Category: Business

Stripe wants to “redesign the world’s online payment structure”. It won’t.

I was recently having lunch in Skylon with a friend of mine who is also involved in software, and he mentioned that Stripe—a payment gateway—had now launched in the UK. A bit of light searching revealed a Wired article which asserts that Stripe’s co-founder wants to “redesign the world’s online payment structure to achieve one universal system”.

“… The internet has made it easy for people to communicate, but payment is still fractured. As a result the internet gets fractured as well. We don’t have this problem offline. The internet is a testament to a connected system that works—it’s a global network where any computer can reach another, and easily transfer information across.

“What if we designed payments for the internet? With interconnectivity and user experience as the goals. We’re designing from the groundup for the internet. We’ve not achieved it yet, but we expect more instruments will follow as Stripe spreads. The reason this problem is so important is that the web economy has so much growth left in it.”

The trouble is that this is simply not going to happen—not through Stripe, in any case.

Why? Well, just look at Section B5 of Stripe’s UK Terms and Conditions:

[B5] Prohibited Businesses

By registering for Stripe, you are confirming that you will not use the Service to accept payments in connection with the following businesses, business activities or business practices: (1) door-to-door sales, (2) offering substantial rebates or special incentives to the Cardholder subsequent to the original purchase, (3) negative response marketing, (4) engaging in deceptive marketing practices, (5) sharing Cardholder’s data with another merchant for payment of up-sell or cross-sell product or service, (6) evading Card Network’s chargeback monitoring programs, (7) engaging in any form of licensed or unlicensed aggregation or factoring, (8) airlines, (9) age verification, (10) age restricted products or services, (11) bail bonds, (12) bankruptcy lawyers, (13) bidding fee auctions, (14) collection agencies, (15) chain letters, (16) cheque cashing, wire transfers or money orders, (17) counterfeit goods, (18) currency exchanges or dealers, (19) embassies, foreign consulates or other foreign governments, (20) firms selling business opportunities, investment opportunities, mortgage consulting or reduction, credit counseling, repair or protection or real estate purchases with no money down, (21) credit card and identity theft protection, (22) cruise lines, (23) essay mills, (24) flea markets, (25) drug paraphernalia, (26) extended warranties, (27) fortune tellers, (28) “get rich quick” schemes; (29) gambling (including but not limited to lotteries, Internet gaming, contests, sweepstakes, or offering of prizes as an inducement to purchase goods or services), (30) sports forecasting or odds making, (31) illegal products or services, (32) mail-order brides, (33) marijuana dispensaries and related businesses, (34) money transmitters or money service businesses, (35) multi-level marketing or pyramid schemes, (36) online or other non-face-to-face pharmacies or pharmacy referral services, (37) prepaid phone cards, phone services or mobile phones, (38) pseudo pharmaceuticals, (39) quasi-cash or stored value, (40) securities brokers, (41) sexually-oriented or pornographic products or services, (42) shipping or forwarding brokers, (43) substances designed to mimic illegal drugs, (44) telemarketing, (45) telecommunications equipment and telephone sales, (46) timeshares, (47) travel agencies or travel clubs, (48) online or other non-face-to-face tobacco or e-cigarette sales, (49) weapons and munitions (50) virtual currency that can be monetised, re-sold or converted to physical or digital goods or services or otherwise exit the virtual world, (51) personal computer technical support, (52) selling video game or virtual world credits (unless you are the operator of the video game or virtual world), (53) selling social media activity, such as Twitter followers, Facebook likes or Youtube views, (54) human hair, fake hair or hair-extensions, (55) any product or service that infringes upon the copyright, trademark or trade secrets of any third party, or (56) any product, service or activity that is deceptive, unfair, predatory or prohibited by one or more Card Networks.

The vast majority of the businesses prohibited above are—assuming relevant registration and permits are obtained—totally legal and legitimate businesses.

As it happens, I was looking at Stripe in connection with a charity-related business that I am involved in. At first I was incredibly excited: Stripe seemed to offer all of the security and flexibility that we need—including OAuth integration.

Unfortunately, there is a gambling element to this business; and, even though the business has all of the required permits and clearances from the British government, Stripe’s Terms and Conditions mean that we cannot use their service.

Section B6 of the T&Cs covers illegal trading, which would surely be enough in most circumstances.

[B6] Business Conduct.

You will only accept payments through Stripe for transactions between you and your customer for the bona fide sale of lawful goods or services. You will not solicit or use a cardholder’s Card Data for any purpose other than to process payment for your goods and services. You will comply with all applicable laws, rules, regulations and orders of governments having jurisdiction in connection with your use of the Service.

One can only conclude, therefore, that Section B5 is something that Stripe have inserted to assert their own morality into their business model. Which is entirely fair enough: Stripe’s gaff, Stripe’s rules.

However, Collinson cannot make grand, sweeping statement about wanting to  “redesign the world’s online payment structure to achieve one universal system” or opine that “we’re still waiting for [an integrated] payment tag, but rather than universal it’s still fractured” when Stripe itself is committed to preventing entirely legitimate—and heavily regulated—organisations doing business online.

Collinson goes on to say:

“Payment systems are holding back online progress. You still have to fill in 15 different fields, then get redirected to Verified [by Visa].”

Collison imagines a one-click world, where making use of any entrepreneurs’ product is as fluid, natural and as user-friendly an experience as the design itself, with little friction and more transactions.

It seems that, like many entrepreneurs, Collinson makes a good case for interconnectivity on one hand whilst, in fact, establishing business practices—based, presumably, on the personal morals of him or his investors—that stifle creativity on the other.

When we have a Stripe-like system that will encourage—or at least allow—any and all legal businesses use their service then we might actually get the universal payment system that Collinson says he desires.

Until that time, talk of wanting to “redesign the world’s online payment structure to achieve one universal system” remains so much hot air.

Microsoft announces Steve Ballmer’s retirement

So, Microsoft has announced Steve Ballmer’s retirement as CEO—presumably effective from whenever the company can find someone competent that Ballmer has not driven out.

Here’s the hitch though: Ballmer has chased all potential successors out of the company — Ray Ozzie, Robbie Bach, J Allard, and most recently, Steven Sinofsky.

Just about everyone in the tech scene reckons that Ballmer was, in fact, fired—and not before time.

As someone who has always loathed Windows as a horrible piece of software (or, if you prefer, ‘as a Mac fan-boi’) I am, of course, very sad to see Ballmer go. The man’s inability to understand how to penetrate the important new markets has not only brought the destruction of Microsoft exponentially closer, but his total lack of vision and ridiculous pronouncements have also destroyed the company’s technical credibility.

The wider problem for Microsoft is that Ballmer had just initiated his (extremely risky) One Microsoft re-structuring and the decision to get rid of Monkey Boy now explains why he has remained at the helm for so long and through so many disastrous product launches, e.g. Zune, Vista, Windows 8, the Surface Tablet, Windows Mobile, Windows Phone, etc. And that reason is, quite simply, that Microsoft’s board have no more clue than Ballmer about how to save the company: it has taken them this long to work out that Ballmer was never going to be their saviour.

Indeed, not only does the board seem to be at sea, but—as Guy English points out—they don’t seem to understand that this moment is, in fact, the worst possible point to fire the idiot.

Ballmer writes in his farewell memo:

There is never a perfect time for this type of transition, but now is the right time.

No. It’s not.

They’ve just completely recreated the company in a pattern that’s totally alien to most organizations of their size. Indeed, the current configuration only seems to work for Apple. Which, arguably, grew into it completely organically. The structure of Apple certainly wasn’t created by fiat a month prior to a CEO hitting the bricks.

The only way that today’s news could have been good for Microsoft is to have announced a successor and to have said that the new structure was determined after long discussions with them. The only story that could be positive is that Ballmer and his successor, whoever they are, have worked closely together and now that the structure has changed there’ll be a year of handing over the reigns.

As it stands? Ballmer has completely shaken up the way that Microsoft has always worked. Now they don’t only need to find a new CEO who believes they can lead Microsoft out of the hole they’ve dug themselves but one who believes that the last decision that Steve Ballmer made, a company wide reorganization, is the way they, as the new leadership, want to run the company.

Microsoft is currently searching for a new CEO who’ll fit the straight jacket Steve Ballmer has left behind.

Yes, Microsoft is still making large amounts of money, but it is difficult to escape the fact that Ballmer’s tenure—certainly over the last decade—has been a failure: Marco Arment neatly sums up why.

My favorite part of this news is that this — the massive, probably-terrible internal reorganization — is what seemingly got the board to finally fire Ballmer. It really shows how far Microsoft is up its own ass.

Let the stock stagnate for over a decade? Fine.

Fail to dominate consumer web services, and only get your share by losing billions of dollars for years? That’s OK.

Lose control of online collaboration of Office documents to your biggest rival? Well, maybe the internet will turn out to be a fad.

Miss the entire smartphone revolution, then field what’s still one of the least popular major smartphone platforms? No problem.

Preside over the mass cannibalization of the PC business by tablets, while having effectively zero tablet marketshare? Hey, maybe you can try again next year.

But try to mess around with our divisions? You’re fired.

Anyone who read my last post on Microsoft will realise that the mind-boggling management practices at the company had stifled any chance of innovation long ago—certainly before Ballmer became CEO (although as part of senior management, he bears a heavy burden).

After all of this, however, people will no doubt point out that Ballmer was good at milking the assets that Microsoft already has, and that’s true.

So, perhaps the board should rethink their decision to fire Ballmer and adopt the strategy suggested by Tim Worstall—sweat the remaining assets, return as much money to the shareholders as possible, and then wind up the company.

Microsoft leads the way

On page 4 of this Vanity Fair article (can’t seem to direct link), Kurt Eichenwald outlines how Microsoft leads the way—in this case, the technology giant ably demonstrates how to destroy a culture of innovation within a business in one easy step.

At the center of the cultural problems was a management system called “stack ranking.” Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor.

“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, two people were going to get a great review, seven were going to get mediocre reviews, and one was going to get a terrible review,” said a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

Supposing Microsoft had managed to hire technology’s top players into a single unit before they made their names elsewhere—Steve Jobs of Apple, Mark Zuckerberg of Facebook, Larry Page of Google, Larry Ellison of Oracle, and Jeff Bezos of Amazon—regardless of performance, under one of the iterations of stack ranking, two of them would have to be rated as below average, with one deemed disastrous.

For that reason, executives said, a lot of Microsoft superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings. And the reviews had real-world consequences: those at the top received bonuses and promotions; those at the bottom usually received no cash or were shown the door.

Wow.

Do go and read the rest: the further revelations about just how utterly insane this idea was—is?—are quite flabbergasting.

In the end, the stack-ranking system crippled the ability to innovate at Microsoft, executives said. “I wanted to build a team of people who would work together and whose only focus would be on making great software,” said Bill Hill, the former manager. “But you can’t do that at Microsoft.”

If you want to know why every “innovation” that has come out of Microsoft in the last decade or so has been an ignominious failure, then you need look no further.

The “post-comp” era

A few days ago, I wrote about moving into the “post-comp” era in the web design process. I linked to a post by Brad Frost, and now Dan Mall has written a reply to that article.

As I mentioned in the comments, I think it’s an expectation problem. The typical workflow for web design projects is to send a client a “preview” of the site to approve before beginning development. This “preview” usually comes in the form of a comp that shows how a page might be laid out and often contains specific, pixel-perfect choices with typography, spacing, images, columns, and other very fine details. The problem is that this says to a client, “We’re now at a stage where we’re focusing on details.” It’s only natural that their feedback focuses on details.

A responsive design process is like a scandal. You’ve gotta pre-emptively control the conversation. If your client wants to have conversations like this, it likely means you didn’t do a good job of setting expectations.

As Dan points out, this expectations need to be set in the Sales process—at this point, the designer should be engaging with the potential customer and trying to establish the deliverables.

Rather than promising multiple rounds of page designs as some of the first design deliverables, we’re setting the expectation that the first things they’ll see are unstyled HTML to demonstrate content hierarchy and flexibility across various screen sizes and a few pieces of a visual style—works-in-progress and unrefined broad strokes, not polished visuals that call for critique at a fine detail level. That’s why I’ve grown to love element collages; they’re literal enough that your client can start to see a picture of things coming together but still enough of a work-in-progress that there’s no expecation that the site would actually look like this for everyone.

This is, in this age of multiple devices, simply not sustainable; in short, it creates false expectations for your customers.

To be fair, I don’t think we’re in a post-PSD era, but I do think we’re moving towards a post-“full-comp” era. I can’t envision a project where I don’t use Photoshop. Photoshop isn’t the problem. It’s a great tool. My favorite, actually. It’s the stigma that comes with presenting a full comp (I define “full comp” as an image of a website viewed on a desktop, typically around 960px wide). By default, presenting a full comp says to your client, “This is how everyone will see your site.” In our multi-device world, we’re quickly moving towards, “This is how some people will see your site,” but we’re not doing a great job of communicating that.

As an industry, we sell websites like paintings. Instead, we should be selling beautiful and easy access to content, agnostic of device, screen size, or context. If you can get your client to believe in the sales process that you’ll do that for them, they won’t care what the site looks like.

This is precisely right. Of course, when you are in a company that has a Sales Team—rather than the salesman being, principally, you—then the first people that you have to convince is the Sales Team.

As I mentioned in my previous post on this subject, we have just started moving our first customers towards this process; however, we are feeling our way to a certain extent and not yet nailed down the outputs.

Yes, the projects on which we have deployed this process do seem to be going fairly well: however, we need to firm up the process very swiftly now—and then sell it to our Sales Team.

I am absolutely convinced that we are moving into a post-comp era and that it is going to lead to far more satisfying results for both designers and customers. However, it needs to be presented in the correct way, and both sides need to understand the deliverables. In short, expectations need to be sold, set and delivered.

I will continue to update you all on how it goes…

Reciprocity: give to get

Living in the world that we do—with its smartphones, transatlantic travel, ultra-high-def TVs and One Direction—it’s sometimes easy to forget that we are, at the most basic level, animals.

We have, over the course of human evolution (modern humans it’s generally agreed upon have been around for at least 200,000 years), carried with us various traits that helped our long gone ancestors to navigate and survive on this planet we call “home”.

In the modern world of communications these traits may seem of no real concern to us but the truth of the matter is that we still act and make decisions based on them.

The use of reciprocity, for example, can be a powerful tool to help create a reaction and a connection with your clients and customers. It can help build a deeper relationship, creating trust and loyalty.

At the most basic level, reciprocity is the exchange of something of value between two or more people. This doesn’t have to be as obvious as giving a present or receiving a birthday card: assistance, advice and contacts can equally be a form of reciprocity.

By and large we try to repay in kind what another person has given us; if we don’t, we usually have an overwhelming feeling of guilt—and there aren’t many people who enjoy that feeling. I know I don’t.

There are many theories as to where reciprocity comes from and why it’s a major influence over our lives and decision making. It has been theorised that it relies on a universally held belief of future obligation: if we give something of value away it won’t be lost forever but will be repaid to us in the future with something of equally valuable (or even more so). Humans for the most part will almost always strive to repay this “debt” even when the expectation of repayment is a vague one.

We can see reciprocity happening all the time in the online arena—take LinkedIn, for example. When we receive endorsements or recommendations from our clients or associates, most of us will respond in kind without being asked—we somehow feel compelled to do so.

When someone comments on one of our photos on Facebook, we will often comment back on one of theirs. Even if we don’t feel obligated, we would rather do this than not as it’s fundamental to our social success.

We can make use of this ancestral practice in a variety of ways.

  • Write free articles—not only will you be giving your readers knowledge for free but you’ll also be enhancing your position and credibility as an expert in the field in which you operate. The same can be said for coding. There are many developers who use reciprocity by giving away bits of code they have created: those who download the code feel obliged to either spread the word about the developer’s site, leave comments of thanks (usually praising the developer’s skills) or offering solutions or “bug fixes” for free.
  • Offer a free consultation—by giving away a bit of your knowledge and helping your potential clients/customers just a little it will instil the feeling that you’ve gone out of your way to help. It will enhance your reputation and increase the prospect of a more meaningful and prosperous relationship.
  • Compromise—by showing that you have the ability to compromise, your client will more than likely wish to reciprocate in kind, leading to a mutually beneficial outcome. This doesn’t mean that you have to become weak and go against your fundamental principles. Be strong, but always make room for compromise too.

It seems that even though we are moving full steam ahead into the future, there are certain traits that are ingrained in the collective human psyche. Don’t forget to use those traits—they’re effective, they work and they have done for at least the past 200,000 years.