Square launched in 2009 with the mission to provide an easy way for merchants to accept credit card payments using only their cell phone. Square has become immensely popular thanks to its ease or use and elegant design.
The company now processes over 5 billion transactions every year and this number is rapidly growing. In 2012 Starbucks announced that Square would now process all debit and credit card transactions in its over seven thousand locations.
This is the second business success for Jack Dorsey who was also a co-founder of Twitter. While Twitter was a collaborative effort, Square is uniquely his and incorporates many of the business lessons he learned in his first start up. Those business lessons are very instructive for any entrepreneur or business owner who is interested in solving a massive problem in the market.
Here are the top five business lessons from Square.com that have lead to its rapid growth.
Emphasize Simplicity Of Design
Jack Dorsey wanted to create a payment device that anybody could plug into their smart phones and easily accept payments. Dorsey himself has a love for the simplicity and elegance of Japanese design and this is reflected in the product that he has created.
The “dongle” which is the white cube that you plug into your smart phone has proved immensely popular. It is given away for free on Squares website and more Recently Wal Mart announced that it would start selling dongles for $9.95 in over 9000 outlets across the United States.
With this one simple device merchants can immediately start to accept payments. Before Square arranging a merchant account was complex, involved many different parties and difficult to use hardware. Square has neatly solved all of these problems. Removing all of the barriers to entry that merchants used to encounter has lead to the rapid acceptance of this simple device.
Keeping a laser like focus is both a secret to Jack Dorsey and Squares success. Square is focused on solving only one problem and producing a single product. Unlike other financial service companies which attempt to offer a range of different services, Square is focused on how to make it easy for merchants to accept credit and debit card payments.
This laser like focus has allowed them to produce a superior solution at a lower price than their rivals. Jack Dorsey says that focus is one of the most important traits of being successful. In his early years Dorsey was very much an experimenter trying his hand at fashion design, a courier company, botanical illustration and even massage therapy.
However in each of these endeavours he was very focused. For example he worked in massage therapy for a year and studied botanical illustration under a master artist at Missouri Botanical Garden. He brought this same level of intense focus to his work as a programmer and founder of Square.
Dorsey notes that it is important to concentrate on only a few areas but then to execute on these few areas perfectly. If everyone in the company knows what their own critical areas are and stays focused on these, while understanding the overall direction of the business, then the company will be successful.
Keep Communication Channels Open
Whenever there is a meeting which involves more than two people in Square notes of what is said must be kept and made freely available to everyone in the company. Dorsey himself receives 40 to 50 such meeting notes a day which helps him to keep abreast of everything that is happening inside of Square. () The benefits of such open communication extend beyond the executive level however. Everyone in Square whether they are an engineer, an administrator or a marketer knows what other people are doing.
One of Dorsey’s guiding principles that all ideas that people who work at Square have should be freely shared with the rest of the company, he describes this as being “the dining table is the center of the home, the work table is the center of the company.”
Keeping communication channels open also means communicating clearly with the general public. Dorsey said that one of the mistakes that Twitter made in its early days was that it didn’t communicate properly why the site was often down. The problem was due to traffic surges at certain times of the day. When Twitter did start to be more open about the issues it was facing, their user base become much more tolerant of these down times.
Metrics Are Key
Dorsey is obsessed with making sure that every aspect of squares business is recorded and analyzed. As he points out if you are not measuring you are not going to be able to improve.
The importance of metrics is integral to the service that Square offers. Square is not only a payment solution, it also gives merchants tracking capabilities that they may have never had before. By using Square small business owners are now able to tell who is buying, how much they are buying and when they are buying it. For someone who might be running a food cart or farmers market stall these kinds of analytics can be game changing.
Remove the Roadblocks
Dorsey has a very macro view of the role of a successful business. In his terms it is to remove the road blocks of society. Square got its start when Jack McKelvey a glass artist was unable to accept credit card payments for his work.
Dorsey and McKelevey were struck by how many small merchants must encounter this exact same problem every day. This was a major road block to both innovation and small business growth. Together they come up with Square which would seek to remove this impediment and allow small merchants to easily accept card payments.
Any entrepreneur should pay close attention to what Dorsey is saying here. The biggest opportunities can be found in those things which frustrate people. Find a better solution to a huge problem and you can build a business very quickly.