Block: Square, Cash App, and Economic Access - [Business Breakdowns, EP. 53]

This is Jesse Pujji and today we’re breaking down Block – formerly known as Square. This software and financial services business was founded by Jack Dorsey and Jim McKelvey in 2009. It has since expanded from its first product – a payments card reader – into a $75 billion market cap with six businesses that build on the firm’s mission of economic access and empowerment. Those are: Square, Cash App, Afterpay, Tidal, Spiral, and TBD. To break down Block, I’m joined by payments expert and investor at TDM Growth Partners, Hamish Corlett. We cover the common threads that have enabled Block to organically build two major ecosystems in Square and Cash App, how the recent Afterpay acquisition can strengthen the connective tissue between those businesses, and the competitive frontiers Block faces. Please enjoy this business breakdown of Block. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss Show Notes [00:02:52] - [First question] - What is Block and what it does as a business [00:04:58] - How is Block organized, their scale, and how many merchants they serve [00:08:03] - Their founding story and the insight that lead to creating Block [00:10:49] - Major milestones in the last decade after releasing their card reader [00:13:47] - The story behind their Cash App and what it is [00:18:59] - What Afterpay is and how it creates connections for merchants [00:21:23] - Overview of the payment ecosystem and where Block fits into it [00:25:03] - The P&L of Square, its blended gross margin, and customer acquisition strategy [00:30:42] - How Cash App makes money and its P&L [00:35:54] - The balance sheet of Block and how they’ve stood out in a competitive space [00:38:31] - The ways their product organization allows them to move at a rapid pace [00:40:30] - How they avoid fraud that’s seemingly everywhere in financial service businesses [00:42:01] - His thoughts on the competitive environment and how they’re succeeding [00:47:56] - Highlights of M&A and how they reconcile them with their overall strategy [00:54:44] - Their view on Bitcoin and crypto and how it plays into Block’s business [00:59:09] - Things that could happen in a macro environment to aid their future growth [01:01:30] - What could go wrong in the future and the macro environment’s impact [01:03:49] - Lessons for builders and investors when studying Block’s story [01:06:20] - Places to go to learn more about Block