While on my way to interview Jack Dorsey, the last thing I do before entering the coffee shop is check Twitter. After all, I am meeting the man who posted the very first Tweet (“Just setting up my
Twitter”), kick-starting a 140-character revolution which changed the way strangers communicate. It also transformed Jack – a trained masseuse with a passion for technology – into one of the most successful entrepreneurs in the world. Today, he is the CEO and cofounder of two start-up superstars.
The 39-year-old’s latest venture, Square, is disrupting the finance industry one swipe at a time. At its crux is a small card reader which attaches to a smartphone or tablet and allows anyone to process credit card transactions, sans credit checks and an often extended, laborious set-up. Square also pays into your nominated bank account in one to two business days. Before its much-lauded IPO, the company was valued at US$6 billion.
The idea for Square came in 2009 when Jack’s co-founder, James McKelvey, a friend from Jack’s teenage years, couldn’t accept a $3000 credit card payment for a piece of glass art that he was selling as part of his side business. The two headed to
TechShop, a membership-based workshop, where they spent a month cobbling together a prototype to help small business owners take credit card payments more easily. What they created was Square Reader: a sleek and sexy card reader that plugs into a device’s headphone jack.
“I think design is about how it works,” says Jack. “Design to me is working out the most simple approach, package and experience. Design is about speed. I look at it and immediately understand how to use it.”
And use it they did. The little cube has since been used by businesses around the world to process tens of billions of dollars of sales. “I like to make tools that empower people,” he says, of what motivates his business decisions. “I don’t really like the word ‘disruption’. I think it’s more about how you solve your own problem, or a problem affecting someone you care about. Communication was a big one and Twitter has done a good job there, and now Square is all about commerce. We still have a long way to go, but we’re getting there.”
Today, Jack Dorsey is the epitome of a Silicon Valley founder – all hipster beard and leather jacket – but his career path has been inspirationally unconventional and proves that anyone can make a difference. A college dropout, Jack once sported spiky blue hair and a pierced nose in his punk rock days – a music genre which he says taught him to be confident and to learn as quickly as possible. In his early twenties, he trained to be a professional masseuse and later on briefly enrolled in fashion classes (he can make a denim skirt from scratch).
“I love learning and that’s a big part of what drives me,” he explains. “I have a big curiosity and want to learn about different industries.”
In 2006, when Odea, the podcasting start-up Jack was working with as a coder folded, he and his two colleagues, Evan Williams and Biz Jones, brainstormed the idea for a new communication platform – and Twitter was born. Jack is still the CEO of Twitter, as well as co-founder and CEO of Square. The two companies’ offices are across the street from each other in San Francisco, which helps him juggle practicalities. It seems like a daunting undertaking for anyone who has tried to manage a businesses, let alone two. So, how does he do it?
“I think the key is knowing what’s most important,” says Jack, “If you have a clear focus then everything else becomes easy. It’s going to be easy to be distracted, but I have a really good sense of what’s most important for my day, my week, my year and how that plays out.”
Despite his obvious talent for creating world-dominating startups, few onlookers expected the social media founder to announce that, out of all industries, he was going to tackle finance. But to Jack, it was the obvious next step. “The financial industry was one that was pretty complex,” he says, “It doesn’t really have to be, but it was because no one had really simplified it. I’m proud that we did, but there’s a long way to go.”
Key to that is one of Square’s latest moves, which sees the company helping small business owners with that other pain point – cash flow.
“We started with the most critical thing, which is accepting a payment. Then the next most critical thing was point of sale because it’s the data around the business. The next most critical thing was [sellers who] spend all this time trying to get a loan from a bank.”
Square Capital, which is currently only available to US customers, allows merchants to apply for financial capital, whether they need the money to hire an employee or to open in a new location, with one tap of a button.
“There is no approval process,” says Jack, “We just send you an email, you tap it and the money is in your business account the next morning.” So far, their biggest loan to a single user has been US$150,000 and he says it wasn’t difficult to convince Square’s board of investors that the money would come back. “Well, we don’t hope it comes back,” he says, “We know it comes back. That’s our whole business, understanding our sellers. We trust people .Sometimes we lose out on that but most of the time we win on that.”
Square ordinarily earns its revenue from taking a small percentage of each transaction – 1.9 per cent in Australia and 2.75 per cent in the US (to promote the latter, last month Jack took a pay cut – to just US$2.75 a year. Yes, US$2.75). With Square Capital, it takes a higher percentage of each transaction to pay back the capital.
The eternally busy entrepreneur could be forgiven for having trouble with work-life balance but he has a new perspective on it.
“I think when you’re living your life you have ideas which will be linked to your work. I think what matters more is you make time for what’s meaningful. If you’re with your family, you’re with your family; if you’re with your partner, you’re with your partner. But I’m not going to say I’m with my family so I won’t have any ideas about work. They may bring something up that transforms the company.”