1/ I just read Cash App's investor day presentation, and I'm convinced it's one of the most underrated businesses out there:
• 80M users
• $600M in Q1 gross profit
• Top finance app 5 years running
Cash App exploded by bringing culture to finance 👇
2/ Most financial services companies approach their businesses like a bank. Cash App approaches its business like a consumer social company.
Just look at its design—splashy, loud, fun. Who else would showcase their product suite like this? No one.
3/ Let's back up: Cash App was created in 2013, but was 4 years behind Venmo.
Cash App's first product was peer-to-peer payments, which have hyper-local network effects. Venmo was strong in big cities like NYC and LA, so Cash App went after an underserved region: the South.
4/ Cash App began to take off among the underbanked, often low-income communities that Venmo had neglected.
As Jack Dorsey put it: “People use Cash App as their primary bank account, and in some cases their only bank account.”
5/ Cash App's premise was simple: people don't want to wait in long lines at the bank. You should be able to do all your banking from your phone.
Cash App's mission is to redefine the world's relationship with money by making it more relatable & accessible.
6/ In order to make money relatable & accessible, Cash App turned to pop culture.
Rappers were already rapping about Cash App, so the Cash App team leaned into it. They gave away $100K as part of a promo with Travis Scott. They sponsored Joe Rogan and e-sports teams.
7/ You weren't seeing other financial services companies working with Megan Thee Stallion and Cardi B on the release of WAP. Cash App was pushing new boundaries.
Cash App was making money cool 💸💸💸
8/ As Cash App seeped into culture, the app began to spread virally across the country. In 2018, Cash App surpassed Venmo in users.
9/ Cash App acts like a social network because it *is* a social network. Cash App sees a 31 percentage point increase in retention when a user has 4+ friends on the app.
A lot of banks had missed the point: money is inherently social.
10/ Cash App's virality means lower customer acquisition costs. Whereas retail banks pay $300+ to acquire a user and neobanks pay $30+, Cash App gets users for just 10 bucks.
11/ Of course, no amount of virality or good marketing can replace a good product. But Cash App blows its competitors out of the water on that front too.
My partner @Mark_Goldberg_ pointed out Cash App's insane product velocity:
12/ Those new products drive up gross profit per user. Cash App has 4 (!) separate products that will each do $200M in gross profit this year: Instant Deposit, Cash App Card, Bitcoin, & Business Accounts.
13/ Last year, Cash App was the 8th-most-downloaded app in the US. You don't often see finance apps alongside the likes of TikTok & Instagram.
Cash App won finance by realizing that slick design, social features, and a *coolness* factor shouldn't be limited to other categories.
