The era of big business seems to be shrinking. Obviously there are a number of reasons why this is occurring, but I want to focus on why the little guys are succeeding. This is a series of posts related to how small can become big. Or, if it is more their style, how the small can stay small and survive.
One of the biggest hurdles any startup runs into is finance. Usually the entrepreneurial spirit doesn’t coincide with the ability to think inside of the accounting box. Independent contractors and sole-prorpieterships often rely on good-old-fashioned cash money, or checks, for payment of services. Both are dwindling in the Plastic Era. Some that are more savvy have looked to services like PayPal, and billing through the web as an option.
But as consumers, we love our credit cards.
The ability for small businesses to take our Visa, MasterCard or American Express has previously involved dynamic rates with contracts and processing fees. A stress that most individuals and independent contractors have ignored. But lately, the tides are a-changing. As consumers, we love our rewards, and hate the idea of forms of payment as a barrier to do business.
Last winter, we had some work done on our furnace. Naturally we weren’t excited about it. Cutting a check for a few hundred dollars always makes me squirm. When it got to that point though, our technician pulled from his bag a big credit card reader, and he let us put it on a credit card from our kitchen. Pretty neat, but I’d hate to bring that thing with everywhere – let alone the hassle of setting up accounts with the credit card companies and such.
And then, it appears life is getting even easier. My wife is a photographer, and her studio was doing portraits on-site for some folks. We had our iMac with, proofed and did quick edits on the spot. We were able to take orders on the spot. We used our fancy schmanzy iPhones with a little doohicky on top to take credit cards. Why? Because it’s incredibly easy. We signed up for a free account, they sent us the card reader, and then they only charge us 2.75% per transaction. The funds get deposited into her bank account, and that’s it. Literally, that’s it.
Square is the company that makes the doohicky, and it has crossed some pretty revolutionary benchmarks in the last few weeks. On March 2nd of this year, Square processed $1,000,000 in transactions a day. That’s pretty amazing. But, then on April 29th, they announced $2,000,000 per day. Not bad. 100% growth for less than two months time. But wait. There’s more. May 21st marked $3,000,000 per day. In the first three months of 2011, they processed $66,000,000. Talk about a rapid acceleration in growth.
They’ve grown quickly, and now acquired some security. The New York Times reported that Visa itself has invested a substantial amount in Square to help ensure it succeeds. Shortly thereafter, you could actually (and still can) find a Square reader available for $9.95 from any Apple Store. Plus, the $10 you spent gets credited to your Square account. So really, it doesn’t cost you anything but the tax.
My wife’s company uses Square, the company I work for uses Square, and rumor on the street is that some very big retailers are about to start using Square as well.
Square’s CEO is Jack Dorsey, who also happens to be the Co-Founder and Executive Chairman of Twitter. Two small startups that are growing like crazy, and both are truly helping “The Little Guys” be better.
And that is becoming a near-universal truth. The most successful small companies today are the ones that are helping others prosper.
Stay tuned for Part II, The Essence of Everyone.