David Rosenthal: evaluation

Transcript context

…You know, as a person I’ve never been able to do that. I know. It’s pretty cool. That's the end of the fun stories of the history and facts for Square. But I think this is really the key innovation. Part of it is the hardware thing and we talked about the lawsuit and Morley. But part of the innovation was being the technology to accept payments on your phone, but the bigger part of it was enabling anyone to accept payments, like we were talking about. It was this huge barrier to doing so and entering the industry. And what Square was able to do and it also I think was technology innovation, but it was on the backend, they were able to let so many people like you and me, Ben, consumers into this world of accepting payments because they got really, really good at fraud prevention. This was part of the reason why the industry didn’t let anyone in before was protectionism probably, but the stated reason was fraud. That if you let anybody accept payments, you’re just opening the door to tons and tons of fraud happening. Yeah, I think you nailed it. There’s a couple of amazing data points here. So I think you’re right that the thing that Square did that's entirely differentiating is unlocked a completely new set of people who could accept transactions, right? They did it an incredibly design focused way. So every POS system ever has sucked. Right? It’s just been awful and they invented this category of sort of cloud Point of Sale which is really the big market than they’re in now. It’s not as much mobile card reader as much as it is a cloud Point of Sale system. They’re competing with like the micros of the world there that are sort of the tethered to a phone line Point of Sale system and really hard to integrate with. So when you look at the market they were entering, so they did three things really well. They did the incredible, amazing user experience as a merchant. They unlocked new merchants, secondary merchants before, and they did the best job of reducing fraud with this new merchant class. So when you look at the Square device was revolutionary but it wasn’t the first. I mean Intuit had something called GoPayment that was totally already catching on. It wasn’t even like, “oh well, you can find prior art” or something like that. It was totally happening but Square had a phenomenally better experience.…

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