Jack Dorsey says the key to a good product is not to define how people will use it.
I'm still digesting a recent interview with Jack Dorsey:
The key to Square’s rapid growth in Dorsey’s mind is the same thing that propels Twitter: “We haven’t defined a lot of how people are going to use them." He sees both as utilities which can be adopted to different purposes by their users, and that is what makes them so powerful. “We don’t want to make Square all about taxi cabs,”" he says. “And we don’t want to make Twitter all about celebrities and politicians.”
The other thing that Square and Twitter have in common is that they are both essentially communications technologies. Dorsey thinks of the receipt as a publishing medium (kind of like Twitter). “It is a communication medium between the business and the consumer,” he says. But normally it is something we throw away. That communication between merchant and payer is where the “exchange of value” lies. Payments is just something “we need to do” to create that communication.
Source: http://techcrunch.com/2011/11/13/jack-dorsey-square-11-million-day/
I can only name a handful of successful general purpose communications technologies (Facebook, Twitter, LinkedIn, YouTube, Flickr, WordPress, Skype, Instant Messaging, Text Messaging).
Is that because communications technologies are winner-take-all?
Are technologies like Usenet and Mailing Lists relics of an era long ago?
I do think Usenet is on the path to death but it has been for a long long time, so perhaps it's an undead technology?
Mailing lists on the other hand are huge: connection via email feels a hell of a lot more personal than almost all the others, gives the option for genuine group privacy, and is a communication medium that allows for medium length communications. The model is popular in multiple ways: Old fashioned mailing lists, most easily accessible via the free-hosted mailing list model of Yahoo Groups for two way communication, through mini-ESPs like MailChimp, all the way up to the giant ESPs for unidirectional targeted communication. There are a thousand business models here, some of which have yet to be fully explored.
Email is here to stay but it seems to get more unmanageable every day.
Further to your other point: Any service that offers a platform or an open API is offering you a way to define how you use it.
(I agree with the Dorsey quote, in case that wasn't obvious.)
Corollary: if you don't have an API, your service doesn't allow for serendipity of unintended usage.
Perhaps a overstated, though I love the phrase "serendipity of unintended usage." Unintended usage happens at the consumer level of the value chain all the time. Eg, Blogger was originally developed as a team communication tool for Pyra, which was making project management software. But they kept the weblog tool "feature light", and so it could be appropriated for myriad other uses and became (for a while) the defining technology in a new publishing category.
The good thing about PandaWhale is that right now it's being used almost exactly the way we intended.
The bad thing about that is that perhaps we're missing something significant?
Another way of interpreting the comment -- don't slice the vertical to narrowly if you aspire to be platform technology. For communication products there are inherent network effect so if we look at Square as a bi-directional, communication tool with memory of transaction hence relationship it is much more interesting.
It is interesting to imagine a Twitter where only celebrities can write. It would probably be wildly successful because of the focus. People Magazine isn't about people; it's about celebrities.
The problem with being general purpose is that you might end up being a solution in search of a problem. I've been there before and it's an unpleasant place to be because it's hard to get enough traction to be relevant.
Ashish, Laura, and Adam - Thank you! Really great discussion/comments on this article.
Not sure if I can articulate well enough, but here goes - It's interesting that Dorsey elevates communication between merchant and payer to the point where that's where the "exchange of value" lies... so payments are just a means to facilitate that communication. As a merchant, you probably want to have an ongoing dialogue/open communication channel with your customer in order to promote further sales and new products while the customer in turn benefits from being able to talk with the merchant about their issues/needs. So are payments almost a "by-product" and not the goal?!
I guess it's a different spin on the traditional transaction model where getting to purchase and payment is the end goal.
And maybe I'm reading too much into this:)
> So are payments almost a "by-product" and not the goal?!
That's an interesting statement, talk about flipping an industries model upside down! I don't believe you're reading too much into this. It sounds like he's trying to get to a point where we aren't thinking so much about the payment, but more about other reasons why I want to visit a physical store. Yes, maybe they have good food, but what else is driving me through the doors? Is it because I have a good rapport with the owner? I feel a connection to that establishment? I like the community of people there?
If the payments did become a by-product, what are the other factors that drive me to go there? Similar to thinking, what are the factors that drive me to Twitter? Facebook? etc...
Dorsey figures you'll use Square because the merchant asks you to use Square.
Dorsey figures you'll use Twitter because sports stars and celebrities ask you to use Twitter.
Those are actually decent figures, IMHO.
> Dorsey figures you'll use Square because the merchant asks you to use Square.
The thing is, I won't visit a merchants store BECAUSE they are using Square (I get the Twitter use-case).
I will simply use it because I desire to pay with a credit card instead of cash. Great for the company, Square. Maybe it's okay for the Merchant if they get a HUGE discount per transaction from their previous one. But any other payment company will do just as well if they drop their fee's lower in this never ending battle of pricing that we are in the middle of.
Why should I, as a customer, go into that store? Square doesn't push me in, and a merchant will not survive unless I patronize their store.
Well now Square is providing incentives -- $5 or $10 -- to use with any Square merchant.
They're also talking about rolling out loyalty programs through Square that earn you Square points.
But your point is a good one. Square had to get critical mass with merchants before this could work.
> Is that because communications technologies are winner-take-all?
I don't believe they are winner-take-all, they are just very difficult to get correct. Think of all the people we meet, in-person, who have horrible communication skills. If we can't get it right with each other, how can we build tools that help facilitate this process.
Well, there are certainly network effects.
All the best communication tools -- email, instant messages, text messages, Facebook, Twitter -- are defined by their good-enoughed-ness.
Is there a better word for "good enough"-ed-ness?
The 2nd paragraph from the OP is spinning my head a bit, and this is what's catching my eye. I'm working in a similar space, and have yet to see anyone articulate it in this way:
> Dorsey thinks of the receipt as a publishing medium (kind of like Twitter).
I suppose a world of opportunity opens up if we remove the physical receipt like Square is doing, but I'm not sure it should be so constrained to just the merchant and payer.
> That communication between merchant and payer is where the “exchange of value” lies.
If I walk into a store with 3 other people, and 1 person pays, there is a lot of value not being captured (only 1 out of 4 being captured). If I walk into a store just to meet up with a few others, there is a lot of value not being captured. A merchant has the opportunity to capture value with something similar to shop kick, I enter a store regardless of making a purchase, walk by a product and a discount is sent to my phone.
Does this bother anyone else? Or am I the only one getting tripped up by this?
I've discovered that Dorsey thinks in big, discrete steps.
So what you're describing is something that would make the difference between, say, v5 of the product and v6 of the product.
Like adding Siri to iPhone.
In that sense, Dorsey is a lot like Jobs. Big, discrete steps.
Hmmmm... Interesting thought, but I have a different perspective (not to say that it's the correct, or only perspective).
I believe he his missing where the exchange of value exists.
His thoughts are that it exists between the merchant and the payer. To me, the exchange of value exists when anyone walks into a merchants store, regardless if they pay or not.
It's correlated to a vistor on a web site, and a user (registered and logged in visitor) to a web site.
When I visit a web site, that site has the opportunity to convert me into a registered user. They either do it on the spot, or engage me at a level that makes me return in the future, turning me into a registered user.
When my buddy wants a coffee, and I walk into a cafe with him, that's the opportunity to convert me into a regular customer. They either do it on the spot, or engage me at a level that makes me return in the future, turning me into a regular customer.
To me, there is a HUGE difference, and I don't see it as simple upgrade. It's a fundamental shift in how they operate.
Right now, Square considers the merchants its customers.
In the future, consumers will also be Square's customers.
It's a balancing act that required reaching critical mass with merchants first.
It might be more accurate to say creators should not *limit* how the product is used. Leaving a purpose "undefined" is extremely dangerous. Most products that serve a nebulous purpose die a quick, horrible death. Successful products have a clearly defined purpose but listen to consumers and eagerly embrace change.
Thanks for saying this, Eric.
It's one thing that has bothered me about Dorsey's platitudes.
Great products have constraints, not lack of definition.
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