Founder Story: Jack Dorsey of Square
A Vision Born from Personal Experience
Jack Dorsey's journey with Square began with a simple problem. In 2009, his friend Jim McKelvey, a glass artist, lost a $2,000 sale because he couldn't accept credit cards. This frustrating experience sparked an idea: what if there was a way for anyone to accept card payments using their mobile phone?
Dorsey, fresh off his stint as Twitter's CEO, saw an opportunity to revolutionize the payments industry. He envisioned a world where small businesses and individual entrepreneurs could compete on a level playing field with larger corporations when it came to accepting payments.
"I think building a company is a very lonely thing. You're making decisions that affect a lot of people's lives, and you're doing it in a vacuum most of the time."
This vision wasn't just about creating a new product; it was about empowering small businesses and democratizing financial services. Dorsey and McKelvey set out to build a solution that would be simple, affordable, and accessible to everyone.
From Twitter to Transactions
Dorsey's transition from social media to fintech might seem unexpected, but his background in dispatch software and real-time communication systems made him uniquely suited for the challenge. His experience with Twitter had taught him the value of simplicity and user-centric design, principles that would become core to Square's success.
In February 2009, Dorsey and McKelvey officially founded Square, Inc. They started with a small team in a cramped office in St. Louis, working tirelessly to develop their first prototype. The initial product was a small, square-shaped card reader that could plug into a smartphone's audio jack, allowing anyone to accept credit card payments with minimal setup.
Disrupting the Status Quo
The payments industry in 2009 was dominated by established players with complex fee structures and lengthy approval processes. Small businesses often struggled to get approved for merchant accounts, and the equipment was expensive and cumbersome.
Square's approach was radically different:
- A flat 2.75% fee per transaction, with no hidden costs
- No long-term contracts or monthly fees
- Instant setup and approval process
- Free card reader for every user
This simplicity was revolutionary. Within months of its official launch in 2010, Square was processing millions of dollars in transactions. The company's growth was explosive:
- 2011: Processing $2 billion in payments annually
- 2012: Reached 2 million users
- 2013: Expanded internationally, launching in Japan
Building in the Face of Opposition
Despite its rapid growth, Square faced significant challenges. Established payment processors viewed the company as a threat, and there were concerns about security and regulatory compliance.
Dorsey's leadership was put to the test. He focused on building a strong team and culture, emphasizing transparency and user-centric design. Square invested heavily in security measures and worked closely with regulators to ensure compliance.
One of the biggest hurdles came in 2013 when Starbucks ended its partnership with Square, which had been seen as a major validation of the company's technology. The setback was significant, but Dorsey used it as an opportunity to refocus on Square's core small business customers.
The Unconventional Path
Dorsey's approach to leadership at Square was unconventional. He implemented a number of unique practices:
- Transparency: Weekly "town hall" meetings where employees could ask anything
- Silent Meetings: Executives spent the first 30 minutes of meetings reading a shared Google Doc, then discussing
- "Block Walk": Dorsey would walk around San Francisco, talking to local businesses using Square
These practices reflected Dorsey's belief in the importance of open communication and staying connected to Square's users.
"My goal is to simplify complexity. I just want to build stuff that really simplifies our base human interaction."
Innovation Philosophy
Square's success was built on a culture of constant innovation. Dorsey encouraged his team to think beyond just payments, leading to the development of a suite of business tools:
- Square Capital: Offering small business loans
- Square Payroll: Simplifying employee payments
- Cash App: A peer-to-peer payment service
Each new product adhered to Square's core philosophy of simplicity and accessibility. Dorsey's approach to innovation was rooted in solving real problems for users:
"Build what people want. Listen to your customers, and make something they need."
Defining Moments
The First Transaction: May 11, 2010
Square processed its first real-world transaction at Sightglass Coffee in San Francisco. Dorsey himself was behind the counter, demonstrating the system to the café's owners. This moment proved that Square's technology worked in a real-world setting and marked the beginning of the company's commercial operations.
Going Public: November 19, 2015
Square's IPO was a pivotal moment for the company. Despite initial skepticism from some analysts, the stock opened at $11.20, above the $9 offering price. This successful debut validated Dorsey's vision and provided Square with the capital to expand its operations further.
Acquiring Afterpay: August 1, 2021
In a $29 billion deal, Square acquired Afterpay, an Australian buy-now-pay-later company. This acquisition marked Square's largest to date and signaled the company's ambition to become a comprehensive financial services platform.
Industry Impact
Square's impact on the payments industry has been profound:
- Democratized access to card payments for small businesses
- Simplified fee structures across the industry
- Accelerated the adoption of mobile payments
- Inspired a wave of fintech innovation
Before Square, only 27% of small businesses accepted credit cards. By 2021, that number had risen to over 60%. The company's success also paved the way for other mobile payment solutions and fintech startups.
Legacy and Future Vision
As of 2025, Square (now part of Block, Inc.) continues to expand its financial services ecosystem. Dorsey's vision has evolved from simplifying payments to creating an integrated platform for financial services, cryptocurrency, and more.
Dorsey's legacy extends beyond just Square. His dual role as CEO of both Twitter and Square (until 2021) made him a unique figure in Silicon Valley, demonstrating that it's possible to lead two major tech companies simultaneously.
Looking to the future, Dorsey remains committed to decentralization and financial inclusion:
"The internet deserves a native currency; it will have a native currency. I don't know if it'll be Bitcoin or not, but I hope it will be."
Closing Thoughts
Jack Dorsey's journey with Square is a testament to the power of identifying a real-world problem and relentlessly pursuing a solution. From a simple idea born out of frustration, Square grew into a company that fundamentally changed how small businesses operate.
Dorsey's approach to leadership and innovation offers valuable lessons for entrepreneurs:
- Stay connected to your users and their needs
- Embrace simplicity in design and communication
- Don't be afraid to challenge established industry norms
- Build a strong company culture based on transparency and shared values
As Square continues to evolve, Dorsey's initial vision of empowering small businesses remains at its core. His story reminds us that true innovation often comes from solving everyday problems, and that with persistence and vision, it's possible to reshape entire industries.
"Make every detail perfect and limit the number of details to perfect."
This philosophy, embodied in Square's journey, serves as an inspiring guide for the next generation of entrepreneurs looking to make their mark on the world.
References
- https://www.biography.com/business-leaders/jack-dorsey
- https://en.wikipedia.org/wiki/Block,_Inc.
- https://advisorycloud.com/blog/uncovering-the-secrets-to-jack-dorseys-success
- https://www.britannica.com/biography/Jack-Dorsey
- https://www.thriday.com.au/blog-posts/jack-dorsey-story
- https://press.farm/jack-dorseys-leadership-style-twitter-square-ceo/
- https://www.goodreturns.in/jack-dorsey-net-worth-and-biography-blnr663.html
- https://www.cinemonic.com/the-rapid-growth-of-jack-dorseys-square-inc-the-square-fintech-story/
- https://www.playforthoughts.com/blog/jack-dorsey-building-future
- https://www.businessinsider.com/jack-dorsey-twitter-creator-billionaire