Twitter Founder Illuminates Plan For Next Online Venture, Square
Dorsey Advocates Square As The Future Of Commerce
Published: Thursday, September 27, 2012
Updated: Wednesday, January 9, 2013 19:01
Jack Dorsey, co-founder of Twitter and CEO of Square, Inc., continued his college speaking tour in the Strata Center at the Massachusetts Institute of Technology (MIT) on Monday, Sept. 24.
Despite Dorsey’s more famous reputation as the creator of Twitter, his primary goal at MIT was to discuss his newer creation and the skills needed to create such a product. “We’re here to talk to students about Square, about the company, about entrepreneurship,” Dorsey said.
Square is an electronic payment service introduced by Square, Inc., a company founded by Dorsey and Jim McKelvey, in 2009. Square is a small credit card reader application that can be attached to most Apple iOS Devices.
“More and more buyers are using plastic,” Dorsey said, “and we want to make that mobile.”
The ultimate goal that Dorsey presented to his team at Square, Inc. is that he does not want consumers and buyers to be “concerned with the payment mechanics at all.” Instead, to cite his example, Dorsey wants to be able to buy a cup of coffee and walk out, no longer knowing that any transaction has occurred.
The mechanics of this are as follows. An individual needs only to swipe a credit card once using the Square attachment on his iPhone or other iOS device, an action that connects his credit card to his iPhone. When the individual with the Square application approaches the counter at a coffeehouse or other business, a tab can either be manually or automatically opened on his phone based on its proximity to a geo-fence around the register. This unlocks the device’s paying potential. Once the individual has made a selection and stated his name, the cashier simply selects the individual’s name on the register. The transaction is then complete.
Despite the simplicity of this, Dorsey said there is still work to be done. “We have to build up the merchant side of the equation,” Dorsey said, and this is a task that will be completed by a quickly growing company. A year ago, Square, Inc. had only 150 employees. Today, it has 400.
With only eight million entities in the United States accepting credit cards, according to Dorsey, Square wants to reach the 26 million small businesses that he said cannot otherwise afford to accept credit cards. Square hopes to prove more cost effective for merchants and producers. With Square, merchants can choose to pay 2.75 percent per transaction, or they can choose to pay a flat monthly rate of $275. Furthermore, if the transaction is completed within business hours, it will be deposited for the merchant by the next day.
These benefits apply to anyone from a hairdresser or doctor to even the world’s largest corporations. “We’ve always seen Square with the idea that it works for the individual and scales to the largest merchant in the world,” Dorsey said. Ultimately, Dorsey hopes to create a revolution in which it is increasingly easy to become an entrepreneur.
Dorsey dismissed potential consumer fears about an increased risk of theft or fraud. “There will always be people trying to steal from each other,” he said. To combat this, Square will continuously work to improve the identity verification involved with its product.
Dorsey is confident that the benefits to consumers and merchants will prove great enough to ultimately incorporate his product worldwide. “The benefit to consumers is certainly the seamlessness,” said Dorsey of transactions devoid of cash or credit cards. Other benefits include the wealth of information that could be available to consumers. One example that Dorsey presented is that an iPhone can register that it is an especially hot day and can present locations near the consumer where lemonade is sold.
Dorsey’s earlier product, Twitter, has seen much success because of the creativity of its users. Dorsey believes that similar creativity can be applied to Square. “I think we’ll see some creative usage of Square,” said Dorsey. “We’ve seen that a little bit with Square already through taxi cabs.” Dorsey referred to taxi drivers, formerly unable to accept credit cards, who began to use Square throughout their company in Cincinnati, Ohio.
“I think [Twitter and Square] are very much aligned,” Dorsey said. “They’re pretty foundational and fundamental.” Twitter and Square, Dorsey explained, deal with the fundamentals of communication and commerce, respectively.
With such an eye for entrepreneurial opportunities, the audience at MIT was surprised when he said that he “never wanted to be an entrepreneur.” Still, Dorsey asserted that building a business is about becoming a better “listener,” someone aware of the market around him. Awareness is the first stepping stone to knowledge.
“Entrepreneurship is truly just an attitude,” Dorsey said. “A lot of it just happens at intersections. It’s really about finding the intersections of life.”