First 1000 - $Cash App
When Cash App first launched in 2013, it tooted its lack of an interface (being an email-first Peer to Peer network), not holding a temporary balance as it differentiated its offering against leading players such as Venmo and Google Wallet. Fast forward 5 years, in 2017, Cash App surpassed all these competitors by holding temporary balances and investing heavily in its app as the primary mode for users to move money around. In a world where competitors easily concatenate features, Cash App won the Peer to Peer market by having a culture that helped a small team innovate within a large company to move fast, innovate and adapt. The Cash app story is a story about how to “build a startup within a large company.” It’s a story about disrupting the disruptors and legacy players by adopting the proper structure, incentives, and processes. Cash App is culture!Cash App, the popular peer-to-peer payment platform, has become a cultural phenomenon and a household name thanks to its widespread adoption and integration into popular music and social media. With over 200 artists, including Tyga, Iggy Azalea, Young Thug, and Lil Durk, mentioning the app in their songs, Cash App has made its mark on the entertainment industry and the world. The app's success is reflected in its ranking as the top finance app in the App Store and Play Store for the past five years. This dominant position results from a series of small, strategic decisions made by the Cash App team at Square, which has allowed the late entrant to the P2P money transfer market to challenge and surpass established players like Venmo and fend off competition from tech giant Google. The Cash App team's ability to outmaneuver its competitors can be attributed to operating principles, which have guided the company's growth and expansion. With these principles in place, the then-small Cash App team was able to navigate a complex and competitive new market and emerge as a leading player in the P2P payment space. 3 Operating PrinciplesHow the Cash App team operated within Square can be summarized in 1 sentence.
Tactically speaking, this meant the Cash App team:
— Culture is particularly important. Culture dictates the heuristics employees use to make quick, informed decisions in a new and challenging environment. When operating in a new arena, as Square was doing in the consumer market, the heuristics they needed to embed in every employee looked different from those at the parent company. At its core this is why the Cash App team succeeded. They were able to
Distribution centric cultureThe short-term independence allowed the team to achieve greatness over the long term. Many of Cash App’s success can be traced to the laser-focused distribution-centric culture Brian Grassadonia, the leader of the Square Cash team, instilled. The P2P market margins are razor-thin. The only way to make meaningful money is to have millions of people send money around the network and utilize add-on services. This is vastly different from Seller market Square was in. Each new business that adopted the Square register to manage their offline store paid a fee every time someone bought something from the store. The math was straightforward. The Cash App team built an obsessive culture over the cost of acquiring each incremental new customer (CAC) in a way that was foreign to their peers working on Square products. Their own operating model and their business formula revolved around CAC. When making decisions, building roadmaps, structuring teams or staffing projects it was all about CAC. They build their own tools and infrastructure in service of lowering CAC. Water cooler conversations were all CAC this, CAC that, Look at my CAC! — That distinct obsession with distribution, powered by their independence as a business unit, with 1 central decision maker in Brian Grassadonia, manifested itself in many ways. Product decisions, gorilla marketing campaigns, and eventually a rebrand and separate brand identity were all done in service of lowering CAC. — |
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