ShopKeep’s Richelson: You Have to Specialize, Then Grow
There’s no shortage of digital tools to ease the various pains of being a small business owner. Many of the companies offering these services to merchants are expanding beyond their initial reach to become all-in-one — or at least many-things-in-one — solutions. Cloud-based point-of-sale system ShopKeep, which began as POS software and now provides hardware, payments, marketing, and analytics, is an example of this trend. Founder Jason Richelson spoke recently about the company’s move beyond the software space and how cloud computing is changing the playing field for small businesses.
What do you think the timeline is for broader adoption of cloud-based POS?
It has nothing to do with technology and everything to do with human beings — most human beings don’t like to adopt new technology in business-to-business. Most of our customers are still new businesses that have just started. If you already have a point-of-sale system, you just don’t change very readily, until something breaks or there’s some reason you have to change. It takes time.
How does everything that’s been happening with mobile payments inform what ShopKeep provides to small businesses?
ShopKeep is now a payments processor, and the reason we did that was because we started seeing that people don’t go get payment processing anymore; they go get software that has payment processing to run their business. It’s really a commodity. That’s why we went in that direction. Other companies, like Square, started out accepting payments and are now doing full-fledged software; we started out at the software end and added payment processing.
In the years since you started ShopKeep, how have you seen cloud computing affect SMBs?
The challenge is that you have to really get good at using technology. If you’re not comfortable with that, you’re going to have a problem. The other people who are opening businesses now are good with technology because they grew up with it. They’re good with cloud-based services, good with using apps. If you’re a small business and that’s not comfortable to you, you’re going to be at a disadvantage. But on the positive side, there are so many great tools out there for starting a business.
How have some of the features associated with newer POS systems affected what we might think of as the fundamentals of running a small business?
The most important thing is that it’s getting easier to identify your customers without having to ask them. For instance, you can do this through email receipts and tracking their purchases in-store, and linking that to MailChimp. If you send an email receipt to a customer through ShopKeep, that address gets added to your MailChimp list. That’s super-powerful stuff, because it used to be really hard to get email addresses out of a point of sale and upload them into MailChimp every time you got an email, so oftentimes you wouldn’t do it. With older POS software, it wasn’t easy to collect this information. That kind of know-your-customer stuff is what’s gotten a lot better.
What are your thoughts are about starting with a single-point solution like POS and then branching out to other things, such as payments and analytics? Do you think it’s necessary to provide a more holistic service?
There is no way a company can start with a holistic service. You have to specialize then grow. But I will say because of the cloud it’s very easy to bolt on other providers to create a holistic service.
Annie Melton is Street Fight’s news editor.
This interview has been edited for length and clarity.