#this got very long in the interest of clarity and at the expense of brevity

[maglors-anion-gap]

I've been mulling something over lately. It's almost a given that one will find questionable elements to older texts; some are overt and some sneaky even to the modern eye. There are, undeniably, many such elements in Tolkien's work, and they cause a lot of trouble for marginalized readers and for fan creators grappling with it in relation to meta and fic.

That the Silmarillion is a largely-omniscient myth-text narrative, composed from a variety of drafts, the discarded versions of which we also have access to, further compounds the issue. Who has read what? Who samples from what? How deeply do some themes pervade both the text and the fandom? There are discarded portions that raise eyebrows (and thankfully, were edited out at some point). However, there are moments where those discarded portions shine through the cracks in exposition, dialogue and reasoning left in the official composite text by the sweeping style of the narrative. The composite can be seen to still rest on certain narrative and valuational presuppositions of Tolkien's - presuppositions he assumes the reader to share.

In the text, of course some have value or more of it, some have honor or more of it, some overcome darkness while some naturally succumb to it. The narrative certainty in these characterizations rests on these lurking (racist, antisemitic, ableist) presuppositions, and in some cases handwaves any deeper exploration or explanation.

There seem to be two fan solutions to reckoning with a cross-draft-consistent bigoted theme. 1) Write meta that explores its traits and manifestations in the text and syncretizes canon assertions with authorial biases, and/or fic that directly addresses the in-text impact of these biases. 2) With an awareness of the bigoted themes, create headcanons, new verses, and fic that subverts, rewrites, or negates the original theme. The former refuses to allow the presuppositions of the text to become the presuppositions of the fandom. The latter allows (particularly marginalized) fans generative space, fodder to create anew, breathing room, and expanded perspectives. Different functions, parallel purposes, both important.

Because it's fandom, and it's large, and our idea of on-the-side fun and not our job or our marriage, we do not have the same preferences for how we go about dealing with these textual issues or the cohesive pressure to be like minded (even as we recognize the need to deal with them). One person's way of reckoning with textual biases or gaps may strike another as reaching too far from canon to be of appeal. This is a common reaction to headcanons, canon divergences and alternate universes, and crack or humor, particularly in the tolkien fandom. However, personal preference is not a basis for asserting that someone is reading the text wrong, especially when the issue at hand is one of reparative analysis and creation.

I am drawn to the issue of the Petty Dwarves. Most information on them comes in pieces from disparate drafts and satellite texts. Some information was erased entirely from the published Silmarillion. However, many people have noted the continual issues in Tolkien's treatment of the Dwarves, the iterative issues with his treatment of the Petty Dwarves, and rightly begin to link the two, plumb them down to their connecting factor, and begin excavating the silences in the narrative which Tolkien allows to be filled by presupposition.

I have found that people who cite personal preference may bring up canon elements to excuse or disprove certain readings; I would argue that the canon elements cited are less often exculpatory of our faves and more often proof of deeper biases, proof of biased presupposition as a stand in for rich characterization. Let me explain. We hear from the Sindar that the Petty Dwarves are reclusive, aggressive, and territorial (on this they base their initial assessment that the Petty Dwarves are two-legged animals for hunting). We hear from the Dwarves who cross the Blue Mountains later that the Petty Dwarves descend from expelled Dwarves who were the smallest, weakest, most conniving and self-serving, and violent persons. At one point, Tolkien describes the Petty Dwarves as older residents in Beleriand than both the Sindar and the eastern Dwarves, and the original inhabitants of Nargothrond, and it is them who Finrod hires to finish its construction. Tolkien describes the Petty Dwarves as agreeing to do this under false and duplicitous pretenses (for what reason, he doesn't say); later, Mim tries to kill Finrod (again, the narrative is sparse on motive), and Finrod alternately outs the Petty Dwarves from Nargothrond or pays the other Dwarves to turn them out. Tolkien evidently means for this to paint a picture of a group of people who are inherently wicked, cannot help but be so, are hated and pitied (for one does not preclude the other, and all good people should pity bad people, after all), and bring about their own diminishment. There's the in-universe justification for it.

I mean to explore why it is not satisfactory to leave the matter alone at "the Petty Dwarves brought about their own downfall." To begin, why does Tolkien rely on the characteristics he does when describing both the Petty Dwarves and Dwarves in general? These are multiple pieces of bigotry at play, chiefly some old antisemitic stereotypes (which have already been unpacked at length and by Jewish fans who are more knowledgable than I; if other have more to add, please do so). But I will give it a try.

First, Tolkien never pins down why the Petty Dwarves are expelled westward, only vaguely pinning it on their inborn characteristics. One old piece of antisemitism held that Jewish people were smaller and weaker than gentiles; Jewish men are still held to be less masculine, which can be traced from a medieval supposition that Jewish men menstruated. Coupled with the ableism of expelling the stunted and the inutile, Tolkien describes here a sort of itinerant and pitiful scrounger who does not belong in a society to which it cannot contribute and into which it cannot assimilate. The concept of vagrancy and the homelandlessness (consider the antisemitism in the concept of the cosmopolitan Jew, and Tolkien's deliberate linkage of Dwarves and losing their homes), is further connected to antisemitism by the Petty Dwarves being duplicitous, self-serving backstabbers toward Finrod, who Tolkien sets up as innocent and trusting enough to sleep unguarded near Mim, further juxtaposing the two. Furthermore, the gentile assertion that Jewish people are violent is escalated to accusations of blood libel and sorcery. Tolkien may not go that far, but he ties this predisposition for violence into the passage about Nargothrond, and their territorial defensiveness and their aggression toward the Sindar. Jewish people have long been stereotyped as insular, traditional, and cold to outsiders (consider the gentile furor over "goy"). All of this passes under the surface of the text - where Tolkien does not elaborate, this rises to the surface to color the reading.

When fans identify these elements in the text (and realize they are very similar to Tolkien's handling of the Dwarvish sacking of Doriath, or gold sickness, or Dwarvish isolationism as a whole), they begin to investigate the places they show up in text. The meta they write must try to syncretize the canon of what is said with the authorial context applied in the characterization. The fic they write must try to fill in lazy gaps left, and to imagine and then confront the missing exigence to the conflict while refuting the antisemitic presuppositions upon which the text relies in place of characterization.

Because it's fanwork, some people may have concepts that you think miss the mark or push further with assertions than you think is logical. However, no one who is in good faith creating, exploring, or trying to remedy the issues of the text, can be accused of using their ideas as a cudgel against canon or against others. Discussion is welcome, when it is conducted in good faith as well.

Relying too heavily on the surface-level assertions of canon to shoot down these musings at times verges upon what I have described above: leaning into the in-world justifications of hierarchy and subjugation to excuse the real-world hierarchies upon which these presuppositions are built. It is not so important how or when the Sindar realized the Petty Dwarves were people: what matters is that Tolkien created a character group, designed to be hated and pitied but never respected, onto whom he mapped real world stereotypes, and set them up in events where these stereotypes lead. It's highly worth considering why we are defending portions of text that are inherently bigoted. The whole broth here is the issue, but people are quibbling over whether they've fished out a potato versus a turnip.

[aion-rsa]

The Secret World of Star Wars Toys and Collectibles

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This article is part of our Collector’s Digest content series powered by:

Want to know something about world of nerdy collectibles? You ask Brian Volk-Weiss, the prolific producer and creator of Netflix’s The Toys That Made Us and A Toy Story Near You, two must-watch documentary series that track the stories of the coolest, rarest, and most valuable toys and collectibles ever made and where to find them.

Volk-Weiss isn’t just a documentarian, though. He’s spent years chasing collector’s items for his own personal collection, and he’s learned a few secrets and heard quite a few stories about the high-stakes world of collectibles along the way.

Star Wars collectibles are of particular interest to Volk-Weiss, who has previously written about the rarest, most expensive Star Wars action figure for Den of Geek. But did you know about the secret Facebook group that deals almost exclusively in precious Star Wars collectibles that sell for six figures? What about the warehouse where sellers who don’t own their own stores keep and sell their prized collectibles?

On a recent Zoom call, Volk-Weiss took us on a trip through the lesser known corners of Star Wars collecting, and even shared his sacred rules when it comes to curating his own collection. Yes, that includes a collectible contingency plan were his house to burn down.

You can check out the interview below. This interview has been lightly edited for clarity and brevity.

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DEN OF GEEK: How did you spend your May the 4th this year?

Brian Volk-Weiss: I am looking at what I already have, praying that some cool stuff gets announced. I mean, that’s usually what I do on the fourth. Well, I mean, before COVID, I’d go to Toys “R” Us, Walmart, and Target and grab whatever gets put out. This year, I ordered an Ahsoka Tano statue, I think about five or six months ago, maybe even more, that I think is supposed to come tomorrow. So if it does, that is exactly how I’ll be spending the fourth, opening that statue that’s long overdue.

You’re not just some creator and producer who works on the idea, but is not invested. You’re in the trenches. In The Toys That Made Us and A Toy Store Near You, you were actually hitting the aisles. You were going to the stores, finding the collectibles.

I try to sell shows that are hobbies of mine, so that a) I’m getting paid to do my hobby, but b) that passion that you need to make your show, because it takes a long time and a lot of work, you really need to be excited about the show to try and do a good job. So yeah, I buy toys. Quite a few.

Is Ahsoka a new favorite character of yours?

Oh, absolutely not. Since the end of [The Clone Wars] season five … I mean, technically, it would have been the end of season four, but really, there’s a moment in the last episode of season five when she resigns from the Jedi Order. I’ve been obsessed with her ever since that moment.

And I have to give myself credit. I knew for over a year before it was announced that Ahsoka was going to be on TV, and I kept my mouth shut. So I’ve known that was coming for a long time. And I kept my mouth shut, Lucasfilm. You should be very proud of me.

Yeah, but by saying that, that now makes me want to try to pull other stuff out of you, because now I’m sure you know about things that are coming down the road.

No, I really don’t. And it’s because of COVID. The reason that I knew about the Ahsoka of it all was I was at Disney or Lucasfilm all the time, and every now and then, you’d hear something. But I kept my mouth shut. Because of COVID, I didn’t have as much access.

So we spoke back in the spring of, well, I guess almost a year ago, for A Toy Store Near You, and if I recall correctly, you said that the Millennium Falcon was your Holy Grail of Star Wars toys?

That’s right. I used to bite my fingernails and my mom told me if I didn’t bite them for a year, she would get it for me. And I stopped. Very hard. Other than quitting smoking, that’s the second hardest thing I’ve ever quit. I’m not even trying to be funny. And I got my Millennium Falcon and proceeded to obliterate it over the next 10 years.

It lasted 10 years? That’s actually pretty good. But that certainly was not your first Star Wars toy?

No, my first. I still have my original R2-D2 and one of my original stormtroopers. I still have those. And in my collection that is absurdly big now, I do believe those are the two old…I have two mini figs from Lego. Those four toys are tied for the oldest toys in my 2000 plus toy collection.

And what is the current status of that stormtrooper and R2?

It’s funny you asked that, because this is crazy. The R2-D2 and one of those mini figs is in my home collection. The stormtrooper and the other mini fig is at a friend of mine’s house in the insane off chance, this will show you how crazy I am, that…I’ve had to evacuate my house twice in the last two years because of fires. If God forbid anything happens to my home here in LA, my two oldest pieces, I have a backup. That’s how crazy I am.

It’s sort of like, whenever the Congress and president gather in Washington, there has to be the designated survivor, right?

These are my toy designated survivors. I’m going to steal that from you. I love that.

We’re pretty close in age. The R2 unit I had, it’s still around, but man, it’s not in great shape. The dome is loose, the sticker is off. And then my stormtrooper, totally yellowed. Is yours the same thing? Or does it actually look good?

My R2’s dome is great. It still makes that super duper weird noise that, we all know how it was made, but it was still kind of weird. But the stickers are very faded. And my stormtrooper, you can tell it’s 40 years old, but it’s not yellow or anything.

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What are the figures that you think people are kind of getting into now? Because obviously, we’re legacy collectors and nerds, we grew up with the first generation of it, but what are the things that people are attaching themselves to now? Anecdotally. As much as you can say.

Ahsoka Tano, all of her stuff, especially because it was made in limited numbers when it came out in the early aughts, as they say, maybe not early aughts, but like 2008 to 2012, there’s an Ahsoka Tano that’s $2000-3000 now. Not a prototype, not a sample, not a paint test. Literally an Ahsoka Tano that was still in the package. That’s two to three grand now. That’s because a lot of the people that are 10 to 20 years behind us, they’re starting to have money. And the same way you and I wanted to start collecting when we got a little money, now they are too.

Is part of that because of the multi-generational component? I guess maybe the question is, what makes Star Wars collectors different than others? I always kind of wonder if it is this sort of multi-generational element to it that’s maybe not present with other franchises or IP.

The main thing about Star Wars collecting that is different than almost any other kind of toy collecting there is, is the amount of people doing it and the amount of data that exists. There are, and I’m making this up, so please, anyone who sees this that’s offended, I am making these numbers up, I don’t know the real numbers, but there are like 10 types of Luke Skywalker New Hope figures with…You need a scanning electron microscope to see the difference in the hair color changes. There is so much data. Oh, that light hair with a freckle on the cheek? Oh, that came from the Taiwan factory. Brownish hair with no freckle? That came from the British factory.

There’s a private Facebook group called Deal or No Deal. It covers all toys. There’s only 3000 members. I mean, I’ve seen stuff sell in the six figures. Very, very high end general toy group. It’s 85% Star Wars. So that’s what makes Star Wars collecting unique compared to any other toy.

You’re saying that the accumulated data continues to unveil other collectibles that we did not know about?

I’ll be honest with you, I’m not trying to be funny or humble, I don’t consider myself a toy expert. I know more about toys than most people, but most people are toy collectors. But I mean, there’s like 10 to 20 Star Wars collectors who have been doing it almost as a full-time job for 20, 25 years. So those 10 to 20 guys, and I think they’re all guys, I mean, they’re probably embarrassed by me talking about Star Wars. So I learned from them…I mean, I could learn one to five new things a week just from knowing those people.

What’s the craziest Star Wars collectible quest you’ve ever heard of? The epic lengths that someone has gone to to pursue an item? Does anything come to mind?

I think Gus Lopez going to Tunisia with a storage container. That’s probably my favorite. I mean, he literally went all around Tunisia to the sets and was buying stuff off the people that own the land. The sets are still there. I went there for my bachelor party and I was there, I think, 10 years after Gus. So what was still there when I was there in 2012, and I think he was there in 2002, approximately…And I’ve seen a lot of his collection. Almost any question you would ask. Like, “What’s the best story?” The answer is Gus Lopez.

And you can get really crazy with the collecting, and sometimes you have to establish rules. I mean, I know I’m fortunate to work a lot of comic-cons, and I’m out there, and I’ve established rules for collecting so I don’t spend too much money or go too crazy. Do you have any rules that you apply to yourself?

Well, number one rule? It must go on display. So I will not buy anything to just go into storage, because if I did that, it theoretically violates my whole reason for toy collecting, which is the objects give me some joy. So if I’m putting it in the garage or a storage shed, it doesn’t give me any joy. This is getting harder and harder for two reasons. One, I now have a lot of “insider knowledge.” So I’m not buying things that I know will depreciate in value. So that’s tough. And then the other thing is, it’s kind of a bad theory because it ends up costing me more money in the long run, because I guarantee you, I will have to buy a new house next year because my collection room is already getting too small. But that’s the first rule. Nothing goes to storage.

My second rule. Have you ever heard of this place called Frank & Son? It’s two full-size warehouses where I think they tore the wall down in between them. And I think Monday to Friday, it’s where toy sellers who don’t own a store keep their stuff, and then they sell it online. On Saturdays, it’s open to the public.

So before COVID, my rule was I would go there only once a year for my birthday. So that’s already a rule, because if I went there more than once a year, we’d be bankrupt and living on the streets. And two, I bring a thousand dollars cash and I leave all my credit cards at home. And by the way, dude, I’ve gone in there and spent it in the first 12 minutes I’ve been in there and basically had to walk around like a jackass for two hours and not buy anything else.

The Star Wars Topps cards have very much been part of the collecting within the Star Wars fandom, and you can display those. Did you have them as a kid? Have you ever collected them as an adult?

I had them as a kid. If I had to guess, I had all of them. Right now in my collection, I have one Star Wars pack. My second favorite character is the aforementioned Ahsoka Tano. My favorite character in all of Star Wars is Return of the Jedi Luke, specifically that. And the only Star Wars cards I have is an unopened pack, it’s probably worth five bucks, and it’s him in Jedi Luke attire.

You are working on so many things. I know you’ll have a new season of Toys That Made Us at some point, I know you’re working on this Gates McFadden Star Trek podcast your company is producing. What else is on the way that you can talk about, man?

There’s a lot of stuff I can’t talk about yet, but two things I can talk about. We’re partnered with Dwayne Johnson and his company, Seven Bucks, and we have a show coming out called Behind the Attraction that’s all about the attractions at the various Disney parks. I can’t say when, but that’s coming out this year.

And then we have another show, which I literally cannot even believe is real, called The Center Seat: 55 Years of Star Trek. We’re making that for History Channel, and to the best of my knowledge, it is the deepest dive documentary about all of Star Trek. I think we’re doing the first documentary ever about the animated series. The first one out ever about Voyager.

And then A Toy Store Near You, which is coming out in June, season three. So I’m pretty excited about 2021.

The post The Secret World of Star Wars Toys and Collectibles appeared first on Den of Geek.

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[shirlleycoyle]

A Roundtable of Hackers Dissects ‘Mr. Robot’ Season 4 Episode 4: ‘File Not Found’

The fourth episode of Mr. Robot’s final season left a lot to be desired, but still gave us a little bit to talk about. We discussed [SPOILERS, obvs] social engineering, audio surveillance, signal jamming, operational security, encrypted chat rooms, and more. (The chat transcript has been edited for brevity, clarity, and chronology.) This week’s team of experts includes:

Emma Best: a former hacker and current journalist and transparency advocate with a specialty in counterintelligence and national security.

Jason Hernandez: Solutions Architect for Bishop Fox, an offensive security firm. He also does research into surveillance technology and has presented work on aerial surveillance.

Harlo Holmes: Director of Digital Security at Freedom of the Press Foundation.

Trammell Hudson: a security researcher who likes to take things apart.

Micah Lee: a technologist with a focus on operational security, source protection, privacy and cryptography, as well as Director of Information Security at The Intercept.

Dark Army Surveillance

Yael: So, uh, how obvious is that white van?

Harlo: I'd just like to say, really appreciate that Audacity hasn't changed in over a decade. Van guy definitely had it open.

Yael: So the best way to get audio surveillance is to put a bug in the actual room and then sit in a white van outside the building?

Jason: Yeah, seems like the kind of wireless microphone setup you can buy at a spy shop.

Harlo: We're seeing some terminal stuff for rtl_tcp, which is SDR (software defined radio) software. So yeah, it's a bug.

Yael: I guess one would think that if you were going to do this, you'd be discreet, so maybe it’d be less obvious breaking and entering and hanging out in a blue van or a green van or something. Something other than a white or black van. But maybe the point was for him to know he was being listened to?

Jason: I once had a chat with a DEA agent about surveillance and he said he preferred minivans—"nobody pays attention to minivans."

Emma: If you wanted to be discreet, you wouldn't even break and enter. You don't need to plant bugs inside buildings anymore.

Yael: How would you bug them?

Emma: For Elliot's situation, the window is a perfect vector. It's glass, I'm sure. Dark Army has access to the kinds of lasers and sensors needed to bug the room from that alone.

Yael: It sounded like when the "mic went out" they just had the bug too close to the speaker, but it's really hard to find bugs.

Micah: I think maybe while Elliot was talking, he was starting to jam signals at the same time to cause the Dark Army guy to get out of the van and investigate.

Yael: How do you do that?

Micah: Well, he'd have to know what frequency to jam, which you're right, isn't easy. But he could use an SDR radio himself to do the actual jamming.

Trammell: Maybe he was messing with the antenna. I think he had pulled the bug out from somewhere. It was sitting on the table with the note "they're listening. " So when Darlene came into the room, she saw the note and the bug.

Yael: I thought if he pulled the bug and brought it closer to the recording device, it could make that noise, but not if he left the bug there. And also I don’t know if that's true; I just know it happens sometimes with mics too close to recorders.

Harlo: I want to look at the man pages for that program, because if I recall correctly, the only options supplied were an IP address and a port for listening.

Cyprus Bank Op

Yael: So Darlene said Olivia was not authorized to transfer anything— “all their authentication goes through a proxy and everything else in their domain is read-only.” So they need to break into Virtual Realty. But I didn’t quite get what Virtual Realty was.

Emma: They didn’t say what Virtual Realty is yet. That was dangerously brief surveillance—only one day. Darlene only saw one shift of security officers; you can't generalize schedules off of that. And no prediction for Xmas, really. It's blind faith. Not that they have a choice.

Trammell: What was going on with Darlene’s OpSec? I realize she was venting and planned to erase the voicemail, but screaming the entire plan to the world while standing on the street was a serious WTF.

Harlo: VOICEMAIL. That's our lil OpSec fail. Maybe she’s on coke? Thus the rant? Then she realizes what she said was really really mean…

Trammell: V O I C E M A I L? Even in 2015, that's such a faux pas.

Harlo: LET'S TALK ABOUT OUR CRIMES ON AT&T'S VOICEMAIL PROGRAM. Like, I have never even left carrier metadata between me and my best friends. Because that's why Signal exists.

Emma: The whole thing was very poorly done on Darlene’s part, but realistically so, given the circumstances. They're all cracking, and they're not playing a long game anymore. They know they aren't getting away clean.

Yael: Yeah, I kind of feel like they're careless because they have nothing left to lose.

Emma: Nothing to lose and they HAVE to proceed, it's now or never.

Encrypted Chat

Yael: Do we, uh, want to talk about Dom’s Adium chat room?

Micah: Dom was using Adium as an IRC [Internet Relay Chat] client, but it also used to be a popular Jabber client for Mac that people would use for OTR-encrypted chats. But she was talking to the person on IRC, which doesn't have built-in encryption, and there was no sign of her using OTR in her private messages

Jason: Yeah, I think she connected to Freenode, which has publicly available/searchable chat logs.

Harlo: The screen shows a little lock icon.

Lost in the Woods

Micah: This was very much a 404 File Not Found themed episode. Mr. Robot had this monologue: “Seems like we're always thinking of ourselves when looking for something that's lost. But we never think much about the lost. Whatever, whoever is unable to be found. Whether it’s a set of keys left somewhere and forgotten, a couple guys wandering aimlessly in the woods, or someone who's disappeared inside himself. What if that's what they wanted all along? Not to be found?”

Emma: Can we talk about the attempted social engineering at the gas station and the three different tactics they each used? Desperate and reserved, straightforward and insistent, and finally just snapping and losing his patience.

Yael: I feel like they COULD'VE used some social engineering. She totally would've given them a ride.

Trammell: There was an interesting minor point about what happens in a cashless society when the internet goes down. Always online systems fail in very brittle ways.

Harlo: I kind of like the idea of overusing the term “social engineering.” Like, where does one draw the line between social engineering, and saying-whatever-because-I-just-want-you-to-shut-up?

Yael: WHAT IS THE GODDAMN SHORTCUT?

Trammell: The shortcut was a bit tropy…

Yael: I just have to say that Tyrell telling Elliot he “didn't care” because he was wearing the standard hacker uniform (black hoodie) instead of an overpriced suit really pissed me off. As if everybody in expensive work clothes gives a shit.

Emma: I got the sentiment. I just think it was expressed poorly. To me it was Tyrell talking about how he thought he and Elliot/Mr. Robot were a team. But Elliot was never of that mindset and would never see Tyrell as his equal—which I felt was the other betrayal. Tyrell has always presented himself as someone with technical chops. In his first appearance, there's the bit about him still using Linux and surprising Elliot. But while he's far from incompetent, he's not on Elliot's level. And that realization hurt, along with learning that he didn't get the E-Corp position on his own. It was because of Elliot.

Yael: Oh, did he figure that out?

Emma: I thought he did from the discussion with Elliot, that it's Whiterose’s maneuvering, not him being recognized as valuable. And at this point he knows he's going to die. He's lost everything. His wife is dead, his son is gone…

Yael: I don’t even know what to say about this scene. Even before he got shot. Like… learn some survival skills? You're probably not going to die because it's cold out and you're walking for an hour? Also one of the things they teach in survival schools is "what's going to kill you first." You make decisions based on what will kill you first—so like, yes you might drink possibly contaminated water if the alternative is dying of dehydration. So, like, you don't bleed to death because you're worried about Dark Army at the hospital and how they'd kill you. Also, you're telling me there's no first aid supplies in that van? Like what the fuck.

Emma: The metrics of success are different here than in the usual survival situations. In the survival situations that those schools cover, your ONLY goal is to survive and help your cohorts survive. The remnants of FSociety see it as a struggle to save the world. Survival becomes secondary to success.

Yael: I think it was just badly written for Tyrell to go from "you don't care!" to, like, not caring.

Emma: Definitely a rushed final arc for Tyrell that could’ve been handled and explored better.

A Roundtable of Hackers Dissects ‘Mr. Robot’ Season 4 Episode 4: ‘File Not Found’ syndicated from https://triviaqaweb.wordpress.com/feed/

[ramialkarmi]

'Big banks want to come see us every week': Starling CEO Anne Boden on building a bank from scratch, making money, and Monzo's Tom Blomfield

LONDON —Britain is going through a retail banking boom right now, with several new, app-only banks setting up shop.

Starling was one of the first. Anne Boden quit her position the COO of Allied Irish Bank (AIB) in 2014 to build a mobile-first bank and has been doing that ever since. This week the company received its full banking licence and is set to launch to the public later this year.

But Starling faces competition. Last year Atom became the first app-only bank in the UK to launch to the public and Monzo, set up by Starling's first CTO Tom Blomfield, is also poised to launch app-only current accounts. Tandem, another startup, is also targeting retail customers but has been hit by a funding setback.

Business Insider sat down with Boden at last week's Innovate Finance conference in London to discuss competition in the market, the challenges of building a bank from scratch, plans for profitability and growth, and her relationship with Blomfield today.

Here is the transcript of the interview, edited for clarity and brevity.

Oscar Williams-Grut: What are the big changes that have gone on in the business in the last year?

Anne Boden: It’s been very exciting because we’re now in a situation where we have a current account, which has all the things that a normal current account has, plus lots of other things which we are developing and iterating all the time.

We announced our APIs yesterday, that was very exciting because we’ve got the first APIs directly connected into a UK current account. We have an API that goes directly into Faster Payments, that’s very exciting.

We decided that the best way of launching those APIs into the world was a hackathon so we tweeted about our hackathon and hundreds of people applied. We picked 100 to come to an event which we held at Google Campus. We were thrilled that we had great reception. People started using them, figuring it out. We gave them their own cards and own account so they could use either their own data that they had generated or our sandbox.

We’ve had great feedback — people saying the APIs are amazing and they had a good time, which is the most important thing.

OWG: What’s the reason for the hackathon? Is this to differentiate yourself from competitors?

AB: I think the idea is we don’t intend to do all the products for all the segments through all the channels. We don’t think that by doing that — by setting out to be a little RBS or a little HSBC — we don’t think that adds anything and I don’t think a company can really innovate on that many levels.

We’re focused on doing one thing and then living in a marketplace of other products

What we’re really focusing on is the day-to-day transactional banking needs, your current account, and giving you all the access to all the payment systems you need. And then use that data to give you insight.

If you want other products, we will help you because we’ve KYC’d [know your customer checks required by the regulator] you and we understand you, your spending behaviours and so on. We’ll know the other products you can buy from other providers, on their balance sheets. We’re not arrogant enough to say we can provide the best mortgage or best long-term savings product.

We’re focused on doing one thing and then living in a marketplace of other products. We recently announced a partnership with TransferWise. We’re also partnering with MoneyBox. Now that’s a great example of linking bank account data to people who are addressing a specific need. We’re building up this marketplace and we intend to be the glue, the curator in the middle of it all.

OWG: How will you make money? Current accounts are famously loss leading.

AB: We’ll make money on overdrafts. So, everyone reckons that current accounts are loss making but that’s because all the banks say they’re loss making. I spent 30 odd years in retail banking and I know how they've come to that conclusion.

They have all the products, mortgages, current accounts, all the product lines, and then they have all the costs and they decide where they’re going to allocate the costs — we have the branch network, 80% of the cost goes to current accounts; payment systems, goes to current accounts. They load up the costs and all of a sudden current accounts are loss making. So they say, we’ve got to cross-sell now to recover the cost of selling the current account.

If you don’t have those costs in the first place, the current account is profitable. Think very simply of the economics. You have balances sitting on an account. You’re paying around 0.5%. It’s low single digits. You’re lending out the money as overdrafts, you can, say, lend half of it. You lend that out at between 12-19%. There’s a difference.

The difference between us and the big banks is we don’t eat up that difference with all the cost of infrastructure. We’ve built everything from scratch. Unlike all the other new banks who are using someone else’s infrastructure, we can deliver this cost effectively.

OWG: On overdrafts — 12-19%, are those actual figures?

AB: At the moment that’s the range depending on an individual’s credit rating. It’s a reasonable interest rate. I’m saying the number because it’s not high.

That’s how we make money and if you talk to any of the big banks and you ask them about current accounts — they look at it in a different way.

OWG: You talked about building a marketplace, there’s a lot of competition in that area: Monzo, Tandem, and N26 all want to do that. Are you feeling the heat from that competition?

AB: I think the market is very, very big. Looking back to when I started this back in 2014, we had a marketplace in our presentations to the FCA [Financial Conduct Authority] back in June 2014. It’s always been something close to my heart.

If you look at where we are, Atom haven’t launched a current account yet, I don’t think Tandem are going to do it, so it’s probably only Monzo and ourselves in that marketplace. I think the market’s big enough.

OWG: How many customers have you got at the moment?

AB: I think we’ve got about 500. The idea is we’re going to build that up now rapidly.

OWG: When will you go from beta to full launch?

AB: I think it’s when our customers feel comfortable with the service. I think we’ll probably have another couple of months of beta. It’s hard to define what a beta is. We’ve got a fully functional current account that can do everything that a Barclays or HSBC could do, so in some respect, it’s not really a beta. But we want to make sure we take on board all the feedback we get from our customers.

OWG: How many staff have you got at the moment?

AB: 85.

OWG: Are you worried about your cash burn rate? We’ve seen some redundancies with Tandem recently. It seems like building a bank is expensive.

AB: The number one thing is: starting a bank is very difficult. We’re in a situation where there’s an awful lot of talk about lots of people going for banking licenses but if you actually take them one by one, there aren’t that many people with retail banking licenses that get through to the end.

There are phases of different sorts of banks. The first phase of new banks were the Aldermores and the Shawbrooks. What they were doing was a consolidation of lots of people doing specialised lending.

Then there were a lot of SME banks that came along, like OakNorth or whatever, which are not really technology driven banks but are dealing with the business that the big banks are not really interested in doing because they’re too manual.

Then you’ve got the latest round of banks, which are the consumer banks — the Atoms, the Tandems, us, Monzo.

You do need an awful lot of money. Starting a bank is very difficult because seed funding is very difficult to obtain because EIS and SEIS schemes [tax-efficient investment vehicles] don’t apply. It’s quite difficult to raise money for a proposition that’s going to be revenue generating in three years or three and a half years. That doesn’t typically fall into the VC model. The VC model wants to invest in businesses that will be revenue generating very soon.

Starting a bank is not for the faint-hearted. But it’s ever so worthwhile. There are lots of fintechs based on pre-paid models but those models are very difficult to get revenue generating. Or rather, they’re easy to get revenue generating, very difficult to get profitable. There are so many people in the value chain. Although it’s quite good in raising customer expectations and customers getting used to nice new things, it’s very difficult when so many people are taking a piece of the pie. That’s why we believed we had to be a bank because we have a viable business model.

OWG: Do you need to raise money?

AB: We’ve got enough money for years. [Ed. note: You can read more about Starling's funding here.]

OWG: Are you planning to raise money?

AB: We’ll probably raise more money as we go into the end of the year but we’re sufficiently funded for the coming years.

OWG: You talked about ramping up the growth in terms of customers, how do you plan to do that?

AB: I’ve spent 30 years in an industry which has become very jaded about trying to acquire customers and sell to customers. I think if you offer good value and you offer a proposition which is innovative, people will migrate to it.

Starting a bank is not for the faint-hearted. But it’s ever so worthwhile.

People can try before they buy. If you look at the existing incumbents, they entice you to switch. But you don’t have to switch. We believe customers will like something different. Lloyds and Barclays sound the same, look the same, but they’ve got a different carpet.

OWG: What will customers see that is different to a traditional bank?

AB: What we’re working on at the moment is — I don't want to fall into the trap of saying it’s wonderful, it’s gorgeous. I think people should experience it for themselves. It’s very easy, it’s very functional and it has all the functions that nowadays people come to expect: freeze the card, the usual sorts of things.

OWG: It sounds like a Catch-22 — you think people will switch because it’s a different product, but you have to try it to understand it. It’s almost an “if you build it, they will come” type thing.

AB: No, there’ll be a number of things that we’ll do to make sure people know about it. I think that we have the whole thing about being different, we have the marketplace platform whereby we’re associated with great brands so their customers know about us. We also have the social media and plans to be out there talking to customers where they live their lives, instead of expecting customers to come to us. It will probably come alive over the next couple of months.

OWG: Do you have an idea of who your target market is?

AB: I think we initially talked about 20 to 45-year-olds but it’s all sorts of people. One of our customers is somebody in the office’s mother who is in her 70s and using it to manage a limited budget. But it’s for the people who are prepared to do all their business on a mobile. We believe in delivering everything in a convenient form and that’s what we’re doing.

OWG: I asked colleagues and on Twitter if anyone had any questions for you, and the number one question that came back was what happened between you and Tom Blomfield [Blomfield was Starling's CTO but left to found Monzo]?

AB: (Laughs) I’ve known Tom years. I met Tom when I was an advisor to GoCardless [a direct debit startup Blomfield cofounded]. Tom joined us for a short period of time, September 2014 and left in February [2015]. I think Tom wanted to do his own thing and he is doing his own thing. Tom and I occasionally have breakfast and, you know, the market is big enough for both of us (laughs).

OWG: So you’re still on good terms?

AB: We’re still friends. I think I spoke to him last Wednesday.

OWG: Do you speak to the other guys — the Tandems, the Atoms?

AB: It’s a small world. Ricky [Knox, cofounder of Tandem] has popped in to our offices, and I’ve gone to see him. I don’t go to Durham very often to see Atom I must admit.

We all as an industry went into the crisis and came back out and I personally don’t think enough has changed

Our competition is the big banks. What we’re doing is raising customer expectations, introducing competition.

We all as an industry went into the crisis and came back out and I personally don’t think enough has changed. Technology has changed, expectations have changed, and regulation has changed. The banks were too busy and too internally focused and I really wanted to do something different.

So I quit my job to start this, and it’s really great to be so near customers. It’s really great to be using technology. I love the fact that we can do things so much easier nowadays. We can do interesting things and why shouldn’t we do it in banking? This is ever so fulfilling. Every time we talk to customers and they tell us how much benefiting their getting — it’s exciting.

OWG: Are you in touch with the big banks? Are they sniffing around?

AB: The big banks want to come and see us every week. On a typical week, you’ll get three or four emails either from consulting firms wanting to bring around people on a visit, or you’ll get people who’ve set themselves up in business doing fintech tours.

OWG: Fintech tours?

AB: Yes! (Laughs) Then you get contacts from overseas who want to come and talk to us. We have to be very careful with our time. Sometimes it’s very hard to say no because we want to be friends. But there’s a huge amount of interest in what we do and I have a bank to build.

OWG: What does building a bank look like in 2017? Where do you want to be at the end of the year?

AB: For us, this year is going to be a year of building our marketplace. It’s going to be really getting out there. We’ve spent a long time testing, we’ve been testing now since July. It’s now a situation of getting out there with real customers and making it work.

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