What do you do if you are the co-founder of Twitter and are worth an estimated $2.3bn at just 38 years old? Start again of course. Jack Dorsey, not content with revolutionising the way we communicate through the creation of Twitter, is now looking to have perhaps an even more significant impact on the world of commerce with Square – a credit card processing and business solutions company. Square can offer us some useful insights into the direction of the digital economy, as one of it’s foremost thinkers takes on a new challenge.
Square offers a credit card reader to customers for free that plugs into the headphone jack of any android or apple phone. It allows any individual to run a business and accept any form of payment without expensive equipment to process most peoples’ most common method of payment in transactions. Dorsey hopes this will fuel the trend of everyone being an entrepreneur, enabling an abundance of start ups to have a level of professionalism that previously was simply not possible.
Beyond this, the company also helps you use this data to improve your business processing – offering basic data analytics in real time, as well as the ability to manage your inventory on the go. Once again, it feels like Square is democratizing business, and making the barriers to entry as close to zero as possible.
This is a great proposition for the customer; a free card reader and data analytics, what is there not to like? It begs the question what Square are getting in return. The answer, the sames as at the core of many successful modern businesses, is data.
Square has unprecedented insights into your business, and they hope to leverage this to offer loans, further packages of data analysis and add-on business consultancy style services. They can perfectly pinpoint when to offer these requirements using their own software systems, and offer great advice to companies. The risk of loans and financial services to these companies is also much lower, due to the total understanding of the revenue and cost streams.
A lesson is here for other businesses. Square is prepared to operate at a loss initially to capture the data that can be later leveraged for huge gain. Data is central to the strategies of Facebook, Google and Spotify: building insights into their customers to be able to offer the right proposition at the right time is key. This may seem a little ‘big brother’ for some, but by releasing our personal details to these companies, the response is inevitable.
The immediate requirement for profit is lessened in the modern economy; the building of customer numbers and data is far more important. It is a consideration for new startups in the digital age, and they should readjust their goals accordingly.