garytouet

On Monday, President Obama’s re-election campaign announced that it would immediately begin using Square, a mobile payments start-up company based in San Francisco, with campaign staffers and some approved volunteers. “Squares are being sent to our campaign offices across the country,” said Katie Hogan, a spokeswoman for Mr. Obama’s re-election campaign. […] Zac Moffatt, digital director for the Romney campaign, said the Romney team planned to experiment with the Square donation process “as a beta test” on Tuesday night during the primary election.

Square has even developed a special app for Obama’s campaign.

Very good deals for Square. The amount of people, who will be introduced to Square, is going to be astounding.

Ryan Kim for GigaOM:

SAIL’s user agreement, however, did more than reuse “industry-acceptable language.” More than half of the sentences at the heart of the user agreement were lifted directly from Square’s legal agreement with almost no alterations. It swapped out all the references to Square and included some original language. And some of the sentences and sections were moved around. But the language was a word-for-word match in numerous sections, including one stretch of more than a dozen sections that were taken directly from Square.

Ryan continues by quoting both Square’s and Verifone’s user agreements. It is chocking to see that the only differences between the two excerpts are the company names.

This is preoccupying, even if terms and conditions are not that big of a deal in my opinion, because it is the sign that Verifone rushed to launch its product. It looks like they did not have the time to even write the user agreements. As a whole, it does serve them, but reinforces Square. If you are copied, doesn’t it mean that you’re doing better?

Ars Technica:

French researchers at Institut Polytechnique de Grenoble, in cooperation with the Centre Technique du Papier, have developed a wallpaper that can block WiFi signals, preventing them from being broadcast beyond the confines of an office or apartment.  But unlike other signal-blocking technologies based on the Faraday cage (which block all electromagnetic radiation), the wallpaper only blocks a select set of frequencies used by wireless LANs, and allows cellular phones and other radio waves through.

Apparently, you’ll be able to use a classic wallpaper on top of it for a better look.

I hope anti-wifi carpets and ceiling paint are in progress.

The New York Times has an interesting article on Zuckerberg and the Facebook story. It is mind-blowing to read about his success and future challenges. He is so young and he built a giant.

The outlines of the Zuckerberg story thus far — the boyhood in Dobbs Ferry, N.Y., the Harvard wars over “thefacebook,” the relentless rise in Silicon Valley — are by now well known. But Facebook’s I.P.O. will begin a new chapter — indeed, a new volume — in one of the great business narratives of our time. It will also make Mr. Zuckerberg almost impossibly rich. In an instant, his stake could be worth upward of $18.7 billion.

It’s a good before-bed Sunday story to read.

GigaOm:

A former U.S. Department of Justice lawyer and antitrust expert says Facebook’s purchase of photo-sharing site Instagram will take between four months and one year to clear regulatory hurdles. In the meantime, the deal is effectively on hold. […] If Facebook can have Instagram, it will be a leading player in photo sharing both online and on mobile. (See Om’s explanation here). The FTC is concerned Facebook could become a dominant advertiser on these platforms — and hurt competition.

Epic.

Paul McKellar is one of Square’s founders. In a blog post from January 2011, he gave 3 reasons to explain his decision to join Jack Dorsey at the beginning of Square. They are well worth reading, but this bit about the card reader was unknown to me:

Square’s card reader uses the actual motion of the card swipe to generate a sound, which is decoded through a microphone, and processed in real time using the phones internet connection.

It is so far from what I had imagined. That explains why you plug the reader in the headphone jack.

“Mark and his signature hoodie: He’s actually showing investors he doesn’t care that much; he’s going to be him,” Pachter said in an interview on Bloomberg TV. “I think that’s a mark of immaturity. I think that he has to realize he’s bringing investors in as a new constituency right now, and I think he’s got to show them the respect that they deserve because he’s asking them for their money.”

Should investors be more preoccupied by Zuckerberg’s hoodie or by his projects for Facebook?

A suit would definitely make him more mature and better at managing Facebook. For sure…

Entitled "1944," the almost 9-minute full version was Apple's in-house takeoff on "1984," the iconic first Macintosh TV ad that caused a sensation during that year's Super Bowl. Set as a World War II tale of good vs. IBM, it is a broadcast-quality production (said to have cost $50,000) that was designed to fire up Apple's international sales force at a 1984 meeting in Hawaii. A copy of "1944" was provided to me by one-time Apple employee Craig Elliott, now CEO of Pertino Networks, a cloud-computing startup located two blocks from Apple in Cupertino.

It is a little gem. There is a lot of symbolism in 1944, so as in 1984. I think displaying Apple as the rebel against the giant Big Brother (IBM) was more effective. To represent Apple as an organised army fighting with “weapons” in a global war does not serve its purpose at best.

I am happy to identify myself with a rebel against domination, but not necessarily happy to join soldiers at war.

New York Times:

The researchers wrote that the new wave of mobile payment services could profoundly alter the relationship between customers and those service providers.

Maybe a reason why Apple will decide not to enter the payment business.

Peter Kafka for AllThingsD:

The site was once one of Silicon Valley’s hottest Web 2.0 startups, and there was a period when lots of Web publishers spent a lot of time trying to figure out how to court Digg’s hordes of users. But that time is long gone (if you’re looking for a social/traffic kingmaker, head to Reddit, which used to be dismissed as a Digg wannabe).

Ironic.

Besides sound quality, the reason why I would buy a Jambox is:

“We are targeting the speakers that want to make you dock your phone,” says Hosain Rahman, chief executive officer and founder of Jawbone. “It makes no sense to dock your phone, considering we are doing more and more things on the phone.” In other words, they are taking aim at the likes of Bose with this new speaker.

Mor Naaman suggesting that Apple should buy both Square and Foursquare:

To summarize: after the deal, Apple will immediately become a giant payments company, with an installation base that is expected to encompass half of all mobile devices sold. The company will have the best local search abilities, far exceeding any existing recommendation engine. And due to its enormous reach, it will possess a payment system that merchants will line up to support. Who’s betting against this holy trinity? Not me.

I find it hard to believe. I can see how it makes sense for Apple to enter the payment business, but I don’t think they need to acquire Square to do so. Apple has the credit card info from over 200 million people, they have experience in managing payments (iTunes and the different AppStores) plus they have millions of devices in the wild already. I guess they have enough talented engineers and designers to work on such a system rather than paying $4 billion for Square.

Now regarding Foursquare, what’s the point? They could offer recommendations with a Square-like service anyway. Plus, isn’t Foursquare a niche service? Most of the people I know use Facebook to check-in nowadays.

Nick Bilton for the NYTimes:

Yet an even more bizarre activity in the Valley than shushing the talk of a bubble is how some start-ups are advised by investors not to make money. This concept might sound ridiculous from a business standpoint, but for investors, it fuels the get-richer-quicker mentality that exists here. “It serves the interest of the investors who can come up with whatever valuation they want when there are no revenues,” explained Paul Kedrosky, a venture investor and entrepreneur. “Once there is no revenue, there is no science, and it all just becomes finger in the wind valuations.”

It is indeed difficult to put a value on a company that does not have revenues. It makes it easier or less head-spinning to look at valuations that way. There is no tangible base to the valuation so how can you tell if it is overpriced?

Bilton’s continues:

When small start-ups I’ve spoken with do make money, they often find it difficult to recruit additional investment because most venture capitalists — and often the entrepreneurs they finance — are not interested in building viable long-term businesses. Rather, they’re interested in pumping up enough hype and valuation to find a quick exit through an acquisition at an eye-popping premium.

I guess it isn’t true for all investors (I hope so), but it makes a lot of sense. A lot of start-ups out there do not have a business model yet.

Dan Frommer updated his chart after Square revealed it is processing payments at a $5 billion annualized rate.

It is exciting to see this kind of curb and Square is exciting to watch overall. However, Dan made a comment I found interesting:

Assuming Square’s published 2.75% commission, Square’s gross revenue run rate on $5 billion of annual payments is about $140 million. Square does make a margin from its commission, COO Keith Rabois told me last month. But the company is far from profitable — on purpose, of course. Much of the commission goes to pay the credit card companies, which Square won’t be able to design out of the picture for a while. And with a staff of ~250, aiming to double to 500 this year, Square is spending tens of millions per year on employees.

Payment systems are so locked by big companies (Visa, Mastercard) that to actually make a difference you have to come in and accept to lose money.

Hopefully, it won’t last long.

Square has seen its payment volume increase by 25% since March, which means the company should process $5 billion in transactions this year. However, the most important thing is the following:

The San Francisco company is making cash from sales before 5 p.m. on any day available in merchants’ accounts on the next business day, compared with as many as five days out for other processors.

So, you close your store at 5pm. You come back the day after and yesterday’s sales are in your bank account.

This is huge. Others take at least two days to process your payments. This time is risky for businesses and any way to make it shorter is great.

Apple:

The Company posted quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion, or $12.30 per diluted share. These results compare to revenue of $24.7 billion and net profit of $6.0 billion, or $6.40 per diluted share, in the year-ago quarter. Gross margin was 47.4 percent compared to 41.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue. The Company sold 35.1 million iPhones in the quarter, representing 88 percent unit growth over the year-ago quarter. Apple sold 11.8 million iPads during the quarter, a 151 percent unit increase over the year-ago quarter. The Company sold 4 million Macs during the quarter, a 7 percent unit increase over the year-ago quarter. Apple sold 7.7 million iPods, a 15 percent unit decline from the year-ago quarter.

Looking at the growth percentages and at the profit margins makes my head spin.

A recent study:

Using a foreign language reduces decision-making biases. Four experiments show that the framing effect disappears when choices are presented in a foreign tongue. Whereas people were risk averse for gains and risk seeking for losses when choices were presented in their native tongue, they were not influenced by this framing manipulation in a foreign language. Two additional experiments show that using a foreign language reduces loss aversion, increasing the acceptance of both hypothetical and real bets with positive expected value. We propose that these effects arise because a foreign language provides greater cognitive and emotional distance than a native tongue does.

I found that to be surprisingly true.

Full PDF to download here.

(via @rsms)

Interesting short biography of Mike Matas, incredible 26-year-old designer with an astounding portfolio.

The title says it all.

Interesting bit about Square’s business though:

Still, the business doesn’t make a lot of money on a per-transaction basis. It scrapes a small fee from every transaction made on Square, which it shares with credit card companies. To become enormously profitable, it will need to increase its merchant base drastically to generate enough transactions. It’s a particularly challenging feat, given the hyper-competitive nature of the mobile payments market.