Huge New Trend:  Innovate the Ordinary

By Shlomo Maital   

  

   I believe a major new trend is emerging in innovation.  Increasingly entrepreneurs are looking for process innovations – ways to make the everyday things we do easier, faster, simpler, cheaper.  For example, how we pay for things.  Whip out cash, or a credit card, right?  Well, VISA takes a lot of money from us (from retailers, but, in the end, from us) for that simple act. 

    A startup called Square has innovated payment.  With a simple ‘dongle’ plugged in to a cell phone, Square’s mobile phone app enables us to pay for anything (at participating stores) with a cell phone.  Starbucks has invested $25 m. in Square and Starbuck’s CEO Howard Schultz has joined the Square board of directors. (So has former Treasury Secretary Larry Summers).  The co-founder of Square is Jack Dorsey, who also created Twitter. 

   The cost to stores of a Square transaction is 2.75 per cent, about half that of Visa.  And not only can you buy things with the Square dongle, you can also sell things – a similar dongle plugged into an iPad makes it into an instant cash register.

   Square was launched in Oct. 2010 and it already handles over $6 b. in payments yearly.

    Here is what Steven Davidoff writes about Square, in the Global NYT (Aug. 16):   “…it is not just your idea that matters, but being at the center of the innovation network. The founders of Square had their own good idea, but it was one that incrementally built on existing ones. It also merely tweaked an ordinary habit – how people pay for things. The difference is,  Mr. Dorsey knows the people to finance it, the designers to make it better, and the firms to market it.  He also kept things simple with the idea of returning to the time when there was only cash and it was easy to use and spend.”

   The ‘recipe’ for Square’s success is:   a) innovate the ordinary, the everyday.  And b) leverage your network to do so.   

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