Jack Dorsey of Twitter, Square

Jack had some help. None of us are truly alone on any journey. 

We Get By With Some Help From Our Friends

The actual research for the electronic design that was to become the Square payment card reader was tasked to co-founder Jim McKelvey, a Glass Artist and small business owner in early 2009. Jim was a friend of Jack and was one of the reasons he formed the payment startup.

An Acorn Of An Idea Was Planted

Jack and Tristan O’Tierney worked on prototypes of the iOS app and some of the conceptual designs on what would eventually become Square payment card reader. The conceptual designs were in the shape of an acorn because the name of the company was to be Squirrel Payments. 

The name had already been in use by a POS company and a few payment companies over the years so it had to be discarded. A classic dictionary look up yielded Square as it was quite close to Squirrel in the list and had an abstract quality that Jack liked. Sadly the amazing and epic logo designed by Robert Andersen was never used.

It took Jack and Tristan about a month to cobble together a working software prototype. Jack worked on the back-end server, Tristan on the iPhone app. 

They tried to see the limits to the technology they were using and had some great fun with “I wonder what it would be like” ideas. Of course some ideas just could not work and were wacky (e.g.: no apps for this generation of iPods).

Rapid Software Devlopment

The early software was completed in a rather rapid fashion. Tristan is not only an amazing iOS programmer he is well adapted to very fast turnaround. Jack’s backend software development was also quite stellar and was ready for testing. All of this took about 30 days. 

There was a problem, the payment card reader design was not finalized. The 3.5mm audio jack was selected early on as the primary method for a number of reasons. One of the primary reasons was to keep the cost of the actual device very low as the plan was to give them away for free. The first versions were designed to not require a battery and used the “Hall Effect” to power the system. Not using a battery saved a great deal of money but it also caused card read errors and an epic conflict with a university professor.

The Greatest Of Ideas Always Have Many Fathers

Jim was not only an undergraduate at Washington University, he later became an instructor at its art school. His dad was also on the faculty of the University. While searching for a solution for an inexpensive payment card reader Jim contacted Bob Morley [1], an associate professor of electrical engineering at the University. 

It is at this point that the hardware story splits into at least two versions. The version from Jim is that he came to Bob with the design and asked for his assistance in creating a workable electronic prototype. Professor Morley claims he came up with the concept, designed it, and assembled the first working prototype for it. He also filed and was granted a patent, note the acorn card reader in the patent images [2]:

ABSTRACT
A card reader device for reading a card having data stored on a magnetic stripe incorporated into the card is disclosed in which the card reader device comprises a read head for passing a magnetic stripe of a card by to read data stored on a magnetic stripe and for producing a signal indicative of data stored on a magnetic stripe, a signal setting device for setting an amplitude of the signal indicative of data stored on a magnetic stripe, and an output jack adapted to be inserted into a microphone input associated with a cell phone for providing the signal indicative of data stored on a magnetic stripe to a cell phone. Data stored on the card and sensed by the card reader device is decoded by components such as a microphone amplifier, an analog to digital converter, and a microprocessor already resident in a cell phone.

The First Square Reader Was Rectangular 

Professor Morley had been researching magnetic fingerprinting as a way to protect against credit card fraud and claims he already had the idea of the payment card reader before Jim contacted him. Professor Morley does concede that the mechanical design comes from Jim, but the technology for scanning the card’s magnetic stripe and converting it into an audio signal is his original idea and filed a patent for it. Professor Morley’s design used an off the shelf USB based Magtek card reader fitted with a 3.5mm male audio plug. This device undisputedly was the testing device for the first iteration of the Square system.

It Gets Ugly

Square has stated in 2009 that they were using a different electronic design then the one the Professor Morley had patented and asserted that the design was Jim’s with no input for this professor of electronic engineering. The difference of opinion has boiled for a number of years and has finally motived Professor Morley to file a lawsuit against Square in early 2014 [3]:

“The publicized origin story of Square, Inc. is a fabrication, the business now known as Square was not created solely by Jack Dorsey and James McKelvey. It was Professor Robert Morley -- and Dr. Morley alone -- who invented the Square card reader, and Dr. Morley co-invented the corresponding magnetic stripe decoding algorithms of the Square app."

From Idea To Execution 

In any case in late 2012 Square moved to a completely different design using battery powered active electronics powering a dedicated microprocessor and triple DES encryption [4]. In late 2013 they iterated to and even deeper refinement. 

Just about six months in to the project that became Square, and many prototypes later, a CNC machined proof of design prototype was created. The first prototype took on the iconic shape of even the latest Square payment card readers. It took some side iterations where it became more complex. The EMV rules that will likely become federal law will forever change Square and the Square card reader.

The Creation Story Is Always Idealized And It Should Be

Did it really just take Jack one month to do this? No and yes. The basic premise, iOS app, back end server, payment gateway connections and useable but not visually appealing card reader was in place. The next few months and years have been a grand refining of this basic idea. However in the early days, you would not really recognize the Square system we know today, just a flash of the idea. 

Jack’s Determination Seeds An Entire Forest

The basic idea and the early Square business plan was nearly flawless and rapidly took hold. Jack, Tristan, Jim and Professor Morley did amazing work. In the process they invented a new payment card sector, the Micro Merchant. 

This amazing journey started from an elegantly beautiful idea, really fittingly should have its roots in the simple acorn. For this seed has given rise to a multi billion dollar industry. With shoots and branches that are perhaps less then stellar. It has given rise to an entire forest ecosystem where now there are many trees poetically reaching to new heights. This has produced a tremendous amount of competition for Square. These competitive forces have changed the laser focus of Square as hundreds of competing products permeate the market.

Jack with his great focus, determination and leadership gave rise to this all. No matter how the long journey plays out, history will remember the way Square rewrote a page in the book of payments. And a great deal of this was in Jack’s hands.

Jack Dorsey outlines three core takeaways from his experiences building and launching Twitter – and more recently – Square, a simple payment utility. 1) Draw: get your idea out of your head and share it, 2) Luck: assess when the time (and the market) is right to execute your idea, 3) Iterate: take in the feedback, be a rigorous editor, and refine your idea.

And I thought about this a lot, and there were many many sleepless nights I think everyone in this room has felt the verge of an idea and just how it gets you a little bit excited and crazy and you can't sleep and you're on a white board or you're drawing like crazy. But that's one of the most important things to start doing: to start drawing your idea; to start getting it out of your head and seeing it from a completely different perspective--and more importantly, sharing it with others.

One of the biggest lessons that I've learned throughout my career is how important the work is--how important not just the end product is, but the actual craft--doing the work, inventing within the work.