GigaOM » Square

Square gets ready to move into local commerce, challenging Yelp and Foursquare

Eliza Kern — Fri, 03 May 2013 17:18:01 +0000

Square is looking to build a recommendation engine in addition to its payments system that could challenge the likes of Foursquare and Yelp as the company moves into the local recommendation space, The Verge reported Friday.

“I think we can do something a lot better” than those other apps, Ajit Varma, Square’s director of discovery, said in the interview.

While Foursquare has recently confirmed its intentions to move away from check-ins and mayorships and toward local commerce, hoping to solve the problem of finding the best businesses near you — that you’ll actually like — hasn’t been completely solved. Not enough people are checking into places on Facebook yet to make the company’s service all that useful, and while Yelp is the established favorite, reading reviews there is a little like shopping on Amazon — you need to know what you’re looking for when you go in. Google’s search offerings and Google Now app have strong possibilities for local commerce, but haven’t yet captured the mobile market.

While Square is still a relatively young company, having launched in 2010, it’s already inked a deal with Starbucks and has millions of local merchants connected to its payments service, and as we wrote, the company had a particularly strong year in 2012. It makes sense that as the company expands further and more merchants allow customers to pay through Square, it will acquire a vast amount of data about your purchasing habits — data that both Foursquare and Yelp lack.

Square has your credit card on file, knows where you typically shop, how much you spend, and how much you tip, even, which could allow the company to make much smarter recommendations than its competitors. For instance, if I go to Starbucks every day to purchase a bagel, Square might know to recommend bagel shops to me instead of coffee shops. Or if I leave better tips at one restaurant over another, Square might be able to determine how much I really liked those two restaurants relative to each other.

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Five things to learn from Khosla Ventures’ newest partner Keith Rabois

Eliza Kern — Thu, 28 Mar 2013 01:31:02 +0000

In one of his first public appearances since joining Khosla Ventures back in February, longtime Silicon Valley entrepreneur and investor Keith Rabois talked about a wide range of topics, including Stanford football, the so-called Series A crunch and working with the press.

Rabois recently resigned from Square, where he was serving as COO in January after an employee accused him of sexual harassment. Square accepted his resignation but has so far backed Rabois and he joined Khosla Ventures in February. Vinod Khosla said in an interview at the time that he was consistently impressed with Rabois’ business expertise, and said he heard from entrepreneurs that Rabois was one of the most sought-after advisers in Silicon Valley.

During the Founder’s Showcase event on the future of investing on Wednesday, Rabois didn’t break a lot of new ground, but here were five things he told us:

His “Spidey Sense” tells him the Series A Crunch is probably real

Various people have written about the Series A crunch, and Rabois said he thinks it’s probably not just hyperbole. It is actually getting harder for companies to move from raising a seed round to raising a Series A round, especially with crowdfunding platforms like Kickstarter making it easier to get in the game.

“My spidey sense is that there is a real change,” he said.

Half the battle for startups lies with people

“Capital is one of the resources you need to build a real business, but people are the other. And people are incredibly scarce,” he said.

Party rounds are not that effective

“When you do that, no one really cares. They won’t wake up in the morning and think about your company. Most of the people will return your call and try to be helpful, but it’s very different having a partner and having an investor,” Rabois said of party rounds, which are investment rounds involving a large number of people where no one has a substantially larger stake.

When dealing with the press, be honest

Having worked on communications teams for a variety of startups, Rabois said honesty is the best policy and it’s not worth taking short-term gains if you think you’ll be around for a while. This gets harder if a reporter hears that you raised funding that you’re not ready to announce, but he said he’s always tried to give more than a “no comment.”

Being a good VC is an art, not a science

In response to questions about metrics he looks for or benchmarks he wants to see in companies he invests in, Rabois said metrics are important to an extent, but anyone can look at numbers and make a call. Being a successful venture capitalist is about the art of recognizing unique founders or market opportunities.

“It’s pretty much a commodity skill to look at numbers. It’s not a real skill,” he joked. “Investment bankers can look at metrics.”

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Former Square executive Keith Rabois to join Khosla Ventures as investor

Eliza Kern — Tue, 26 Feb 2013 17:00:13 +0000

Keith Rabois, the longtime Silicon Valley tech executive who most recently left Square as COO in January after sexual harassment allegations, plans to announce Tuesday morning that he’s joining Khosla Ventures in March as an investor.

“We’re known for big bets and bold swings, and not being like a traditional venture investment firm,” said Vinod Khosla, founder of the firm and who Om feels is one of the Valley’s “super VCs,” in an interview discussing Rabois’ addition.

“We look for people who’ve earned the right to advise entrepreneurs. So we look for people who entrepreneurs look out for and who say, ‘I want you on my board, I want you as a mentor,’” Khosla said. “And Keith, as I did my reference checks in the Valley, he was really at the top of every CEO’s list.”

Rabois’ next move has been a topic of interest among the technology community, considering his past expertise at companies like PayPay, LinkedIn, Slide, and others. His addition to Khosla was suggested by Kara Swisher at AllThingsD this past weekend, after The Wall Street Journal wrote that he might join Airbnb.

“I love Khosla Ventures’ vision and passion for assisting the next generation of entrepreneurs,” Rabois said in a statement. “The Khosla team encourages entrepreneurs to be bold. And the team’s legendary work ethic ensures that entrepreneurs will receive the best possible assistance.”

In January Rabois stepped down from Square, where he was COO, after allegations of sexual harassment by a fellow employee. Square strongly backed Rabois, and the executive wrote in a personal blog post that he had engaged in a relationship with that employee but that it had been mutual. Khosla Ventures did not comment on Rabois’ legal issues. Khosla serves on Square’s board, as Square is one of the firm’s portfolio companies.

“I couldn’t be more excited to see two of the top entrepreneurs I know, join forces at Khosla Ventures to support and coach the next generation of entrepreneurs the world over,” said Square founder Jack Dorsey in a released statement.

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SumUp adds American Express to its mobile point-of-sale terminal roster

David Meyer — Thu, 21 Feb 2013 10:14:02 +0000

And so the European mobile point-of-sale (POS) terminal wars continue. With iZettle, Payleven, Adyen, mPowa and SumUp all trying to replicate Square’s dongle-based model in the EU, the various stages in this scramble for the mobile merchant tend to involve the signing of distribution partnerships or the support of new cards or card technologies.

Yesterday it was iZettle adding chip-and-pin capabilities — as happened earlier this month with Payleven — and partnering up with Banco Santander, and today it’s SumUp’s newfound support for American Express cards.

SumUp is still working on the technical implementation for the deal, and its merchants will start being able to take payments from AmEx cardholders in the second quarter of the year in the UK, Germany, Ireland, Austria, France, the Netherlands, Spain and Italy. Belgium and Portugal should follow, though SumUp is still in negotiations with American Express on that point.

This is not the first such firm to sign with AmEx – after all, American Express has actively invested in iZettle. However, according to SumUp, the deal means the company “will accept more types of cards in more regions than any other mobile point-of-sale technology provider worldwide”. Co-founder Stefan Jeschonnek told me SumUp has “several tens of thousands of merchants” now using its terminals, and “several thousand” are joining each week.

SumUp does have an extra trick up its sleeve, too: later this year it will be bringing out the slightly Square Wallet-ish SumUp Pay, which will let end-users pre-approve a participating merchant through an app, then pop up on that merchant’s system as soon as they walk into their shop – the idea there is to allow purchases based on a simple verbal interaction with the merchant, without the need for even taking the phone out.

And according to Jeschonnek, SumUp will be able to exploit its growing installed base of merchants to crack the classic chicken-and-egg problem associated with mobile wallet schemes:

“We’re making payments smoother today with the card reader, but we’re thinking about how things should work in the future. We are building technology to make that real-world interaction possible again… The difference this time around is that we already have a pretty large and fast-growing merchant base. For our merchants to accept SumUp Pay will be as simple as updating their app.”

He added that SumUp Pay would also provide a nifty way around Visa’s stringent authentication procedures, which have previously proved a stumbling block for the likes of iZettle, when it launches later this year.

It’s good to see companies innovating in the financial technology space, and SumUp’s focus on in-house technological development theoretically places it well there. That said, with the mobile POS wars as heated as they are in Europe right now, I would not be in the least bit surprised to see a rival try to beat SumUp to its frictionless payment goal.

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Disruption: It moves in mysterious ways

Om Malik — Thu, 21 Feb 2013 02:15:33 +0000

A friend and a long time reader emailed earlier this morning, offering his observation regarding Google Glass. His prognosis – it was a hands-free camera. Laughs aside, it is an easy deduction to make from the new video shared by the Google Glass team. Sure, the video focused on ballerinas, balloon rides and bubbles, but Google was trying to get maximum oohs-and-aahs from as wide a set of people as possible.

That said, I have been intrigued by Google glasses from the very beginning, mostly because despite being nerdy and in a very early stage, it represents a bit of the old Google. As I previously wrote: “It represents the kind of things the company needs to do in order to leap over its rivals.”

So, if you focus on just the video, I guess, the shrug of shoulder is an appropriate response. However, when I watched that video, I saw three things that were possible.

A new way to interact with information Google indexes: Google’s original premise was to make sense of all the messy data on the web. The mess has become bigger and finding information has become more difficult. We have to start looking at information we need in context of where we are, who we are and to what purpose we need that information. While it is easy to provide the “where” and “who” information, nothing adds “purpose” than what the eye is seeing. So, from that perspective, this is the right evolution of Google’s basic utility.
A decent working voice-based user interface: Siri is cute. Siri is helpful … sometimes. But Siri is still not the answer. However, the Google Glass UI seems to have found the answer to the age old voice-based UI question. And with increased usage, the UI will get smarter and better. (Well, that is what I hope.)
And lastly, it gives us the ability to add more contextual information to the real world around us: With Google glasses, everything becomes searchable. I think this is the most underrated part of Google Glass. So far, we have restricted “information lookup” to the computers.

That said, this is just a video. And as a cynic I am going to withhold final judgment on the glasses and what changes they might unleash until I can get my hands on the actual devices. That said, the video released today definitely makes me even more keen on trying them on.

Google is working to get developers to sign-up and develop apps for this new class of anywhere, anytime computers. And we don’t know just yet, what the creative minds might do and what impact their efforts might have on how we live, create and consume.

iPad, the slate for disruption

Three years ago, when everyone saw a bigger the iPhone, I first saw the iPad and my initial response was that it was a slate “to reinvent pretty much how we think of media, information and in fact the whole user experience.” I saw a blank slate that was ready, for lack of better words, for creation and disruption. It is just that no one knew how it would disrupt and who it would disrupt. I was reminded of that today when I saw this news release from Jack Dorsey’s Square, a San Francisco-based payments company.

Business in a Box: all the hardware you need to run Square Register on your counter: Historically, business owners were forced to piece together multiple hardware components from various manufacturers, manage complicated contracts and pricing structures, and pay for expensive software licensing and service plans. Now, they can be up and running with Square Register in minutes.

Three years ago, it wasn’t clear if the iPad was going to clean VeriFone’s clock or give an underclass of merchants a chance to participate in the mobile and electronic economy. It certainly wasn’t clear that it would become the engine for the people-to-people economy I often talk about. The sharp decline in the fortunes of laptops is another disruption.

The fact is that when you combine software with connectivity and use data to create new experiences, you end up disrupting old industries and building new fortunes.

When I look at Google Glass today, I see a big similarity between them and Tesla — the electric car, not the company. Both are a bit nerdy, both are a bit cool and both are showing us the way to the future.

Elon Musk would like us to believe that he is building the new Toyota — and I for one am glad that he is — but the real impact of his car is on the business of transportation. Tesla for me is the marriage of electronics with data, software and connectivity.

The Big IF

“The big if” for both Tesla and Google Glass is going to be how they think about the interaction of humans and the machine. If they keep using data without an emotional quotient, then they are going to get nowhere fast. If they don’t build systems that constantly learn, evolve and become smarter with usage — much like human brain — they are not going to go anywhere. They should take a cue from IBM and its Watson effort: that’s where some of the answers lie for them.

And as for disruption, as the title says, it moves in mysterious ways.

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Square introduces “Business in a Box” to set stores up with hardware

Eliza Kern — Wed, 20 Feb 2013 17:06:53 +0000

Square plans to sell a “Business in a Box” package that includes two Square Readers, an iPad stand, a cash drawer, and an optional receipt printer, it announced Wednesday. The items will all work together to allow business owners to accept credit card purchases, furthering the company’s mission of simplifying payments.

“Square Register serves as the full point-of-sale system for businesses to accept payments, track sales, and share item and location information,” the company wrote in the press release. “Historically, business owners were forced to piece together multiple hardware components from various manufacturers, manage complicated contracts and pricing structures, and pay for expensive software licensing and service plans. Now, they can be up and running with Square Register in minutes.”

The paperless package that includes just the Square Readers, iPad stand and cash drawer starts at $299, and the package that includes the receipt printer starts at $599. Full purchasing information is available on the company’s website.

Square has grown substantially as one of the companies attempting to bring credit card and mobile payments to small businesses, and in 2012 it grew its merchant base from 1 million to 3 million and its annualized processing rate — the total value of transactions processed through Square — from $2 billion to now $10 billion. It also signed a deal with Starbucks that will integrate Square payments into the coffee stores across the country.

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Angie’s List merchants can now accept payments with Square

Laura Hazard Owen — Wed, 30 Jan 2013 13:41:23 +0000

Consumer review service Angie’s List is partnering with Square to let merchants — service providers like plumbers, housecleaners and painters — accept credit card payments from their iPhones. Square’s technology will be integrated into Angie’s List’s iOS app, Angie’s List Business Center, rather than requiring merchants to use the separate Square app.

“We’re proud to work with Angie’s List to make life easier for businesses of all sizes,” Square co-founder and CEO Jack Dorsey said in a statement.

Angie’s List has about 1.7 million subscribers, most of whom pay a membership fee that varies depending on their location (in New York City, it’s $3.60 a month). The company had previously announced in its October earnings call that it would be working with Square, but hadn’t explained the specifics. “The Square relationship fits into a much bigger and more important activity set that’s around deconstructing the local service transactions – measuring it, monitoring it, improving it and enforcing it,” Angie’s List CEO Bill Oesterle said at the time.

Square, based in San Francisco, has raised over $340 million in funding and has a reported valuation of $3.25 billion.

In a previous version of this post, I wondered whether this was the first time that Square technology has been integrated into an outside business’s app. It’s not: The company told me that the Obama and Romney campaigns also used Square technology.

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Square’s Keith Rabois checks out of mobile payments startup

Tom Krazit — Fri, 25 Jan 2013 07:08:18 +0000

Square COO Keith Rabois, one of the most prominent figures at a business that’s having an outsized effect on the mobile payments era, has decided to leave Jack Dorsey’s company.

According to AllThingsD, and supported by statements from Square and Rabois himself, the investor and executive has decided to part ways with a company that’s considered one of the brighter stars in the Silicon Valley constellation. Led by Dorsey, Twitter’s co-founder, Square has captivated small businesses with an easy-to-use credit-card payments system, and Rabois has been one of the more vocal proponents of Square’s approach to mobile payments.

It’s not entirely clear at this point what Rabois might have planned for the future, but AllThingsD points to “disagreements” between Rabois and Dorsey over the future of Square.

Rabois spoke at our Mobilize conference last year, and a video of that session follows below.

Watch this video for free on GigaOM

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Mobile’s future is in finding solutions to the problems that are all around us

Edward Aten, entrepreneur — Sun, 06 Jan 2013 18:30:29 +0000

It was a banner year for mobile in 2012. Smartphone use eclipsed that of feature phones in the U.S., and time spent on mobile devices jumped 40 percent. And yet our expectations for mobile are still an order of magnitude too small. The truth is, many of us remain blind to the possibilities of the devices we carry in our pockets because we continue to view the future of mobile in the context of the web.

Mobile is not an iterative step for the web, but a complete revolution. So instead of asking ourselves how we can adapt web-based stores to our smartphones, we should be asking how we can use unlimited access to information to help us when we are in actual stores. The full potential of the mobile revolution won’t be realized until we build the tools that make every moment of our lives better.

The internet squeezed onto mobile devices

It’s understandable that we use the web as the baseline for measuring mobile, especially since many of our most widely used apps and services originated online – email, text, maps, Twitter, Facebook, Amazon and so on. The comparison has worked until now because we’ve spent our first years with smartphones reformatting the desktop experience of the web to fit into our pockets.

Today the web itself is the product of decades of adapting the real world onto the connected desktop. First we ported over letters (email) and posters (websites). Then we moved what we could of traditional businesses online to the large screen perched on our desks: Bookstores and record stores became (literally) Amazon.com and iTunes; travel agents became Kayak.com and Yelp.com.

Since smartphones have brought computing power and an internet connection to our pockets, naturally we want those tools everywhere we go. But porting these advancements to our phones is only a pre-game to the real mobile revolution: when connectivity reshapes our minute-by-minute lives.

The offline opportunity

Opportunity is everywhere: The offline world is filled with friction, inefficiency, incomplete information, tedium and excess capacity. We feel it all the time. Waiting for elevators. Waiting for delivery drivers. Going across town only to find an empty bar. Forgetting the name of the person you just met.

These problems are so frequent and inherently human we are often blind to them. But for almost every problem we encounter, relief will be found in the same place: The device we carry with us. We don’t need to log in. Sensors minimize the information input. Smart assistants and voice recognition allow hand’s-free use and allow the least technically capable among us to use their deepest, richest features.

Last year saw the first mass implementations of phones making what used to be our offline lives better with companies like Uber and HotelTonight, but 2013 will be the year in which we start looking to our devices to scratch our every itch – for companionship, entertainment and much more.

Why now?

A number of these ideas have been around for a long time, but 2013 will be our first chance to build many of these new companies.

When Amazon.com started in 1994, less than 10 percent of U.S. adults were online. But even though that small segment of the population was spread around the country, everyone used the product in the same way whether the user was in Dubuque, Detroit or Dallas. Everyone hit the same website, bought the same things and was plugged into the same distribution network. In its infancy, Amazon only needed a tiny fraction of the country to use its services.

The comparison today with Uber, the real-time limo service, almost makes itself. Uber instantly pairs available drivers and cars with demand for rides. Crucially, Uber needs a critical mass of both supply and demand on its platform in the same geographical area, down to the same neighborhoods and streets, and needs to be able to update and match them in real time based on their current locations – a task nearly impossible to accomplish at scale on desktops or laptops. There are several forces beyond raw adoption numbers though that enable Uber’s success:

Smartphones free us from our desks. When we have problems, questions or desires, we don’t need to return to our homes or offices to satiate them; we can address them on the spot.
Touchscreens, Android and iOS are amazingly simple to use. Not only do people have the technology readily available to them, but even the least technically savvy can (and do) use it.
Apps are simple, elegant problem solvers. Small, beautiful, and easy-to-use, the best apps are easily understood in seconds.

This is the year these trends will reach critical mass in almost every major market in the US. The result will be that more great companies will be started, gain meaningful traction and drive investment. More startups will get more tries at solving problems, and a virtuous cycle will accelerate the trends.

Bringing the offline world online poses unique hurdles and rewards

While some problems are easy to identify they may be difficult to solve. Unlike many of the first internet companies, the real world has legacy industries with entrenched lobbies, distribution providers or regulations. Many require real infrastructure that needs to be acquired, integrated with or leased. In the offline world, scale is often much harder than simply spinning up additional servers.

On the other hand, many of these new companies will become natural monopolies – difficult to overthrow once they achieve scale, lock up resources within their systems and start generating significant cash. Many are adaptations or improvements of current businesses, but given the inability of incumbents to design, develop and deploy revolutionary software, we can expect many to be upset by startups.

Looking to the future

Unlike any technology we have ever seen, mobile has the opportunity to improve our minute-by-minute lives, wherever we are. While there are unique perils to the offline world, the significant rewards to those that build these new companies more than offset the risk.

Companies like Uber and HotelTonight are just the tip of the iceberg. Square isn’t just revolutionizing payments, but the experience of paying for things in real life. A company like Highlight will eventually be a real-time, in-person LinkedIn that gives us context, history and information for all of our encounters.

Mobile isn’t a portal to the internet we know today, but a gateway to build world-changing companies that will upend entrenched incumbents and exponentially recast even the most bullish of mobile expectations.

Edward Aten is a designer and entrepreneur. He is the founder and CEO of CopThis and previously founded Swift.fm. Follow him on Twitter at @aten.

Photo courtesy of Felix Mizioznikov/Shutterstock.com

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Revealed: the finalists for the 2012 Crunchies

Tom Krazit — Thu, 03 Jan 2013 18:00:44 +0000

The finalists for the 2012 Crunchies have been released, and now it’s time to decide who should rewarded for their technology innovation and leadership over the course of 2012.

The list of honorees follows below, and it’s a list packed with newcomers as well as Silicon Valley veterans. Thanks to all for voting in the nomination process, and now that we’ve narrowed it down to five candidates for each award, don’t forget to vote for which person or company you think is most deserving. Voting begins today (the voting page can be found here, and the rules are here) and closes on January 24th.

As a reminder, the Crunchies, a joint production with our friends at Techcrunch and Venturebeat, will take place on Thursday, January 31, 2013, from 7:30pm to 11:30pm at Louise M. Davies Symphony Hall, 201 Van Ness Ave, San Francisco. You can purchase tickets here.

So, without any further delay, the nominees for the 2012 Crunchies are as follows:

Best Technology Achievement
Baumgartner Jump
Google Glass
Mars Curiosity
SpaceX docks with International Space Station
Tesla Supercharger Network

Best Collaborative Consumption Service
Airbnb
Get It Now/Postmates
Lyft
TaskRabbit
Uber

Best E-Commerce Application
Fab
Hotel Tonight
Karma/Facebook Gifts
Warby Parker
Zulily

Best Mobile Application
Evernote
Google Maps
Grindr
Instagram
Square

Fastest Rising Startup
Exec
Lyft
Pinterest
Snapchat
Stripe

Best Content Discovery Application
Flipboard
Instapaper
Pinterest
Prismatic
Tumblr

Best Design
Facebook Timeline
Medium
Paper by FiftyThree
Square
Svbtle

Best Bootstrapped Startup
FreshBooks
Instapaper
Nimbus
Techmeme
Upverter

Sexiest Enterprise Startup
Asana
Box
Cloudera
Plexxi
Zendesk

Best International Startup
Hailo
Rovio
Soundcloud
Spotify
Xiaomi

Best Education Startup
Codecademy
Coursera
Edmodo
Khan Academy
Udacity

Best Hardware Startup
Lit Motors
Lockitron
Makerbot
Nest
Raspberry Pi

Best Time Sink
Angry Birds Star Wars
Buzzfeed
Letterpress
Pinterest
WhatsApp

Biggest Social Impact
Donors Choose
Indiegogo
Kickstarter
Kiva
Reddit

Angel of the Year
Michael Arrington
Chris Dixon
Paul Graham
David Lee
Chris Sacca

VC of the Year
Marc Andreessen and Ben Horowitz
Matt Cohler
Jim Goetz
Michael Moritz
Peter Thiel

Founder of the Year
Nathan Blecharczyk, Brian Chesky, Joe Gebbia (Airbnb)
Kevin and Julia Hartz (Eventbrite)
Elon Musk (SpaceX, Tesla)
Kevin Systrom (Instagram)
Nir Zuk (Palo Alto Networks)

CEO of the Year
Dick Costolo (Twitter)
Phil Libin (Evernote)
Marissa Mayer (Yahoo!)
Larry Page (Google)
Mark Zuckerberg (Facebook)

Best New Startup of 2012
Coursera
Crowdtilt
Lyft
Snapchat
Waze

Best Overall Startup of 2012
Fab
Github
Instagram
Palantir
Square

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