Square Valuation Reminds Us Just How Simple The Best Ideas Really AreSeptember 20, 2012 8:18 am ·
Keeping it simple. It really is more difficult than it sounds. And yet, it’s always the simple things that seem to catch on the most. After receiving a mind-blowing $3.25 billion valuation this week, San Francisco startup Square found itself in just such a position.
Known for its iconic yet minimally designed card reader—or dongle—that fits comfortably atop just about any smartphone, Square has become the standard bearer when it comes to mobile payment processing. As a result, the humble startup has become a prized asset among small business owners and others who typically can’t afford the steep fees—not to mention the immobility—characteristic of traditional credit card processors.
But the appeal hasn’t stopped at smaller entities.
“It’s enormous news for a startup that has grown from about 150 employees a year ago to more than 400 today,” writes Entrepreneur’s Brian Patrick Eha, reacting to the news of Square’s latest valuation. “Square says it’s processing more than $8 billion in payments each year.”
Raising more than $200 million in its latest (fourth) round of funding, the Bay Area startup, headed by Twitter cofounder Jack Dorsey, has begun attracting the attention of blue chip investors. According to AllThingsD, those in attendance for this round included Starbucks Coffee Company, Citi Ventures, and Rizvi Traverse Management.
“The funding will help the company continue to grow, including plans for international expansion later this year,” the report also notes.
This is all impressive, of course. However, one thing that is easily missed among talk of multibillion-dollar valuations, multinational expansion and acquisition rumors is precisely the thing that has made Square the envy of all tech startups—its simplicity.
From design to mission, Square saw a need—affordable, convenient credit card processing—and sought to meet it in the simplest way possible. Noticing that consumer wallets had begun including less paper and more plastic, Square provided the perfect answer to the increasingly mobile nature of our consumption-based economy. Even as the company has begun wooing corporate elites and dabbling in web apps, Square has not lost sight of its central mission, and more importantly, its identity.
As a result, the deluge of cash that continues to pour into (and through) Square serves to underscore one underlying principle that should serve as a guide to all new startups: While being successful isn’t exactly simple, it’s typically the simple ideas that are the most successful.