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I assume this was a strategic move - Square seems to be buying businesses in adjacent markets that are more profitable than credit card processing and that are

I assume this was a strategic move - Square seems to be buying businesses in adjacent markets that are more profitable than credit card processing and that are complementary to their offering. I'm guessing that small local businesses tend to use website creators, and it's mostly profit (once you have a good tool). Does anyone have any more insight?

vm 8y ago
Precisely. Square has a sticky customer relationship with SMBs, a customer segment that has been tough to sell to because of high CAC and high churn. Now that Square owns this customer relationship, it is selling adjacent services to those customers and making more money over time (increasing LTV). Square ecosystem partners will get replaced by Square directly over time; like how Twitter ate all its ecosystem partners with its own competitive offerings.
aviv 8y ago
I've heard rumors of Square trying to buy Dialpad.com.
rmason 8y ago
According to Crunchbase Weebly has 50 million users and I'm guessing they're mostly small businesses which would all be perfect prospects for Square. Not a bad outcome for them as they sold for roughly 10X what they've raised. Competitors Wix and Squarespace have raised much more money and would probably have been too rich for Square to buy. Wix is now a public company too.
- wtvanhest 8y ago
  Product line acquisitions and cross selling are one of the most successful acquisition strategies.
- deleted 8y ago
  [deleted]
- avip 8y ago
  > According to Crunchbase Weebly has 50 million users I don't see that number, but Weebly cannot have 50M customers. That's a 1.5 order-of-magnutude error.
  - rmason 8y ago
    "Weebly was started in 2007 and currently powers more than 50 million entrepreneurs around the world" https://www.crunchbase.com/organization/weebly#section-overview https://www.crunchbase.com/organization/weebly#section-overv...
    - avip 8y ago
      Ok. Assuming that number has any merit, it'd be "websites built with Weebly". If we take a page from WiX's book, divide by 10^2 to get paying customers.
    - bearcobra 8y ago
      The TechCrunch article about the deal says they have 625,000 paid subscribers https://techcrunch.com/2018/04/26/square-acquires-weebly/ https://techcrunch.com/2018/04/26/square-acquires-weebly/
      - deleted 8y ago
        [deleted]
  - sashagim 8y ago
    From Weebly's about page: "More than 325M unique visitors are now going to over 40M Weebly sites monthly."
wonder_bread 8y ago
Also improves their offering against companies like Shopify and Salesforce. Square's never really offered an online store option beyond allowing you to link your account with companies like BigCommerce, WooCommerce, Magento, etc. putting them at a disadvantage as most brands want a strong online presence that a horizontally integrated offering won't be as good at providing.
traek 8y ago
Wix is roughly a fifth the size of Square by market cap (4B vs 20B respectively). Makes this Weebly acquisition seem like a great deal for Square. Next Square will expand Weebly into offering more tightly integrated online presence management services for small businesses. E.g. a SinglePlatform competitor for restaurants. They can then use their existing relationships with small businesses to cross-sell (which has been their modus operandi for a while now).
tptacek 8y ago
My brother owns a coffee roaster and cafe in suburban Chicago. Like a lot of new retail businesses, they use Square readers to take credit card payments. He's now selling beans over the Internet; the way he did that was to set up a store on Square (like most retail business owners, he has better things to do than optimize how he sells stuff online). But Square's current online store offering _sucks_. It won't soon.
- draw_down 8y ago
  Yeah. Payment providers either start out focusing on in-person or online payments, then they get customers that end up needing both kinds of payment. So they buy a company that does the other thing. https://www.pymnts.com/news/partnerships-acquisitions/2018/stripe-pos-software-startup-index-acquisition/ https://www.pymnts.com/news/partnerships-acquisitions/2018/s...
- volkk 8y ago
  i'm sorry to be off topic, but out of curiosity -- how's his cafe doing? i've been longing to open a coffee shop. is it worth it?
danielrhodes 8y ago
My guess is it has something to do with Shopify. Shopify has been getting into physical retail with a PoS system and I am assuming they were doing a good job of bridging the online offline experiences. So it’s an opportunity for Square to do better in this space.
- alexkcd 8y ago
  Yeah, we're using Shopify for our online store. Recently started using their PoS system because we were already set up on their platform. I suspect this is a driving force for other customers as well. Shopify, Square and Stripe are poised to become direct competitors if you follow this inertia.
swyx 8y ago
Ben Thompson would probably call this integration by an aggregator (or of an aggregator). he wrote this about Zillow going into buying real estate recently: https://stratechery.com/2018/zillow-aggregation-and-integration/ https://stratechery.com/2018/zillow-aggregation-and-integrat... i’m not smart enough to look into Jack’s mind but I’d draw the value chain chart out for Square/Weebly and see if I can find some bigger trend.

vm 8y ago

Precisely. Square has a sticky customer relationship with SMBs, a customer segment that has been tough to sell to because of high CAC and high churn. Now that Square owns this customer relationship, it is selling adjacent services to those customers and making more money over time (increasing LTV). Square ecosystem partners will get replaced by Square directly over time; like how Twitter ate all its ecosystem partners with its own competitive offerings.

aviv 8y ago

I've heard rumors of Square trying to buy Dialpad.com.

rmason 8y ago

According to Crunchbase Weebly has 50 million users and I'm guessing they're mostly small businesses which would all be perfect prospects for Square. Not a bad outcome for them as they sold for roughly 10X what they've raised. Competitors Wix and Squarespace have raised much more money and would probably have been too rich for Square to buy. Wix is now a public company too.

wtvanhest 8y ago
Product line acquisitions and cross selling are one of the most successful acquisition strategies.
deleted 8y ago
[deleted]
avip 8y ago
> According to Crunchbase Weebly has 50 million users I don't see that number, but Weebly cannot have 50M customers. That's a 1.5 order-of-magnutude error.
- rmason 8y ago
  "Weebly was started in 2007 and currently powers more than 50 million entrepreneurs around the world" https://www.crunchbase.com/organization/weebly#section-overview https://www.crunchbase.com/organization/weebly#section-overv...
  - avip 8y ago
    Ok. Assuming that number has any merit, it'd be "websites built with Weebly". If we take a page from WiX's book, divide by 10^2 to get paying customers.
  - bearcobra 8y ago
    The TechCrunch article about the deal says they have 625,000 paid subscribers https://techcrunch.com/2018/04/26/square-acquires-weebly/ https://techcrunch.com/2018/04/26/square-acquires-weebly/
    - deleted 8y ago
      [deleted]
- sashagim 8y ago
  From Weebly's about page: "More than 325M unique visitors are now going to over 40M Weebly sites monthly."

wonder_bread 8y ago

Also improves their offering against companies like Shopify and Salesforce. Square's never really offered an online store option beyond allowing you to link your account with companies like BigCommerce, WooCommerce, Magento, etc. putting them at a disadvantage as most brands want a strong online presence that a horizontally integrated offering won't be as good at providing.

traek 8y ago

Wix is roughly a fifth the size of Square by market cap (4B vs 20B respectively). Makes this Weebly acquisition seem like a great deal for Square. Next Square will expand Weebly into offering more tightly integrated online presence management services for small businesses. E.g. a SinglePlatform competitor for restaurants. They can then use their existing relationships with small businesses to cross-sell (which has been their modus operandi for a while now).

tptacek 8y ago

My brother owns a coffee roaster and cafe in suburban Chicago. Like a lot of new retail businesses, they use Square readers to take credit card payments. He's now selling beans over the Internet; the way he did that was to set up a store on Square (like most retail business owners, he has better things to do than optimize how he sells stuff online). But Square's current online store offering _sucks_. It won't soon.

draw_down 8y ago
Yeah. Payment providers either start out focusing on in-person or online payments, then they get customers that end up needing both kinds of payment. So they buy a company that does the other thing. https://www.pymnts.com/news/partnerships-acquisitions/2018/stripe-pos-software-startup-index-acquisition/ https://www.pymnts.com/news/partnerships-acquisitions/2018/s...
volkk 8y ago
i'm sorry to be off topic, but out of curiosity -- how's his cafe doing? i've been longing to open a coffee shop. is it worth it?

danielrhodes 8y ago

My guess is it has something to do with Shopify. Shopify has been getting into physical retail with a PoS system and I am assuming they were doing a good job of bridging the online offline experiences. So it’s an opportunity for Square to do better in this space.

alexkcd 8y ago
Yeah, we're using Shopify for our online store. Recently started using their PoS system because we were already set up on their platform. I suspect this is a driving force for other customers as well. Shopify, Square and Stripe are poised to become direct competitors if you follow this inertia.

swyx 8y ago

Ben Thompson would probably call this integration by an aggregator (or of an aggregator). he wrote this about Zillow going into buying real estate recently: https://stratechery.com/2018/zillow-aggregation-and-integration/ https://stratechery.com/2018/zillow-aggregation-and-integrat... i’m not smart enough to look into Jack’s mind but I’d draw the value chain chart out for Square/Weebly and see if I can find some bigger trend.