I'm not seeing people use it for splitting bills and the like as much, but I got the impression Square was making a conscious shift away from that market and toward small brick-and-mortar (or truck-and-van?) businesses.
Square reached too high a valuation off of low value business with merchants. They have burned through staggering amounts of cash, canceled high profiled products, and purchased payment-unrelated startups and made other changes. The high valuation they've had in funding rounds makes them an unattractive purchase because the business they have isn't worth what it would cost. To get new money they'd have to do something like foursquare did to raise money, which dilutes everyone's current equity to very little.
They probably can turn it into some kind of business but the growth has stalled, the equity employees have is at risk and they've all but lost the sparkle that excites the press when they talk about the company. They could gain momentum back, it's not impossible, and they have really, really good engineers and designers so that's a plus.
The key point about Square's business is that they're in a new market. Their primary users are small businesses that would not otherwise be able to accept credit cards. I just bought a bottle of vodka directly from a distillery using Square: they had no cash register, no front office, you walk up to the door and the guys who run it will sell you a bottle on an iPad. Last Christmas, I bought our Christmas tree directly from a family-owned tree farm in the Santa Cruz mountains using Square. I paid for Maker Faire with Square.
If you follow Steve Blank's Lean Startup thought process, new markets take an average of 7 years to reach profitability. It's not just a matter of convincing customers to switch; you have to wait for people to enter the new lines of business that you have made possible. That's finally starting to happen for Square: I see people on HN down on it, but I talk to their actual customers, the ones who pay money for it, and they are all very happy with it.
[1] http://www.forbes.com/sites/stevenbertoni/2014/04/21/why-squ...
[2] http://fortune.com/2014/05/14/squares-status-its-complicated...
I know an engineer who works at Square, they are not a lean startup, they have all the various excesses that people love to hate which is expensive catering, free shit, expensive furnishings. Square is not lean, and when you're losing $100,000,000 a year, I don't care if you're an ancient business like Ford or IBM, that's not good, and you wont have 7 years to reach profitability profitability, you got about half that, if you don't hire anymore. If Square stops hiring, that's also not good. They're going to have to let people go, like their recruiting operation, which is world class.
"Lean" in this context doesn't mean "cheap." http://steveblank.com/2009/11/02/lean-startups-aren%E2%80%99...
The key point from the article: "If you confuse Lean with Cheap when you do find a repeatable and scalable sales model, you will starve your company for resources needed to scale."
Your point about lean and cheap is fair but a bit confusing in context.
The reason this works is because once you have that repeatable and scalable business model, you can be fairly sure that hiring a person (plus all the other operational costs) at $X will bring in >$X in new business. So you spend money for growth; the expenses are booked this year, the revenue doesn't happen until next year when contracts are inked, product improvements are launched, more people hear about Square, etc. The number to pay attention to is gross margins (the amount of money they make off each transaction); the 2nd article I linked lists that at 34%, which is comparable to Amazon's 30% and Apple's 39%. As long as that is positive and high enough to cover fixed operational costs, Square can instantly get to profitability by laying off people (or, with current revenue growth, simply by slowing down hiring).
The risk with this strategy is that the market turns out to be smaller than expected, and your product appeals only to a small number of early adopters. Growth then slows down markedly right as expenses ramp up, and there's no way to jump-start growth again. I think this is what's happened with Quora. Square seems different, though: the customers I've talked to are decidedly non-technical, and yet they love the product.
Me, too. I live in Japan and it blew me away when I saw Square readers for smartphones in convenience stores the other day.
Amazon has a strong history of expanding their business and building new highly valuable products with staying power. Google has only expanded a little in terms of actual functional products, most of their additions have been via acquisitions, and they have not done well at monetizing or even supporting many of their new product offerings. Google is primarily search + backbone ISP, that's where almost all of their revenue comes from, everything else falls into a tiny "other" category. Indicative of their utter inability to effectively spinoff new products and high revenue businesses.
The only downside is that the work environment is more than a little dysfunctional.
Google is good at launching products, they're not good at maturing them. Chrome is a fantastic piece of software, and it fulfills it's purpose for google quite well, but it's not a product in the way that AWS or the kindle is a product.
Google is good at development, excellent in fact. But they get stuck in the hard middle parts of product development. They fail to monetize products well and they fail to mature products into their full potential. Partly that's because product development at google is basically just play-time. As I said, revenue for google derives from a tiny subset of products (search and network almost exclusively), everything else is just a side project. As such, when a product doesn't meet its potential or doesn't bring in billions in revenue that is not an issue at all at google, it's the expected case. In some ways that's good, but in other ways it's bad. Docs/drive has stagnated relative to what it could have been for years.
Amazon is almost diametrically opposite. They productize well, extremely well, but they have a horrid working environment in regard to devs.
I buy tons of wierd automotive parts that are not 'well known' and usually end up using Google to find products on Amazon.
Their search engine is actually pretty limiting in some ways.
They also advertise some of their working practices when it benefits them (eg datacentre physical staff don't have logical access), but to be honest, there aren't a lot of big companies out there that openly advertise their internal processes. They're also being extremely open about wanting to be The Middle Man when it comes to cloud, nothing stealthy about it at all. I just went to a free AWS summit, where the VP giving the keynote said as much - how is it possible to accuse them of secrecy when they paid for a big venue for me to visit, just in order to tell me exactly that factoid?
They are worth watching due to monopolistic concerns, sure, but there's so much FUD out there about them.
Just because they aren't based in the valley and make Apple look positively liberal when it comes to secrecy and working practices doesn't mean they should be ignored. Quite honestly I think they're the single most terrifying company in the US today, an idea Bezos would take as a compliment.
The big picture is they are gunning to become the universal middle men for when people actually spend money on the net. Google only have the ad side of things together, but never really cracked getting end users to open their wallets, yet Amazon are in the position of starting in front of users, and slowly moving themselves into being the background glue between everything else, facilitating transactions between everyone while taking their cut and enforcing their rules. Terrifying, and brilliant.