Square (The New Groupon?)
Square is the hottest payments company on the planet … right now. This quora post got me thinking about whether or not square is actually as great as everyone thinks it is.
It’s an interesting thought because square has received nothing but amazing press. They have created an aura of inevitable success around the business. However, as you think about the industry, their success is anything but guaranteed. They are playing in an increasingly crowded marketplace and competing against extremely entrenched players. Every great move by square is countered by intuit, PayPal, and others.
Moreover, they are a firm with an incredible design edge, which can be a critical asset for a consumer-facing product. However, the core of their business, is merchant facing. And as noted in the above quora post, many merchants are choosing square for less competitively sustainable reasons - like their ability to settle merchant accounts with 24 hours - not for it’s look and feel.
This will be an interesting space to watch over the coming years. Square is going to battle with a war chest of venture capital, a stable of amazing designers and engineers, and an established base of small merchants. But it’s facing tough competition from much larger financial players with an ability to subsidize losses and out-execute the new guy.