How Square’s Alyssa Henry Used The ‘Amazon Playbook’ To Amass A $550 Million Fortune
Revenues at Square have grown more than tenfold since Henry joined the payments company in 2014. Along the way, she’s received stock worth more than half a billion dollars
by Kenrick Cai
If you’re buying something at a store, there’s a good chance you’ll be paying through Square. The company’s little white readers—some models no larger than a credit card—have become ubiquitous fixtures at restaurants, retail stores and even farm stands.
Millions of businesses, or “sellers” as the company calls them, use Square to process their transactions, generating $1.5 billion of the San Francisco-based company’s $2.7 billion in total gross profits last year. The Seller business is at the crux of why Square has ballooned from a $2.9 billion market capitalization at its 2015 IPO to a $110 billion in market capitalization today.
Masterminding the growth is Alyssa Henry, 51, a longtime Amazon executive who joined Square in 2014, the year before the business went public. Henry—who debuts this year on Fintech Zoom list of America’s Richest Self-Made Women, with an estimated net worth of $555 million—started her career as a programmer for an insurance company before being hired by Microsoft, where she climbed the ladder over the course of a decade. After seven years at Amazon—the last four spent as a vice president for its cloud provider Amazon Web Services—she joined Square in May 2014 to lead its infrastructure team. She became head of Square’s Seller team six months later, inheriting a business that was still struggling to build out software around its white reader. Over the years, she’s gotten Square stock as compensation and now owns a 0.3% stake in the company.
“We started as a hardware company,” says Henry, who is an executive vice president and one of the most senior executives at the company. “What I’ve been working on over the last seven years is really transforming this business into a full suite of software and financial services.”
Henry began her tenure as Square’s Seller lead by implementing the frameworks she learned at Amazon, where she spent stints with both the retail and cloud businesses. At the Seattle tech giant, Henry had helped its retail software complete the shift from a “monolithic” architecture, in which the full software suite is built as an all-encompassing application, to a “microservices” architecture. By breaking down the single application into a number of smaller, interconnected applications—for example, separating the code for its bookselling business from the code for its video streaming service—Amazon developers could build out new features and scale the product more efficiently. “We had gotten to a point where we had a core vision, but software development was moving really slowly,” Henry says of her early years at Amazon.
She then became an early employee of Amazon Web Services, which the firm launched in 2006 to resell to other companies its successful solution for developing and scaling software. Last year, AWS brought in $26 billion in revenue from an industry-leading 41% market share of global cloud infrastructure, which includes the rental of computing, storage and networking services, according to research firm Gartner.
“When I got to Square, we looked like the early days of Amazon: big, monolithic architecture,” she recalls. “We didn’t have the concept of a commerce platform. We just had payments and attached a bunch of stuff to it.”
By moving Square to a microservices architecture, the company created an “omnichannel” commerce platform. Square’s software now connects some 30 different components of a client’s business, including order management, subscriptions and loyalty programs. If a customer purchases an item online, then returns it at a brick and mortar store, the inventory is automatically synced through Square. Henry says the integrated software suite has helped Square add many customers, particularly small businesses, which often rely on fragmented solutions. “A lot of it, they were doing on pencil and paper,” she says. “If they’ve actually bought an automated solution, none of these solutions work together, so they were cutting and pasting from one browser tab into another. It’s horrific.”
Each year of Henry’s tenure has brought a new challenge, she says, identifying one particularly pivotal challenge as her decision to go beyond the physical white reader and place equal weight on e-commerce. In 2018, Square acquired website builder Weebly for $365 million to give businesses more tools to build their online stores. Although the Seller business slowed during the pandemic, experts say the wide offering of features helped it soften the blow. Around 45% of Square-enabled merchants globally now have an e-commerce presence as well as a Square reader, according to Wedbush analyst Moshe Katri. On August 1, the company further doubled down by announcing that it would acquire Australian “buy now, pay later” firm Afterpay for $29 billion in stock, adding another fintech service to its interconnected product suite.
Moving forward, Henry foresees deeper integrations between the business she leads and Square’s mobile banking service Cash App. The company has already announced features that allow loyalty rewards and on-demand payments to be redeemed directly through Cash App, and the Afterpay acquisition is sure to bolster the connective tissue. Analysts agree that the deep software suite has already given Square a competitive edge in the merchant space compared to other payment processing providers such as Fiserv’s Clover. Square’s plan for an ecosystem that connects businesses and consumers puts it in a position comparable to JPMorgan 150 years ago, says Mizuho Research analyst Dan Dolev, meaning that he’s long term bullish on the stock.
“The magic is unlocked when you make the whole bigger than the sum of the parts,” Henry says.