Square just posted the “Top 10 Myths About Square.” Jack Dorsey and his superstar investors respond to the six they really care about.
Lately, Square CEO Jack Dorsey has been binge watching Friday Night Lights. The uplifting TV series, about a high school football team called the Dillon Panthers, is centrally themed around underdog comebacks. And after the week Dorsey has just endured—during which Amazon launched a product aimed at stealing away Square’s customers, a move that compelled the startup to publish a blog post debunking the “10 myths” about Square, including whether its business is struggling—one might think Dorsey is due for a Panthers-style comeback of his own.
Based on the time I spent with Square, including interviews with Dorsey, his investors, and his key lieutenants, here are their flesh-and-blood responses to the myths they really care about:
Square, the payments startup from Twitter cofounder Jack Dorsey, has prototyped a Square credit card. The plastic card is all black, and save for the card holder’s name emblazoned on the face, features no logos—not even Square’s. Over the past year, multiple sources indicate Square employees have been carrying the card—seen here below, partially blurred to protect the card holder’s identity—around in their wallets.
However, despite buzz about the potential of a Square credit card, other company sources indicate the project was recently killed.
Details of the rumored prototype came to light during reporting for Fast Company's profile of Square, published this week. As Square seeks to unearth new sources of revenue beyond its core business of payments processing, the company has launched a slew of new products, including Square Market, Cash, Feedback, Invoices, Capital, Dashboard, and on Monday, August 11, Appointments. Some insiders expected the Square credit card would be a promising addition to the mix, potentially opening the company up to a swath of lucrative consumer loyalty and rewards services. But after pressing the company multiple times about the project, Square finally confirmed that it’s not launching a credit card. Or, should we say, the company is no longer launching one. And the reason why highlights the difficulties Square faces in the immensely complex financial space.
When selecting a partner to power mobile payments in its stores, Starbucks could have approached Google, one of the most profitable companies in the world. It could have worked with PayPal, which already has more than 106 million users in the payments space. Or Isis, a consortium formed by telecom giants Verizon, AT&T and T-Mobile that is also producing a “mobile wallet.”
“I’m sure if you and I were to rattle off the names of everyone in the space, that at some level we’ve been in discussions with them,” Starbucks’ Chief Digital Officer Adam Brotman tells Fast Company. Presumably that includes Mastercard, Visa, and Verifone, which handles $10 billion in global transactions per year. But Starbucks chose to partner with Square, a three-year-old startup. Why?
“They’re focused with a level of intensity on the customer experience,” Starbucks CEO Howard Shultz told a small group of reporters Wednesday morning.
In other words, Square treats payments a lot like Starbucks treats coffee: by focusing on the experience around a product that is more or less a commodity.
Today, Paypal announced PayPal Here, a triangle-shaped mobile creditcard-swiping gadget aimed directly at Jack Dorsey’s reader, Square. And, just like Square, they’re aiming to convert customers with the power of their design: They tapped Fuseproject, the firm run by Yves Behar and a darling among Silicon Valley entrepreneurs, to create the object.
He tells me a story about how his father, an engineer and semi-serial entrepreneur, helped him build a model of a mass spectrometer out of Legos, ball bearings, and magnets when he was 11. (A few weeks later, Dorsey’s father, Tim, tells me his version of the story, taking the time to teach me the concept of mass spectrometry. In the Lego device, the magnets were there to encourage ball bearings of different sizes to arrange themselves by weight, just as a real device would do with gases of different weights. “Did it work?” I ask. “No! It was a disaster!” Tim Dorsey laughs. “But we had a great time!”)
From our story about Jack Dorsey, cofounder of Square and Twitter. Read more->
The Obama campaign worked with Square to develop a custom-built mobile payment app for Obama For America, and gave Fast Company a first look. The app is currently available to staff and will be available in the Store in the near future. See more->
Square is a nifty startup that uses a free plug-in to turn any iPhone, iPad or Android into a credit card reader. Does your friend owe you $20? Swipe his card on your phone. It’s another in a long line of cool startups popping up everywhere, but now, the company is getting a little more visibility with this glut of billboards in Times Square.
Such aggressive marketing is a big change from the San Francisco-based company’s past strategy. Last week, COO Keith Rabois told me of the difficulties of creating awareness for the young startup. “Not everyone knows about Square, but everyone should,” he said. “Our job is to communicate that, and some of that communication—particularly when we’re talking about communicating to 180 million Americans—cost some amount of money.”
And at the time, it was money Square wasn’t necessarily willing to drop. According to Rabois, Square’s marketing budget in January: a measly $3,000. That’s a far cry from the tens of thousands of dollars a Times Square advertisement typically costs, though a Square spokesperson tells us the billboards were actually a gift to the company and didn’t cost them anything.
Pretty soon, all of these apps that we think are “under-the-radar” will just be commonplace and used everywhere. Kind of scary/awesome to think about. Hack the planet!