In 2010, I was introduced to Venmo, a peer-to-peer digital payment platform. I had just moved into a seven-person house in West Philadelphia with a motley crew of nonprofit and public sector professionals and one graduate student — who happened to have gone to college with Venmo’s first employee. We were among Venmo’s early adopters, and perfectly-matched target customers: we needed a simple way to split utility bills and charge each other for groceries. We heard that screenshots of our transactions made it into Venmo’s investment pitches: “Jenny charged Greg and Melissa for farmers’ market veggies and a Dock Street growler.”
I was highly skeptical of Venmo, and my roommates agreed. Sure, Venmo worked for our eccentric living arrangement, but who else would use what seemed like a basic, single-function app? How could such a streamlined platform protect security or meet a diverse array of user requirements?
By the time I started graduate school six years later, my classmates used “Venmo” as a verb and the platform seemed ubiquitous. Venmo users transferred $17.6 Billion in 2016, the LA Times reports. Rather than getting crushed by a bigger financial player as I’d expected, Venmo had exploded. What had I missed in my initial dismissal of Venmo’s staying power? Analyzing Venmo with Alex Osterwalder’s Value Proposition Design canvas sheds light on the platform’s unique value:
Two key insights emerge from this exercise. First, my assumption that minimalism translated to lack of sophistication or broad user application was way off the mark. In fact, I now believe that it’s Venmo’s simplicity — combined with the platform’s effectiveness at uncovering and addressing a core set of customer pain points — that drives success. Most of us have sat through the awkwardness that follows a 10-person dinner at a cash-only restaurant; we’ve spent too much time and soured pleasant social interactions digging for bills and making pay-back plans.
Venmo’s user-centered design responds to urban young adults’ need to streamline these thorny, socially charged financial interactions. With just two buttons (pay and charge) Venmo offers convenience and speed, at little to no cost. While it may not solve every customer financial use case, it solves enough important ones to remain a dominant player in digital payments. Its functionality zeroes in on the people the product is designed for, and anticipates their needs. The app’s simplicity enables focus and user-centricity.
Second, and related, my Value Proposition Design exercise points to the importance of Venmo’s creation of social value, which can mean just as much to users as convenience or financial value. For most Venmo users, spending is social. They want to tell their friends what they’ve been doing and spending, and with whom — and they want to know what their friends are up to. They’re also aware that what they do and don’t pay for in social settings carries reputation risks and social consequences. Venmo can add transparency and ease to these interactions. While banks are increasingly introducing their own payment platforms, Venmo still dominates the social payments space, by linking with social media sites and offering one-click ways to share and build community. I’ve gotten used to seeing clever emoji strings that signal my debts — a service that my credit union has yet to offer.
In 2010, when I first tried Venmo, I was working for a food policy nonprofit. My housemates worked for the city’s literacy program, arts education and college access organizations, and a community development corporation. In the context of Digital Government, I can’t help but wonder what it would have looked like to bring Venmo’s orientation to this set of critical service organizations. Perhaps it was our familiarity with unnecessary complexity, from food stamp enrollment to federal grant applications, that made it hard to look around the corner and imagine what Venmo could become.
Today, there are thousands of young, idealistic, urban millennials using Venmo — in West Philly, some wide-eyed group is probably splitting up the bill at an Ethiopian restaurant, talking about political organizing. My generation’s charge is to learn from Venmo, and bring the best of this streamlined, customer-obsessed design to social service organizations, delivering value to the users who need it most. Thanks for the lesson in human-centered design, Venmo.