The Hard Lesson I Learned About Online Services

It has been a week! One with an important lesson that I want to share with you.

Tuesday I made a lot of sales calls for Hotchkiss Pecan Foods. Early Wednesday, I went in to the office to generate invoices and begin filling orders. We use Square for that. As a small business, we appreciate that our only fee is the relatively small percentage Square takes on each sale.

But when I attempted to log in, I was informed on screen that I needed to reset my password. No explanation, so I figure they must have been hacked, or perhaps they’re strengthening their security. I clicked the on-screen button to receive the reset password link.

Five requests for the link submitted over the next 90 minutes. By this time, I should have had every invoice printed and a good many orders filled. (Yes, I carefully, obsessively, checked my inbox and spam bucket for their email.)

I came to the only obvious conclusion: they’re not sending me a reset link. I have no access to my account. I can’t create invoices. In fact, I can’t access any of my business information.

That’s when it hit me. At any time, any online service we use can nullify our password and then give us no way to reset to a new password, and no way to contact them otherwise. They can hold our critical business information hostage (and even our money) at will.

Pay up or move on.

They’re a short jump away from the ransomware villains.

Those of you in IT may wonder why it took me this long to realize this truth, especially if you know much about my background, or know me to be the pragmatic cynic that I am.

I’m sharing this because I figure there are others who have not thought of this, or who dismissed it as unlikely. (As my wise daughter pointed out, it’s not in a company’s long-term interest to do something like this.)

Perhaps it is.

Unless your business model is advertising, where customers are the actual product, low-margin customers, in isolation, are a net revenue drain.

So, Square, are you trying to get rid of startups like ours? Make us and the thousands of startups like us a drain on some other company’s balance sheet?

Or is this a ploy to force our cohort of customers into a higher revenue model?

Perhaps it is.

When I shared this story with my webmaster a few hours after it had been resolved, he shared his own experience with Square this week.

He was a no-monthly fee customer too. The part of the service that he valued most for his karaoke DJ side business was the No-Show feature that gave him some monetary protection. This week he had to accept a new set of terms and conditions from Square in order to access his account. The changes weren’t clearly listed in short, easily read bullets at the front of the document. So, like the rest of us, knowing there’s no real choice in the matter anyway, he just accepted them. That’s when he learned that the fee-free version no longer offers the No-Show feature.

The only way to get this feature? Pay Square $29 per month.

Pay up or move on.

Companies like Square are not just providing a service at a very low cost to self-funded companies boot-strapping their way to profitability. They gain valuable word-of-mouth advertising. We went with Square because our webmaster recommended it. Knowing he was a customer played a part in that decision.

They also gain more than that. They gain a pipeline of future monthly subscription customers by providing important features that larger companies need. Loss leaders are nothing new.

They gain marketplace recognition every time a customer uses Square to process a consumer payment. That improves name recognition, top of mind awareness, and brand image. Those items have monetary value: to the stock market; to future investors; to bankers; and in mergers or acquisitions.

Like most online companies, you can’t reach a real human being at Square without first running the gauntlet of online “help” FAQs and “trouble-shooting” documents. I’m all for self-service when it makes sense. All I had to do to access their online help was to, yes, LOG IN TO MY ACCOUNT.

Square is on the west coast. So once it reached 9 a.m. east coast time, I was able to reach a real person via their online chat, who, after several minutes, manually sent me the magic password reset link that instantly arrived in my inbox.

Fortunately for us, our business does not depend on the morning commuter rush, and this didn’t happen while we were running one of our pop-ups that only last a couple of hours. But it might happen again, and next time, the timing might be catastrophic.

Can I trust Square to not stop our sales function again? What about disappearing features? What if one day the only way I can access our customer records for sales, or business records for tax filings, etc., is to pay a monthly fee? What if that fee is hundreds of dollars?

Now I have a business decision to make: should we just move on?

What are your thoughts on this?

#square #business #online #riskmitigation