A Different View-Square.

There are some things which stand out about Square. First, it is a tangible product with a real solution to real problems. It seeks to address the payment acceptance market –one that is critical, conflicted and often unfulfilled. The product is very well-designed and has strong visual appeal. It has a charismatic and well-known founder-CEO in Jack Dorsey. The offering has expanded from converting a phone into a mobile terminal to an end-to-end proposition. Square is synonymous with payment acceptance. This is a formidable list of plus points for a payments company.

Square sits on top of the perception hill because it built a great story. It has all the elements of a smash hit-young entrepreneurs, the farmers’ markets(or some such), the eureka moment, the can-do individualism and great design thinking. It is worth considering that once the tale is told, everyone else becomes a follower. In the world of fast-changing technology, this is a strategic advantage that is not seen on a spreadsheet and deserves a closer look. Certainly other aspiring start-up creators can be inspired as well as draw important lessons from this.

The stock is on bit of a comeback trail but there seems to be some unease. Perhaps it has to do with Mr Dorsey being the captain of two high profile companies, the other being Twitter. I will take a contrarian stand and say that this is a not a negative-we may run the risk of viewing new businesses through old lenses.

At the same time, let us consider the global opportunity and how Square has responded to it. The company is present in Japan and Australia. But the big hits will come from elsewhere. As contactless-especially mobile contactless issuance- comes alive in different markets, the acceptance opportunity becomes apparent. Millions of mobile terminals are needed in supermarkets, groceries, taxis, buses and hawker centres. Many small and medium enterprises need easy acceptance. At some stage, the battle for these large, chaotic and crowded markets will need to be fought. Square will have some early advantage but there will be formidable local and regional competition. There will be different perceptions of price and quality. How Square views , approaches and tackles these markets will be of importance not only to it as a company but to the markets themselves.

With a different view.

Note: All comments and opinions are my own and this note is written in my personal capacity.

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