← Decoder with Nilay Patel
Decoder with Nilay Patel
Square's product chief on the death of the penny and the future of money
01:13:47
Square’s Willem Avé on AI automation, investing in crypto, and what it’s like working for Jack Dorsey.
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- [00:01]
A
Support for this episode comes from Snapdragon. Laptops are meant for mobility, but the constant search for an outlet can really tie you down. You can break free from outlets with PCs powered by Snapdragon X Elite processors offering up to 22 hours of battery life. Imagine working freely wherever life takes you, without the worry of running out of power. That's true mobility. Learn more@snapdragon.com laptops Snapdragon branded products are products of Qualcomm Technologies Inc. And or its subsidiaries. Battery life varies significantly based on device settings, usage and other factors.
- [00:39]
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- [01:16]
Support for this show comes from Amazon Ads. It's time for some fresh tech consumer insights and Amazon Ads just released a study that's challenging what we thought we knew about electronic shoppers Remember when we assumed everyone bought headphones out of necessity? Turns out, according to their new data, only 54% do. The rest they're impulse buying or chasing the latest new product launch. For brands, this means rethinking their approach to reaching customers throughout the purchase journey, from building awareness to to capturing those crucial purchase moments. Ready to rethink your Strategy? Head to advertising.Amazon.com to learn more.
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B
Hello and welcome to Decoder. I'm Neil I. Patel, editor in chief of the Verge, and Decoder is my show about big ideas and other problems. Today I'm talking with Willem Ave, who's head of product at Square. You know, Square was started by billionaire Jack Dorsey of Twitter fame more than 15 years ago and he got big on the back of that little magnetic reader that plugged into the headphone jack on the iPhone let small businesses accept credit cards. Now, of course, Square is much more than a credit card reader, and sadly, the headphone jack is ancient history. Square itself is part of a new parent company called Block, which is made up of a really interesting mix of financial services like cash app, the digital wallet and payment platform, the Buy Now, Pay later service, afterpay, and quite a few other subsidiaries. Block also owns a majority stake in the music streaming service Title for some reason that no one can quite explain. And that's where this episode becomes pure decoder bait right from the jump. As you'll hear Willem explain, Block restructured the entire company last year into a functional organization so that it shares resources across all of its units. For Square, that means it's sharing engineering resources with Title, a company that makes an entirely different product serving an entirely different industry. So I asked Willem about how all of that works and his answer might surprise you. He says that Square and Block as a whole are better aligned now that they have a single shared roadmap, one that, as you might imagine, is pushing very hard into AI and the kinds of back end financial automation that companies like Square want to bring to business owners. So sure, Square might not move as fast as if it was an independent division working autonomously, but Willem says the new structure is already reaping benefits. As to how the company develops new products and plans for its next turn, which he refers to as square 3.0, you'll hear Willem and I dig deep into what it actually means to enable AI for small business owners. What kinds of questions might Square user ask a language model about their sales data and how Square might turn that into actionable input that won't just hallucinate or straight up fail to do what you ask? Willem says the really meaningful shift for this kind of AI is to take the non deterministic elements of LLMs and agents and link them to deterministic systems like traditional computers. That's going to be how a company like Square moves beyond the gimmicky, often unreliable era of AI chatbots into meaningful automation for small business owners that helps them be more productive and grow their businesses. It's also a very weird time for money when you combine what's happening in decentralized finance and the Trump administration's interest in crypto with things like the discontinuation of the United States penny and the overall turbulence of the economy. Well, Square's pretty deep on all of it. It's a company that processes transactions for all kinds of cash businesses every day, and at the same time it holds large reserves of bitcoin and is working to enable merchants to actually transact in cryptocurrencies. It's been a long time since anyone anywhere has wanted to give up any portion of a bitcoin to pay for something except crime. But you'll hear Willem make the case that enabling this kind of choice is part of Square's mission. By the way, one fun piece of trivia after we wrapped this recording. Square got back to us and confirmed that it moves at least 16.7 million pennies between merchants and customers every week. It's all going to go away now that the penny's been discontinued. There's a lot going on in this episode. It's a pretty fun one. I can always tell when I'm talking to a Decoder fan. And Willem is someone who came ultra prepared to talk about not org chart, but how he makes decisions. You will actually hear him use French winemaking terms to describe his decision making process, which might be as nerdy as we have ever gotten on Decoder. One last note before we start. We're running a special end of the year mailbag episode of Decoder later this month where we answer your questions about the show, who we should talk to next, what topics we should cover in 2026, what you like, what you hate, all of it. Please send your questions to decoder the verge.com and we will do our best to feature as many as we can. Okay, Square's head of product, Willem Ave. Here we go.
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Willem Ave, you are the global head of product at Square. Welcome to Decoder.
- [06:09]
C
Thank you. Glad to be here.
- [06:10]
B
I'm excited to talk to you. It's an interesting time to run businesses. It's an interesting time to run businesses connected to the Internet. It's an interesting time for money, which is an odd thing to say, but it is an interesting time to money. I suspect you and I are going to talk about the end of the penny quite a bit on this episode.
- [06:27]
C
That'd be great.
- [06:28]
B
As somebody who has to accept literal cash at restaurants, it seems like we should talk about the penny. Let's start at the start. I feel like everybody knows what Square is. Everyone's seen the reader. I have a lot to say about the headphone jack and how it enabled the Square reader and how it went away. I think people listening to the vert chat now. I have a lot of feelings about headphone jacks on cell phones, but we've all seen Square. We've all seen the hardware, certainly. What do you think of Square is as a, a, as a company, as a product? Yeah.
- [06:52]
C
A lot of people have seen us in coffee shops or farmers markets. The interesting part about Square is that we serve sellers that are very small farmers markets all the way up through Chase Stadium and everything in between. We've been hard at work building kind of this comprehensive commerce platform that helps sellers really of all types run their business better. With Square in the very beginning, the kind of Innovation was yeah, on your mobile device you could quickly take payment. And our focus has really been to help sellers accept any sale. And that's kind of how we got started and how we ended up here.
- [07:27]
B
Today I'm going to do, I'm going to talk about Jack. I promised myself I would not get totally sidetracked with what enabled the first Square reader. But it is interesting to me accept any payment. In a world where most payments are going digital or at least passing through a credit card and lots of people don't even have wallets or cash anymore. You are in direct competition with cell phones in like a very real way. And the reason I bring up the headphone jack is that first Square reader was just a card swipe and it plugged into the headphone jack and it passed the magnetic data from the stripe on the card through the headphone jack to the Square app and suddenly the phones could read credit cards.
- [08:03]
C
That's right.
- [08:04]
B
And that was an open interconnect, maybe the last great open interconnect on cell phones. The cell phone companies have a lot of thoughts about me talking about this way, but it was the last great open interconnect and then obviously that went away and you moved to a Bluetooth reader and now you have dedicated hardware. But you know, an iOS and Android, you can just beep a credit card to it, you can beep a phone to it. There are other kinds of payment transaction services that are available in just apps. Maybe you don't need an open interconnect anymore. How do you think about Square in that ecosystem?
- [08:29]
C
We've always wanted to help sellers get started easily, right? So Square is you can download the app, sign up and get going within seconds many times. And as the payment landscape has evolved into hardware, interconnect landscape has evolved. We've kind of supported both the Lightning Plug or Lightning Jack for Apple and then USB C now. And our hardware and software ecosystem is really meant to support both. When you want a really pro device that's all in one, right? Running kind of, you know, our, you know, Android and kind of our own version of Square, point of sale all the way through, integrated, kind of beautifully designed hardware, all the way through. Just bring your own hardware, right? This is your cell phone, you can plug it in either to Bluetooth or one of our kind of Jack based card readers and then now tap to pay is really blowing up, right? So if you get started, you can just click a button, get registered with Apple or Google and easily just boop, take a payment and we're seeing like a huge amount of adoption, particularly in the smaller sellers, that kind of value portability and value kind of able to take payments easily. As far as like an open ecosystem, ecosystems evolve and I think it's important to realize that and be able to kind of lead through those changes.
- [09:50]
B
The reason I start with open ecosystems is that easy initiation into Square, where I'm a merchant, I download the app and someone can just tap their phone onto my phone and pay through Square. That is very powerful. Right. That is the selling point for a lot of small merchants is it's just that easy and it's the hardware they already have. And somewhere in the middle of that is whether or not Apple wants you to do that in a way that they could not really stop you from doing it with the iPhone. Jack. There's been a lot of controversy around what Apple will and will not let you do with the NFC reader on the phone, with the other parts of the phone. Has that come up with Square?
- [10:23]
C
Not as much as you'd think. Right. I mean, it's in Apple's best interest, I believe, to provide APIs and accessibility to let kind of sellers, people use.
- [10:35]
Products on their devices. Apple's in a lot of news around a lot of other things that they're doing with the App Store. On the business side of software and the business side of payments, we haven't really felt kind of a lot of those constraints. And Apple's a fantastic partner of ours as we continue to innovate.
- [10:52]
B
That was a good managed PR response to Apple being a good partner. I love it. I can see them coming a mile away. One of the reasons I'm starting here because I want to get to the big parts of Square. How does Square interact with the death of the Penn. The reason I'm starting so like on the ground in the weeds is the move from this is the thing that can accept payments to we are running your business to their Square AI and your product roadmap. And it will custom develop applications for you as you ask about your data. And that is the future of all businesses. And now we're running, you know, stadiums. It starts with we can accept the payments as easily as possible.
- [11:28]
C
That's right.
- [11:29]
B
How do you think about that? Slide to we can accept the payments. It's so easy when we, when we Square your payment provider, you should just let us run your business. How do you think about that, that transition and that, that journey for somebody who signs up just to take payments at a farmer's market.
- [11:45]
C
So when, when you talk to sellers and you listen to the challenges that they have. You know, running a small business is one of the hardest things ever, right? These are the true definition of entrepreneurs, right? You're putting your livelihood on the line many times to, you're passionate about, and they kind of reach for software and technology to help them run their business, right? So in the beginning, it's just an idea, right? I want to sell something, right? And you get started small and you start, start taking payments very quickly. You struggle with, okay, I need to, you know, manage my inventory better, or I need to hire my first staff member and manage schedules and manage payouts and all those other good things. And the, the idea with Square and the kind of ecosystem that we've built is that every step along that journey should feel simple. And then as you keep getting larger and larger, we want to kind of constrain the complexity so that it stays easy to use our software. And that's an incredibly hard product and design challenge. But that's where we've kind of built our ecosystem organically rather than via, you know, acquisitions and kind of other strategies that companies grow. Because then we can maintain a bar for how sellers use these products, how they discover them. And I think that's really important to be able to kind of grow with the seller. One thing we say at Square is like, you know, a seller should never outgrow Square, right? And that means we need to meet them where they are with all these different capabilities. You're right. It starts with just, payments have to be good, right? Payments aren't good, fast, etc. Then like, nothing else matters. But as you get larger and larger, most of the problems, you know, at one or two locations, seller face is staffing. You know, can I get folks to show up on time, how do I manage my staff schedules so that staff are happy, how can I manage my vendors and all the other costs of goods sold? As we know, costs are going up across almost every dimension in the industry. So the problems keep happening, right? And I kind of truly believe that you want to democratize technology, right? You want to take technology, and this is really relevant in the AI space. You want to take technology that's usually locked to just the very large corporations, the wall streets, et cetera, and bring them down to main street, right? And I think if you do that successively and make that technology accessible, you can actually help society. Like, you can make things better, right? You can get neighborhoods vibrant again, right? You can, you can help these sellers because, you know, a lot of these a Lot of these small businesses fail, unfortunately. Right. And it's because it's hard to run a business. And I think if you can apply technology effectively, you can run a better business and you can kind of revitalize a lot of the main streets across, across the world.
- [14:27]
B
It's a big mission. It's interesting, right? That implies that you're going to go from taking payments to, you know, helping more efficiently run businesses or helping small business owners more effectively run their businesses. I've heard variations of this pitch from, I wouldn't even call them competitors from other companies that have an entry point into small business. Intuit was on the show and they're like, we're going to run your whole back office. Squarespace has been on the show. And the slide for Squarespace to go from we set up your website to your website has a booking calendar on it to now we manage your bookings, we should manage your payments, we're going to do all of your invoicing. It's very easy for them. It was very compelling. It was like, oh yeah, I started a website. Now that you run my front end, you show it on my back end too. Like get the pitch. And it all starts with we're going to do one thing and we'll expand everything else. Is that how you think of Square in that same ecosystem that your competitors are, other providers who start with one thing and are trying to expand the entire back office?
- [15:23]
C
I would think in broad strokes, yes. I think the unique part about Square is that because we build and design all of our own hardware kind of from the chip up that we can provide, I would say better end to end experiences than competitors that may be starting in other areas. And at the end of the day, for the majority of brick and mortar businesses, the point of sale is the, is the artery, so to speak. Right. Like quick serve restaurants, retail restaurants, even a lot of services that need kind of this kind of help, you know, help make a sale. It's important to think that if you do the core things that a business really needs done super well, then I think it gives you the ability and the believability that you can build additional products. And then one of the unique things about Square and then Block is that we've also been able to build other business units like Cash App and kind of other complete ecosystems, which is pretty interesting.
- [16:16]
B
Do you think of Like Toast is your competitor? Like Toast makes hardware, it's in point of sale in restaurants. Is that the big competitor? Is it other hardware companies? How does that work for you, you.
- [16:25]
C
Know, while I think about competitors, I don't obsess over competitors. I think it's better to obsess over customers. But one of the unique things about Square is that we can serve effectively almost any type of seller, retail, food and bev, health and beauty services, et cetera. And the reason why that's I think really interesting is that when you think about our competitive set, yes, like you know, for food and bev at the large end of the market and quick serve and full serve restaurants, it's toast, it's Q, it's a couple other folks in retail. It's like Lightspeed and Shopify, health and beauty. There's a bunch of scheduling products out there. Services, you know, mainly Intuit, QuickBooks, Service Titan, et cetera. Then I just kind of come back to what a lot of these sellers need is like they need a rock solid platform and software to help them run their business. And as you kind of build some of these capabilities, a lot of the needs across these industries rhyme. Right. And I think that's where you can leverage platform in our ecosystem. You know, especially on like help me understand how my business is running, help me grow my business, help me manage my staff. There's a lot of like very core similar needs so that we can then build, you know, capabilities that we can apply across, across industries.
- [17:42]
B
I'm fascinated by the fact that you said you think the hardware is a big differentiation, right. You design it from the chips up, that's a big investment. You know, the cliche is hardware is hard, that has to run all the time. If the point of sale goes down, that's, that's the end of that, right. Your, your sellers are probably moving on. How do you think about managing the hardware roadmap next to the software roadmap next to, hey, maybe the future of all these capabilities are on an AI roadmap somewhere else.
- [18:09]
C
We have an incredible hardware team. Thomas Templeton leads our hardware team and it's I think one of the best in the industry. So we partner very closely on making sure that we can form fit seller need. Right. Like the form factors that they need to run their business with, then the software workflows that work best and it's a partnership. And the faster that we can iterate and deliver both software and hardware experiences together, I think the better off all the sellers will be.
- [18:37]
B
I'll make the comparison to Apple or even to Google. Right. Like every year Apple shows off iOS and then a few months later they show off the phone and it sort of Embodies whatever new features of iOS happen. Google does the same with Android and the Pixel. Are you on that kind of roadmap where you're like, I've got a bunch of software ideas and the next version of the point of sale terminal will really bring them to life, or are they separate in your mind?
- [18:58]
C
A lot of the reasons why different hardware companies have different strategies is largely the, you know, how much the hardware underlying hardware exposes APIs and enables the software behaviors. Right. I think ultimately for square, we can decouple those to a larger degree where we don't need kind of monolithic kind of hardware software release cycles, where we can be more nimble on the software side. And then, yes, there's like step function improvements and things that get unlocked from a hardware capability side, but it's not as monolithic as some of the other kind of hardware companies out there.
- [19:31]
B
What I'm really pushing on is the idea that it's the hardware that is the big differentiator here. What about, like, what's the evidence for that? Is the customer saying, boy, we love these square terminals? Is it just that it's easier and more convenient? Is it that they're more reliable? What are the factors that make it the big differentiator?
- [19:46]
C
Yeah, I would say this hardware and software working together is a differentiator. But specifically from a hardware perspective, I mean, the point of sale is front and center. Every single customer that you know, at least in brick and mortar businesses where you're selling something, sees that hardware interacts with it both from a consumer perspective as well as a staff and employee perspective. So if we can build workflows that are delightful and simple to use on both sides of the counter, that. That I think makes. Makes the vibe of the business marginally better. Right. And if we can help with that and we can have customers walking away like, oh, that was fast, that was easy. That was delightful, and all the software and tools around that, as well as staff members, that's fast, it's easy to use, kind of helping customers, making sure technology doesn't get in the way. And I think.
- [20:36]
At the most broad strokes, we kind of hope that most of our hardware and technology kind of fades into the background. We want our seller's brand to stand front and center. There's a lot of design decisions that we've made to make sure that that stays true for a seller.
- [20:50]
B
Do you ever do the Steve Jobs things where you pick up the pictures of, like, the BlackBerry and the. The Palm trio and you're like, this is why they suck and this is why ours is better.
- [20:59]
C
No, I haven't. I think, you know, it'd be funny to do, but no, we haven't.
- [21:05]
B
That's like a big vision, right, that we're going to. We're going to enable sellers of all kinds at every scale. We're going to have hardware that's better, that is a better literal customer experience. And then I was looking at a public roadmap and it is extraordinarily tactical in places. One of the items is there's going to be support for combo meals at quick service restaurants. Where do you think that balance is? That Square has to do the work to support combo meals, not the restaurant has to decide it wants combo meals and it can make Square do that.
- [21:36]
C
The genesis for the public roadmap, and it's pretty unique for larger businesses in the space, is that we wanted to build out in the open and we wanted to drive accountability for what we say we're going to do, we're going to go do, and we're going to do it with speed, velocity and quality.
- [21:54]
As far as, you know, the granularity and the details of what we show in the roadmap, it's really a judgment call. My general preference is to show more, right. And make it kind of more raw and utilitarian rather than maybe more polished. So I think that's, that's why you kind of see everything. Tiny little features, but also really big things will show up there. Specifically for combos and kind of some of the capabilities it's important for when you run a business, the software has to work for how you want to run your business, right? And that's like how you merchandise your, your sales, how you present those kind of goods or, or food or services that you're creating and present them to customers. So that's why it's important, you know, and, and sellers tell us this, but it's important to be able to help sellers model their business the right way.
- [22:42]
B
This is gonna be a very esoteric idea, but in my mind, all software is a combination of like metaphors and interfaces and templates, right? There's just patterns that repeat and then the patterns match some metaphors. A combo meal, like fits into that framework really well, right? Like you open a restaurant, you download Square and it says enter your menu. And then you get to some part of the menu and it says, what are your combo meals? And maybe you'll just like enter them. Is that the kind of thing you want to do for people is templatize a restaurant so that they have combo menus. Because the other way of doing it is I run the restaurant, I invent the combo menu and I just put it into the menu with a price and that that's fine. And there no metaphor required. No, no further. Like the combo meal is made up of these three separate items.
- [23:28]
C
I mean, I think what you need for any software, and I generally agree a lot of software is like forms and lists of things, which is interesting as a reflection, but for you need the core foundational primitives and constructs. Right. Like for example, in the hierarchy that those things kind of how they're designed and engineered in the back end are important to get right and are important to be flexible. You can offer infinite flexibility. Right. I think it's important for any software product to provide guardrails to a certain degree and take opinions because you know, a lot of, you know, if you don't, it could just end up in like a super complicated kind of cockpit of knobs and levers and kind of forms and buttons that are really hard to use and understand.
- [24:14]
B
Yeah, it's funny, I use the cockpit of knobs and levers all the time. But the thing I always think about is okay, I run my little team and if this was a submarine, like my managing editor needs to sit at a console with a lot of buttons and how can I put the buttons in front of her so that she can do her job most effectively? She does not like this metaphor and I don't think it actually works. And I think I'd be bad at driving a submarine because I don't think that's how a submarine works either. But that's what you're describing, right? Is like how do I put the various tools of the business in front of the person who operates the business? What's the dynamic between Square saying these are the tools we think you need that will be most effective and the customer saying these are the tools we actually want?
- [24:52]
C
Yeah, that's the, the art and kind of mainly the art of building great products. It's one of the reasons why Square and Block as a company is a very design led organization. I think design in its kind of most simplest form is helping understand the core needs and building solutions and designing solutions to help solve those needs. And I think time and time again I'm always surprised and delighted by the creativity that comes out of basically a design team in org working closely with engineering to craft these experiences. I think if you have too much of a top down view of exactly what you want to build. I think that a limits the creative process and almost every time in my experience it limits the end result of what you're trying to build. I think it's like an interesting thing to reflect on about different companies have taken different strategies, right? Like very top down requirements based approaches versus more I would say bottoms up creative kind of approaches and kind of the different results that happen because of it.
- [25:55]
B
Do you find that depending on how big your customers are that they have different needs in terms of how to even describe their problems? I imagine the person who downloads a Square app does not have a bunch of out of the box ideas about how to design a payments workflow. And then I imagine the stadiums you work with have literal data analysts being like this is exactly what we need to maximize our revenue. How do you manage that wildly divergent set of needs or even communication styles?
- [26:25]
C
This is one of the benefits for Square's open platform. So at the end of the day like if you're a very small seller, you kind of just want to adopt all the features and products within Square mainly, right? Marketing, loyalty, you know, everything really. And then as you start to get larger and larger, you want to pull in either tools that you want to use, right? So you, for whatever reason, it's a best in breed, you know, barbershop loyalty program or whatever. And our open platform and open partnership strategy really helps sellers pick and choose the parts of Square that help them run their business best. And I think there's a continuum, right? So we want to enable our app marketplace and kind of our kind of developers partners to be able to build on top of Square and extend capabilities that work well for them and then that gives both sellers choice, right? We never want to hold data hostage, we never want to do those things because ultimately.
- [27:22]
We want to help sellers run the best business. And if that means using a third party for some part of that, then we need to enable that.
- [27:32]
B
We need to take a quick break. We'll be right back.
- [27:43]
A
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- [29:04]
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- [30:17]
Support for the show comes from Crucible Moments, a podcast from Sequoia Capital. Sometimes the difference between success and failure comes down to one chance encounter. Or following a counterintuitive instinct or ignoring conventional wisdom to make a bold decision. Like when the founders at Palo Alto Networks wanted to redefine cybersecurity for the modern age.
- [30:38]
B
Everybody thought we were crazy. Nobody would use the cloud for cybersecurity. And when I hear something like that, I say, of course I'm going to do it. You know, if everybody believes it shouldn't be done or it cannot be done.
- [30:48]
A
Then you know it's a good reason to do it. Or when mobile gaming giant Supercell could only rewrite the rules of the industry after failure in the company's formative stages.
- [30:58]
C
Many of the best things we've learned.
- [30:59]
A
Have actually come through failures. These are Crucible Moments, turning points in a company's journey that made them what they are today. Hosted by Sequoia Capital's Rule off Botha, Crucible Moments is back for a new season with stories from Zipline, Stripe, Palo Alto Networks, supercell and more. Subscribe to season three of Crucible Moments. New episodes are out now and you can catch up on seasons one and two at cruciblemoments.com on YouTube or wherever you get your podcast. Listen to Crucible Moments today.
- [31:37]
B
Fox Creative. This is advertiser content from Snapdragon. Now.
- [31:43]
C
We're in flight 247.
- [31:48]
D
Maria, hi. I'm almost to my gate.
- [31:51]
C
Yep.
- [31:52]
D
Flying home for the holiday. You need me to hop on a client call right now?
- [31:58]
C
Sure.
- [31:59]
D
I. I mean, yes, yes, not a problem. Give me one sec. I'll grab my laptop.
- [32:09]
B
Mom, hi.
- [32:10]
D
I really can't talk. No, Mom, I have to get on a call with a client. Yes, a scary one. I love you too. Okay, bye. Bye.
- [32:21]
C
Come on. Open, open.
- [32:26]
D
Okay. Good morning. Yes, hi everyone.
- [32:31]
C
Oh, no.
- [32:32]
B
No, no, no, no, no.
- [32:33]
D
Did the battery just die?
- [32:36]
B
When you're on the go, you need a PC that can actually keep up with you.
- [32:40]
C
Oh, my God.
- [32:44]
B
PCs powered by Snapdragon X series processors.
- [32:47]
C
Provide multi day battery life so that.
- [32:50]
B
You decide when you're finished, not your PC. Snapdragon. Less plug time, more go time. Learn more@snapdragon.com laptops battery life varies significantly.
- [33:02]
A
Based on device settings, usage and other factors.
- [33:09]
C
Foreign.
- [33:15]
B
We're back with Square's head of product, Willem Ave for the break. We are discussing the evolution of Square's business and the role that hardware differentiation played in that growth story. But now I wanted to get into the real meat of the conversation, which in this episode is absolutely how Square is organized and the ways it's recently changed because of Jack Dorsey's decision to switch Block to a functional structure. I think it's actually a good time for the decoder questions. Just take a step back.
- [33:38]
C
Sure.
- [33:38]
B
I think I have a sense of what's going on. Square. Square is part of a company called Block. Jack Dorsey is the CEO of Block. Block is a wide array of interests. Right. There's afterpay, there's title, there's all kinds of stuff. Where does Square fit into Block? And what's your relationship with Jack Dorsey as the CEO of Block as it relates To Square.
- [33:58]
C
Yeah. So Block is the kind of company that has a bunch of brands in it. I'm responsible for the Square brand from a product product perspective. We, we obviously have like sibling teams or sister teams in Cash, App etc. We functionalized the entire company earlier this year, actually late last year and it was a big change Right before we had kind of a divisional GM business unit kind of organization and we went to a purely functional. So there's engineering, product design kind of at the highest levels and then within that kind of brand focused teams that think about the different areas. Jack is an incredible leader and spends time with each of our brands, kind of both guiding kind of really the strategy, but also feedback on fit form and kind of the actual products and the pixels that we're building. So it's kind of been great to work together with him a lot closer over the past kind of year and couple months after we've turned into a more functional org.
- [34:57]
B
So inside of Block, Block has a functional structure. There's one engineering team for Square, Cash, app and title.
- [35:05]
C
Yeah. Afterpay, et cetera. There's a single engineering word.
- [35:08]
B
How do you fight for resources with the music streaming services?
- [35:11]
C
My thesis for teams and prioritization is one, when we functionalize the company, we created a single set of priorities. So a single shared roadmap, if you have a single shared roadmap with clear DRIs for each of the areas, it makes a lot of these decisions a lot clearer. Right. Because you can be like this is more important than this and then we can staff appropriately. I think that's one, I think two though. It's also really important to make sure that like the teams and the squads are stable at kind of the kind of ground level that they're building. They have autonomy, mastery, purpose. They can go kind of go build the things for customers and you kind of need to synthesize both kind of stability at the squad team level with kind of top down strategic prioritization. That's kind of happened and I think that's been the biggest change and benefit from going from a divisional business unit structure to a functional structure is that alignment is super, super important in a large organization. Right. And if you create kind of different, effectively different mini startups or kind of product areas which happens in a divisional org, then yes, you can kind of go fast in each of those directions. But you're usually going fast in like different directions. Right. Versus going fast and making trade offs and being able to build together and, and kind of build something really incredible.
- [36:35]
B
All right. I'M just going to push on this a little bit. I think I understand what you're saying, but just assume I'm much dumber than maybe people think I am. DRI is directly responsible individual. You said you had squads. I understand why you would want shared engineering resources for Square and Cash App and maybe even afterpay. Right. These are payment rails.
- [36:56]
Why does Title need strategy alignment with Square?
- [37:00]
C
So not everything has to harmonize at like exactly the same strategy or exactly the same things that we're working on. It's more that when you functionalize a company, you can also make sure that each discipline is operating kind of at the highest, highest levels. Right. So both from a performance perspective, but also accountability perspective. I think that's one of the key points. It's not like we're trading off people necessarily between Title and Square all the time. It's Title as a team, Square as a team, Cash App as a team, et cetera. And at the margins we might make prioritization, trade offs, but in the broad strokes that's, you know, kind of we have our strategies and we go execute on them.
- [37:37]
B
This is the argument that I've heard for functional organizations and companies that have lots of disparate businesses is that actually it's very hard to manage engineers. Actually designers all want to work with other fancy designers. And the reason you would functionalize them is to hold all the engineers to the same high standard. And engineering management is at a smallish company is too hard to break up. You can't hire enough good engineers, enough good engineering. Right. Is that the thesis here?
- [38:02]
C
Maybe I'll just take a step back about where Square has gone over the past 10 years. Right. So in my journey at Square a little bit. So you know, Square in the beginning, square 1.0. All right. This was a little white reader we talked about earlier. Right. This is kind of solely focused on growing kind of, you know, helping sellers take, take any, make any sale. And then, you know, we went to square, let's say 2.0. This is where Cash App kind of grew and scaled as it's as a separate business unit within Square. There was a GM divisional structure where we kind of really exploded our software ecosystem to help sellers with a bunch of different jobs. Right. There was a GM for the staff tools and there was a GM for kind of the order system, et cetera. As you know, companies go between kind of divisional versus functional structures all the time for various reasons. And I don't think there's a single. Right one for every company. Right. It Just it depends on the circumstance and the culture and the kind of market and a bunch of other reasons.
- [38:58]
B
This is the underlying thesis of the show. This is why I get to ask the question every time. Because, like, I picked one.
- [39:03]
C
Yeah, yeah, yeah, totally. And I. I do think they oscillate based on different things. And I think the, the, the reason that that kind of leads us to square 3.0, which is really that there was a realization that the benefit of Block as a company and the benefit of the two great products that we've built with Cash App and Square is that their strength really, is that the connections between the business units. It was just very difficult to do that in a divisional model. Right. Like, the incentives are just completely misaligned. Divisional models work super well. If you have like completely separate P Ls and the products rarely have to talk to each other, you can kind of hire and build whatever cultures you want within each of those areas. It doesn't work super well when you want kind of that, you know, one plus one to equal three, let's just say. Right. And I think that's kind of the realization for square 3.0, is that we wanted to one, build with velocity across the business units and two, kind of really build interesting products at the intersection between all those.
- [40:04]
So that's kind of the journey, I believe Square has gone over the. Over the past couple years. And one of the reasons why, like, very invigorating to work. I've been here for almost 11 years, a little over 11 years now. And I think it's the ability to move fast, the ability to make quick decisions, and the ability to kind of build these products at the intersection of both the business units. Just incredibly exciting and fun.
- [40:27]
B
How many people is Block now and how many people is Square?
- [40:29]
C
I'll talk in generalities. We don't share them publicly, but block has about 12,000, and we're not growing past 12,000. And then Square's, I believe, roughly like 4,4000 or so.
- [40:43]
B
And then inside of that, how. How is Square structured? And I know the whole company is functional, but you have like a product team. How is Square generally structured?
- [40:51]
C
The biggest challenge with Square, like I mentioned earlier, is that we serve every segment, right? We serve food, retail, health and beauty services. Kind of a long tail of other kind of types of sellers. So the core decision that we had to make to when we kind of restructured around Functional versus GM was do we organize by customer or do we organize by functional surface? So do you need a retail team that wakes up every single day, living and breathing kind of the retail customers and the retail workflows or do you just have more generic pillars like orders and payments and stuff like that? I think ultimately the decision we came to was both and that we have kind of key product areas that are focused on food and bev retail, local services, and then we have a whole set of, I would say like kind of foundational product capabilities that span all the different verticals and audiences. They kind of work together to prioritize and build the best experiences.
- [41:59]
B
Give me an example of those capabilities.
- [42:01]
C
Banking is one. We have a financial suite team. So financial suite is think about a lot of the cost of goods sold. So things like reporting, accounting, kind of etc. Then we have a growth team, right? Every, every team needs kind of a growth, growth org that helps with onboarding, conversion, et cetera. We have an identities and trust org, right? Helping sellers take payments safely and effectively is super important. We have a foundations team, right? So one of the things you need in I would say most orgs, either functional or divisional is a team that's, that's helpful for ensuring that the general experience, right, whether that be like navigation, design systems, things like that are cohesive and good and it kind of acts as a check and a balance to a lot of the product teams that are moving very fast to build capabilities across their areas. And then there's a couple other product areas as well. You know, customers, for example, staff and payroll. We could kind of keep going on. The ecosystem is brought put that into.
- [43:04]
B
Into context in terms of we're going to roll out combo meals for quick service restaurants, right? Is that your growth team heard from a bunch of quick service restaurants that entering combo meals was too arduous and you need a template for it. Was it the team that actually services restaurants is like this is the capability we think they need. How does like where does that idea come from? How do you implement it and how do all those teams work together to do it?
- [43:29]
C
It really starts with the strategy and the customer problem, right? So we strategically say that, that QSRs and FNB is a priority for square, which it is. They're kind of the core cornerstone to the neighborhood. And it's kind of obvious.
- [43:44]
B
Food and beverage.
- [43:45]
C
Yeah, sorry, food and beverage sellers. And then quick serve restaurants are kind of like your fast casual, kind of burger, burrito, et cetera, salad, salad spots. So we kind of start with, start with the customer and the strategy and be like, okay, what are the key things that they need to do? And then basically that's kind of the top down. This is where we're going. And then each of those, the kind of orgs and product areas come up with, okay, these are the key needs and the combo specific example that would be the FNB team kind of thinking, okay, this is really, really important for these types of sellers. And then works closely with the catalog team and a couple other teams to be like, okay, we got to prioritize this. And in any sizable org you always have to kind of make sure dependencies are mapped and kind of different teams can, can, can work through the things they need to deliver.
- [44:28]
B
Yeah. I think this brings me directly to the other question I ask everybody on decoder. Right. Prioritizing the roadmap. That's your head of product, that's the decision. How do you make decisions? What's your framework?
- [44:38]
C
I'm excited for this question. So I think one is I kind of think about this in two ways of tactical and strategic decisions. Right. So at any org of any size, speed and decision making and making sure that the machine doesn't get jammed up, so to speak, is critical. Right. So part of our decision making process, I think for the org, and I'll get into mine specifically, is that you want to make sure teams, right. The squads and the teams at the ground level have rituals that they can get decisions made quickly. So at the team level, we do pit stops, which are multi times per week. They can get unblocked. And then at the leadership level we have what we call unblock meetings, right. Which is anyone can kind of sign up and bring a decision to kind of cross functional leadership, to kind of weigh in on a path. We aim to have decisions made within 48 hours or less. Very difficult to get to that timeline all the time. But that's kind of just a stake in the sand that we've put. So that's the tactical side, I think on the strategic side. The thing that I've kind of been reflecting on is that I think you need the terror of decision making, right. You need the right ingredients as a leader to be able to make decisions. And I think it's really steeped in a few things. First is like deep customer empathy. It's hard for me to believe that you can make great decisions if you don't really understand who you're building for and why you're building for them. I think two is you have to understand the market. You have to understand the history, the market, like, kind of like maybe the environment that you're competing and building products in. And the last one is just constraints and I think you need to understand effectively, intuitively almost what the different trade offs and constraints are if you have kind of all those, and I joke with my team, your gut is the best trained ML model on the planet. It's just the synthesization of all the things that you've seen over your entire career, day to day, in and out. And I think if you have a lot of those components, then you can be good at making strategic decisions. Then if you think about actually making them, the biggest thing is like should you make it or should someone on your team make it? And if it should be you, great. Then you need to decide how much information you need to make said decision. And in that case it's usually starting from the customer and working backwards. Want to ask you last note. I think decisions are kind of important, but what's even more important is just alignment of the entire org, right? So in a larger. This is why startups can move fast. Alignment is simple. You're like literally sitting with 20 of your co workers and you can make a decision and just run immediately. Right now if you think about a remote company or a larger company, alignment becomes more and more difficult as you add more people into the equation, right? So I think it's important that when decisions are made that you know, and a lot of people talk about, disagree and commit or whatever, great. It's really just another way to say can we align on this thing and can we go run as fast as possible? So I think a lot of my job and a lot of my team's job is to make sure that we have that alignment at block and square, specifically the kind of singular roadmap and top of priorities help with that. And then within that, the DRI model can.
- [47:43]
Help make sure those decisions are cascaded down, owned and kind of driven towards completion.
- [47:48]
B
Nothing makes me happier than when I can tell that someone is a decoder listener and they came fired up for the decoder questions. Like if you do a show like this, you're like, I did it, that's great. I can tell you've been ready. There's that, right? There's the best laid plans, there's systems and frameworks. It sounds like you have a lot of authority and you push down a lot of that authority. Then there's the CEO and you have a famous CEO who at least in public plays a very eccentric character. Is that a stabilizing force? Is that a destabilizing force? What is it like to work for Jack Dorsey?
- [48:20]
C
I think it's one of the reasons why I'm still here 11 years in. I think Jack is an incredible visionary leader. I sometimes joke and I think he, like, lives in the future. This has a great intuitive sense about what's important for customers and where markets and things are going. Jack and kind of his directs are really responsible for setting the overarching strategy of, like, these are the big opportunities where we want to go. We've made some good decisions and we've made some bad decisions at the kind of corporate level. I think with the new focus of kind of these functionalized teams, we're making better decisions every single day again from that alignment and actually forms for Jack to weigh in and kind of provide guidance and input on things that teams might be struggling with.
- [49:06]
B
Is he the same character in your meetings as he is on stage at various conferences?
- [49:12]
C
He's very similar. Yeah, yeah, yeah. Definitely.
- [49:15]
B
One of the ideas, I mean, besides the beard, which I think is him trying to live in the future as much as possible. Cyr from. From the year 3000. Right. He's big on bitcoin. Square accepts Bitcoin. Square holds a lot of bitcoin. He's big on AI. Obviously, there are some AI integrations that I absolutely want to talk about with you. Where is he pushing you the hardest?
- [49:33]
C
He's pushing the hardest on AI. We have, you know, kind of automation is one of our top priorities as a company. And it's not just automating products for sellers. It's also just automating internal processes. Right. And that's, you know, everything from kind of support sales all the way through compliance, risk, etc, and there's just this fundamental belief that if there is a process, we should try as hard as possible to automate it. I think it's exactly the right push just because of how much and how fast this technology is changing and improving. There hasn't been a technology in, let's say, past 20 years that improves by an order of magnitude every 12 months. There just really hasn't in a long period of time. And we can debate on a lot of the impacts of that, but you kind of have to skate to where the puck is going. It's kind of like if I take a step back.
- [50:32]
Remember when mobile was a big thing and the iPhone came out?
- [50:36]
B
Yes, I remember the genesis of my career. Yeah.
- [50:39]
C
A lot of companies at that stage had a little mobile team off to the side building a little bit app. Right. And that was the strategy for a lot of companies. A lot of those companies didn't make it. Right. The companies that made it were the ones that reimagined how they should work with this new way of reaching customers in this new technology. Right. Uber reinvented transportation in a mobile device. Right. Square, I would argue, reinvented payments on a mobile device. Right. And I think, you know, that we could debate if AI is another one of those kind of of seismic shifts. I believe it is. And I think companies that embrace AI and kind of really ingrain it with both the products that they're building, but also the internal processes they have are the ones that are going to make it and the ones that don't, you know, might not.
- [51:29]
B
We need to take another quick break. We'll be right back.
- [51:41]
D
Support for this show comes from Adobe, who are introducing the all new Adobe Acrobat Studio now with AI powered PDF spaces. Look, I'm sure when I say PDF you have a very specific thing in mind. And I'm guessing it's an email attachment. Certainly not a dynamic asset that can help elevate your business, but Adobe Acrobat is changing that. It's time to do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. It's time to reimagine and rethink what a PDF can actually do. Learn more@adobe.com. do that with Acrobat. That's Adobe.com DothatWithAprica.
- [52:35]
Guys, thanks for helping me carry my Christmas tree.
- [52:38]
B
Zoe, this thing weighs a ton.
- [52:39]
C
Drew Ski, lift with your legs, man. Santa.
- [52:41]
B
Santa, did you get my letter? He's talking to you, Bridges.
- [52:44]
C
I'm not.
- [52:45]
D
Of course he did. Right.
- [52:47]
C
Santa, you know my elf, Drew Ski here. He handles the nice list. And elf, I'm six' three.
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B
What everyone wants is iPhone 17 and at T Mobile, you can get it on them. That's center stage. Front camera is amazing for group selfies. Right, Mrs. Claus?
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D
I'm Mrs. Claus much younger sister. And AT T Mobile, there's no trade in needed when you switch, so you can keep your old phone or give.
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It as a gift.
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D
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Nice. My side of the tree is slipping.
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A
Kimber, the holidays are better.
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At T Mobile, switch in just 15.
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A
Visit t mobile.com support for this show comes from Amazon Ads. It's time for some fresh tech consumer insights. And Amazon Ads just released a study that's seriously challenging. What we thought we knew about electronics shoppers. Remember when we assumed everyone bought headphones out of necessity? Turns out, according to their study, only 54% do. The rest, they're impulse buying or chasing the latest drop. They also found out that 45% of gamers buy completely spontaneously. And despite all the digital options, they're reporting that 38% of games are still bought in physical stores. Not exactly what you'd expect in the age of downloads. For brands, this means rethinking their approach to reaching customers throughout the purchase journey. From building awareness with streaming TV ads, to driving consideration through display advertising, all the way to capturing those crucial purchase moments and more. Ready to rethink your Strategy? Head to advertising.Amazon.com to learn more. That's advertising.Amazon.com.
- [54:43]
B
Zoe, the mall's about to close.
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A
It's impossible to do anything in 15 minutes.
- [54:46]
D
Oh, it's possible, Harvey. I mean, you can switch to T mobile in just 15 minutes. So you think you can find your auntie a sweater?
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B
Come on, you spent an hour buying jelly beans.
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C
I know.
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D
I do love jelly beans. Trust me. Now you can switch to T mobile in just 15 minutes. Plus you'll get America's Best Network.
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No, no.
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15.
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A
Maybe I should switch to T Mobile.
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C
Right now, this holiday. Switch to T Mobile in the just 15 minutes from your phone. Check out in 15 minutes or less per line. T Mobile is the best mobile Network in the US based on analysis by O Speed Test Intelligence data 1 2025.
- [55:17]
B
We're back with Square head of product Willem A. Before the break, Willem was making a case that what we're seeing in AI now is the biggest seismic shift in technology in two decades. So I wanted to press him on what he thinks AI can really do for a product like Square and why he's so confident it will be as transformative as the iPhone was.
- [55:37]
All right, let's debate it. I'M ready. I've been thinking about this a lot. The idea that a business is just a collection of databases and that you should connect those databases and run your business more efficiently, right? That's the metaphor. Like, I, I see it everywhere now. Everyone that I talk to about AI is like, finally I can send my agent off into some database that previously had some weird API and it was very brittle. I can set up the MCP server and it can just finally tell me all the information that I've always needed to know to sell widgets more effectively. And I say that not with derision, I just say it because I hear it so much. But even on Square's Roadmap, that is kind of what Square's AI roadmap looks like, right? You're going to have a bunch of information in your business, and you, the small business owner, are never going to set up all the tools to get value from that data. So you'll just ask the AI, The AI will build the tools and then you'll have it. And that is a very big vision of the future. Like, I see that. I see why you're describing it as a big vision of the future. That is not a big user interface shift, right? That is a software architecture shift. Now the databases can just talk to each other like old friends or like whatever they're going to do, but it's not a, we need phones to make Uber because the Internet is with you all the time. How do you bridge the gap? Because that is the thing that I see most of all. We started off by talking about how Square's differentiation is hardware. And now we're at, we have to re architect Square for the AI era. And I can't quite connect those two things together.
- [57:02]
C
Just, just correct. I don't think Square's only differentiator is hardware. It's one of the key, key things. But I want to come back to the customer, right? These small businesses, whether you're running one location or like 10 locations, making good decisions, right, is actually like one of the hardest things about running a small business. You just don't have a ton of time, right? You're sweating. Making sure that you know the, you know, you've your food delivery ingredients showing up that day, that your staff is showing up that day, that you're doing enough on marketing to make sure that you can generate interest for your business. At the same time, you know, you, you have access to data, but it's very difficult, you know, to, you know, investigate and interrogate that data in a Meaningful way for your specific business. So if you kind of just think about the customer, it's really the first time that, that the interface for accessing decisions and data is not some complicated UI with a bunch of dropdowns and buttons and charts that are a. Not always, even if you build them beautifully, just hard to use, right? Getting access to data across all the different dimensions of your business. Right. Sales, customers, et cetera. And then the intuitive thing about like, okay, I want to look at my sales on a rainy day versus not a rainy day over the past summer. These are pretty complex questions or like, how are my tips different on rainy days versus not, right? And I think for the first time, these kind of agentic systems give sellers a natural language way to answer questions about their business, like kind of letting their curiosity run, run free. And I think that's super unique in kind of a set of technologies. So you're talking about like, hey, the interface isn't so different. I would argue that the interface is completely different now for two reasons. One, almost every interface in, let's say maybe web 2.0 world was synchronous. You had to sit there and you had to push a button to get an action. Now, for the first time, you can have asynchronous things, right? It can do something on your behalf and it'll check with you for approvals and making sure that I can go do that. But I think that combined with the fact that it's a more natural, both voice and text, right? Soon we're going to. Voice is really good. And, and honestly, I know Siri had some struggles, but voice is getting really, really good as an agentic interface. When you combine both of those and you combine just that, these sellers are busy and now they can.
- [59:30]
Meaningfully know how their business is working and make better decisions. What I think happens is that we see better business outcomes for these small businesses. Right?
- [59:39]
B
Can I sit in the rainy day tips example for one second to make this real? It strikes me that even knowing to ask do I get better or worse tips on rainy days requires a level of insight, right? Like why do you think your sellers are going to ask questions like that?
- [59:56]
C
So there's kind of two, two things that we're thinking about. One is sellers intuitively know their business far better than. Than we do, right? Like just honestly, right? They wake up, they're in it every single day. They know the things that are, they're keep. Are keeping them up at night, right? Should I stay open an extra 30 minutes? And what does that do to my tips on Thursdays or whatever. I don't want to discount how well they know their businesses. So, you know, there's very specific things they want to find out to help them run a better business. And I think the interesting next step is how we can be more proactive and proactivity for suggesting things that they may not be thinking about. And this is also when you combine these large language models with tool use, right. You can actually get very grounded, correct things to help them understand what's happening. And that's like a really key investment area for both us and most of the industry.
- [60:51]
B
I'm going to force you to sit in that example. I know you just was off the cuff, but I want to sit in it because it is useful for me to think about real examples. Does TIP revenue increase on rainy days? I'm going to ask Square's AI that question. Does Square have a database of historical weather patterns? You have to go out and, and get it like that's right. Just foundationally. That's the first task. We need to know what the weather was like on Sundays. We need to understand whether it was raining or not, maybe how much it was raining. We need to synthesize that with a database of sales that has both like the core revenue and then the TIP revenue in it. And then we need to plot that out. I have asked various LLMs to do tasks like this and sometimes it works. It works to a degree that is high enough that I understand why the entire industry is betting on it. And sometimes it just crashes out, man. Like just doesn't work at all. First tell me, do you have a database of weather that you've been tracking against sellers? Like right, this is just a first problem. And then how do you make sure it works every time?
- [61:48]
C
This is part of the art of building, I would say products in today's age. Right. So there's a few things like kind of when first ChatGPT first came out and large, a lot of these large language models came out, there was a lot of quote hallucination. Right. You would ask these things. It'd just be like blatantly not true. True. The real innovation in my opinion is one, yeah, they've gotten better at pre training and better kind of data inputs. But the second really is that we've taught basically these large language models to do better agent loops. This is one of the reasons why Gemini and ChatGPT are much better now is that they integrate search data. They can enrich their context with actual data from tools. So if you think about this specific example on rainy day. Two tips. What we do is we have an MCP ecosystem that we connect our kind of AI tools to and there's like a, there's a weather MCP effectively and there's a data warehouse that these language models actually write real SQL against. Right? So it's not, it's like as deterministic as possible. And then basically you can, you can kind of reason through it that, you know, get the rainy days, those are actual days. So I'm going to use the days as the kind of where clause or whatever in the SQL statement and then pull back the data and kind of render it appropriate appropriately to the seller, to the customer.
- [63:07]
B
This hybridization between we're going to make it write real SQL code so it's actually doing deterministic calculations. This feels like the turn that the whole industry is making, right? We're not just going to let the models run off and do their thing. We're going to use the models to accept natural language input and then we're going to make sure we do real computers in the back. That turn feels very big, right? It feels like not just we're figuring out how to use the models better, but maybe we're acknowledging that the models can actually do the work that everyone thinks they can do. Do you see that as a limitation or do you see it as an extension of capability?
- [63:39]
C
I think it's an extension and just a realization of how to use. For many years, I don't think we totally knew how to apply these things to real problems. There was this very cool technology and there was this capability overhang that we just didn't know how to apply this perfectly. Tool use and context window expansion, right? Both of those you kind of have to do together because you kind of have to put all this data somewhere are really the two big unlocks. And then the ability for these agents to work over a longer time horizon. Right? So 30 seconds, 1 minute, 2 minutes, 5 minutes. It'd be totally reasonable for proactive insights for an agent to work for a couple of minutes or more, right. Collecting data, testing it, making sure it's right before builds a comprehensive report. Kind of like deep research and others. And I think those two innovations have really unlocked, I would think, far more tangible business value than the kind of earlier, I would say, chat based conversational interactions that were kind of the very beginning of this whole era.
- [64:43]
B
I guess I'm focused on you saying as deterministic as possible, right? Because the idea that you definitely need a deterministic traditional computer in the background of the interface seems important to me. Is that as important to you as it feels to me?
- [64:58]
C
My mental model now is more that these large language models are becoming more like the CPU of a lot of these different products that we're building. And you need to give the CPU different things, right? You need it to give it access to data, you need to teach it how to use sandboxes and different tools so that I can effectively learn and get stuff done. You need some working memory, you need all these constructs. I think ultimately.
- [65:26]
Even if you ask someone to go do something, they sometimes do the job wrong some percentage of time. Humans using computers are also not deterministic, even if clicking the button is 100% deterministic. And this is where I think there's really interesting UI challenges and things that we're working on and going to be releasing kind of in our spring release next year is how can we have of these large language models prompt the user with actual generative interface. I'll give you another example. So I want to bulk update all the prices of my menu, right? Let's say increase prices by 5%. In one world you would just have the agent go do that and commit those changes and those would go live on your point of sale and your buyer services. That's pretty risky in my opinion. Another path you could be say, okay, I'm going to generate a form and a list of all the things I want to change and then the user, the customer needs to go click okay, boop. And then that actually goes and commits those changes. And I think that's the next frontier after we've done a lot of work as an industry on kind of this tool use agentic thing is like how do we have more natural interactions in a generative UI construct to help sellers kind of use these tools? And I think that the realization behind all of that was that if you look at most of ui, it's really forms and lists of things, right? So if you know it's pretty straightforward to have these large language models generate those UIs and then what you can actually do is for the longest time the builders of tools, right, like the software teams were specifying and designing the user interfaces. I think for the first time ever, the interface is generated by the customer or the user. I think it's like a pretty profound way to think about what the future over the next couple of years is going to be be with how these products are going to be built.
- [67:18]
B
That's the tension that I find the most Fascinating, all of this. I am a proponent that no UI should be hidden. This is just. I grew up in the sort of Windows and Mice era. Like we just put all the UI in front of your face. Like we move from the command line to here are all of the buttons. And then over time we have abstracted everything away and now the kids don't know how to use file systems. Like there's a real push and pull there that is has some real consequences. The iPad kids do not know what files and folders are. Now we're going to abstract more of the UI away, but you can just ask the magic Box to do anything and it will at least tell you that it's doing it. How do you see that transition? Because there's a part of me that says people won't actually know the full capabilities of the tools you're giving them.
- [68:01]
C
Yeah, I mean, it's kind of a very interesting philosophical discussion. I think the way that I would think about this is back in the day where I used computers back then too, with file systems and dragging. As we've built more software on top of those, those things, we've been able to do more with the tools. Right. And honestly, like, you know, I don't know if Gmail has files and folders behind it. I don't really care. Right. I can do way more with Gmail than I can do with all those, those things in the past. So part of me is that one, like AI tools need to build trust with the customers and people using it. That's, I think, a bedrock belief that we have when building these. And that means there's some sort of like explainability about what's happening. And our strategy is to be able to present.
- [68:45]
Sellers kind of what's going to happen and let them take some control over what's going to happen as far as how this is going to impact, you know, my kids or the next generation of people using computers. I'm not totally sure we've figured that one out yet.
- [69:01]
B
There's just a part of me that says if you don't show people what they can do, they won't even try. And then what scrambles at with AI is you can ask it to do anything and it will just confidently say it's happening, whether or not it actually is happening, happening. And there's some new dynamic that needs to be invented there. I want to just talk about databases for one more second and how AI might interface with them. And then I want to talk about just money because it is a weird Time for money. And I want to make sure we talk about that a little bit. I've been talking a lot about what I call the doordash problem, which is you turn every business into a database and then the AIs can just come and use that database. And you know, services like Uber or DoorDash might lose the value add, right? They might all just become wholesalers or commodity providers of sandwiches. Small businesses have that same problem in different ways. Square sitting on top of business or running a business having a bunch of AI features that can talk to a bunch of other AI agents that might run around and do things kind of creates that problem at scale for a bunch of small businesses in a neighborhood. Right. Burrito delivery might change and maybe we actually bring the power back to the quick service restaurant in the neighborhood to just be the provider of burritos without a doordash sitting on top of them and extracting fees. Is that on your mind as a potential solution or change that AI might bring about?
- [70:14]
C
I think everyone is going to want to expose capabilities to these agents, right. And let those agents do certain things on their behalf.
- [70:26]
I think at the end of the day we want to make sure that sellers and customers can build some sort of relationship. I think. I firmly believe that the main streets and the neighborhoods of the world are better because of interactions that you have at those small businesses. DoorDash is notorious for trying to separate the customer from the seller and have the doordash tax as you call it. I think for us what we want to do is just support end to end seller interactions. If we can have agents enable that and make that better, then that's definitely something we're interested.
- [71:03]
B
As you're saying this, you know, Square has done a big integration with Uber Eats, Door Dash, grubhub because that is the audience funnel. That's where the customers come from for a lot of these restaurants. Is that intention with? One of our goals is to enable more direct customer relationships.
- [71:17]
C
At the end of the day we have to help sellers sell where they want to sell, right? We can't control that. We shouldn't control that. We should enable that in whatever ways. I think the goal for us is to provide enough tools to enable sellers to create direct connections with customers. Customers. It's one of the reasons why we launched this new Neighborhoods product built into Cash app because we want sellers to maintain and kind of enhance the interactions that these sellers have with customers, mainly around loyalty programs and re engagement. I think the more that we can do that, the better it is. For the seller, and also over time, the better it is for customers.
- [71:53]
B
The weirdest way to think about databases, in my opinion, is to think of money as one giant weird database. You know, the banks are all just databases with fancy faces on top of them. Credit card companies are just databases. Jack Dorsey is big into crypto, which is a decentralized database of money. Bitcoin is just an openly readable database that you can transact on. How do you think about that interaction? Block has big investments in crypto and bitcoin. Those numbers go up and down. That might change the company's balance sheet day to day. And then obviously you can transact in alternative currencies. How do you think about that relationship? Because it is like the last database.
- [72:32]
C
To conquer, I think effectively. The whole space is fascinating. And if I think just from a square perspective, that we always want to help sellers.
- [72:42]
Accept any sort of payment. Right. And just make the sale. That's how we were founded, and that's one of our core principles. You know, sellers can't control how customers want to pay. Pay. Right. Which is why we truly believe helping sellers accept any type of payment is super important. Back to my point about democratizing technology. Right. You know, there's a lot of talk around Wall street having bitcoin treasuries and all the other kind of tools that they have. I truly believe providing those as options to small businesses and guardrails and guidance and education is important. Right. We should give sellers choice. I believe that they're far more intelligent and can make those decisions for themselves. And I think if you kind of see about all the investments and all the tools that we're building within the bitcoin space, it's really that it's helping sellers accept bitcoin and they can settle in fiat. They don't have to take bitcoin. That's fine. Bitcoin as a payment rail is super interesting. Our goal is to make bitcoin everyday money. It doesn't mean you have to hold bitcoin. You can choose to hold fiat if you'd like to. And again, giving sellers that choice, I believe is super important.
- [73:50]
B
Important is it fast enough to transact in bitcoin today to be usable on a payment terminal?
- [73:55]
C
The bitcoin mainnet, like the bitcoin network, isn't fast enough to transact. However, lightning is fast enough. And this is where block has made, I would say, monumental investments in the lightning network. We're one of the largest lightning nodes. And if you combine those capabilities, you get both all the Benefits of the bitcoin network with the speed that lightning provides.
- [74:19]
B
There's a very philosophical crypto question, but here we are. You know, the argument against lightning is that it centralizes Bitcoin in specific ways. Right. That people actually hold a bitcoin. And then now you've just built a database again that some centralized providers hold and it you've reduced the actual decentralized nature of Bitcoin. Do you, do you buy into that?
- [74:38]
C
I think it's important to have technology be as usable as possible. Right?
- [74:44]
B
That is a very polite way of answering that question.
- [74:46]
C
Yeah, I think. And I think it's important that you know that we can kind of enable those technologies. As far as like the specifics of lightning versus Bitcoin and all the trade offs, I think that's for other people to talk through.
- [74:58]
B
When I think about crypto generally and why you might transact in it, why you might not transact in it, the idea that number always go up. Just the first thing that comes to my mind. And actually today you and I are talking and bitcoin is down substantially. So maybe the answer to this is it feels different today than on every other day. Okay. But you know, if I had a bitcoin, I can't think of a good reason to spend it. To me this is a real problem is that the culture of bitcoin is you should just hold it as long as possible because number always go up. Are you seeing significant transaction volume on in bitcoin on your network?
- [75:32]
C
Not significant, no. But I believe what we want to see over time is giving both sellers and customers an option. Right. At, at the end of the day, there's not a lot of options for digital currencies or digital ways to do transactions. Let's just say that aren't Visa and MasterCard. Right. You have ach kind of slow. Right. You have other payment mechanisms and payment rails. So we just believe that it's important to offer options and sellers and customers again will choose technologies that are both more cost effective, better user experiences. And as long as we keep investing in that, I believe good things happen over time.
- [76:13]
B
Are you seeing increased bitcoin transaction or is it just flat diminish?
- [76:17]
C
Can't comment specifically on the kind of number of transactions. We're seeing a lot of adoption and interest in just the bitcoin product portfolio. Right. So conversions is taking off a ton. Right. Which is basically taking a percentage of your sales and converting those to bitcoin. And there's a ton of excitement from a lot of sellers. And a lot of customers. On our very recent bitcoin payment, rail launch a couple weeks ago, it's.
- [76:42]
B
This is what I mean. I can't think of a reason to sell bitcoin, by the way. I'm not allowed to hold bitcoin. It's like just like holding stocks. Like it's a thing we can affect the price of. But I understand why you would hoard bitcoin. Like, why a seller would be like, oh, I can just convert my revenue to bitcoin. This is great. It's very easy. Can you think of a reason why you should set why you should use a bitcoin if you're holding one? I mean, that isn't crimes. I'll set aside crimes. But can you think of a reason? Reason?
- [77:09]
C
Ultimately, you know, people need to make decisions for themselves, right? And I think I want to build the technology so that people can make those decisions and that they don't have gatekeepers. Right. That are making decisions for them. And as long as I can do that, I think it's up to those people to make the best decisions for them, whether that be to sell, transact, etc. And I think that's kind of how I think about, about both prioritizing products, but also kind of what we build and how we build it.
- [77:40]
B
I'm just going to say I've been asking for years, why would anyone spend a bitcoin? And no one has ever given me a reason. We've talked about the future of money. Let me just drag us into the past of money to close this out.
- [77:49]
C
Sure.
- [77:50]
B
You run point of sale terminals, you run hardware. You have to accept cash. The United States government just decided to round up all cash to 5 cents. Like we're just getting rid of pennies. Goodbye. How has that affected your business? Did you know that was coming? Do you have to recode the point of sale terminals to be done with pennies?
- [78:08]
C
So I think a couple things. First is many countries, Canada and Australia already do this, right? So we're live in Canada and Australia. So we've had to build the features and capabilities to let sellers do roundups and all that other stuff. So we're excited to just enable that for US Sellers now. There's always a transition period where it's a little bumpy to start and then it gets better over time. Time and from just a pure point of sale, helping sellers run a business, we're ready and set for them to make this transition.
- [78:36]
B
Did you know it was coming or did you just wake up one day and say, oh, do the Canada thing.
- [78:40]
C
We got a little bit of heads up. But not, not a ton. No.
- [78:44]
B
Does it feel like a lot of work? Does it feel like it will change transaction volumes or average pricing? How's that going to work?
- [78:50]
C
I would guess that there would be very nominal changes in this. Like if you think, you know, a lot of companies already do roundups to help charities and other their kind of local initiatives. So I believe that elimination of the penny and kind of rounding up a little bit isn't going to like meaningfully change the behaviors we see just in the industry. Time will only tell though.
- [79:13]
B
How many do you know how many pennies you handle point of sale terminals handle today?
- [79:17]
C
That's a fascinating question. I don't know offhand. But you know what, I'm going to go check it out right after this. Now.
- [79:22]
B
Yeah, I'm dying to know. You've given us so much time. Come back to us with a penny answer. We'll put it in. I'll mention at the top. Willem, this has been great. You got to come back. I know you've got some AI features and new products to launch. Come back and let us know all about them.
- [79:35]
C
Cool. Yeah. Thanks so much for having me. It's been a great, great convo. Appreciate it.
- [79:40]
B
I'd like to thank Willem Ave for taking the time to speak with me and thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about this episode or really anything else at all, drop us a line. You can email us@decoder theverge.com we really do read every email or you can hit me up on Blue sky or Threads. Also, another quick reminder, we're running a special end of the year mailbag episode of Decoder later this month where we answer your questions about the show, who we should talk to next, what we should dig into next year, what you want more of, what you want less of. Really all of it. Send your questions to decoder the verge.com and we will do our best to feature as many as we can. We're also on YouTube now. You can watch full episodes at Decoder Pod and we have a TikTok and an Instagram all at the same handle at Decoder Pod. It's all a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcast. Decoder is a production of the Verge and part of the Vox Media Podcast Network. The show is produced by Kate Cox, Nick Statt, edited by Ursa Wright. Our editorial director is Kevin McShane. The Decoder Music is for Breakmaster Cylinder. We'll see you next time.
- [80:31]
A
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