Bank of America: growth lessons and numbers

Acquired · Nov 26

Visa

Mailed 65,000 unsolicited cards in Fresno in 1958, absorbing 22% delinquency and $2 million of fraud, then signed 20,000 merchants and 2 million cardholders in year one. Its franchise model failed because it sold a brand without an operating system, which led to the October 1968 Columbus revolt and Hock's takeover.

Tips

Dee Hock convinced Bank of America to give away its crown jewel by showing the pie would grow▶ 1:07:00Every one of the 200+ franchise banks then signed up to the new organization, and not a single bank jumped ship.
Bank of America used its scale to absorb huge losses on the Fresno card drop▶ 34:30About $2 million of fraud in the pilot and 22% of credit delinquent or defaulted; 2 million California cardholders and 20,000 merchants in year one; only 10 new credit cards launched in the US from 1960 to 1966.
Bank of America made the first modern credit card by bundling convenience with revolving credit from a real bank▶ 29:00It became the largest card program in the world within one year and one state.
Bank of America's franchise model failed because it assumed its own situation applied to every bank▶ 45:40This produced the 1968 revolt that led directly to Hock taking over and creating Visa.

Bank of America

What was said about Bank of America

Capital and deals4

Founder principles2

Strategy and moats2

Building the company1

The Walt Disney Company: The most successful enterprise for monetizing human nostalgia

The Biography of Walt Disney

David Packard (Founder of HP)

Visa

More in Finance

Ramp

Coinbase

Revolut

Nubank

Payout

Pollen VC

Wise

YNAB