Month: June 2010

Square Could be The Next Paypal

Square has the potential to be a game changer.  It allows anyone with an iPhone to accept credit cards.  The founders, who previously founded Twitter, realized that while just about everyone has credit cards, only 2% of credit card holders had the ability to accept them.  From their site:

Square changes all that.  All you have to do is download their app, give them your social security number and a bank account number and you can process credit cards.  If you want to get a lower fee, you can request that they send you a free credit card reader, which you plug into your headphone jack.  From their site:

In February 2009, Jim McKelvey wasn’t able to sell a piece of his glass art because he couldn’t accept a credit card as payment. Even though a majority of payments has moved to plastic cards, accepting payments from cards is still difficult, requiring long applications, expensive hardware, and an overly complex experience. Square was born a few days later right next to the old San Francisco US Mint.

I’ve downloaded the app and played around with it and it’s about as easy to use as it could possibly be.  Just like paypal, you always know what you have to do to accept payments.  Imagine being able to settle debts and split bills at restaurants right on your phone.  Or maybe accept a utility bill from your roommate who never has cash and doesn’t like to write checks.  Or imagine a street vendor selling food or tshirts.  Square opens up completely new markets and lowers the friction between buyers and sellers.

There are drawbacks.  First, many people do not trust vendors who use their personal mobile phones to accept credit cards.  People are worried about being scammed.  I wouldn’t be too worried about being scammed, since if you challenge credit card purchases, your credit card company refunds you and goes after the seller.  From my understanding you won’t have any liability, but that does not stop the trust factor from being an issue.

The second problem are the credit card fees.  Square charges 2.5% when you use the card reader (card present transactions) and 3.5% when you just type in the credit card number.  These fees seem really high.  I use traditional credit card processors and their fees have been 1.5%-2%.  I know that when I sell big ticket items, I shy away from PayPal because the fees eat up any money I make.  Square needs to figure out a way to lower it’s fees and get buyers to be more trusting, or find a place where people are willing to pay those fees out of convenience like PayPal did with eBay.

For now, I probably won’t use Square very often, but I can see times I would use it.  I’m really interested to see how the general population reacts to Square as it becomes more mainstream.  I think it’ll be a tough road, but ultimately, accepting credit cards on a mobile device will be the way of the future, unless we just eliminate the credit card completely and just use our phones to make purchases like they do in Japan.

What do you think?  Will Square take off?  Will you use it?  Are the fees too high?

World Cup 2010 Preview and Predictions

I’m on my way to South Africa for the World Cup right now with my friends Andy and Katie.  This morning, we flew out of Milwaukee to New York and will be exploring the city for the day.  Late tonight, we fly out of NYC and head to Dubai, where we catch a plane to South Africa.  We’ve got tickets for USA vs. England, USA vs. Slovenia, USA vs. Algeria and Spain vs. Switzerland and we hope to be able to catch Brazil vs. Ivory Coast and Cameroon vs. Netherlands.

We’re going to Johannesburg, Cape Town, Rustanberg, Durban and hopefully Kruger National Park for a safari and we’re all excited.  It’s my first trip to Africa and I’m hoping its as amazing as World Cup 2006 in Germany was.  I’m confident that the South Africans will pull off a great tournament, just like the Germans did in 2006.

I’m not really sure what to expect out of the US squad.  I think the US got a fairly easy group compared to what they could have gotten, but there are not easy teams in this tournament, save North Korea.  I’m thinking the US will advance and most likely lose to Germany in the round of 16.  I’m looking for Landon Donovan to continue to build on his breakout performance in the 2009 Confederations Cup and his loan stint at Everton and really show that he is a world class player.  Clint Dempsey will continue to shine out on the left flank like he has for Fulham.

With Charlie Davies not fully recovering from a deadly car crash, the US is really thin at forwards.  Luckily, three previously unheralded forwards seem to be hitting their stride right at the right time.  Look for big things from Hurcluez Gomez and Jozy Altidore.  The most improved player from qualifying til now seems to be Jose Francisco Torres.  I think he can have a breakout performance at the World Cup, attracting attention from clubs in the best leagues in Europe.

The biggest problem for the US is at the back.  Tim Howard is a world class goal keeper, but the defense in front of him looks shaky.  Oguchi Onyewu looks amazing in 2009, but suffered a knee injury in qualifying.  He doesn’t seem fully recovered.  Green Bay’s own Jay Demerit looks solid as the other center back, but the outside backs will have trouble with fast players like England’s Aaron Lennon and Wayne Rooney.

The African sides look to be really strong this year.  Ivory Coast looks really good, but they have a really hard group.  Cameroon and Ghana looked solid, but both are suffering from injuries and the hosts, South Africa have a decent squad that will be boosted by the home support.

So who’s going to win it all?  I’d love to see Spain win it all, but I don’t see it happening.  I think they’ll make a deep run, only to come up short.  Argentina is an easy pick since they have arguably the best player in the world in Lionel Messi.  As Arsenal’s coach said after getting lit up for 4 goals, Messi is “like a video game player.”  Ultimately I can’t see Argentina taking it because they have a moron for a coach in Diego Maradona.  England, Germany, Portugal, France and other traditional powers look to be weak, but you never know when a team will catch fire, like Germany and France in 2006.  I’m going to go with the safe pick and choose Brazil, even though they left Ronaldhino at home.

I can’t wait to be in South Africa and hope to write a few posts during my down time, but I can’t guarantee anything.  I have 2 posts scheduled to post while I’m gone, but any new posts I write in South Africa will be about South Africa.  I’ll be back on June 30th!

Capital Entrepreneurs: How To Start A Founders Meet Up Group In Your City

I’ve been involved in the startup community in Madison for about 6 years now, but had a hard time fitting into the networking scene, especially as a college student who was also running a business.  Most of the entrepreneurship and networking events in Madison were either overrun by service providers trying to sell you something, cost too much for what they provided or were at bad times or locations.  The signal vs. noise ratio at most of these events was pretty poor.  At some of the other events, I’d be the youngest person by 3o years.

There really wasn’t a good, free, entrepreneurship organization that was limited to founders.  To fill the gap, I founded Capital Entrepreneurs, an invite only meet up for founders of startups.  We meet up once per month at a bar in Madison, grab drinks and talk about our businesses, ideas and how we’re moving forward.

Here’s some Capital Entrepreneurs stats from the last year:

Best of all, it’s been something that we all look forward to each month.  It’s lonely starting a startup.  In the early stages, you might only see one other person (your cofounder) each day for months at a time.  Founders groups like CE help create a scene and allow you to commiserate with others in your situation.  You also get “coworkers” and if you’re lucky like we are in Madison, most of the startups will be located close together to facilitate lunches and happy hours.

The awesome thing is that it’s been really easy to get Capital Entrepreneurs started and it’s been incredibly successful, moreseo than I ever envisioned back in May 2009.  If your city doesn’t have a good founders group, I’m here to give you the steps to take to replicate the success that we’ve had with Capital Entrepreneurs.

Your startup group should have the following characteristics:

  1. Exclusive to Founders – No attorneys, accountants, people searching for jobs, consultants etc.  These are all nice people, but do not belong in an entrepreneurship group.
  2. Private Email List – People like to keep their emails private.  Use BCC to send out invites
  3. Open to new members – You’ll never grow if you exclude startups
  4. Free – Do not charge admission
  5. Website – Create a website and post updates
  6. 1-2 people should control it – If there’s more, it gets too complex
  7. Sponsors – After you’ve been going for awhile, you’ll find that attorneys, accountants and others will want to be invited.  We started offering sponsorships where service providers can attend one meeting per year as long as they do not try to sell their services.

Step 1

Survey the existing startup groups in your city and try them all out.  There are 6-7 entrepreneur and young professional groups here in Madison.  All are valuable, but none provided exactly what we wanted to do with Capital Entrepreneurs

Step 2

Reach out to your network.  I emailed all of the founders that I had gotten to know, about 15 of them, and asked if they were interested in a meet up specifically for founders.  I got a good response and moved forward.

Step 3

Set up a wordpress site.  I bought the Capital Entrepreneurs domain name and installed wordpress.  I created a members page that includes everyone’s logos and a 2 sentence description of their business.  The home page is a feed of press that our member companies gets and we have a contact form so that new businesses, press and other can get in contact with us.  We later added a resources page that lists some service provider sponsors to advertise to our members, along with a list of helpful articles and resources that came from Entrepreneur 101.

Step 4

Find a location.  We’ve been fortunate that we’ve had a regular meeting location.  The great guys at Brocach let us have a private room upstairs, give us free appetizers and run us a tab for drinks.  I called 5-6 bars in town to find the one with the best deal and you can too.  Try to find a place that will not charge you fees.

Step 5

Pick dates and time that people will be able to come to.  We’ve picked Wednesdays or Thursdays from 7-9pm, as we are a somewhat younger crowd and most of the people walk to the events.  Pick a time that works for your members and your city.

Step 6

Send invitation.  Shoot emails to all of the people who’ve expressed interest and tell them that they should forward the email on to any other startup founders.  Make sure that everyone understands that it is for founders, not service providers like attorneys, accountants or for people searching for jobs.

Step 7

At the first meeting, make sure to introduce everyone so that everyone is comfortable.  Explain that this will be a monthly event and that it is for founders.  Keep it casual and then schedule the next monthly meeting at the end of the event.

Overall

Overall, you want to create a place where founders can come to meet up, exchange ideas, get to know each other, without the burden of talking with service providers are those handing out resumes.  Once you get a group together, make sure to keep emails private and set up a twitter handle and website where you can post updates about group members.

If you follow these steps, you’ll likely be able to replicate what we’ve done in Madison.  I think cities of just about any size can benefit from founders groups.  Even if the groups are small, they can be fun, easy ways to connect with your fellow entrepreneurs.  If you’d like help starting a founders group in your city, please feel free to contact me.

Are there good startup groups in your city?  Have you started one?  Would you go to one if there was one in your city?