Monthly Archives: February 2010

Why I’m excited for Square vs Verifone: The Revolution

Normally I don't like it when startups describe themselves as, "Trying to revolutionize X." Everyone is trying to start a revolution, and very few companies really end up affecting massive revolutionary change in the world. Instead, it may be more appropriate to be honest and say that a startup is, "Trying to carve out a small piece of market X." After all, a small piece of a large market is generally good enough.

In the case of Square, the new mobile credit card processor from Jack Dorsey, I really do believe that there is major potential for a revolution brewing. I'm even more excited that Verifone rushed out PAYware mobile to compete, and force the pace of innovation and competition. The revolution that I'm looking forward to however has nothing to do with the ability to accept credit cards from a cell phone however. Instead it's about the changing paradigm of paying for things, and organizing all the information associated with the purchase.

Consider this lists of wants as catalysts for the payments revolution:
  • No paper receipts – why would I want a 3 inch piece of paper when I buy a soda?
  • Searchable online receipts tracked at the item level and not the merchant level.
  • Centralized online transaction manager containing said receipts so that you only have to go to one place to organize all your spending.
  • Automatic expense report generation and tie-in.
  • Electronic submission of expenses and receipts to IRS.
  • Don't have to carry 6 different credit cards.
  • Don't have to carry even 1 credit card.
  • Ability to pay anyone, anywhere.
To me the mobile payment hardware war that is about to be waged behind Square with it's smart founders and investors, and Verifone with it's enormous pockets and commercial connections, will be less about who wins the ability to accept payment on the iPhone, and more about the race for building a platform that can support all of the above from the consumer side. People use credit cards because they're convenient, but there's been very little iteration in the area for many years. Now all of the sudden there are new conveniences that customers are looking for, and whichever vendor allows businesses and individuals to provide their customers with the greatest level of convenience will have a good chance of creating a real revolution.

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Justifiable confidence in your skill set means you have nothing to be scared of

Why are professionals with years of experience and talented work to show off nervous that amateurs and hobbyists will steal work from them? 

If they truly have the skill and experience that they are claiming justifies their price, then they shouldn't be worried about this at all. As I wrote in my last post, there has been an uproar lately among the professional photography community that up and coming amateurs and hobbyist photographers are undercutting them on price, stealing their work, and bringing the industry down as a whole. This is an especially sensitive topic to me obviously, as Snapm, aims to connect amateur photographers with paying jobs. However I argue that they are serving different customers, different needs, and that the price being charged for a job is determined by the market and not by an artificial point agreed to by the old guard.

Additionally, if you are truly talented, have years of work under your built, and have a portfolio of work and clients to show off in support of this, then the last thing you need to be worried about are amateurs stealing work from you. I liken this to the scare in the IT world that IT professionals are losing their jobs to outsourced workers overseas. Unknowing outsiders started advising against studying computer science in college because all programming jobs would soon be snatched up by overseas workers who could charge a fraction of the price. This thinking is wrong for two reasons.

First of all, the statement comes from a lack of understanding of what computer science really is. It is, contrary to common belief, not the study of computer programming. It is a rigorous background in abstract and analytical problem solving. It gives you the basis to solve problems that deal with system architecture, scaling, network administration issues, data model design, security, as well as the ability to implement solutions in all of these areas. The notion that someone with a strong computer science education is a replaceable programmer is most definitely false. This is supported by the fact that smart, experienced computer science minded folks are in high demand throughout industry as well as in the early stage startup world. You may be able to outsource some of the repeatable programming tasks, but when it comes to architecting your system, you need someone who knows what they're doing.

The second reason that I believe this thinking is wrong in the area of computer science, is that as companies take advantage of cheaper overseas programming for basic tasks, they become more efficient in the technology arena – and this leads to more technology. The more cutting edge technology or new initiatives they are taking, the more talented, intelligent people they'll need locally to architect and oversee the efforts. This creates "smarter" jobs. Sure the IT certified Java programmer may lose his coding job to an outsourced agency, but the jobs that are created will reward smarter more well rounded candidates, allow the companies to grow more intelligently, and the result will be even more jobs created in the future.

So how is this similar to photography? Any talented experienced photographer is ideally like someone with the strong computer science background. They've been studying their art form their entire life in an effort to get better, and there will always be work for them on the high end of the spectrum. Up and coming amateurs and hobbyists can serve the low end of the market, because they're happy to get some experience and fulfill roles where a professional wasn't affordable anyway. The amateurs are like the outsourced talent. They'll allow companies and individuals to accomplish their goals (of getting photos taken) more efficiently, but when it comes time for a bigger project or something incredibly important, the established pros should have nothing to worry about.

If a strong professional photographer is competing with an amateur, then they may want to question whether that particular job is something that is up to their standards anyway. Or if they have trouble convincing the client that their price is worth it, then perhaps their price is too high. Snapm aims to make photography accessible to those who wouldn't be able to afford it otherwise, and at the same time allow amateurs to gain experience and make a little bit of money. Magazines, corporations, and upscale wedding participants will still be in need to A-level talent, so spend your time learning what you need to in order to capture those jobs instead of competing with amateurs for work you don't want anyway.