Consolidating Point-Solutions to Adapt in a Changing Economy

Lynx Co-founder and CEO Matt Renfro writes in the PYMNTS eBook “Baseline 2022: What the Next Six Months Holds” that only the most viable point-solutions will survive and the platforms with the largest consumer populations will have a massive opportunity to become a one-stop shop for consumers.

As we set our sights on the balance of 2022, what is the new baseline for payments, commerce and the digital economy? 

In the last decade of rapid growth and innovation fueled by an economy flush with private equity and venture capital dollars, entrepreneurs were focused on building point-solution technologies to solve for specific and nuanced consumer needs. In reality, this didn’t necessarily benefit consumers, who are looking for streamlined experiences across payments, commerce, banking and beyond. Additionally, many of these disconnected point-solution platforms are based on unsustainable business models and acquisition marketing tactics that won’t survive the global shifts and issues that have transpired over the last few years, and more specifically in 2022. Investors are now reeling in the aggressive capital spend and looking thoroughly at the sustainability of a business’s economics to ensure a pragmatic cash flow when investing. Looking ahead, the days of becoming a billion-dollar business based on strong acquisition marketing, but with poor unit economics are over. The new baseline, as we see it, is that only the most viable point-solutions will survive and the platforms with the largest consumer populations will have a massive opportunity to become a one-stop-shop for consumers.

What assumptions still hold, and what new shifts will have to be made? 

In our business, as healthcare expenses continue to grow with rising deductibles, making it increasingly difficult for Americans to save and pay for healthcare, companies will attempt to relieve these burdens by adopting and building solutions that serve end-to-end needs for consumers. This further solidifies the need for companies to consolidate point-solutions; whether it’s a health plan including pharmacy and care services in their offering, or a benefit administrator incorporating all of your benefits and rewards in their platform, there is more to streamlining experiences than simply offering a “better experience.” If companies can help consumers stretch their dollars, large platforms that serve many of the required constituents will have the opportunity to create “super apps” specific to the healthcare vertical.

What trendlines are you watching to help you navigate what has become an “interesting” 2022?

As we move into the second half of 2022, we’re keenly interested in how well-funded disruptors and point-solutions will shift their business models to address the economic changes and issues that have surfaced in the last year. Additionally, now more than ever, we’ll be watching what bets the large and well-capitalized business make to advance themselves across different sectors. With a focus on healthcare, we’ll keep an eye on which businesses attempt to double-down and become the one-stop-shop “super app” for all things primary care, payments, virtual care, benefits and more, to understand how Lynx can play a role in making those solutions possible.