Jack Dorsey Q&A at Square + 500: Founders Day

so this is Jack obviously Jack meatballs pounders got a bunch of folks here who are founders from Python that startups various different batches many of whom are pretty early on in their journey and building out their idea and getting it to market so really excited to let them learn from you so so I'm going to just kind of kick off with one question about that experience and then well they're absolutely quick some folks can ask you whenever they want cool so there are hundreds of things obviously they keep down there's up at night I'm curious like what's the most overlooked thing that you think founders should be thinking about such an early stages sleep I been through the whole thing about I mean that was I was a hacker when I was kid so it's like the mountain do the staying up all night not sleeping and thinking like the only way to prove myself was the fact that I could sleep the least and it's just you it's been so I open it was wrong about that and how I instead of focusing on the number of hours I'm up focusing on like what I'm actually focused on and why for the hours that I am working has been so much more impactful than trying to maximize everything I mean there are certainly times when you have to go all out and and and reach deadlines but I just don't think health is valued enough by people who are starting something and it does it does where are you eventually where some of the ways just kind of following up for some the way that you actually bring focus things that are most critical I'm sorry would just like how do you have in tax plate so it's one thing to say like oh yeah just have a really good sense of I only have so much time on the planet I only have so many hours in the day is this really the most important thing I could be doing right now and if I were to look back 10 years this is would I be proud of the hour I'm spending right now and that's kind of heavy you don't have to do all the time but and somewhat unrealistic but like a holding holding that bar for like what you're working on in the moment I think is important that's we actually had someone submit a question ahead of time so I do want to read that and just get this person's question out there this is from one of the founders in the room this person says light-square we're also focused on small business customers and retail in particular speaking to an investor what would you say is the reason why you chose small businesses as your target market and how's that benefit the growth of your business speaking to an investor it wasn't a fight I'll say it wasn't really about a category like we're going after small businesses we we instead we talked about the problem that we were seeing which was more and more people are choosing the convenience of a plastic card versus paper money and a lot of the businesses today don't accept them and we dug into that and we realized that businesses were getting their FICA FICO score checked or their credit checked to accept money which made no sense whatsoever and we dug into that and it's just that's the technology that the banks had at the time so we were painting a picture of the problem that was a merchant and and then we realized it wasn't about accepting the credit card is actually like these people are losing fails because they can't accept this Payment device so it became a you know a problem statement that we're gonna help these sellers make the sale in the first place and then potentially as we figure things out help them make more sales as well so we I think it's um I think it's hard to go after a category of people and focus on the or focus on the persona instead of the the problem statement and the job that you're trying to solve and I think you'll get a lot more insight by focusing on the on the job and again just a picture like our first merchant was a flower cart and she just because she was underneath my apartment and we noticed that she would not accept credit cards she just went to keep it simple in cash and it wasn't until we were with her and someone came up and tried to pay with a credit card and then she told him to go to an ATM and he never came back that she was open to it and it was in that moment that we realized she doesn't need a credit card reader she needs to make sale and that one insight like we could have gone down to a path of building credit card reader charging for the software or charging for the reader and we'd end up being like VeriFone which produces all these big black terminals which is a not a very valuable company I don't even know if they're around much anymore but instead we went into this inside of like actually what she's trying to do is make the sale and there's a credit card machine it's just one way to make the sale there's also point-of-sale which helps organize the business so they organize the information around the business so they can make more informed decisions capital lending helps them make a sale so with that one insight we were able to really expand the value the potential value of the company because we won't focus on one tiny thing we're focused on a bigger job which has helped me make a sale and then help me make more sales that did not focus on technology that didn't focus on a category it could have been someone who is micro like our first merchant or a small or medium or arge but that to me is like where the true value is crit is when you're not boxed in by these by these categories all right who's the first brave soul to ask a question raise your hands hijack I have a business related question and maybe a follow-up question - well like um in the past ten years there's a lot of brick and mortar retailers or like for them very stores for example Starbucks they're struggling with one particular problem that they're trying to figure out whether some people going to the store for a free bathroom and buying a coffee or not so like I understand square half this kind of real-time data of the payment events but so you guys know that whether they like to sell is slow or not but not necessary knowing they're like what's the reason behind it whether it's because of the layout of those stores or whether it's just too much too many people go there for free bathroom so is this something on their squares radar that you guys want to solve no not yet yeah now yet I we've we've kind of built the business just focusing on like what is the most critical need right now and then the next much critical need next most critical need next most critical need and we started with a smaller merchants who probably have this problem but it's in comparison with the other problems that have of just getting people on the door it's you know it's just not meaningful to solve so eventually over time I'm sure analyzing what traffic and and how to gain insight from that would be useful but at the moment thanks jack thank you for the question hi jack I'm sorry my company is building a developer platform in the blockchain space so my question to you is do you see integrating the blockchain as a technology in Square for whether its orders payments apart from just accepting crypto as a payment solution well we the blockchain is a ledger and our business is around having a credible ledger so we're actually using the blockchain internally right now and I'm sure it has other applications internally I don't know much I don't want it just like Oh block change great let's apply it everywhere we you know what again it starts the problem and is is this a unique and efficient solve for that problem and then we're going to be doing a ton with with Bitcoin and crypto generally but yeah we are using it today because it fit perfectly because it actually solved one of our biggest operational challenges which is a ledger and in real time yeah so this is like digital because I asked the question in Vegas are you in Vegas yeah it's a MyAccess question i you said he wasn't the right you weren't talking about another company but you should talk about square now so I'm gonna actually the game is Square coming to Africa because the solution that you actually give solves a lot of problems so I work with a company there and one of the patch companies what we do is we use rewards and incentives to help merchants analyze their sales inventory and stuff like that and using this rewards customers are excited to actually visit my son location so we use it for major legal ethics but getting that data we had to do in a roughly a lot of integrations so we have to get into banks we have to get to POS machines payment terminals these that that when one integration could have solved all that problem if we had it like a square so the question is square coming to Africa that's first question second question is so we're also looking at the American market and we see that what we do is a bit unique we've not really seen that a lot here because most of the rewards and incentives that come come from either credit card companies or coupons or vouchers so we want to see how we can partner with square to be able to give this centralized rewards some like s quick cash that can be given to true merchants and Merchants consider she was the customers and can spend at any of the square location and you know and rewards with that data you can share customers than just just not just our merchants and so it's square open to a partnership with a company coming from so else well we're now an American company so would you be willing to do a partnership with us well so for the first question I'm coming down for gun I'll be there for four months probably starting in May which I'm really excited about four or five countries including Nigeria and my goal in my time spent there is is number one - we're trying to do you centralize the company a lot more so we're way too tied up in the san francisco clock and it's not serving us well anymore so I want to go and basically do what I do here but in a completely different time zone location so we need to figure this out where it doesn't impact our execution to the negative that's cool number one is like just walk the talk around to remote and be elsewhere in that it doesn't impact and doesn't require people to travel to see me to continue around the company that's number one number two is to learn where we should partner and I do believe that as square does enter the continent it should be a partnership strategy not a replacement strategy which is what we've done with all the other places that we've come in where we're seeking to replace the competitor on the ground I think for a lot of the entrepreneurs I met Nautica I think it requires a different approach I think it's a partnership approach so if we can structure a partnership on the continent certainly goes two ways and it happens on this continent too so yes I we have to talk about your yes that the mindset is open enough that we want to do that it's just a question of when and then third goal for me is to help entrepreneurs in these various countries with sharing any my experiences about how we felt Ethiopia was very eye-opening to me because they have all these crazy requirements in order to start a business like you must be profitable we were this company still not profitable by the way Square Twitter just turned it and you must have a physical office and you must have and this is their words a secretary so it's just completely backwards and old and one of the things that Ethiopian entrepreneurs ask me is like Nick I didn't meet with any of the government when I was in it there on November next time can you come and just share your experience with our prime minister about we could not start these companies by being profitable it's just over we didn't we didn't have I work out of my apartment and we didn't have an office and that's how it had to begin so you got to remove some of these constraints so so those are my three goals but yes yes yes then yes thank you very much people are getting brave again I'm curious like if there were anything anything from your first trip Africa or anything you're going back to learn more about that was more on the innovative side that you thought we could bring back to the u.s. well I I think um here especially here on San Francisco and Silicon Valley like a lot of our innovation comes from desire and the the stark contrast in the countries earth in Africa is it's all out of necessity and that creates in an incredible focus and passion and it feels like I mean a lot of the entrepreneurs I met were focused on payments because I mean one entrepreneur who started the lift super of Ethiopia and she can't like the biggest issue she has is like people can't move money like they can't pay her and they have to do all these things just to get the money to the drivers into the company why not so there's just like some some foundational stuff that a lot of these companies are looking at and they're not just looking at like let's replicate what's elsewhere in the world but like let's jump so there's a huge appreciation for crypto and like what that can mean especially and then makáts and the other thing which you see a lot of government control and corruption through the the currencies you have the foreign exchange issue so that was a huge bucket of innovation and then the next biggest one felt like health and the next biggest one felt like sustainability and what was awesome is like again they're not like replicating they're jumping and it's like super super focused a lot of a lot of necessity and to me like the best invention comes out of necessity like that's how this company started my co-founder this may not feel like necessity but he he was a glass artist and he couldn't saw a piece of glass art and for a lot of artists like him that's like the decision between doing what you love versus doing what you have just to eat so that that need that problem was was important and with Twitter it was funny because like it definitely did not come out of a necessity and no one needed Twitter people talk all the time I'm solving a problem nobody has but then all these people would show us why they needed it and that was a special thing about the company is like we saw all these activists show us why it's important and we show we we saw like how people were protesting government show us why it's important and then all these use cases emerged we didn't know why it was important and it was nice to not have to dictate that but to be shown why it was it was critical and why is important so it's very espoused to figure out this hey Jack um from any of your companies what would you say has been your biggest setback or failure and in hindsight what was the learning coming out of that I always hoped for bigger setbacks and failures because I want to like that's the only way I learn but I think the earliest one is just not valuing enough the team dynamic that we're trying to create we had an individual early in Twitter who was brilliant and by all measure probably the only one that could keep the service up and bring it back if it ever went down which I went down like every single day and but this person was like toxic and just really hard to work with and was bringing the team down so it took me six months to finally build up the courage to part ways with this person and the courage I was lacking because I didn't know if we could get the site back up if this person left so what happened is finally did it and it was a you know pretty emotional moment first one was crying I was crying then they told the company the whole company was crying and we're like crying because we're sad like this is the first time someone's leaving the company but also like oh and what happened is to say went down and three people kind of rose the occasion and brought it back up and within like an hour too and so many we went from being a single point of failure on one person and being entirely depending on one person having three people being able to have more knowledge about how to bring something so that like I think my number one the number one part of my job is team dynamic he starts with my team but it extends the whole company and that means how we work together whether we're contrasting in a positive way whether we're making ourselves more creative through the conversation the work so a lot of it a lot of it follows from from that that was probably the biggest I am Jeremy I um I actually wrote the first question that I submitted online I'm kind of surprised nobody else actually used the form but I wanted to ask a follow-up to that so we sell the small businesses and that's a category right and I'm curious whether maybe this is a difference in how the fun raising market has changed in 15 years or so but I've been in the situation a number of times or if I give a story about how I can help a flower person sell more goods or a glass maker sell more goods the investor is immediately crank it through the numbers they're like okay lifetime value how many of them are there how fast can you acquire them and like is this a good business for me to invest in and that can be difficult especially if they're pretty hard driving numbers cycle person it can be a hard thing to navigate so I was wondering if you could speak more to that it seems like there's a big part of of telling the story of who the people are and what the problem is but yeah what do you do when it becomes like you're being boxed into something and you have to bring it back out to that yeah I mean I'm I think so the the most important thing to me is we actually have something to show we're not just telling a story so a Twitter we only went to outside and Twitter is very unique as well because like we came out of this other company that was failing so we had money from my co-founder of who funded OTO and then we went out for our Series A but we only went out with real usage I don't I didn't I wanted to be able to tell this the story of the people using it how they were using it and that's critical and we only went to investors with this company when we had a few merchants and we we only had seven and it was completely against visas rules for us to be doing what we had to lie on our merchant application and and hide it for like a year so we we took a lot of risk early on to get into the usage we needed but but then I I wanted to go in with a not only usage but a working prototype and square was like incredible company to pitch because I would just go up to the these investors I would say your wants your thing yeah and hand over your credit card I'm gonna say why I want to show you the thing and they're like no I'm like well we're gonna leave nothing out here and then I would take like five dollars or 50 or if they hand me up and and like that it being that tangible just immediately got their imagination working like they would say my dog worker could use this my babysitter can use this like there's a coffee store I go to that I think some credit cards are so frustrating so as soon as they start like completing the story then we have a captive audience to tell our own sense of like how we're going to build a business of mass and the numbers certainly come into it they want to see how these models but they're all in the end I mean you have to just make it work right so all we can do is show why we are best to make it work and that was the other thing that I was up against is like a lot of investors we we we we did something that I thought was clever one we had two weeks mr. square with two weeks of meeting investors and in the first week we put all the people we didn't want to work with so he pitched all the firms and the people we did not want to work with in the last week we pitched all the ones we did so we got in that first week we got all the questions and the pushback and all these made all of her mistakes and then by the final two I really want to work with Sequoia roll-off who was a CFO at PayPal or Vinod Khosla just because of what he's brought in his insight and his contrast of cosa was was at the very end and so when we reach them we were very well rehearsed and practiced and whatnot and we saw all the questions and then the second thing we did is we had a slide in the deck of like a hundred and forty reasons why this company will fail and we just went out and we took ten of them and we went line by line as to how we would address those potential failures and that gave people a lot of confidence again we only had seven merchants when we showed it off but we had a working prototype with people using it and we had enough of a story to tell that was believable that they took a chance and then once they took that chance then it was easier to get the other funding dumped on the line but I I think it's just a question like how can you people feel you know what you're trying to build I think as tangible as possible and then get them to finish your sentence has been the thing that's always worked for me hi jack I'm Benjamin from our med techs we apply AI in data the self problems in healthcare so thanks for sharing early on and you observe a problem in payment and then you guys did a great job to solve that but you also mentioned that you observe like health problems as well so if you had opportunity to use your experience to solve health care problems how would you stop I don't know I I do if I were to start another company it would definitely be in health space you know probably be mental health just because I'm fascinated by the mind and how we just don't understand it so I guide myself more by what I'm curious about and I imagine that I would find a bunch of interesting problems there and go from that but I you know I'm from Missouri my state my community has been and just the the health epidemic there is crazy and you look at the incentives that push that I mean there's no focus on preventative at all there's no focus on eating healthy there's no focus on moving so and then some prize is really really unhealthy behavior on lifestyles so I'd probably go home again and like ask the question why and what can we do what can we do about it yeah thanks Sebastian probably a temper one hey Jack I wanted to know about squares plans in emerging markets I come from South America and Buckeyes Asian is a huge problem there and also think about what's going on for instance with m-pesa in Africa or even in China where the PlayBook is not including banks or is not even including credit cards and yet those are the markets that probably need a better way of paying the most so what what are your plans on that well there's the short-term plans in the longer-term plans the short-term plans is we as a company cannot act like an Internet company an Internet company can launch something and publish a website or publish an app and the whole world can use it we have to go market by market have a relationship of the bank of a relationship where the regulator's change our entire flow for all these different markets it took us like nine months to opened in this country even though we had all the technology built it took us almost a year and a half to open in Japan because we're the first time you could actually accept credit cards without doing an in-person government visit Australia took two years because we found out that the banks also make point-of-sale systems and they didn't want us in the market so they push the regulator's to keep us out so like it's just a mess so on the short term we have to conserve our resources and go market by market by market by market and and do all these trade offs around like what is the benefit we in the only rubric we use does what is what are the biggest economies in the world and just go down the list so we start with us skip China went Japan went to Australia and tried to get we you know we thought we were smart by trying to get in the UV you through England we're in England now but now we have to go back to the you and to Paris or France or Spain so that for a payments company it kind of sucks because it's just like it's a crazy slow process something like Bitcoin changes this completely because if the world has one currency you don't have to go market by market by market you can actually launch something in the whole world content reuse the same thing so for the long term that's why we're we're pushing so much on Bitcoin and cooked I was like we need to see this as a as a as a currency we need to see this as a as a global currency because it solves a bunch of our needs it's also what that wants so I don't like it kind of sucks in comparison to what we are able to do at Twitter where we just launch and the whole world can use and it's our discretion whether we hold back any particular markets like we do a small test in Brazil versus launch it entirely you know throughout the world from day one so yeah we we love to move faster for all these countries around the world but like payments payment sucks right now let's getting better and better every day on that note thank you so much for lending [Music] [Applause]

Channel: 500 Global

Views: 64,138

Keywords: 500 Startups, 500 strong, Silicon Valley, Venture Capital, Startups

Id: c5-XWjrVX6M

Length: 30min 55sec (1855 seconds)

Published: Tue Mar 31 2020