Appearing on the Techonomy Detroit stage for the third year, Twitter and Square founder Jack Dorsey shared with Detroit CIO Beth Niblock his vision for how technology, and in particular the evolution of Square, is helping the commerce ecosystem, and could help cities like Detroit.
Dorsey and Niblock’s conversation followed a talk by author Andrew Keen in which the techno-polemicist cautioned the audience that tech companies operate strictly in the interest of their own profits, not to help society. Dorsey acknowledged Square’s profit motive, but pointed out that Square’s revenues depend on the success of its customers, so the company is highly invested in helping merchants succeed.
No matter what size, there are three things every business needs, Dorsey says: “Access to capital, new customers, and the tools to retain them.” He calls “criminal” the systems that have traditionally made it difficult for merchants to accept credit cards from customers and delayed access to sales revenues. Square, he says, is driven to make it easier for businesses to get more customers and faster access.
Square’s initial contribution to commerce was its small mobile hardware that let merchants accept credit cards anywhere, he says. “When we started out, we created a reader that enabled people to accept credit cards. It was about getting new customers and making every sale. Buyers want to use cards everywhere because they’re convenient, but sellers didn’t have tools to accept them.”
But the company also created a system that put funds from payments into the business account the next day, instead of the next week, and then built a register system around the hardware to enable merchants to better retain customers.
Dorsey is careful to differentiate between simple payments and more complex commerce, which he says Square is enabling: Beyond the exchange of goods for cash, “commerce is the interaction between the buyer and seller. Humans were trading goods and services before we were trading stories.” And while storytelling, or communication, has become freer over time, commerce has become more complicated. Says Dorsey, “Our mission is to make commerce as free as communication.”
Dorsey says one major benefit of new commerce technologies is that they give small businesses and teams the freedom to stay small while interacting in a global marketplace. “A team of six can build an app that impacts the entire world,” he says.
He also described how Square’s new Square Capital tool is helping merchants grow their businesses with cash advances. “To get a typical business loan takes a lot of collateral and insurance.” Square doesn’t need that. He explains: “We have a deep understanding of our sellers because they’re running their accounting on our service. So we can send them an email with confidence to say, ‘We’d like to advance you some capital. Here’s how much it will cost. Touch this button.’”
Earlier in his Detroit visit, Dorsey stopped in at Square Capital customer Human, a clothing boutique on Cass Avenue. Human accessed a low-interest cash advance from Square to buy mannequins for clothing photo shoots designed to enhance the store’s online sales. And hair salons have taken Square advances to buy more chairs in order to serve more customers, he says.
“The money is paid back by selling—by running your business,” Dorsey explains. “With every swipe, they’re paying that advance back automatically. If they grow their business, we grow too,” he says. “We need capital and revenue to invest back in our business. You need it to exist. All our customers need it to serve their customers.”
Asked whether Square, with its focus on credit card commerce, could have the effect of excluding buyers in a market like Detroit, where access to credit or debit cards is not universal, he says, “We should enable sellers to accept checks, cash, credit and prepaid cards, Apple pay, and Bitcoin. As long as you’re making that sale you’re growing the economy and the buyer gets what they want.”
Contrary to Andrew Keen’s characterization of tech company CEOs, Dorsey says he wants to help people. “We intend to use technologies to have an impact on the world. Great tools get used and save time for people and allow us to focus on things that are more meaningful to us. Bad tools take attention and time away.”
Niblock said she and Detroit Mayor Mike Duggan are “committed to transparency,” and that “Detroit is trying to do business differently.” She agreed with Dorsey that great tech tools can contribute to running government and balancing public and private sector interests more efficiently.
Dorsey said commerce technologies like Square and social technologies like Twitter can deliver data and feedback to city leaders in a way that lets them make better decisions. “The more we surface what’s happening in a city in real time, we can make better decisions about what the city needs and build a stronger economy and civic society.”
Asked by Niblock, “What new ideas have caught your imagination?” Dorsey responded, “The best technology reminds us that we have everything we need and encourages more human interaction. A great technology gives time back to people so they can focus on what’s meaningful.”
Dorsey is not a fan of “building tech for tech’s sake,” but says, “If we build to create efficiencies, that’s what I love to see. Taking something time consuming and bringing it down to a second or a minute.”
