Block ft. Jack Dorsey - A controversial hack week project becomes the #1 financial services app
Sep 21, 2023
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Jack Dorsey, founder of Square, reflects on the origins and defining moments of Block. He discusses the evolution of Square, their partnership with Starbucks, and the birth of Cash App. Dorsey explains how Block succeeded by weaving new products around a core vision and taking risks. The podcast also explores the development and launch of Cash App and the importance of connecting ecosystems through acquisitions.
Block Inc disrupted the credit card terminal business model by giving away their hardware and software for free, enabling them to build a large network and empower small businesses.
Block's decision to acquire Afterpay demonstrates their ambition to create a unified network between their seller-focused ecosystem and Cash App's consumer base, establishing themselves as a comprehensive financial services provider.
Deep dives
Block's Crucible Decisions: Sacrificing Revenue for Growth
Block Inc, formerly known as Square, made a crucial decision early on to give away their credit card reader hardware and software for free, focusing on building a large network. This disrupted the traditional credit card terminal business model and incurred initial losses, but it allowed Block to empower small businesses and gain widespread adoption.
The Starbucks Deal: A Risky Path to Distribution
Block faced a critical decision when Starbucks offered a partnership deal. While it seemed like a valuable opportunity for distribution, it came with risks and potential diversion of resources from their core business. Ultimately, they took the deal, leading to a high-profile partnership but also significant losses. However, it accelerated Block's technology stack, increased awareness, and expanded their mindset beyond just small sellers.
Cash App: The Battle to Establish a Business Model
Cash App's inception faced internal resistance as Block's primary focus was on helping sellers, not building a consumer payment product. Despite the challenges, Cash App's potential for economic empowerment and serving the unbanked kept the team dedicated. After nine months, they successfully developed revenue-generating features like Instant Deposit, Cash Card, and Cash Boost, transforming Cash App into a profitable unit within Block.
Connecting Ecosystems: The Acquisition of Afterpay
In another bold move, Block acquired Afterpay, a leading buy-now-pay-later company, to build a bridge between their seller-focused ecosystem and Cash App's consumer base. This acquisition aims to create a unified network and capitalize on synergies, ultimately driving growth and establishing Block as a comprehensive financial services provider.
CEO Jack Dorsey reflects on Block’s origins and defining moments with host Roelof Botha.
Dorsey founded Square in 2009 with a clear vision: economic empowerment for all. Their dongle that turns iPhones into credit card readers was just the start. With Square, small business owners were able to reach more customers and better manage their companies. But when Cash App, which emerged from an internal hackathon, started to gain traction, Square had a decision to make: stick to their core focus, or risk building an unproven product for consumers? Dorsey explains how Block succeeded by weaving new products around a core vision, and how a controversial shift in strategy led them to fully deliver on their founding mission.
Host: Roelof Botha, Managing Partner of Sequoia Capital
Featuring: Jack Dorsey, Alyssa Henry, Brian Grassadonia
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