The Case for Square
You are forgiven if you haven't followed #Square closely. They grew up in payments, helping physical retailers - mostly the smallest entrepreneurs.
Today I make the case to start paying attention if you are in #ecommerce
1 - First, Square is fundamentally a financial services business. One one side you have consumers, and the other, sellers.
I like to describe it as what Paypal would be doing if they were actually paying attention.
A few quotes from their recent earnings call:
2 - “Our focus is on helping Bitcoin become a native currency for the Internet” -- while this is a < 5% bet for them now, it's already prominent in their UI for users.
3 - - gross profit from sellers 606M, up 48% y/y" - Square reports out two things only. Gross Processing Volume (GPV) and Gross Profit. That's it.
4 - Their main seller priorities are:
a - enable omnichannel b - grow globally c - go up-market
Keep in mind "omnichannel" from their roots means more online and digital-only commerce. Whereas "omnichannel" from Shopify means more physical eCommerce.
5 - Unlike their humble beginnings, their primary segment is now mid-market. Which they describe as greater than $500k gross processing volume/year.
But one of their most recent wins was SoFi stadium.
6 - The recent Square Cash App Pay blows every other payment method out of the water - including Shop Pay. Press a single button button to pay at retail or scan a QR code at retail is ridiculously convenient for both parties.
7 - The company is growing fast and wants to grow faster. "Out CAC is $5 and that is _too efficient_. We will be spending more to grow faster".
When is the last time you heard a company say that?
8 - As far as I can tell, they have about 2 million active sellers. AfterPay acquisition added 100k mostly midmarket and larger merchants to their ecosystem.
Finally -- Shopify's recent moves in NFT and bitcoin and Tobi's "innocent" questions on Twitter about de-fi mean the company is following what Square is doing.
