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How Jack Dorsey approached the payments market: As a buyer

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Session Name: Redesigning the User Experience of Everything

Om Malik
Jack Dorsey


Announcer 00:01
Thank you, John, always good. I know you guys are excited to see our next speaker. He is the modern day, multi-hyphenate, he is Mr. Jack Dorsey. I’m more excited to see if he has another great denim recommendation like he had at RoadMap a couple years back. He’s going to be talking with my boss, Om Malik, the founder of GigaOM about Redesigning the User Experience of Everything. Please welcome Om Malik and Jack Dorsey to the stage.


Om Malik 00:37
While I was coming on stage, Square communications person said, “There is one topic that is off limits.” I’m assuming that’s the Cardinals and what happened to them in the World Series?

Jack Dorsey 00:52
Don’t rub it in.
Om Malik 00:54
I know. It’s like my team didn’t do too well either. I tried really hard to feel sad for my team, but it was really much sadder for the Cardinals; it was this close, this close. Anyway, in case you guys didn’t know what we are talking about – it’s baseball.

Om Malik 01:14
It’s a design conference, I’m not assuming everybody knows baseball. Welcome back.
Jack Dorsey 01:19
Thank you.
Om Malik 01:19
It’s been a while since you joined us on stage. You did the first RoadMap, which was back in 2011, and we talked about a lot of things, including great denim recommendation. I’m not telling anyone anymore what that recommendation is, I let you do that. Let’s talk about what’s been going on with you. How is Square doing in the last two years or so? How have things progressed?
Jack Dorsey 01:51
It’s been amazing to watch and to be a part of. We’ve had two major launches in the past six months in that we enabled anyone who is using Registered simply flip a switch and they can go from being a local business to a national business through Square Market. Just one simple flick of the wrist and they have an e-commerce. One of the things I’m most excited about right now is a product we just released – about three weeks ago – which is called Square Cash that enables anyone to send money via an email. You can actually just compose an email, send it to Om, cc:[email protected], put any amount in the subject line and it goes right off and you enter in your debit card to receive that. We can push that money right to your debit card instead of you having to put in a bank account. What’s most interesting about this product is you have everything in your pocket that you need to actually transfer money. You have your mobile phone, and you have a plastic card, and you can use that pretty much instantaneously.
Om Malik 02:57
In case you want to send me money, it’s [email protected], you can do that. I absolutely love that product. I tried to send money to somebody this weekend and they lived in Canada, so I wasn’t able to. But the whole experience, the choice of colors. And this was an email, and I like the email itself, the Square Cash email was a pretty amazing experience.
Om Malik 03:23
What I wanted to talk about was how Square thinks about experience. How you like the Square Cash experience, what is so amazing, because there was no friction in that experience, just one email and it just happens. How do you guys think about it? What is the Square way of thinking which other people should be thinking about as well?
Jack Dorsey 03:47
I don’t know if it necessarily works for everyone, but it certainly works for us. We have this principle in the company, which is show, don’t tell. What that means is, we don’t want to go around the world and tell people we’re going to build the best way to accept credit cards through your mobile phone, or the best way to send money via email, we want to show them and then have them show it off as well. What that means we have to have an experience that feels great, that feels like something new, feels like something that should have always been, but a lot of people wouldn’t have normally seen that go that way. We’ve had the benefit of having multiple occurrences of that throughout our history. Four years ago, nearly five years ago now, we built a very simple card reader that plugged into a mobile phone, and the first time we showed people and swiped their card, they said, “Wow, how did you do that? I want that.” It resonated with folks immediately. Then we had them sign with their finger and they said, “Wow.” It seems obvious right now and it seems like something that always should have been, but back then it was entirely new and people would question it, both in positive and negative ways. It paused, it gave them a lot of pause about what that thing was, what that thing meant, and it was enough to talk about it.
Jack Dorsey 05:06
To pay attention to that principal of show, don’t tell, we want to make something internally that we feel great about, that we feel like wow, this is something that just feels really amazing, it feels stunning, it feels like something we want to use every single day, which was very, very hard in the early days of the company because a lot of us in the company – we’re not merchants, we’re not sellers, so we are not necessarily building for people who are us. When you’re building for yourself it’s easy to have passion, it’s easy to have drive, but when you’re not it becomes much, much harder. One of the framings that we kind of got into was, well we are all buyers. We love these merchants that we go to, we love places like Blue Bottle and Sightglass Coffee. We want to do right by them, we want to have a great experience as well. We don’t want to have them wait and try to figure out an ugly point-of-sales system or all these mechanical things, because that actually impacts the time that we stand in line or the time it takes for us to get the cappuccino that I just ordered. That framing kind of helped us get into the sense we’re building for ourselves still. That feeling of wow, that’s a great experience. It happened again with Wallet, it happened again with Market, and happened again with Cash. Once we first saw the product, we had a prototype built in about three weeks, and I received my first dollar from our engineers, it’s just an eye-opening experience. It felt so easy that I want this everywhere and I want to use it for everything.
Om Malik 06:41
The funny thing when I think about Square – I use Square a lot. The thing which I love about Square is the little things, like the receipt you get from Sightglass when you get Sightglass Coffee and they send you their receipt. There is a very subtle marketing going on there, which is the receipt is structured in way that it’s a reminder of that – not a transaction – but of that moment. Same is with the colors you chose in Cash. I just wonder, how do you arrive at those decisions, like how do you arrive at that decision of making receipts such a focal point of the process?
Jack Dorsey 07:19
Early on in the company we were building this thing that enabled people to accept credit cards, and credit cards don’t always have the most positive feelings around them. Money as a concept is something that touches every single person on the planet, and every single person on the planet feels bad about it at some point in their life. It feels like a burden. So how do you actually abstract that away? One of the things that really excited us in the early days was the receipt, putting a very simple map on the receipt where the transaction took place, putting a business’s Twitter account, putting a big picture of what they just sold, a beautiful photograph of a cappuccino, just to make it feel like something that was a lot more tangible, and also a lot more focused around communication. In the early days we saw the receipt as this amazing, kind of often played down and often forgotten about communication channel. It kind of evolved our thinking, this is not about payments, this is about commerce, and the definition of commerce is the activity between buyers and sellers. That’s been going on for over 5,000 years. We were trading things as humans before we were using language to trade stories. It’s as old as our civilization, but over time it’s just gotten more abstract, and more obtuse, and more expensive, and less people could participate, whereas communication has always gotten easier, freer, more participation, and something that’s really tangible and feels great. Our mission at Square is to make commerce easy and to make it as easy as communication. That means that we don’t see it as payments, we see it as this continuum. It’s not just the swipe of the credit card, it’s everything that happens before, it’s everything that happens after, and a big part of what happens after is the receipt.
Om Malik 09:14
You know, the thing which I love, sometimes in life you’re lucky enough to shop at a luxury establishment, and they never show you the receipt, it’s always very discreet, it’s almost like the transaction didn’t happen, it just was an interaction. I think when I look at the web today, a lot of people don’t think about the subtle things, it’s becomes like the whole – the shopping cart is so ugly, just is all created around the idea of less utility. Do you think there is room for improvement in the world, which has Amazon-like, complete commerce utility?
Jack Dorsey 09:57
Absolutely, otherwise I wouldn’t be here. I find commerce, going up to a neighborhood store, still accounts for over 90% of commerce in the world, eCommerce has only taken about 10% of that. It’s a massive market, and there’s a lot of pain that every seller has to go through. What that pain actually equates to is time that they have to spend learning a new system, dealing with a point-of-sales system that is not intuitive. It takes time away from them thinking about building their business, thinking about serving their customer, and if you give that time back by making something easy, making something intuitive, making it accessible so that more and more people can participate, people have time to spend on what is truly more meaningful to them, and that is exactly our mission. We have a long way to go on that, we’re just getting started.
Om Malik 10:52
What about all those people who are throwing out Square killers and Square copycats? What do you make of those guys? Do you think they start to eat into your plan, like your vision of the world and just eat away at it?
Jack Dorsey 11:07
I think it’s easy for a lot of companies, whether they’re small, start-ups, or the cafe around the corner, to look at the competition and react purely to them. But if you’re reacting to someone else, you’re doing someone else’s road map. You’re not doing your own road map, you’re not performing your own vision, you’re just simply reacting to everything you see in the market. We have to have the confidence and the conviction of our vision, of our road map that it’s the right thing, because it should be in the world and that we feel so strongly about it that we’re willing to do whatever it takes to make it exist. We’re going to see a lot of people who do similar things to us, but we believe that what we’re doing end-to-end, cohesively, has never been done before and we like our approach, which has to do a lot with the feeling of the transaction, the feeling of the trade, rather than just the mechanical aspects. A lot of folks in our industry are looking at individual parts, and not necessarily tying them together. You have someone who is building a terminal, someone who’s building analytics, someone who’s building a point-of-sales system, someone who’s building coupons, and loyalty and all those things, and none of them connect together, so that means the customer of that merchant actually sees all the seams behind all these. Our mindset is let’s build one cohesive stack so that there are no seems, so it feels like a fluid environment and touches everything from the decision all the way to discovery, all the way to the transaction, and then what happens when you leave, and getting you back.
Om Malik 12:51
You say end-to-end experience, what is it? What is it that you’re trying, what is the narrative of score that you’re trying to tell?
Jack Dorsey 12:58
Very simply captured in a phrase, we want to meet our customers where they are. With the original card reader, everyone was carrying a phone in their pocket, they all had touch screens. They have a lot of power, so we can actually build the credit card terminal on it, and we add a little bit of hardware and it makes it better, gives it a super power. That enables people to accept a form of payment that everyone is now carrying around to the decrement of cash and checks. We released that and we saw people use it, and then we saw Sightglass use it a lot, and we learned a lot from them. One of the things they were doing immediately was they’re accepting credit cards, which they no longer had to turn those people away to go find an ATM in their neighborhood. But they’re also accepting cash – people are still using cash, are still using checks, and they had to account for those transactions in a completely different system. They also had to type out the word cappuccino, and calculate how many cappuccinos, what the cost of two was, or three, or four, whatever, and those are things that we can make easier just by building into the software. We made a full point-of-sale, we made a whole register. One of the things that we benefited from is now we had all this item-level detail that we could actually push back to our merchants to say, “Hey, this is your most popular item, this is when it’s the most popular, this is your busiest day, this is what happens when it rains.” A lot of folks in our industry, they only see the amounts, they only see $12.34. We can actually tell the merchant you sold two cappuccinos and a biscotti, and week over week, if you move the biscotti jar your biscotti sales go down. These are analytics that we’re used to on the web, but offline merchants never had access to. A lot of them just because they didn’t know they were necessarily the right thing to look at, or the most important thing. But we’ve had merchants who have looked at this simple data and seen that they close at 4 pm, there’s this rush of people that come in at 3:40, what if we stay open one hour later and increases our revenue by 20%. It seems obvious, but when you’re running a business like that it’s not. Anything that can really surface, everything that’s happening in your business is meaningful. That’s what we mean by the end-to-end. We want to make sure that a buyer coming in and a seller has just an amazing great human conversational experience instead of worrying about the mechanics of what they have to go through.
Om Malik 15:35
How have you architected your company in a sense? Do hardware people talk to the software people? I’m assuming in order to come to analytical conclusions you have a full data science team somewhere there looking through data. How do these people collaborate? What is the Square makeup of this hardware/software data in an online service?
Jack Dorsey 15:58
Again, to really focus our time in what’s most meaningful we want a very, very simple process and practice within the company and the simplest thing to do inside a company for us was to give every one of our employees access to all the information. In that spirit of show, don’t tell, we share everything with our employees. Any meeting of substance, any meeting with more than two people, someone is required in that meeting to take notes. They send that to an alias called [email protected], and that goes out to the entire company. As the company grows from three people to 30 to – we’re over 600 people right now – when you’re just starting out everyone is in the same meeting, because there are no meeting rooms, everyone kind of participates, but as you grow, you start developing these feelings of like why is that guy in that meeting, why am I not invited to that meeting, I want to be in that meeting. What’s he talking about. Why does he like him more than me, why shouldn’t I be there? Then you start thinking about all those things that are not actually the work. Everything we do is to really focus ourselves back onto the work. If you enable people to just share what’s happening in a meeting, then you see, Oh, that’s what’s happening, I don’t need to be there, that’s something I didn’t want to participate in anyway. But you wouldn’t know it unless you had that sort of record. Everything we do is kind of aligned around this spirit of show, don’t tell in responsible transparency. We just had a board meeting at Square last week, and we had a 250-page pre-read into the board doc, and we sent that out to the entire company, over 600 people have our entire board doc in their email inbox. There’s a huge amount of trust in the fact that everyone receiving that will look through it and bring their own prospective and bring their own perception to it, and may have an idea that really changes the course of the company. And if we constantly do that we can build a company that regenerates, it’s not depending on any one person in the company but actually outlive all of us who are currently in the company, because it’s always looking for that next thing and always looking, enabling and empowering that new perspective.
Om Malik 18:13
Why did you arrive at that decision that this openness of information is vital for creating a new kind of a company, a new kind of a product?
Jack Dorsey 18:24
Selfishly, it’s just the simplest thing to do. It’s very hard to keep secrets, it’s very easy to just give information and people can interpret it in any way they wish, and every now and then you have something that is truly insightful and really changes the mind of folks. We’ve built the structure of our office around that as well. We have very, very few conference rooms, we have tons of stand-up tables, it’s completely open, there’s this wide, wide boulevard that a lot of people congregate around and have conversations. Anyone can walk around the office and just through serendipity you hear all these things that you could never, ever schedule. You walk by a conversation and you pick up on something and it changes your mind, it changes your perception, or you can get in that conversation and actually change someone else’s mind. These are things that, no matter what you do you can’t schedule them, and we benefit so much from how quickly we can move against the changing circumstance and the changing reality of what’s happening around the company.
Om Malik 19:28
How have you incorporated the feedback loop from the actual market, like market place, like how people use Square and Square data you have now to re-create or modify and improve your experience? I think I’ve seen subtle changes in the Square Reader for example. How did those come about?
Jack Dorsey 19:51
Our customer service organization and our risk operations organization are our front line, they’re interacting with our customers every single day. If you’re building an organization and you’re not treating those organizations as the feedback loop, you’re really missing out on an opportunity. Of course we take those as input, we don’t react to them, but we take as input, weigh it against what we want to see in the world, against the decisions that we have to make and then we, hopefully, do the right thing there. We put a lot of weight into the feedback coming into those channels, we put a lot of weight into what we’re experiencing. We go to our sellers every single day, we then try to encourage them to come in to our office and tell stories and talk about what’s working and what’s not working, and then we hold events around the country – we’re doing one this week in New Orleans on Thursday – which brings a bunch of merchants from the local area together to just talk about the challenges and the successes of building a business in the city. We have four merchants that come up on stage and we simply have a conversation like this. Here’s what works, here’s what doesn’t work. Here’s what New Orleans is doing as a city to help small businesses in the area, here’s what could be much, much better. One of the things I loved in St. Louis, where I’m from, we had this coffee owner, named Scott, some coffee, and we had the mayor in attendance for this event. I asked, what could the city be doing better, and he said, the city needs my business, the city needs me in the neighborhood. My neighborhood was going downhill, it’s all abandoned buildings, and I chose to move from New York to St. Louis to open my coffee store. I got to city hall and I could not find one person that told me everything I need to open my business. I had to talk to 18 different people in city hall. If you give me a checklist I will do everything on it, but no one has that checklist. Why can’t we streamline the government, so I can go up, I talk to one person and then I’m in business, and it benefits the city? The mayor, the next day, tweeted out that tomorrow we’re going to talk about small businesses and how we can improve the interface of city government, of government at large, to encourage this. 55% of our economy right now is small, 55% of jobs in this country are from small businesses. It’s deeply, deeply meaningful, and if you build simple technologies that enable them to focus on truly the meaningful things, then they can move faster.
Om Malik 22:32
What does that mean? I think I understand what Square is trying to do. How do we make sure the rest of the tech industry think about this kind of–, take this approach where the technology almost becomes invisible, the experience becomes completely transparent. How do we do that? I know, we are running short on time, but before we go I would love for you to answer that, so that we all are thinking about this in a correct manner.
Jack Dorsey 23:02
I think it has to come back from experience. The tool that’s helped me the most and certainly Square is really doing the work to visualize what we want to see in the world, and painting that picture through whatever medium works. Whether it’s trying code, writing narratives, whatever, and then working backwards from that. If you look a year out and you paint that picture for a year out, of course it’s going to change because the circumstances around change, but that tool for me has really been really fundamental because we can see this is what we want to use in the world, this is the experience we want to have. It’s not about technology disappearing, or how we design things, or how we engineer things. This is what we want to use every single day and we hope it resonates with other people. We’re making the bet that it’s going to resonate with other people. We go at it as far as we can and then we just work backwards and break it into smallest problems. To me a lot of what great engineering and great design is, is taking something that is very large, very complex and breaking it in very simple problems that we can feel like we’re solving in sequence, and we’re moving as quickly as possible, and we have the self-awareness to realize when we’re going the wrong direction, or we’re working on the wrong tiny things, and we’ve lost vision of that painting that we’re trying to create. It sounds simple, but it’s actually just doing the really, really hard work of painting what you want to see in the world, and then doing the work to break it apart into the sequence where you can actually execute on. And then it’s all about patience. That to me has been what’s really defined Square’s success, is having both of those.
Om Malik 24:49
Having patience is okay if you have your kind of profile and your kind of backing, but patience for start-ups is a little difficult in Silicon Valley, because they all are under a different kind of push-and-pull, especially from the investor community.
Jack Dorsey 25:06
But I was in the same place with Square. People would look at what Square was and they would say, You’re previous life was about micro-blogging, about what people had for breakfast. Why do you think you can move money around? You’ve never worked in finance, you’ve never dealt with credit cards, sellers aren’t the sexiest thing in the world. This was all their perception. Credit card, aren’t they going away, isn’t it all digital? And it was very much an uphill battle given my background. I love that, because it makes you stronger and it makes you better and it really clarifies what you’re trying to do in the world. We just addressed it head-on in our pitches to investors, which a lot of them said no to. I listed out, here’s 140 reasons why Square will fail. And they went through all of them, and then the next slide was, here’s 10 reasons why we’ll succeed, and you either trust us to do that or you don’t, and if you don’t, don’t invest. We’re not going to be sad about it.
Om Malik 26:15
You have a thing for 140 characters, right?

Om Malik 26:19
Seriously, thank you, Jack, I know this is a busy week for you. Thank you for taking time and coming on stage and talking to us.
Jack Dorsey 26:25
Thank you so much.
Om Malik 26:26
Good luck with everything.