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Jack Dorsey: With looming Twitter IPO
and Square's new digs, innovator's
hot streak continues
By Peter Delevett
(mailto:[email protected]?subject=San Jose Mercury News: )(mailto:[email protected]?subject=San Jose Mercury News:)[email protected] (mailto:[email protected])
POSTED: 10/11/2013 02:45:12 PM PDT | UPDATED: 3 DAYS AGO
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A portrait of Square's CEO Jack Dorsey and Global Facilities Manager, Maja Henderson, on Oct. 8, 2013 attheir company's new San Francisco headquarters. (Dai Sugano/Bay Area News Group)
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SAN FRANCISCO -- Jack Dorsey may shy from being called the Steve Jobs(http://www.siliconvalley.com/topics?Steve%20Jobs) of his generation, but there's no questionhe's on one hell of a hot streak.
Square, the mobile-payments startup that's landed $340 million in venture capital, just moved intosprawling new offices in San Francisco after doubling its head count in less than a year. The newdigs sit -- coincidentally, Dorsey insists -- a block from those of Twitter(http://www.siliconvalley.com/topics?Twitter), which he cofounded in 2006 and whose loomingIPO figures to make Dorsey his second billion dollars in the past 13 months.
In an interview, the 36-year-old declined to say much about Twitter, citing federal "quiet period"rules that precede an initial public offering of stock. But asked how it felt to have invented twoproducts whose users number into the hundreds of millions worldwide, the notoriously buttoned-up hacker allowed himself a moment of introspection.
"If you're climbing on the mountain, it doesn't look that massive to you," he said from the glass-and-wood accented Market Street headquarters into which CEO Dorsey and most of Square's 600other employees moved last week.
Twitter made news of its own last week with its long-rumored IPO filing, which revealed themicroblogging service has more than 200 million active monthly users. Square, meanwhile, claimsto process $15 billion annually in credit card transactions -- not including a deal cut last year tohandle all of Starbucks' card payments.
But, said Dorsey, "we don't feel we're at even 1 percent of our potential with either company."
Dorsey, a bachelor who grew up in a blue-collar St. Louis family, owns 5 percent of Twitter and areported one-third of Square. Each of those holdings is worth at least $1 billion, according to theestimated valuations of both companies.
To his admirers, though, Dorsey's accomplishments aren't measured in dollars, but in influence andvision.
The parallels to Apple's (http://www.siliconvalley.com/topics?Apple%2C%20Inc.) (AAPL(http://markets.financialcontent.com/mng-ba.siliconvalley/quote?Symbol=AAPL)) cofounder areobvious: Both men were forced out of startups they launched, only to return and help lead them tonew heights. Both men, after being ousted, started second companies that became powerhouses intheir own rights (Pixar, in Jobs' case).
And both men became famous for a relentless focus on simple, elegant design: Even the pillars thatsupport the new office's ceiling have been rounded to resemble Square's namesake plastic reader,which lets anyone accept credit cards via smartphone or tablet.
One way in which Dorsey differs from his role model: "He doesn't lose his temper," said MajaHenderson, who was Dorsey's executive assistant in Square's early days and now rides herd on thecompany's design and construction efforts. Those include the 150,000-square-foot headquarters,where employees avail themselves of such perks as in-house chiropractic care and unlimitedvacation.
Henderson acknowledged that few "Squares" take much time off, although she said Dorsey "hasgotten a lot better" about breaking away from work after a stretch in which he split 80 hours eachweek between Twitter and Square.
The Twitter creation myth has various versions, but the fundamental story is that Dorsey wasworking at a San
Francisco podcasting startup, Odeo, in 2006 when he and several others cooked up a 140-characterinstant messaging system for mobile phones. Twitter spun out of Odeo with Dorsey as CEO, only tosee a shake-up when co-founder and investor Evan Williams moved him aside amid much mutualfinger-pointing.
Williams, in turn, was replaced in 2010 by Chief Operating Officer Dick Costolo, who broughtDorsey back in a product development role. Costolo said then that "having the inventor in theroom" helped solve arguments about what the service should be.
With those debates more or less decided, Dorsey these days focuses most of his time on Square. He
still spends Thursday afternoons at Twitter, wherehe's executive chairman and holds a weekly lunch
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their company's new San Francisco headquarters. (Dai Sugano/Bay Area News Group)
(/portlet/article/html/imageDisplay.jsp?contentItemRelationshipId=5472246)A portrait of Square's CEO Jack Dorsey and GlobalFacilities Manager, Maja Henderson, on Oct. 8, 2013at their company's new San Franciscoheadquarters. (Dai Sugano/Bay Area News Group)
he's executive chairman and holds a weekly lunchwith Costolo.
Steve Wilson, an analyst at Constellation Research,noted that Twitter essentially created a new categoryof communication before anyone realized it wasneeded. With Square, on the other hand, Dorseyidentified a huge and lucrative problem with anexisting market. In the United States alone, creditcard payments are expected to hit $31 billion a yearby 2016, according to an estimate by industrynewsletter The Nilson Report.
"Amazing that no one thought to jump in before" tobring small merchants into that ecosystem, Wilsonsaid. While he and others call Square a tempting acquisition target for a major financial servicesplayer, Dorsey insists he's building for the long haul.
To be sure, Square faces plenty of competition, from entrenched payments giants like Verifone andeBay's (http://www.siliconvalley.com/topics?EBay%2C%20Inc.) (EBAY(http://markets.financialcontent.com/mng-ba.siliconvalley/quote?Symbol=EBAY)) PayPal unit tostartups like Clinkle -- which drew gasps around Silicon Valley in June by raising a $25 million"seed" round from titans including early Facebook (http://www.siliconvalley.com/topics?Facebook) investor Jim Breyer and PayPal co-founder Peter Thiel.
"Square is primarily a credit card reader for your iPhone or Android device. To me, that's really notmobile payments," said Lucas Duplan, the 22-year-old who founded Clinkle last year with a bevy ofother young Stanford University programmers.
Dorsey acknowledges that Square Wallet, which his company rolled out in 2011 to let consumersbuy things via smartphone, has struggled for widespread acceptance despite two rebrandings. Buthe's content to focus on building services for small merchants, confident that the consumerseventually will follow.
"Jack holds true to his vision of empowering local business," said Mary Meeker, of Kleiner Perkins(http://www.siliconvalley.com/topics?Kleiner%20Perkins%20Caufield%20%26%20Byers)Caufield and Byers, who sits on Square's board along with fellow venture capital star Vinod Khosla(http://www.siliconvalley.com/topics?Vinod%20Khosla) and former U.S. Treasury Secretary LarrySummers.
Dorsey and Henderson applied that same sense of vision to their new offices, which take up parts offour floors in a dowdy former Bank of America data center. The theme is one of a miniature city,with conference rooms named for famous streets and a grand "boulevard" the length of two footballfields.
But Dorsey said the headquarters is more than a pretty place. Much thought went into breaking theopen floor plan into clusters, to preserve the camaraderie of a small company.
And in discussing the finished product, Dorsey said something that might sum up his entireapproach to design: "It's not just about how it looks," he said. "It's about how it works."
Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.
Get hip to square
Jack Dorsey's mobile payments company offers a growing suite of products:
Square Reader: Lets anyone accept credit cards via a smartphone or tablet for a 2.75 percenttransaction fee.Square Register: Helps merchants track payments, manage inventory and share menu informationwith customers. Square Wallet: Allows consumers to pay at local businesses automatically via smartphone.Square Market: Newest addition is an eBay-like marketplace that lets Square Register users set uponline storefronts.
Source: Staff research
JACK Be Nimble
The lowdown on Jack Dorsey, who helped build two billion-dollar companies -- Twitter and Square-- at the same time.
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Age: 36Born: St. LouisEducation: Dropped out of New York University to launch his first Silicon Valley company in 2000.Lives: San FranciscoMaking history: In March 2006, Dorsey sent the world's first tweet: "just setting up my twttr."Human touch: Takes every new Square employee on a walking tour of San Francisco.
Source: Staff research
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