re-issuance. It’s a marginal benefit and not something that banks would not spend money to re-issue cards en masse for.

redesignAnswer: The easiest, most productive way to improve @Uber screen is…

7 Jul

… to add the color of the vehicle.

Having the picture of the driver, type of vehicle or license plate number isn’t useful when you’re trying to spot the car from a block and a half way.

You can see color from a block and a half or two blocks. (Depending on the size of the blocks, of course.) If you’re well versed in vehicle models, you might be able to see it from half a block or a block. (Unless it’s a Prius, of which there are many.) You certainly can’t read the license plate until the driver is a few feet away.

The driver’s picture is useless until the driver is right in front of you. Maybe when the driver is within 10-20 feet, the map and the vehicle info zooms into a picture of the driver.

Putting the color of the vehicle would be a huge improvement.

It would make it easer:

  • For passengers to find their driver.
  • Get passengers to hold their phone out or otherwise signal the driver.

It would also prevent incidents like what happened to me on Sunday — the driver sped past me at at least 30 mph. And then backed up several hundred feet in one-way traffic. Clearly unacceptable in my book.

redesignQuiz: What’s the easiest, most productive way to improve this @uber screen?

7 Jul

Difficulty: Moderate. Sam got it in about 15 seconds, but she is brilliant.

One small change to this screen would greatly enhance this Uber experience. What is it?

Uber screen

redesignQuiz: What is this object?

3 Jul

Difficulty: Medium

photo (3)

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