Square founder and CEO Jack Dorsey credits his mother and father with teaching him about entrepreneurship. But it was his mother’s ambivalence about turning her business into something big that really taught him a valuable lesson about individual values and goals.
Dorsey — also the co-founder and CEO of Twitter — spoke about the founding of his payments company on Tuesday at an event in Long Island City, N.Y. The event was hosted by Goldman Sachs in celebration of its 10,000 Small Businesses program, which offers support and financing to promising small companies. Donning a long-sleeved pullover and jeans, Dorsey was joined by other prominent entrepreneurs, most notably Warren Buffett, CEO of Berkshire Hathaway, and Michael Bloomberg, former mayor of New York City and founder of financial information company Bloomberg. Also on stage was Goldman Sachs chairman and CEO Lloyd Blankfein.
“Both my mother and father were small-business owners in St. Louis,” said Dorsey. His father owned a pizza restaurant and his mother owned a coffee shop; he and his two brothers worked in the former as youngsters.
Dorsey said he was frustrated by his mother’s desire to stay small and local. “I thought, ‘Why can’t we be like Starbucks?’ And she said that just wasn’t important to her.”
Instead, his mother believed it was more important for her to give her children jobs, and to provide a place in the community, where people could come together and have conversations. According to Dorsey, that perspective helped him start Square, as he ultimately wanted to help business owners focus on what was most meaningful to them. He said he understood that many business owners were prevented from fully participating in the economy because of the expense associated with setting up merchant accounts to accept credit cards.
“We saw an opportunity where people were left out of the economy,” he said.
Founded in 2009, Square is perhaps best known for creating a small credit-card reader that plugs into a smartphone or tablet and enables merchants to take payments. The company, which now has numerous competitors including Intuit and Paypal, has since moved into Android and iOS apps that also facilitate merchant payments on mobile devices.
Dorsey said Square’s own technology has given it an eagle’s eye view into its customers’ day-to-day operations and selling patterns, which in turn has sparked another business opportunity, in small-business lending.
While Square started out by offering merchants cash advances through its Square Capital subsidiary starting in 2014, the company announced in March it planned to discontinue those, and was entering the online lending world, offering its customers loans which they pay back as a percentage of sales. To date, Square has extended $400 million in financing to 70,000 merchants, according to its most recent annual filing with the Securities and Exchange Commission.
Square went public in late 2015.