Read the full transcript of the closing session of the Techonomy Detroit 2013 conference. (Transcript by Realtime Transcription.)
To watch video of all Techonomy Detroit 2013 sessions, click here.
Kirkpatrick: We have a wonderful way to end this conference, which I think has been a pretty darn good day, and I got to ask—maybe, Jack, you should sit here, why don’t you do that.
Jack Dorsey—you know, I really got to thank this guy. Because last year and this year he committed to coming to this conference, and it really made all the difference. So having someone of his stature committed to our project here has been catalytic, and I just want to thank you on stage, again, for that, it’s really so …
We’ve really had quite an extraordinary set of discussions today and I think if you hadn’t made that commitment it would have been lot harder, so thank you.
Dorsey: Thank you.
Kirkpatrick: Jack, of course, invented Twitter. He is the CEO and founder of Square, which is transforming commerce for small businesses. Jack just announced it’s going to go public, but we are not going to talk about that at all.
But I have to say, myself, that the world often asks, and asks me as a journalist, who is the next Steve Jobs, and if there were going to be another Steve Jobs, which is probably a crazy idea anyway, the best candidate for that, in my opinion, would be either Jack or Elon Musk. These are the two guys that are incredible, with incredible design and product and technology insight in the way that Jobs did, kind of tackling huge problems, and I just am so pleased to have Jack part of this event. So I won’t say anymore about that.
He is having one of his Let’s Talk events for Square merchants later tonight. And I have a location.
Is that open to the public?
Dorsey: Yeah, yeah, it’s open.
Kirkpatrick: That’s going to be at The Shelter, 431 East Congress Street, 6 to 8. So Jack is going from here to there. If you are interested, please join him.
I hope that was okay.
But this is another thing that is testimony to Jack’s uniqueness. He didn’t want to appear on stage alone. He wanted to have some entrepreneurs up here with him. So we have three local Detroit entrepreneurs, business owners. I will quickly introduce them.
Catherine Kelly, she’s the first on my list, the publisher of the Michigan Citizen, which is a weekly newspaper for African‑Americans, founded by her father in 1978, somebody who is really running a business that’s been around for a while, but she’s really, like everyone in media, taking it through a lot of transformation now. We are thrilled to have her on stage again.
The far end here, Alex Southern, who leaves business development and issues for a Detroit‑based creative studio, MidCoast. But I think the reason he’s here more is that in 2011 he founded GrowDetroit, which is a nonprofit dedicated to helping foster Detroit’s emerging entrepreneurial and startup communities. So he’s really an entrepreneur of non‑profits.
Finally, Scott Moloney, who is founder of Treat Dreams, and I’m sure a number of you have had his ice cream in some amazing flavors. He has 750 different flavors so far, including lobster bisque ice cream.
Moloney: True story.
Kirkpatrick: What is another really weird one?
Moloney: We just did a beer cheese and brats ice cream. We are working on a smoked salmon and cream cheese ice cream.
Kirkpatrick: Are they sweet?
Moloney: They are combination sweet and savory.
Kirkpatrick: I think that’s probably good.
So he opened in 2010, and it’s really a big success story, but, you know, as you will hear, he’s used Square a lot in his process, and he’s very interested in using technology to turbo charge his business even further.
So, you know, maybe we should just start by—let’s start with Scott. What do you do with technology in your business, and what you’d like to be able to do. Then we can ask Jack whether he’s going to help you do that, whatever it is.
Moloney: So my background was in banking. I spent 18 years in banking, didn’t know anything about the restaurant business. Decided four years ago I wanted out, decided I wanted to do ice cream. But if it were not for technology I could never even have got started. I did a lot of research online and it gave me the courage and strength to do what I did and think I could do it.
Since then, okay, now I have a business, I have opened the doors. But I have a bad location, how are people going to find out about me? I opened in late August, the first year, and it got cold very early, and it was a long winter, but we still kept building the business; and that was through Facebook and social media, through Yelp, love it or hate it. But I have always embraced that, embraced that technology.
Then we got bigger and we got more well known, and people started talking about us. And it became kind of like a viral thing. And we just started doing more events. And each step I took, it seemed I couldn’t have got there without technology. We started doing mobile events. When you do mobile events, you need to take credit cards in the field.
Kirkpatrick: But even with the basics, you learned how to make ice cream on the Internet.
Moloney: Absolutely. I made one batch of ice cream six months before we opened. It was for my wife’s birthday party. It was a failure. Her family was over. I had already quit my job at Comerica Bank. So you can imagine how that went over with her family. So you are going to make ice cream and support the family! And I was literally so terrified by that experience—I had bought the commercial machine, it was in our house, it weighed 500 pounds, so I couldn’t stick it in the back closet and forget about it. So it was always a reminder of that first failure.
I didn’t make the second batch of ice cream until two days before we opened when we got Health Department approval. So I maybe did some crazy things. Like making my second batch of ice cream two days before I opened was probably the craziest. But I got confidence through research and reading the manual, which if I had done that to begin with I would have realized how to make my first batch of ice cream.
Even today, we have made 750‑plus ice cream flavors and I am trying to come up with that next flavor, trying to make a flavor that no one else in the room has ever done —I go on Facebook, on Food Channel sites, to find some ideas for flavor combinations that are really unique that will set us apart.
So technology, for me, now that I’ve got my business, how do I manage it better? My time as a single proprietor, my time is so limited. So technology, for me, now that I have got my business, is how do I manage it better? I am able to do that. I don’t want to sound like a commercial for Square, but we did share POS systems, and I program it myself.
Kirkpatrick: Point of sale.
Moloney: Point-of-sale systems. I can do it in two hours, and I can remotely monitor the business when I am in the store, because I’m not behind the counter anymore.
Kirkpatrick: With Square, you mean?
Moloney: With Square. So anything that I find that can help me. Like tonight, I’m going to go home, and it’s payroll. I got to call in payroll tomorrow. So we do old‑school pay cards, handwritten, and I have to calculate the hours. I will spend an hour doing that. But if there is a way for technology—maybe there’s an app out there that I haven’t found yet.
Employees put their thumbprint on my iPad when they check in, and that’s the payroll system, the HR system. They check in and check out, and it automatically computes it. Right now it is all about saving an hour where I can. If I can save three hours over the course of a week, it’s a God‑send.
Kirkpatrick: Just quickly, you made a similar point about inventory management when you’re on the phone.
Moloney: Yeah. Right. I probably have 12 different sources for ingredients. We are not your normal restaurant. We are changing our flavors every Sunday. I challenge you to find another restaurant that changes their menu up every week. So we are constantly ordering new ingredients. And if there is one central spot where okay, I know I need waffle cone mix from this person, from this site—if I can go to one dashboard and order all of those once a week, it would be a God‑send.
Kirkpatrick: So, Jack, are those the kinds of problems that you are thinking of trying to help businesses with as time goes on? I mean that’s not in the products set now, but are those things that interest you?
Kirkpatrick: I had a feeling.
Moloney: We need to talk, then, because I have a bunch more of them for you. I want to save an hour, that’s my goal.
Kirkpatrick: The thumbprint for the employee thing, Jack sort of perked up when you said that, I thought. Okay, good.
Dorsey: No, I loved what he said because I think the most important thing that we want to do with our mission, building our services and the software, and even the event tonight, is finding ways to develop products that are so intuitive and so easy that they actually give time back to the entrepreneurs that are using them to focus on what’s more meaningful.
So the typical point-of-sale system, the typical credit card terminal, is just a nightmare. It’s a maze of all these functions that you have to learn. You have to hire people to help you figure it out. And we want to build software that you understand how to use as soon as you open it up. And if you do that and the technology fades away completely, it disappears, you are actually giving time back to the sellers to focus on building their business, to invent new flavors, and also time back to buyers to really enjoy the experience that they just purchased.
Dorsey: So it does have meaningful outcome if the technology becomes the right one for the business.
Kirkpatrick: I’m sure a lot of you just thought of some of the things Rodney Brooks was saying earlier about manufacturing technology. Similarly, it should be so intuitive you don’t have to, like, study how to learn it. You don’t have to spend too much time reading the manual, because it’s not a 500‑pound ice cream machine, presumably; it’s not the kind of product Jack’s going to be making.
So Catherine, you have a completely different set of issues. Talk about what some of those issues are facing you at the Michigan Citizen, how those technologies help you, how it might hinder you or where you would like to see it take you—and Detroit for that matter.
Kelly: Most of you are familiar with the issues facing the newspaper industry. And the Michigan Citizen, we are dealing with this just like everybody else is.
But I think what is important about the Michigan Citizen is our audience. Our audience is a part of Detroit that may not be largely represented here. We bring information and ideas to people who are largely isolated, who advertisers don’t always, you know, don’t have a lot of money to go out and buy things. So as I deal with, okay, just the change from becoming a newspaper business to a media company, you know, we’re also kind of dealing with our audience, and as the economy changes and equity grows, how do we bring, you know, our audience along with all these changes that are happening? Twitter’s been a wonderful tool for us in terms of helping drive traffic to the site and all these different things, but, you know, not only are we a small business in Detroit but we’re also a newspaper business just trying to stay up with the times.
Kirkpatrick: So technology is more of a disrupter to you than an enabler in the aggregate level, would you say?
Kelly: I don’t know about that. It is certainly disruptive in the sense of, you know, I’m not running my dad’s newspaper business, but it also provides tremendous opportunity for me and the readers. I mean, even if you look at the way newspaper or media companies are aggregators for information—so one of the things when you’re dealing with people in the city of Detroit and the readers of the Michigan Citizen, one great thing that you can do is bring information.
So technology really opens worlds, it opens—you know, shows new ideas. It can take you places where maybe financially, you know, you may not have the money for a plane ticket, you may not have a car. I mean, these are the very literal realities of Detroit. Median income has fallen every year since 2007.
But technology can hopefully give you a new world, and these are kind of some of the things that we’re interested in, we’re really open to—economic opportunity is an important component for what we do in informing people on how to be more empowered. That’s where we are.
Southern: What was interesting to me, we were talking about that old platform way of thinking, the print publication, migration to an online platform was, how do you collect, have that back‑and‑forth dialogue with your readership, amongst your readership. Maybe an interesting question for Jack, in driving that, in engaging that, because that shifted. And I think Twitter is a big proponent of that. You were talking about quality conversation, how to have quality, meaningful dialogue in the context of a news story, for example. When you look at a short burst of information, a short tweet, for example, how do you—how does that change this dynamic of mass media?
Dorsey: Well, I think it has the potential to increase the audience, you know, certainly. And I think the challenge in the industry right now is figuring out other alternative revenue streams away from print. A stream that actually makes sense in a digital and very, very tendril way. I don’t think any of the bigger guys have figured that out, so I’m hoping that some of the smaller do.
And I think there’s a lot of room for innovation there. But I think technology like Twitter really puts a spotlight on these atomic little units of really great content. And I think, you know, the journalistic integrity and discipline that the typical newspaper has will never go away. That narrative is important to our democracy. It is important to how we think about the world and relate to the world.
Twitter provides a great man-on-the-street account, to people who are actually experiencing the event. But we need to tie those things together, and I think that’s where the rule persists and stays; but we need to think about the models that sustain that from a revenue standpoint.
Kirkpatrick: So, Alex, talk about Grow and GrowDetroit, what your aspirations for it are.
Southern: The impetus behind GrowDetroit are, it was a very simple concept. We had just a dozen young tech entrepreneurs who basically had this moment of coming together in a format not unlike this and saying, we have ideas, we want to enact positive change. How do we cross that chasm and promote cross collaboration between kind of people who are passionate about technology and innovation and entrepreneurship? How do we cross over and gain access to the old guard of Detroit? So how does somebody with a great idea get into the GM or get into the large manufacturing companies in this area and enact change or promote that great, innovative way of thinking that they have or they come up with?
So that was really the reason why we created Grow. And a big mission or what we really do well is, we go into really innovative growth companies in the area, companies like Mangled Languages, and Hello Innovation, or Billhighway, and we sit down and do a fireside chat like this with the founders of the company, to share struggles and successes, and find out where they are on their growth trajectory.
Kirkpatrick: And bring in members of your community to hear that conversation.
Southern: Exactly. And it is very laid-back. It’s all over kegs and everyone is in jeans. It’s like a very laid‑back, tech’s format. So it is not people showing up in suits and that old‑school business networking that is kind of stagnant.
Kirkpatrick: What would you like to see GrowDetroit do that it hasn’t been able to do?
Southern: I think we are still on the mission of how do you effectively get through to a—how do you get a great idea in front of a Roger Penske? At first glance it is a really intimidating concept, right, but I think we are starting to make strides collectively as a community, because of, you know—VC funds are a huge proponent of that. IncWell is a great example; they’re a fund in the area that’s comprised of former CEO of Chrysler, Tom LaSorda, and Roger Penske. And Fontinalis Partners is a fund capitalized by members of the Ford family, and it is all focused around X Generation of mobility. I think that type of thing goes a long way because that makes the old guard of Detroit more accessible in a way, which is cool to me.
Kirkpatrick: So Jack, when I was talking to both Scott and Catherine in prepping for this, you know, they’re both facing a lot of questions about where to invest their time and energy and money in terms of their own technology, especially from a marketing or publishing point of view. So they both have websites, of course, and that’s a key distribution mode; but on the other hand, we’re moving into this world so quickly where mobile is the Internet.
I think companies and businesses like theirs are really faced with this question of how much priority should you spend on maintaining and improving a website as opposed to focusing on mobile?
And I think you are an interesting guy to ask this because really both of your businesses that you’ve started are basically entirely mobile. So is that a statement that you would basically say symbolizes what you think everybody should do? Or how do you think about, say, Scott’s problem of should he invest or improve what he concedes is a relatively creaky website that he hasn’t spent much time on in the last couple of years?
Moloney: Yeah, please don’t pull it up if you are here.
Kirkpatrick: And also, should he just go mobile and really build a really cool mobile?
Moloney: And the question is coming from, I mean, we talked about how much I love Square, how much it has done for me. And to prove I am not a shill for Jack, I have never tweeted anything. We have a food truck, we have a store that changes flavors every week. I engage through Facebook, but I know that’s static. So my question is, is there another Facebook? Or will Facebook be here another 20 years? My 13‑year‑old daughter is on Instagram now. I’m not sure what’s that all about; but should I, as a business owner? I should, yes, as a parent, I should. As a business owner, I don’t know.
But so that was my question. And obviously, I need to invest the time in figuring this Twitter thing out. When you say hashtags, that scares me.
Kelly: And running such a lean, challenged business right now, how much—how many resources should I do something where there really isn’t a model yet to monetize it? I’m so—
Kirkpatrick: You mean mobile in particular?
Kirkpatrick: Or the Web as well? You are really facing that on the Web and mobile. Well, let’s get to Scott’s question about future promotional technology.
Dorsey: The way I would think about it is not necessarily about mobile versus Web; it is about meeting your customers where they are. So more and more, these devices are being carried around everywhere. And when we started Twitter, we were excited and inspired by the idea that if we limited the text constraint to 140 characters, we could fit in a 160‑character envelope an SMS, which meant that anyone around the world with a $5 cellphone, or a cellphone shared within a tribe of 20 people, could participate in a global conversation, and they could do so for free.
So we optimized for where we thought people were and had a graceful degradation path up and down. So if you just had a $5 cellphone, you could have a conversation with Justin Bieber, who will have a gold iPhone, right, in the middle of California. And that’s truly empowering and levels the playing field, and that was what’s important for us. And programming for us didn’t take a lot of our resources; it was just the right refocus. So the first question to ask is where is your audience, where are your customers.
The same thing was true for Square. You know, our co‑founder, Jim McKelvey, is a glass artist. I consulted him on glass art at an arts fair when he was out. More and more people are carrying these super computers in their pockets. You can pick them up fairly cheaply right now. And there was no way to go from that phone, that device, to a sale.
So what’s the smallest piece of hardware that we could build that actually not only worked on Jim’s iPhone but also worked on any Android device? And what we built was through the headphone jack, because it turns out that a credit card is just the same technology as a cassette tape, and the headphone jack is actually a microphone jack as well. So if you plug that in, you can listen to the audio from the credit card, and convert it to a number, and we can bring that to a bank and verify that the funds are on the card, and deposit those funds into the seller’s account.
So we recognize that people weren’t necessarily on the Web; they weren’t wanting to take their computers out to the art fair or the farmer’s market, or with them while they were doing their flight instruction or piano teaching or whatnot. But they did have their phone. And the most important thing was, it’s a commodity device, and people already know how to use it. So there’s all these credit card terminals in the world, which as I said you have to learn to use. But people’s 2‑year‑olds are teaching them how to use an iPad and how to use an iPhone and how to use an Android.
So what is the simplest thing that we can do to plug in and actually make that the register that runs your entire business? So that focused us. So we said we are not going to build anything for the computer or for the Web. We will build the simplest thing we can for the phone, which meets where our customers are, meets where the sellers are, and meets where we see this interesting intersection.
So that’s how I would filter how you think about resources. I do believe people are consuming more content and interacting more out of their pocket, and I don’t think that’s a trend that goes away. I think to the point of Instagram and technologies like Snapshot, and there’s a new photo sharing app that I’m in love with called Frontback.
Kirkpatrick: Frontback? Oh, it takes two pictures at once?
Dorsey: Frontback. It uses the front‑facing camera and the back camera and takes two pictures at once.
And these things look sometimes immediately like ridiculous little toys, I mean on a very superficial level. But I think it’s the responsibility of every entrepreneur and everyone who’s innovating to play with all these things, because it always brings you new ideas, it always brings you new perspective, and it might do so in such a way that it really changes the course of your business.
Snapshot I think is a stunning company in technology, where they went from zero people using it to sending 350 million images per day over this service. And it’s so fundamental to the phone itself that it’s become the camera application for most of the people that use it. So instead of opening the camera app on the phone, they open Snapshot, because what Snapshot figured out is, again, where do customers want to be? What do they want to do with this technology? When someone takes a photo, what’s the first thing you want to do with it? You want to share it with someone. So what’s the simplest way you to get there? Open up the camera immediately, take a picture of the very next screen, this is who you share it to, and you take another picture. That’s the magic of that technology.
And if we approach our businesses, first, what do we want to build, and who are our customers, and where are they going to be, it really focuses your development, and it really, you know, helps you get a lot of time back to focus on other technologies. We just need to tap the desire and ambition to do so.
You know, that gap is bridgeable. It’s just constantly reminding us that we need to find something that really speaks to what everyone has access to and everyone can utilize. And it’s there. I mean, it’s definitely in our near‑term future, and I think it does bridge those islands. I mean, we have definitely seen that with Twitter.
And my own personal account of it is, a lot of the world, especially Iran right before the election protests, was very much a black box. And then suddenly people were on the street taking pictures and sending videos. And I saw exactly how people woke up. I saw exactly how people lived their days, and it just created all this understanding, right? So we can do the same things in our own communities, in our own neighborhoods, and our own cities that will help the fabric of our nation.
Kirkpatrick: And I can imagine that specific apps and media products potentially can be invented that somehow incentivize people to bridge these gaps from a communications point of view. I don’t know exactly what those would be, but even some of Jean’s comments about prizes, and maybe there’s a way to think of all of this in one big package. Because I think, frankly, as a long, repeated visitor to the city, this is a big problem.
Many people don’t know, Jack grew up in the center of St. Louis. And St. Louis is a city much like Detroit that has a very serious gap between the rich and the poor. But it sounds like, bottom-line, long‑term, you are optimistic about really leveling the playing field and bringing a lot more people into the economy. I know it’s hard to be specific about that, but am I reading you right on that?
Dorsey: Absolutely. Those are the technologies I want to build and work on. I think the potential is absolutely there, and the audience is there, and people in the world want it.
Southern: I was reading that your Square co‑founder just invested in St. Louis in an incubator for fin tag companies? Is that right?
Southern: Right. So knowing that is a financial hub, I am curious about a little bit of color on that, and maybe that is something that we could be looking at here to kind of bring it home. Is there something around 3D printing or manufacturing—given the wealth of expertise here, should we be looking at doing something similar here?
Dorsey: Yeah, I think Jim McKelvey, our co‑founder of Square, has a really interesting idea. It’s not just an incubator, but really focused around internships. I had an internship with Jim when I was 15 years old, and I certainly learned a lot with Jim during that time spent. It’s one of the best ways to—it goes back to that old apprenticeship model of learning by doing, and I think it’s also an idea deeply steeped in Detroit and Detroit innovation and Detroit technology leadership. So, you know, I think it’s a fantastic model and he’s definitely pushing it very hard. If we can spread these models to other cities, I think that’s fantastic.
Kirkpatrick: Okay. We have two people at the mic. Please identify yourself.
Davison: Great. Good evening, everyone, good afternoon. My name is Devita Davison, and I work at Detroit Eastern Market. And I have a question for Jack specifically.
Working at Detroit Eastern Market on Saturday, anywhere upwards to 35,000 to 40,000 people come through Eastern Market on a Saturday. And many of the farmers and the food artisans and the food trucks that are at Eastern Market utilize Square in order to service their customers. And we also have a pretty robust and creative, supportive pipeline that allows a lot of Detroiters to take advantage of under-utilized space, to also have pop‑up retail. And I was wondering, Jack, if you have any quantitative data on the City of Detroit in terms of how many entrepreneurs and vendors actually use Square and what that number looks like, not only from a user’s standpoint, but how much money is generated from the City of Detroit utilizing Square and POS systems.
Dorsey: I do. Do you have a postcard? We have over 5,000 sellers using Square in Detroit. I don’t want to give you the—we facilitated some number of millions of dollars.
Kirkpatrick: Yeah, I think you said 170‑some million, when we were talking on the phone, of transactions that have occurred in Detroit using Square. Do you have some data there?
Square Representative: We have 5,500 businesses in Detroit printing from Square, and Detroit businesses have powered $174 million in transactions.
Kirkpatrick: Not bad.
Dorsey: And this is a trend, not just Detroit businesses, but this trend of local businesses emerging. There was an article some months ago that stated the number of independent coffee houses in New York City outnumber Dunkin’ Donuts and Starbucks combined. So there’s this general trend of more local neighborhood experiences that people want to see. And Square, total in the United States, is processing over 15 billion, annualized, and that is all small business. That is without Starbucks.
Kirkpatrick: That is something. Fifteen billion run-rate of transactions.
Dorsey: Just small businesses.
Kirkpatrick: But we have Starbucks too.
Kirkpatrick: Oh. I forgot about that. Okay, over here.
Hooker: Hi, my name is Timothy Hooker. This question is for Jack. What do you think are the three most important characteristics of an innovator are?
Dorsey: Well, I think you see it on this panel. The thing that always impresses me about entrepreneurs is, they do things for themselves. They want to see something specific in the world, and they build it. So the fact that there’s not 750 flavors of ice cream—750?
Dorsey: —that do not exist in the world? Build it. I think every entrepreneur builds and dreams up and does what they want to see in the world, and they fight like hell to get it out there, and they fight like hell for whatever they believe. And they’re making a bet with the world and themselves that he resonates with other people.
So, you know, with both Twitter and with Square, we built something that we wanted to use on a daily basis, and our bet was that it would resonate with other people in the world, and they would want to use it on a daily basis. And that bet changes every single day. We have to keep winning the bet every single day. And sometimes we lose the bet and we end those features with those products, but most of the time we win. And it’s certainly not over.
So that drive and that conviction and the confidence in someone’s vision to just do what they want to see in the world and be who they want to be in the world is what’s great about entrepreneurship, and that’s a lot of that stuff that I see on this panel as well.
Moloney: And I think the more you tell an innovator they have to do something, the more they will dig their heels and not do that. I talked to David yesterday about the flavors that you have to carry. Before I opened the store, I was told the flavors you have to have—you have to have chocolate, you have to have strawberry, and you have to have butter pecan. Guess what? We never carried butter pecan. We did it one time, and I will never do it again because people tell you, you have to do it. And if I ever do it, it’s going to be, here is your blank butter pecan.
Kirkpatrick: That is what the sign will say.
I want to point out something Jack said before about independent coffee shops in New York. If you think there’s a pattern here, go back to Rodney’s diagram of the little distributed manufacturing plants all over the country, and then think about the maker moment and what’s happening there, the distributed economy. And now Jack is really reiterating the same point, that okay, it’s in retail, the same impulse that is leading the Etsy merchants to do their things locally. It really is a new model, and we have to reiterate this in a city like Detroit, which still has a very industrial mind‑set. Old industry is still seen—I think at the national level it’s still the presumption that economic salvation in America’s cities is going to come when somebody builds a new plant and puts 2,000 people to work. That isn’t going to happen. But this is happening, and I just want to draw those strands together.
Dorsey: But Detroit invented the car industry, so it was a brand‑new industry when it was invented. I had United Press this morning, and one of the things that is so topical is every single entrepreneur in Silicon Valley and San Francisco and the Bay Area always references the Henry Ford quote of building a faster horse quote, always. And that’s Detroit, right?
So a lot of our feelings and our conviction and our practices around entrepreneurship came from the city, and the attitude is still here; you see it in every sign, industry, commercials; you see it in the people walking the streets and working at these businesses. It’s just collecting that energy together and doing something with it.
Kirkpatrick: Nice. Over here?
Audience Member: Thank you very much for being here. This question is for Mr. Dorsey and all the panelists for that matter. What is your take on visual currency, like bit space, and is that a technology you are going to be utilizing?
Kirkpatrick: I would love to hear Jack testify about Bitcoin.
Moloney: I have no idea what that is. I am still fighting fires somewhere.
Kirkpatrick: I want to hear Jack talk about Bitcoin.
Dorsey: The most important thing for us in building a register or point of sale is no matter what device comes over the counter, the merchant always makes a sale. So if the buyer is using a credit card, or cash, or check, if they are using their phone, or if they are using Bitcoin, we should always make the sale.
Bitcoin is a dream for a lot of mathematicians and folks who are into cryptography, because it represents a truly anonymous currency that can’t be traced, and is free. So I think there does need to be a digital equivalent to cash. I think it needs to be free, and I do think it needs to be anonymous.
Kirkpatrick: Free in what sense? What do you mean “free”?
Dorsey: Not paying to exchange it. So cash is free to exchange. It does have real cost. You do have to pay to account for it. You do have to pay when you lose it. Because it can be lost, it can be stolen. So there’s a real cost to cash, and there’s also a cost of losing a sale because you don’t accept something else.
Kirkpatrick: Go back to what you were saying. People are saying they really believe we need it. You believe we need it?
Dorsey: Yes, I think we need it. It is important to our democracy. Anonymity is important to our democracy. We value anonymous communication in the form of whistle‑blowing, which I think is a really important checkpoint to our government and to the corporations existing in this nation, the people. And, you know, currency is another form of a vote. So we need to be able to replicate a paper‑based currency in a big way, and Bitcoin is a potential answer. It’s gotten a lot of bad press because of a lot of negative uses. But it may mature; it may not be the one, but there may be one eventually.
Kirkpatrick: Have you made any Bitcoin investments personally?
Kirkpatrick: A lot of your friends have?
Dorsey: No, I don’t think so.
Kirkpatrick: A lot of people out there have. Maybe they are not your friends
George: Hi. My name is Gabbie George; I’m with Team Detroit. And I am really intrigued by the power of the hashtag as a way of capturing trending topics and current events, and I was just wondering if you had any good stories about how the hashtag has influenced or embellished any sort of social events in society, or positive examples of change.
Dorsey: Yeah. One of the most amazing things about Twitter is it’s a true platform where people can come and build their own products on top of, and including their own social products. And the “at user name” and the hashtag is not something we thought of or was invented at the company. It actually came from the people using the service. And the hashtag came out of one guy’s desire, Chris Messina’s desire to tag his content so that he could categorize his content.
And we noticed that this was happening and we made it a little bit easier in that any time you click on a hashtag, it starts to search. So what this means is, any time you include a hashtag in your tweet, you will also be included if someone clicks on a hashtag in the search if everywhere else using the same hashtag.
So people do this at events. People do it for commercial reasons. People do it for conferences like this to ask questions in real time. There’s so many examples of the power of that just simple linking. But I think the true power of it is, you know, people have standardized around one format. It’s readable by people. It’s not something that was meant for computers. It’s simple, and it works everywhere. And you are seeing it in more and more technologies. Instagram adopted it, and a few other companies as they built out their social networks are adopting it as well. But it’s a way to index immediately into a topic.
George: It’s almost like the People’s Choice for current events on Twitter.
Dorsey: You should be in marketing.
Kirkpatrick: What do you think about the fact that Facebook adopted it?
Dorsey: Not a fan, don’t like it.
Kirkpatrick: I’m not surprised. We have time for one or two more quick questions, not too much more time, though.
Baker: Mine is quick. My name is Greg Baker; I’m with Quicken Loans, and I have a question for Mr. Moloney.
You mentioned that you have a 13‑year‑old daughter. Why, when you have an absolute expert in social marketing sitting in your own house, have you not turned around and said, “Hey, how do I use Twitter? How do I use Facebook? How do I use Instagram?”
Moloney: I have her out selling in the streets, so she’s my marketer.
Baker: You could have all your specials tweeted, everything.
Moloney: That was good. She’s in training too.
Davis: This question is to Jack again.
Kirkpatrick: Identify yourself. What’s your name?
Davis: I’m Brian Davis from Bamboo, Detroit. We are a co‑worker downtown. I’m sorry for not introducing myself.
Jack, with all the big data you are collecting on businesses, is it possible you might begin to share that big data with small businesses? Hypothetically, if I owned a specialty ice cream shop, I could see like the competitive pricing of what is going on in my area or maybe even like locations of other ice cream shops around?
Kirkpatrick: Good question.
Dorsey: Yeah, we have a start to that. The only thing we want to do with all the data that is created that people use when transacted at Square is to give it back to merchants in order to grow their business. There is a merchant in St. Louis who was closing his doors at 4 p.m. and noticed that all these people were coming in from 3:40 to 4 p.m. and he decided to stay open an hour later, and that next week increased his revenue. So there’s little bits of data that we can give back to merchants in a very simple way that enable them to make decisions. So we have an analytics product that can—you just slide over and you can see in real time what your most popular item is, what your busiest day is, what happens when it rains, any trends. If you move the biscotti jar to the other side of the store, what does that do to biscotti sales.
So this is something we have taken for granted on the Web in e‑commerce. We have all this data. We know when people visit a page. We know when people click a link. We know when people engage deeper than the click. But offline, which still amounts to 94 percent of commerce in the world, does not have that. It doesn’t have those metrics. And you have to pay inordinate amounts of money to get access to that. You know, the typical point of sale to answer that question is around 15,000 to 20,000 dollars. So we offer it for free, and we want to make it better and better so you can do things like, I am opening a cafe, what is the average price of a cappuccino?
And why is that meaningful? Because you are going to do that anyway if you are going to open a cafe. You will visit all the other cafes. Again, technology makes it faster and enables more people to participate. But you could say, okay, I want to compete on price, or I want to compete on the fact it is cappuccino, or I want to compete on quality and have something more expensive. And you make the choice, you make the decision, but you need to have that data to do it, and that is exactly what we want to provide all those sellers.
Davis: Thank you.
Kelly: What about cities or large investors, people who are trying to understand the market? Where are there new businesses? How well are they doing? If you think about a place like Detroit and people are wanting to open a business and they want to know how much they could potentially make, you know, what is the market price, all this kind of information, would—
Dorsey: We want to do more of that, because it is really interesting data. In Twitter-sense, you can see a map of everything that is happening in the world, in the way the people are communicating and acting and questioning.
In Square, you actually see all the transactions. There are some events that we have done some really cool things with, like the Super Bowl. What is the Super Bowl’s impact on the local economy and the local small business economy? We saw this massive lift around the Super Bowl, which also stayed as the Super Bowl left the city. So as we find these insights, and as we think it can help the city and it can help these governments make policy decisions, we’re happy to show them.
Kirkpatrick: Cool. Jack’s got to go. We have one last question; hope it will be quick and we will wrap, but this has been a fantastic discussion.
Zhang: My name is Kevin Zhang. I work in a company in downtown Detroit here called Fontinalis Partners. Question is for Jack.
A lot of entrepreneurs experience a lot of failure before they reach success. That is not something talked about often. Can you tell a little bit more about some of your failures and what you learned from it?
Dorsey: That is exactly what we are talking about tonight, mistakes entrepreneurs make. That is one of the things I love about this country is the willingness to make mistakes, to get back up and take big risks. I have made tons. The one that really helped me build Square is the realization that we had no instrumentation, we had no data and/or analytics around what our technology or what our business was doing at Twitter for the very early days of the company. And it meant that we speculated a lot, and we had a lot of, you know, debates; and people were telling people what they thought instead of being able to show what was actually happening. And once you are able to show what’s actually happening, it’s a very simple conversation. You know exactly what needs to be fixed, you go fix it, and then you move on.
So the first line of code I wrote for Square, and the first thing we really did for the company, is really a discipline around measuring how we’re doing, both from a quantitative and also qualitative standpoint. So we set up all these structures in the company, of course looking at the metrics of the system, of course looking at our numbers and what we’re processing. But also, you know, we have this practice in the company of anyone who goes into a meeting, someone has to take notes in that meeting, and they’re sent to an alias, which goes out to the entire company. So everyone in the company can see what happened in every single meeting in the company. And any time we have a board meeting, we show the entire board deck to the entire company.
So we built the company around transparency, because we believe if everyone has access to this data about the company, they may have different perspectives about the company that may change the company in a positive way. So you allow for all the moments of serendipity. So the transparency in the sense of how we’re doing as a company is one of the things I learned the most from going from Twitter to Square.
Kirkpatrick: Unfortunately, we need to wrap. It’s been a great day; it’s been a great panel. Thank you, everybody.