Does Twitter owe its success to SXSW? That may be a stretch but Twitter can thank the tech and media savvy throngs at SXSW for tripling their traffic at the 2006 event from 20,000 to 60,000 tweets a day. Eight years later and 288 million users later, that number averages a half billion tweets per day. What has surprised Twitter founder Jack Dorsey the most about how people use his creation? Hear the answer to that and much more on this edition of The Business.
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Brian Kenny: Our guest today is Jack Dorsey, cofounder of Twitter and Square. He’s joining us from the Bay Area, where he goes by the handle @Jack. I guess that’s one of the benefits of creating the platform Jack, is that none of the handles are taken yet, and you get to pick whatever you want, right?
Jack Dorsey: Yeah, I’ve never been so lucky with my name, which is a pretty common one.
BK: We’re going to cover a lot of ground today. I’d like to talk about Twitter and Square, but I think our listeners would also love to hear your insights about entrepreneurship, the challenges of leading a startup, and the kind of things that you’ve learned along the way and we’ll try to do it all in 15 minutes to be consistent and concise, which is your philosophy as I understand it.
JD: It is.
BK: So, in March of 1876, Alexander Bell made the first phone call, and he said, “Mr. Watson, come here. I want to see you.” Then 130 years later, in March, also of 2006, you sent the first Tweet, “Just setting up my Twitter.” And both of those have now become pretty famous entries, right? Do you think about that at all as you sent your first Twitter?
JD: You know, I haven’t always made the connection, but it was a magic moment at the company when you—we were working on the system for about two weeks, and when you first get to use it, and you first get to feel it, it just feels like electricity, and it’s something that kind of makes all the hard work worth it in an instant.
BK: You got involved in IT at a really young age, right? You started at 13. Is that when you wrote your first program?
JD: My father was an engineer. We had a lot of solder irons and circuit boards around our house, and I was always pretty interested in taking things apart. We got our first computer when I was ten, an IBM PCjr and a Macintosh, and I was enthralled by both of them, mainly the ability to just change what they do. So I learned how to program in BASIC, and I played with HyperCard, and little by little I got better and better at newer programming languages like C.
BK: Where did the idea for Twitter come from? I’m sure you’ve told this story a thousand times, but I think people are still not really certain where the idea originated.
JD: For my part, I was always obsessed and interested in maps and how cities work. I used to study them when I was a kid, and just look at them and wonder what was happening in a particular part of a city, or a region, or around the block. What if you could actually see that live? My parents had a CB radio and a police scanner, and you would actually hear what was happening in the city from taxi cabs to fire trucks to police cars, ambulances, and they would always report where they were and what they were doing, so you could actually listen to a police car saying that something is happening at 5th and Broadway. We’re investigating. We’re going over to 6th and John, and we’ll be there in 15 minutes. If you take those two end points, you could actually plot them. You could point all the activity in a map that’s actually happening in the city, and I just thought that idea was so fascinating. I taught myself as much programming as necessary to actually make that work on my computer. Little by little, I got more of these visualizations of the city, and I got into dispatch when I was about 17, and eventually moved to New York and worked for the biggest dispatch firm in the world.
BK: Bike dispatching; is that right?
JD: Bike dispatch and black cars and general delivery. Little by little, I had all this information about what was actually happening in New York City, which was an amazing feeling just to see the city unfold live right before my eyes. It took a while to realize that I was missing a big part of the city, which were the people. Where were they? What were they doing? What if you could build a technology to actually enable them to just simply report where they were and what they were doing, what’s happening around them? I tried to make that system in 2001 with my first Blackberry, which was a Blackberry 950 e-mail pager, and it just wasn’t the right time, not the right technology. In 2006, SMS started getting really big in the United States. I had a great team around me. I was working at a company called Odeo, which was a podcasting company. Twitter was never started as a company. It was started as an idea that grew out of a failed company, a failed startup. We built the system that allowed people just to report what they were doing and what was happening around them from their mobile phone, from SMS. We built it in two weeks and then sent that first tweet, and it took off.
BK: That’s amazing. Did you ever imagine that it would evolve the way that it has?
BK: What’s been, in your experience, the most amazing thing that somebody has done with Twitter that surprised you the most?
JD: I mean it really surprises me every day from—you know, I think the first real catalyzing moment for me was when I was in the office on a Saturday, and my phone buzzed, and it was a tweet, and it said simply, “Earthquake.” Immediately after that I actually felt the tremors in San Francisco. The phone kept buzzing, and there was earthquake, earthquake, earthquake. I think it’s epicentered out of Berkeley. I think it’s epicentered out of Richmond. I think it’s a 4.7. Then very, very quickly, that speculation and just that shared experience went down to fact when the USGS reported that it was a 3.7 epicentered out of Richmond. What was amazing about that is I was experiencing something in the world, and immediately I felt comforted, because it was obvious that other people were experiencing the same thing. I thought, wow, the world is so small. You can actually—just by having that shared sensation that shared experience, you all feel like you’re all in this together.
BK: Tell us a little bit about Square. What’s the sort of backstory to Square, and what are you hoping its impact will be?
JD: Well, Square is seen as a little tiny “dongle” that you plug into a mobile phone to enable you to accept credit cards, and a lot of people just stop there when they consider what we’re doing. What was interesting about what we did five years ago when we built the company and built the product was my cofounder Jim McKelvey is a glass artist, and he was trying to sell a piece of glass, and someone wanted to us their credit card to pay for it, and he couldn’t accept it. He never went to the bank to get a merchant account. It was just too expensive and too complicated to even think about. He just wanted to sell his piece of glass art. What we recognized was there was this real opportunity in the fact that people were losing sales because they couldn’t accept a device that more and more people had in their pocket, which was a plastic card, whether it be a credit card, a debit card, or a prepaid card. The most critical thing we did immediately was just enable them to accept every sale. As we’ve grown and as we’ve watched our sellers over the past five years, we’ve realized it’s not just important to be able to accept that form of payment, but actually account for one’s entire business, actually build tools to make the running of the business even easier. Little by little we’ve added more features and services that address any business’s top three issues, no matter how big you are. You could be a Facebook or a Twitter, or even a flower cart, which is just operated by one person. You need three things fundamentally. Number one is access to capital. You need to have money to grow your business and to start your business. Number two is you need to find customers, and number three is you need to retain those customers. That’s it. So we see our mission and our role as providing solutions for all three of those, and we’ve launched products over the five years to do just that.
BK: Both of these ideas sprung out of your observations, and your cofounder’s observations of a felt need, something that you could provide that didn’t exist that would help people. At what point in that process does the idea of how are we going to make money off this come into it?
JD: It’s extremely important because money and revenue is the oxygen to actually continue growing the business, and you need that oxygen to live. It’s not something that we think about every single day. I don’t think about all the times that I’m breathing. I know that it’s necessary to survival. I know it’s necessary to sustaining what I want to do in the world, so we see making money and revenue in the same way. But at the same time, we’re making a bet constantly with ourselves that in order to have an opportunity to really grow and sustain, we need to build the network. You take investment in order to have the time to make that bet, to hold your breath a little bit while you build that network out, and then that oxygen comes in to sustain the company.
BK: How did you sort of make the journey from being a programmer to being a manager to being a leader? What was that journey like for you?
JD: The interesting thing about entrepreneurship to me is a lot of people think about that word, and they assume that it means to start a business. The definition of entrepreneurship is actually taking on significant risk, usually financial, in order to build something. That means that anyone can really take on an entrepreneurial attitude. An entrepreneur does not necessarily create a business. It’s just a very—it’s a very bold attitude of taking on risk because you really want to see something in the world. What that means is that when you have a clear vision of what you want to see in the world and what you want to use in the world, you do whatever it takes to make it real, right? For me, to make that idea real of being able to see the city around me through police cars and ambulances and taxi cabs, I had to learn how to program. The next step around that was encouraging and attracting other programmers to help me. Suddenly you have a team, and you need to coordinate that team. Then someone has to actually be accountable to the decisions the team makes, and that leads into more leadership, and that leads into what we call management. So little by little, you attack the next most critical thing, and you learn the next most critical thing to make the idea thrive and to sustain what you’re building. It’s something that—you know, I didn’t wake up thinking I really want to build a business. I really want to be a CEO. I really want to found companies or be a leader. I woke up thinking I want to see this in the world, and what do I need to learn, and what do I need to do to make it real? And not just make it real, to make it thrive and make it something that everyone in the world could potentially use. That requires scale, and that requires thinking about teams. The most efficient means of doing that today, in our day and age, is building a company around it, so that’s what I learned how to do.
BK: Are there things that you’re doing differently at Square than you did at Twitter just based on your experiences there? There were some management challenges at Twitter; those have been written about. Has that sort of changed your approach in how you manage things at Square?
JD: I mean it goes back to learning around the decisions you make, but absolutely. When we started Square, one of the first things I built and wrote in the company was around analytics, instrumentation. I wrote some code to actually show everything that was happening with our service and more in the company. The reason why is because in the early days of Twitter we just did not put an emphasis on that. We were flying blind, and we were flying the system blind. When you don’t know how fast you’re going or how high you are, you will crash. We saw so many crashes in the early days of Twitter, because we just did not have instrumentation, and it led to a lot of speculation around what the problem was and how to fix it. That led to a lot of arguments and a lot of miscommunication, and a lot of contention. Just by showing what we’re doing constantly and pointing back to the data and pointing back to how things are going, it eases communication, and it eases the work environment, and that’s been critical within Square, given that we are moving people’s money around. If we go down, if we’re not available, if we’re confusing, we’re losing their money, and we’re losing them business, and we just won’t allow ourselves to do that.
BK: Technology is advancing so fast these days that it’s in many ways outpacing the ability of governments to think about policy around technology. Certainly when you think about data security, that’s an issue that everybody is grappling with. How do you think about the role of government and how involved it should or shouldn’t be in sort of managing and putting policy around technology and how we use technology?
JD: Technology—and that’s a word that becomes this very abstract concept. Ultimately to me it means a tool, a very simple tool that saves people time and allows them to work more efficiently and gives them time back to focus on what’s most meaningful. I think the majority of technologies today, and the majority of tools, point to a world that wants to be more global and more unified, and closer and faster. We see it in communication, and we see it in commerce. I think it’s the role of government to make sure that we’re balancing those desires with the practicalities of the day and encouraging more positive motion forward.
BK: I saw that you tweeted to the president of Iran when he first signed onto Twitter asking him whether or not people in his country could read his tweets. Did he respond to you?
JD: He did, and it was another one of those magic moments when the boundaries that we’ve put up in the world just eroded. I was thrilled and humbled to be able to even ask that question, and to get a response. He said he’s working on it. There’s a lot to untie there, and there’s a lot to move, but that is the intention. It’s up to the people of his nation and the world to hold him accountable to moving that forward.
BK: Jack Dorsey, thanks so much for joining us today. We hope you’ll tweet about this.
JD: I will. Thank you.
Not long after we spoke with Jack Dorsey, he was jetting off to Paris to lunch with Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, the chairman of Kingdom Holding Company. The Prince’s interest in Twitter is reportedly worth about $1.2 billion, after an initial investment of $300 million. (Source: www.arabianbusiness.com)
A bit of Twitter trivia: The company that has the most Twitter followers? YouTube (@youtube). The musician with the most followers is Katy Perry (@katyperry), with 50.2 million. Don't dismay, though, the average Twitter user has about 27 followers. (Source: blog.socialcentiv.com)
“The Business” is an official production of the Harvard Business School. We publish twice monthly, and you can find all interviews at www.hbs.edu/thebusiness. Our next interview, which will air on Friday, September 12, is with HBS faculty member Linda Hill about the skills necessary to lead innovation. Subscribe to “The Business” on iTunesU or SoundCloud, and join the conversation on Twitter by posting your comments and questions at #thebusiness.