Transcripts For CSPAN2 Jack Dorsey On Financial Services Innovation 20170830

He saw the introductory video. You do have an idea but i love to do a state of the union on how square is doing and usually had a pretty positive Quarterly Earnings report, your stock is up 96 yearoveryear and are starting to make money on things like peer to peer payments. How much are you processing the monthly . Monthly, i dont believe we give up those numbers you can give it out now if you like to i could but i wont. [laughter] since you started square nearly a decade ago, nine years ago, what has been the most significant or surprising change you have seen happen in the business . In our business or the industry . Both. When we started we were having an offsite today and tomorrow and weve been discussing a lot of the companys history and where we are going and one of the things that we started with was we were trying to solve our competitors problem which was he cannot accept credit card. We got fixated on building little device that you can plugin to his smart phone so you can accept credit cards and it generally works for him and resonate with him but we wanted to see if it resonated with other people as well. We went down, i was living in a city apartment in San Francisco and we went down and there was a power court under my apartment and we noticed she wasnt accepting credit cards and we asked her do you want to accept credit cards and she said no. It is to come gated and too expensive and i hate them. We said okay. We came back the next day, we are very persistent and said what about today . We did this and we made it work differently and would you accept credit cards today. She said no. I tried to accept credit cards i went to a bank and they denied me and i dont want to mess with this. Leave me alone. We went back out the next day and we asked her again and she said no. Stop asking me. We went back to portland. This time we just watched. We watched what she was doing and we saw a guy come up and he wanted to buy flowers and he handed over a credit card and she said i dont accept that but theres an atm around the corner and you can go get cash. We watched him walk away and he went around the corner and we waited for five minutes and then we waited for ten minutes and 15 minutes. The guide never came back in my cofounder asked a question do you want to make a sale . She said yes. I will accept credit cards now. That was the big insight for us. It wasnt that we were building a credit card machine but it was that we were enabling someone to participate in the economy in the first place. When we change the mindset about helping someone to make the sale instead of accepting credit cards that only we could do so many Different Things to help them make a sale. Square capital to give them alone of 6000 to help make more sales. Then the universe was so much bigger than we originally thought it was. That was probably the Biggest Surprise for us and the biggest joy in the business was those moments when we realized that it wasnt just this mechanical thing that had so much more potential. I guess in the industry i imagine a bunch of you that when i was a kid i spent a lot of time on use net and i really liked the subs and i liked cyberpunk. One of the dreams was visual currencdigitalcurrency. It felt like such a faraway reality faraway dream. The fact that we have seen not just in adoption of it but one of the most seminal works in Computer Science in the decade and a bit coin white paper is amazing and its amazing that we have a technology now that can once again distribute and decentralize something fundamental and in this particular case, a ledger in the extension of the trust. That is the biggest shift that impacts our business or industry and a big part of how we live together and Work Together and trade together. Yeah, im excited about learning from it first and foremost in figuring how to do what i think we did wellin the early days of square which was help people access the Financial System in the first place. We were talking with merchants who werent even able to participate. They were being tonight. Only 30 of people who applied to accept credit cards actually got to the process. We took that number up to 99 . Being able to accept the form of payment that people wanted to use meant you got to participate. Since that day asked the question again and again how can we continue to build simple tools that empower people and the economy to make them more. Contributors. We will not fix everything but we will contribute a small bit and that will be meaningful back i remember interviewing you back in the very early days in the wall street journal and its interesting because the proposition at the time was on the merchant side now that we accept payment and a making a sale and on the consumer side there was still a little bit of that what happens if you show up to the business and dont have the cash and lets make it and he had this out for a while, square wallet where its this ambient recognition and someone was in the store and all of that. Now in this short amount of time, literally within almost a decade, people are talking about peer to peer as a legitimate business. I want to talk more about going as we get to it. I love talking about peer to peer so i love to talk about that first. You said you now starting to make money off of significant is that . Well, so, i guess, the really hard thing for us in the early days we werent our customer. What i mean by that is we were not sellers. We are not power sellers were not copied sellers and we dont own a restaurant. When you are building and you are your customer in your building herself its pretty evident what you need to do next and what bothers you and when youre not your customer you have to ask a lot of questions and one of the things was really important to us was the realization that while we are not our customer we are the customer of our customer so we love places like coffee and blue bottle and we want to go up to the counter and were not there to pay, were not there to have a transaction but to get a copy and drink it. So how do we take that away completely . The amazing thing about the business is the business inherently there. We get a transaction fee every single time someone cites a credit card so every time that we help the seller make a sale for help a seller grow our business grows and if our business grows we can more sellers grow, as well. But we can also as we grow take on things that we want to fix because we build the infrastructure. So square cash represents that where it was a desire that we wanted to build something for ourselves that we could use on a regular basis that was fixing a problem we are having in that problem being we wanted a very simple, open and fast way to send money to each other and that was it. There were certain solutions out there and we didnt love them because the amount of work would have to do to sign up, the speed that it took. Paypal western union, look at any way that you move money from one person to another. Paper cash. We wanted to make sending money as easy as me just telling you here is 5. When we first started we put pressure on ourselves how can i send you an email and cc were cash in the subject line i have 5 and the money is transferred just by sitting there in the. The challenge was how do we make it secure because email is inherently unsecure. Thats really made us rethink everything. If we can make that secure then we can take down some of the identity bearers and barriers that normal services have to go through. And we can make it feel like cash. Im just saying im giving you 5 by writing it out and that money is transferred automatically. The other thing is it has the network of email which is infinite. We started there and made it into an app but to get the concept of were going to make it feel easy, simple, three and fast. We have to now fear out how to support ourselves doing it. We have to figure out how to make it into a business. So theres a few things that we realized on the way. One is that people will pay to hurry things up so people will pay to get their access to their money instantly. Thats one thing that we offer both on the seller side and on the individual side. If you dont want to pay, it goes the next business day but if you do its instant. What a transferred to your bank accounts. We also get paid if we enable people to spend it in more places or spend it in different ways. We added a place a stored value account where you can enter money and a virtual card on top of it so you can spend money with it and every time the card is used we get paid by by the consumer but by the banks and Financial Networks. Theres no tax to the individual. The third way is if you dont have a bank account where you want to fund your square account through a credit card we take a transaction fee for that as well. All three of those have added up to contributing a pretty meaningful that were proud of and that we can extend. We have diversity as well. If one fails or diminishes in some way and we have two more to lean on. We wanted to start this project as he did was square with we need to build the network as fast as possible and then we will figure out how to make it work and make it work means figuring out how to fund it and give it its own oxygen. With square that decision was 2. 7 and we priced credit card acceptance at 2. 75 and put it in perspective most merchants get charged anywhere from 1. 6927 called the interchange and that price is not dependent on the merchants but dependence on the card the buyer is using. Oftentimes the rewards that you have on your card the merchant is subsidizing those and they had no idea usually. We decided thats way too complex and no one understands it and its pushing people out of accepting credit cards in the first place so lets simplify it down to one price and then be 2. 75 . In making that decision we knew that for the next two years if not three years we would be losing a lot of money. We that was extra special. We could be losing so much money that we go out of business but we believe in ourselves enough and we believed in the size of the network and we believed that we can make it work and we did. Is that the way you see peer to peer in the sense that its a Capital Investment first and it wont make money at first but eventually it will . I guess im trying to determine whether to look at Something Like what youre doing with peertopeer payments with others are doing for the gateway into other services that the other services are still more important or if you see peer to peer something that will eventually evolve and evolve into the way that people bank . I think peer to peer is pretty fundamental. I think being able to just as easily send money to you or pull out my card and use that money at a coffee store for dinner and those two things are linked and the simpler we can make that so that people dont have to think about different systems the more it will be utilized. I dont see it as a gateway necessarily but this is an annoyance that we can fix and we can make it easier and i think we can make more fairer and we can make more useful and build utility around. It wasnt ever a question of can we monetize this something that one cant monetize and answers the question of where can we add value. There are things that people value and speed is one of them. And networks, value utilizing the network and building risk, as well. We get paid on that site to. I will say square is offering right now you have alone is part of your business you are allowing people to hold balances within its where theyre able to make deposits within square that are able to pay for things and with square you now have a typical prepaid card that your shipping to people. I have one. I know where youre going with this. A lot of people probably know im going this. Basically in your fdi the insured. No,. No were not. Your Bank Partners are. Aside from that and aside from offering interest in some of the balances that are being held, you are getting closer and closer to a bank. Is square going to become a bank . We have a lot of peers in our industry that went out and said were here to kill the Banking Industry in the Financial Networks and cash is a concept and we have always taken a different mindset. Weve taken more of a Partnership Mindset and we believe thats what they have is useful. Financial system is useful. It is not accessible. And its not always fair and is often obscure which hides a lot of information which encourages negative behaviors which take fees from people and that some of that is probably by design. We saw that and we wanted to make sure that we were building something that was fair but extended the reach of the Financial Network to as many people as possible and enabled as many people as possible to participate. We dont need to become a bank to save a trip to the bank. We saved a trip to the bank the first time when we said you dont need to go to the bank to start to get a merchant account and you can go to the upstart and downloaded an app and you dont need to sign up for a merchant account but you put in your name, password and where we can ship your reader and you are done. That saved people having to go to a bank branch. The second trip we saved was with the Square Capital loan and whats interesting about this is we really thought we were competing with Financial Institutions for a while and we thought we are competing with lending club and on deck and all these people who are lending and then we realized that a bank cant actually make money from a 6000 loan. Again, we looked at why what are we actually competing with when a merchant or seller need a 6000dollar loan are not going to banks where are they going. Is that the average amount of people are farming. That is the average. Where are they going perspective going to friends and family. Going to their friends and their parents and theyre asking for 6000 to start a business or grow the business and thats who we are competing with. We are competing with them going to a friend or family to get a bit of money, not too much because they dont want to get a bank and get a hundred thousand dollars and have that debt. They just want the right amount and that was the job that wasnt being served and wasnt being served well. We could do it because we had such a deep understanding of our seller and what they needed and when they needed it and we made it into an application process and an invite process. Square Capital Works just by you will get an email in your inbox saying do you want 6000 or do you want 10000 and you hit one button and its in your bank account the next ace you can use it in the way you pay back is every time you make a sale inside the credit card we take a little fee on the top from interest paid back automatically. We dont need to become a bank to do that spirit so its traditional from different from traditional banking and lending. I wonder if any of the Big Tech Companies you can be yourself and someone like apple or amazon and they already have this transactional nature with their customers and they have huge cash files theyve establish trust with their customers and people consider them to be primary commerce engines for them in their lives. You think its possible that in the next fiveten years will see any of these Big Tech Companies become things as we have traditionally known the . I think the definition of a bank will evolve rather than companies becoming for Tech Companies becoming more like banks. Things like Digital Currencies change it up as well when you dont have parties to control the currency or any of the gates that requires a new definition. Thinking started in the 1600s in florence and it hasnt evolved that much but the technology hasnt evolved that much. I do believe thats what we now has and have with the black chain is a step function that allows for a pretty dramatic evolution and that we need to study how this Impacts Society and how it impacts our business and our industry. And how it impacts the on banks, as well. How important is the un banked categories . I think right now and i saw something that extension or recently filled out a report a third of the world has no form of formal banking. The un banked population is huge and you sort of already are catering to the on banks but are you looking into expanding into other markets . I think theres a significant issue in the United States. Not just with the on banks but with the underserved and the under banked. So, when we started close to nine years ago we were reaching merchants who didnt have a lot of services from banks from being denied Services Like merchant accounts from banks because of their credit and the only instrument the bank had to that someone was a credit check in pico score and it wasnt a strong indicator of performance or risk tolerance for a seller so that was the first thing that we said were not sending people to. We need to figure out another way to bet identity and we also took on a different mindset that we would invite everyone in and watch and observe and found negativity we would ask them to leave versus no one gets in unless you pass the test. We changed that a bit and that was a big part of our success. We have seen underserved sellers and with square cash weve seen a lot of underserved individuals so we have evidence to show that people are coming onto square cash and their downloading the app and theyre using us as a primary spending device. In some cases theyre not even linking a bank account or credit card. They are coming to us and they have a stored value account in their press money from their parents or friends and we can issue them a physical card now and that is what they use. I do believe we have the potential reaching more of the underserved and the under banked as we get better and better at having an on boarding process that allows more people. I think it is pretty good right now. One of the things youll notice with square cash is that it doesnt require a password so we figured out to provide a secure network and also a spending instrument without requiring a password. That was because we started with that concept and i think its innovative and makes you feel faster and feel like paper cash. As we get newer technologies like the block chain in Digital Currency. That security goes up, speed potentially goes up and theres a lot more work to be done to get there but the trust also goes up. That is the most important thing in finance in moving money and to provide Financial Services is that people actually trust you. Trust comes from transparency comes from being honest and realizing its never too late to do the right thing and making sure that we are serving our customers in the right way. Those are the more important his will for us. We are focused on the un bank right now and primarily in the states, im getting upset. It is in the states because we feel theres a lot of work to do here and look at anti [inaudible] thats a huge innovation thats using a whole different different currency as well. As we look at a market like that where do we add value. It is not clear so we only want to be in places where were believe will have significant value and in the markets we are in. Japan is interesting because we entered the market when they didnt accept credit cards and without an in persons in interview with someone from the government so for us you had to meet a government agent in person and go through a whole interview. Just to set up a credit card. Just to accept them in the amazing thing about japan is theres a zero fraud. We deal with risk and fraud all the time in the United States and we had one case of merchant fraud in japan and it was out of merchant negligence and he realized it and apologized to us and he said can i pay you for my mistake and we said no, its okay, youre the one case in five years. What was the item purchased . I dont even remember but it was negligence on his part. It was being naive about something and it was the one time we ever saw fraud. We have a system to detect everything. We are good. Every market is really different and if we think we can add value to it we will but right now we think theres so much more to do here and in this country especially peertopeer. I get the sense that you are into block chain right now. You mentioned it a few times. Lets talk about block chain. First i will put you on the spot and ask you to define watching for people who may not have a full grasp of it. How many people appear feel that theyre familiar with watching and what it is . Okay. I was in your vote a few weeks ago when someone asked me to host a breakfast on block chain and i said yes and then said several hours before i could understand it. Why dont you illuminate us, please. One simple way to des one simple way to describe it is is a database. Like what weve seen with most interesting to these Technology Gets more empowering when he gets decentralized and when there are less gatekeepers and obviously last centers of control so our ability and capability to coordinate this machine all over the world is that understanding of the internet in the the internet in general. Our understanding of how to coordinate data is a cloud and our understanding of how to coordinate computing is cloud computing. The next big on block was this concept that is often thought of as accounting terms but can be applied to so much more which is a ledger and being able to distribute and decentralize a ledger enables proof of work and proof of one entity in an un trusted network and the same thing that weve created with the cloud and the internet. Assuming that hostile distrust of the network we can still account for transfer of value. Thats how we woumac define it and how do we think about implementing a ledger and how does that make our work more efficient and how we did distribute trust and we talk about shooting trust and identity theres so many more problems that we can help solve that are not just related to finance but finances is an obvious one. I saw a quote that if block chain is the internet then you might look at one of those specific crypto currencies like buts isuite as email is one version of something is occurring within the framework or one version of the transaction that is occurring and i understand i want to back up and talk about that point specifically. Are you invested in but g anng into you followed that p annt . One of the principals at square was we will help a seller make a sale and that means whatever form of payment comes across the counter whether digital will it enable them to accept. That brought her in our thinking. We wanted to help them accept cash and checks and they should never have to think what someone is using to pay them. We should just think about the sale of the buyers should never have to compromise what they want to use. Or what they have access to more importantly. When that first cwork ae out we build acceptance into our Online Stores and so that any one of our customers g anng to the online store could use but point to purchase. A lot of our sellers back then were selling candles and bags of coffee and incense and sture s d people were using but g anng to buy that sort of stuff. We saw two or three sales a day it was interesting because we got to figure out how to apply the technology and it wasnt enoudig to say we need to shis focus toward us. Recently one of the most surprising things that i have experienced in this space is that i am from st. Louis, missouri and i have a lot of friends and fwork aily who are t into technology and im effectively thichr it support when i go home. I fixed the printers back back up the iphones. And back up i got asked by the people i know and the people i met around st. Louis was you work in technology and by n. Rt and how do right by that point. I asked why do you want to fight between and they said i heaaid its a pretty fast and easy way to make money. Do you want to treat it like an investment and they said yes. What does it digital gold. The price of gold right now. Buying digital gold and how do i do that. Ilyve heaaid so mapph about that point and its amazing how main stream the brand is and id whs t about currency at all to these people ask me this question. It is an investment in one of the interesting things is the fact that one of the incentives that we wanted to put out there was that in teris o of incentivizing sailing on. Saving rather than sending and i thinoumacnt say he wanted to create a deflationary currency which meant that it had to be finite and it essentially always go up in value because it was a scarce resource. So, people have actually grabbed onto these concepts that it is like gold and its a weird Digital Asset that i dont want to buy but if i buy it it will have some ups and downs but the trends have generally been up and if i stick with it if i buy 10 or 25 or 100 worth i might make a litto use bit and then tt to me is fascinating. Do you agree that that p annt is a new kind of gold or crystal currency . I dont know if i have to to mree with it. That is how people are using it right now. The market is telling us that is what id whs been used for. Have i bought some yes. Write it like this yes how much have you boudigt mark. [laudigter] not as much as others that i have heaaid of have boudigt. Yes audigtemuch so, you know, i have thought about i bought some and could i spend between at this cgsy store and what would that be like and then you realize this thing is dending atpoinnary and itfasceeg anng up and if i buy that 3dollar coffee today two weeks later it comuch expensive coffee i have ever bought. Heres id whs interesting to thk because id whs been labeled by o many people as currency, which it does have overtime, some attributes around but thats not how people are using it today. I think thad whs a that iays the interesting question is what job is it serving for people today and the jck quick way to potentially make money. And it is cool and interesting and new and different from the stock market or other securities or gold which someone today in our ore sice site described as bold as iraq. Like a generatpoinn coming into knaccau it is. This is something they want to participate in and they donld an fully understand it but they want to and we should really ask more questions about that. What are the bigger implications of having a crypto currency out there in the wormac that is deflationary and it doesnt know porters or isnt governmentbacked or owned in any way and that aildone around the world can access and trade in a pretty secure way it seeis. These are things iy w thinking about the geopolitical occasio occasions. There are so manrti look at the attributes as to why one would want a digital curren a d and you woumac want t to be free and you would want it to be convenient, which it is with digital, and you woumac wat it to work anywhere which it is with global. Those are the thichee a gributes i womuch people do value anonymity as well, and for those who need to assume them in an honest passion or take action in that way it is important and those who not be the leading indicators. I generally believe i need technology that helhat b us see that we as assimilation are all in this together and the sooner we can remove the barriers that we put up to us which we have seen with medication and we have seen with media and we imaporne we will see with money in currency in our lifetime and if we remove these barriers and continue to recognize and acknowledge the were all in this together and repladolng really big problems and we need to focus on like the environment and like health and death and increasing our health span in essentially increasing our life knan and economic disparity and enabling people to participate more fully. Those three things are massive and reqis wre all of our attentn instead of all of these distractpoinns that we put in front of ourselves. You take out the distraction of having mmuch having one way to trade and thats to me the idealistic positive that i get excited about. To main, we need to make it practical and we need to build a cidges to get there but it is possible. Distractions like or. [laughter] for people on their. Want to aand about blocking for we move on from that which is theres been some discussion about whether boxing could be utilized in industries outside of finandolal services because thats been the primary focus or do you think that is possible . I saw a news rencyort the other day that china is essentially using watching to correct taxes and china has been working on its own Digital Currency for a while but thad whs still in financtogl services, in some wa, but what about media you mentpoinned the eon. Hange of meg and other things that could be as watching. I think there will be a bunch pegsle who say use it everywhere and solve every single problem with it in the swork ae way thae try to solve every single problem with Machine Learning and data sdolence and artifictol intelligence and we need to be more thoughtful. What are people strainmac ing wh and how dres the technolecoy hp them progress or how does it distract them. Back to our first merchants, she didnt struggle with accepting credit cards she strainmac ed wh missing the sale because she couldnt accept payments and those are the questpoinns you thinoumac aand if you aand theres a ton i think there was a rencyort not too long ago about spo ged by acquiring a black Chain Company to help with its distributed payoung. Rtremely complicated loyalty schedule that has to manage. Thats a super creative solutpon to a real problem that the company is currently with and its very mechanicabe f it can be fixed by this distributive ledger. I would approach it more from that. What are the fundamental problems that were struggling with that we can create more effidolendoles around and go frm there. So there will be people who will say were using b. [ing because blocking and youre saying it doesnt malun are there other companies. Are you . Know. I had to aand i think we will get to a . Questions momentarily but i do want to ask you a couple of questions about twi ger starting with how you are currently splitting your time. Ifascnow you can aand but you are running two companies concurrently, also on the b. Aid at disney which, you urreow im not chairman. [inaudible conversatpoinns] are you div ting your time evenly between square and twitter . Yeah, i think we often emphasize that i think its easy to go back to time in the early thouys and it in the early dayst was matter of time for me. It was what we do with the time and id whs astpuestpoinn of focd what we are spending our time on. So, its not about 50 of my time here andoseiv they are. Its our i my spending this one hour that i have in our we focused on the most important thing right now and if not, why are we even talcus ng about it. That mindset allows the whole lot more in my schedule and this is indencyendent of twi ger and ly i want to get to an answer of what is the most boring thing ridigt now that i need to be thinking about and spending my time on and talcus ng with peope about and if its not that then why in my spending any time on it or talcus ng about iway it gres back to the ultimate train of we only have so many hours in the day and we only have so many days on the planet and in my doing something that i feel pro . Meaningfmuch balance things. Its really understanding what re a priorities are and understanding what matters and what does it matter and having people around me tomre a what is up if they disagree with what i think matters and that shomuch work. Do you feel that square is doing very well right now and wanitter has ing stl unique social network and unique platfoi do and do you feel in se ways that you are prioritizing things differently because of how successpanl square has been lately and because of the struggles that twitter has . Fascnow, they both have diy,erent needs and phases and i will do whatever it takes to whatever i can to malue both lie up to their potential. The potential is great and thentialtle both enduring compas that i want to set up so they outlive me in the not dependent upon mn that is what im focused on and as individuals, as humans, sometimes were gg thng throudiga lot of really bki stuy, and sometimes were going its good and we certainly change the manspr. Ch and it puts things in focus and focusing on one thing doesnt mean that you completely lose sigion doesnt feel gated to me. And it drenicssp feel confident because it feels like we have a shared sense of what matters and as long as we have that, his lungs were holding each other accountable and will do the ridigt thing. You say that and h it seems s though there has been a lot of vitriol on twi ger in recent months, rigion some is coming from highprofile peach people in some is just hang network and it happened on social networks. You it seepaas youtle caudigt up that you should kick the president of twitter and some pelifle are saying that gres nduainst the freedom of speech and there has to be something i imnduine you are grang and i remember when you were interviewed last december you sa t itu stated and has your thincus ng evolves around that n recent months . Has my thinking et hs ones ot being complicated . More or less the. Look, we have to hold a sepeaice and were compaild and e have published rules and we have to hold every sinmac e anicsouno them indencyendent of who is between them. That said, i do believe that the more we hear and see how our leaders think and act more we can hold them accountable and our id rather those conversatpos be in the open and be in the dark. The constraint on that that we have to malue sure we are balancing his actions that are inspired from reading and seeing and sharing those thoainhts. So, i dont know other ways to solve that then shining as mdish lidigt as possible and having it open and transparent so that we can get to a common understanding faster. Look, we are pushing ourselves to learn as quickly as possible and as the rest of the wormac is how to deal with the technologies that we now have and thatu i thick th, is what changed for us fundamentally and with any technolecoy id whsonfut nt feed. The technolecoy is a tool that helps us do things faster and that dg thng things faster it cn be sca at first but it also has the potential to save a bunch of time and a bunch of effort and idu an optimist and positive and an idealist and i do believe that openness and trannt farency help us realize, again, were all in this together and we need to come tecoether ad all of these barriers that we put up our distracting to the real problems that we need to sos one together. [applause] we have a bunch of questpoinns here so maybe we can do a rapidfire round. Thank you for submitting these. Sit down restaurantu where dres ly interaction . Thats a greatist uestpoinn. We acte,lly routed around this because when we first went to restaurants you woumac say you want to malue more sales by something for cards because we learned hki aand questions and they said yeah, do you want to do reservations as well and we said, nbet that seer teted that something we dont want to get into right now. We decided not to be cmac a pointofsale for restauranng but we you decided to do was look at ways to continue to drive more sales to restauranng and the superpower that we found was delivery. The interesting thing about restaurants is there constrained by their physical size and the on how quickly they can turn them over. Thefascitchen can acte,lly pro e more than the tables they have a lot of restaurants go to delive but they have to manndue the delivery and there can be messy and can be a ton of work so we found a compaild called caviar that has its own delivery and had a deep relationship with restaurants and we coumac send a customer through an app and i want to order some Fried Chicken and ser a and i wanted to come o me and we could send a courier to pick up food and send it to the customer and all the restaurant had to do was focus on its kitchen. It seemed amazing and weve done really well with that because of that focus and now we are sending that to maybe notonfust delivery but bunch of competition in the delivery nt face of fk,d in particu forh what if we do shift the mindset instead of focusing on delivery of fk,d focus on fk,d andonfust ordering food. That enables us to think about lot ockup as well and we wantedo be a p for ce when youre hungry that you go to caviar and you get to choose what you want to eat and then you go pick it up and you want to sit down or do you want it to come to you and that feels a much Broader Market and something that also aligns with driving more sales to customer we couldnt reach because. Still no pg thnthave f a len restaurants with the delivery. What is the first thing you do when eroundluating a new idea . Be cmac iway [laughter] we have this principle at square called. [ina . And what we meant to do with that we meant to tell the company and ourses ones is that you canssponfust go to someone r an idea and i want to be able to thinow how something works and i want people to feel it and i want them to finish our sentences and i want them to en tege in our imagination and lets do the work to make the thing work and then present it to the company or to our customers and learn from that and in an eroundgratpoinn from r customers or colleagues will get critique and will learn a bunch and that shoof and that has always worked for me. With twitter we d tnt go to a tn investors as we hki hunto thousands of people using it and was where we d tnt go to a tnone oung te re a cofounder so we have something that worked and we dithe investors and we d tnt go to visa so we had something that woe,led and we were out of and that was the best way for us to evaluate it. Otherwise there so many excuses or things we shoof shouldnt do and the idea gets convoluted and way tk, big and then it becomes something that is not solving the problem. I woumac imagine there have o be some type of eroundgration process and you wouldnt have the time in your day to do thawy re we have a lot of people who can do that. Right, youonfust delegatign for someone who wanng your shoes in ten years what does he or she hki to do. Re i thick th the most i uportt thing is to be clear about what i wanted to be cmac in the wormc and what i wanted to be and more importantly what i wanted to go so having seldaawareness and havingonfust make you understand where your strengths are and where your gmanss are and thasts not a onetime event. It is always ongoing. Having a clear sense of what your purpose is or what youmpe what you want your purpose to be is important. And then a lot of hard work and a lot of putting yourself out in situations. When i was afasc t i coumac not i hki a speech defect that i could not pronounce pretty much any word and i hki to go to nt feech theralot ost for years before i felt comfortable even nt feacus ng with pfa felign it mkie me super sons and it caused me to withdraw and i got a lot ofist e,lities from that i became an introvert and im very focused on my intuition and my urst feeling and those are positives but i wasnt able to do anything like this. When i was 12, ionfust said i gt to get over this and be able to talk with people and i joined the nt feech cgrb. Which is absurd, learn, and proof. To become a really good listener and observer of how people act in what you do, and just watch and then go into learn, which is understanding and putting patterns together and recognizing how things connect. And then how to use those understanding patterns to improve and ideally improve yourself. I think the responsibility i have to my company and to my family into my friends is selfimprovement, to better myself every single day in some way. Taking on that mindset of im going to work really hard and feel really uncomfortable aligned with my purpose and understanding what my gaps are to get better every single day. Has helped me in the past ten years. Lots of people ask this question. What competition, if any, do you plan or mercy, do you plan for or foresee with apple i was 11, apple message integration, which is an excellent question. Ios 11 is supposed to come out in the fall. One thing apple is doing is peertopeer payments directly. Are you planning, its interesting because you also work with apple in a lot of ways. Talk about that relationship and how you are planning for the launches of this competitor. Well, yeah, i mean, theres a lot of areas we can collaborate and some where we were obviously compete. We are here because of the iphone. Like it enabled us, its enabled so much in our company. The fact that theres a some computer supercomputer at ones pocket, general enough we could hook the reader to it is amazing. We have so much gratitude for what the company has done from our business but also personally. So we had to see what people do with it, obviously and we need to see her. I havent seen it. Ive seen the keynote of it. Ive seen it. But i think one of the attributes we have is we are a crossplatform, and we have a really open network and thats really important to us. I think theres value in being at the intersection of platforms and intersection of things rather than being on the platform. Weve also found, you know, we have, always wondered about messaging and money movement. Thats how we started. We started with email and delete moved to an app, and we found that really like single focus, singlepurpose applications. That has been a strength of hours. So well see if that actually plays out as it becomes omnipresent everywhere. But more and more i think were seeing square cash not as peertopeer but as they spend device. You can spend money with your friend come with your parent which is the peertopeer case but we are seeing more and more of activity go into our cart and going to the stored value. We think theres a whole lot more we can do there that really excites us. You look at our whole basis and the ecosystem all the services where providing and all the potential intersections between them. Theres a lot of interesting things. Credit Card Companies collect transaction data from their cardholders and sell that dated. Does square collect in cell user data . No. We wanted to make sure that our job with data was to provide insights to the people that own it, which is our customers. So our customers come first and foremost. Our job and i think our value is like take all the data that they have, all the data that they see, and then bubble it up into insights that they can make decisions around. This is how cappuccinos are turning over time. This is how many new customers you have versus consistent customers you have. At the same time we want to make sure that their customers had control over what data they were sharing with square, because thats what goes to. We dont enable a buyer, a customer to share, or we dont enable our seller to seek the email address or phone number of a buyer, for instance, but we have given a button to a buyer on a receipt that says the seller can add me to their newsletter. Or the seller can offer me rewards. We have opted more for a really simple straightforward control for the buyer customer, and then insights and more data for the seller customer. But in the case of Something Like the square physical card, which is a visa card, in that case visa is getting information based on the purchases made with a card . And the issues are still getting that information. They are getting that information. We dont control what data they sure choose not to share. Producing siloed within square and does not involve initial . We give it back to the film in terms of insights and back to the bar in terms of options and control. Several European Countries companies will phase out checks in ten years while bills and coins are going extinct across world of lies the u. S. Lagging . Can use catch up and be a leader and a cashless world . Its a funny thing because weve always been laggards in adopting technology. Like this is, the same was true when twitter started. We started the service in 2006. 2006. In 2005 was the first year that sms text messaging really became a thing in this country. Thats surprising to people, anyone outside of this country because they been using it for ten years prior. So for ten years people were using sms to to make it with each other, very reliably, and doing more so than phone calls. We didnt have it in this country because of you could not send a text from cingular to verizon if we didnt have any cross carrier ability to send Text Messages because they were two Different Technology sets. You tsm, which is what sms is based on an cdma which was verizon and older trunk system. Because of those different stacks that you could not communicate and then they made a bridge and text messaging just blew up here. I imagine we are saying similar things where we have parties in the network who are holding on very, very tightly to what they own and what they have, and not necessarily be open or forwardlooking in terms of how utilizing a Single Technology or, technology or a standard could help grow their business, or not doing the work to look at where they can add value elsewhere in their business as well. So thats probably the reason, but i dont know. We have traditionally been very slow to adopt to these newer things that the rest of the world gets first. There are also instances in emerging markets where people of use mobile because they have to. The infrastructure wasnt and isnt a plaistow. Thats fascinating to learn from. Countries and communities all over the world who are skipping things we have to go through. Actually not just skipping things to arrive at the same place, but arrived like five years ahead of us in this country. Definitely to learn from. I asked if the how do you value your time between twitter and square . In the short answer again. No. Moving on. He spoke a lot about adding value in solving problems. As a young entrepreneur how should i raise enough capital and higher technical talent to growth before monetizing . How should i how should i raise the capital and our technical talent to grow rather than grow before monetizing . I mean, this can be a different answer for you are doing, but like having awareness of what you absolutely need and then adding a little cushion for the unknown i think is generally a good formula. I think we, we live in the world right now where we could do a a whole lot more with a whole lot less. And were looking in both companies in terms of like how do we become a lot more efficient. One of the things i learned from my mom, my own my mom put a copy as when i secured. A little coffee store in missouri and she employed me and my two brothers. And i hated coffee and i hated key, but she made me the barista. Barista. For joy for me not many people in st. Louis will renew what a good tasting cappuccino tasted like. [laughing] i would just make them and they were like this is the best tasting cappuccino ive ever had. That the person i permit, thank you. [laughing] i would always ask the question, why dont we go, why dont we be like starbucks . Why do we open another location . Why dont we go around the world . Why dont we go global and like self in supermarkets . Why dont we have that ambition . I would ask if she would say, thats not what i want. Like i want to provide a place for my neighborhood to get together and buying beans and getting coffee might be the reason, but the results is the neighborhood gets to come together and see each other and talk. And we lived in kind, st. Louis extremely segregated, northsouth, and my parents always lived right in the middle. So it was right on the central point, and it actually works. People from the north and south came together and they talked. It took me a long time to learn this but i realize one of the powers of technology is not necessarily to get vaguely fast. Its actually to be up to make the choice to stay small. My mom wanted to stay small. She did want to go abroad. She wanted to go deep. I just think thats so cool. So i would look for ways to view as much as possible as she resources as few resources as possible because thats what everyone around the world is trying to figure out to do. Thats really stunning. Weve seen some examples of this in our companies, square cash is an interesting example where it is our smallest team in the company. Its also our most distributed team. We have no center of gravity for engineering. We have engineers in San Francisco and kansas city, missouri, and waterloo and sydney and melbourne and sweden and austin, texas, probably just tired people in places on not aware of yet. I think thats so cool and they figured out not only how to distribute themselves completely, but also to be one of the fastest moving teams in the company as well. So they are small and super distributed. I think that is, that is the future of our workplaces and our companies. We had these big offices in San Francisco for both twitter and square. I think the make offices and these huge campuses are history. I think those things are going away. I think its just so liberating as well that i can work from anywhere and impact the world from anywhere. I think its an expectation of a generation coming into the workforce as well. Next question. As peertopeer digital wall and other nontraditional banking roads, how do you think government regulation will respond both your and internationally . As they have for the past 40 years. I think there will be a lot of skepticism, and i think patrick of stripes said this really well when he said that our job at our company is to help educate regulators. And you take on that mindset of like we are not against the regulators. We are going to help educate them. It really opens the door for a healthy and progressive and forwardlooking conversation. I imagine like their job is to be on the defensive and to protect, and to protect particular interests. Ideally they are the interests of individuals. Doesnt always manifest in that way, and those of the things we need to question and those are the things we need to educate around. We saw this, for example, in, you know, we love software. We love hardware. But we had this rule in this regulatory body that in order for us to get outside of the United States and to serve in markets that required a dip of the chip and a pen, we had these regulars tell us that the only secure way to do the annually way to allow you to do that is a hardwarebased pin pad and that just did not seem logical to us. Because with hardware if there was an issue, its really slow to update or we have to recall it. Its also really expensive to put a physical keypad on a piece of hardware. So if we had put a physical keypad on our hardware it would raise the cost, meaning less people could afford it and we would see less customers. So we were super stubborn and we tried her best to educate as much as possible without come look, for over ten years, it wasnt tenured at the time, but over ten years people have been entering and a pen into the device to unlock it and they feel come they seem pretty comfortable with it. Seems pretty secure, and then we also si said it is a security ie we can update it instantly and security is not an endpoint. Its a constant evolution. Its always staying ten steps that ending faster than the others. We try to educate them on like this is not an endpoint, constantly evolve. It took us three years to change the regulation and then we did and when launched in australia and that enable us to launch in the uk as well. So its a push and its not going to happen overnight, but i do like the concept of it being a task of education rather than a fight. To use straight as competitive, by the way . What is your relationship . Theres a things we compete on an theres a lot of things that we dont. Strike is serving a customer that is typically a startup or online and is building very quickly and with focus on the offline. We focus on physical sellers, and we have definitely gone online but we are not going after it in like we need to be the ecommerce platform for the world and for every developer. We are looking at what our customers actually need and what theyre telling us is like isil offline. I want to sell online, too. This quoteunquote on the channel is where we are focused on. Then we had a bunch of Online Sellers who doing popup shops and doing physical retail because of what physical presence. Thats where we fit perfectly. We are always going to compete with every company in some regard, and then others were not. The core of what wer we are doe are not. Last question. Considering the increasingly contested market for peertopeer payment, where d. C. Square cash playing a role and squares future success . We touched on this early but may we can answer it again. Theres a followup question which is it square opens traditional partnerships such as with snap cash, if he suggest we would love to talk to jack about square cash and our product. [laughing] they left a phone number for you. [laughing] it is 650 im not going to read it here. [laughing] but its from near here, and yeah, the first square cash, where does it fit into the future and are you open to additional partnerships such as snap cash . Yes, we are open to additional speedy or you go. Heres his number. [laughing] thank you. And how does it fit into our overall ecosystem . I mean, i think we, our main job is moving money around. We move money in the physical space with our card reader and we move money in the purely Digital Space with square cash. We dont talk about this a lot but square cash also has square cash for business as well. We have a lot of sellers on square cash who are using it like golf instructors or massage therapists or dog walkers or people are just selling a couch on craigslist to request money very quickly. They dont need a card reader. They dont need to accept credit cards but we do charge them as the seller because they sign up as a business. To me that gives me a lot of comfort because we asked the question at least to disrupt ourselves, what if hardware goes away . We have an answer which is we havent all software solution. We want to make sure we have a multitude of potential answers to the challenges and the struggles that our customers are facing, and some of them are going to be physical which is how we started, but more and more, probably all of them will eventually moved to all software and all digital and we have a really good answer. Thats how i look at it. One more question which is about the future. Lets say five years about all of the compass we talked about tonight in addition to the apples of the world, amazon, strife, everyone is offering some version of the same thing. They are processing payments, peer to peer, maybe a pointofsale, online deliveries. Where, how does square stand out at that point . Well, you know, i think we have four differentiators that set us apart. One, we focus a lot of our energy on speed and being the fastest and access to funds is critical for people. There that really pushes the second was our cohesion. So were not just offering one part of the equation. You have all the tools that you are the most critical needs in one app. The third was is we are really elegant and we hear from a lot of our sellers, like putting a register on my countertop makes me feel proud. It validates my business, like im in business now and theres an emotional component to what we do. And the fourth is selfserve. You dont need our help to get started and you dont need our help to do anything. It becomes very easy for us to tell the company, like make it faster, make it more selfserve, make it more comprehensive and cohesive, and jenna, so those directives become very easy for any of our folks in the company to go after and really continues to set us apart. I also think its our sense of purpose is whats going to win for us. We came at an industry was not fair, but encourage people in the negative behaviors that didnt allow everyone to participate for the wrong reasons. And we built a right into our name, which is square, like if you look at the definition you will see the phrase there and square, and use square up and you will see the simple understandable, object thats kind of boring. But relatable and the building block. So, i dont know, like you have to really, we have to lean into ourselves and really focus on whats i personally and what sets us apart and theres tibbetts product that we do things and also we are and what we believe, that set us apart as well. Thats what were doing. Good think you didnt stick with squirrel. We were originally called squirrel. [laughing] jack dorsey, thank you so much. Thank you. [applause] this from the hill, use economy grew at an annualized rate of 3 and the second quarter, thats up from the first estimate of 2. 6 according to the commerce department. A second estimate which incorporates more data and saw strong growth and personal consumption can indicate a general sense of Financial Security among the population and nonresidential fixed investment which indicate bullishness on the business side. The growth is the strongest since the First Quarter of 2015 when it hit 3. 2 but not as hot as he i. 2 . 5. 2 . In the Third Quarter of 2014. You can can read more at the hill. Com. President trump may comment about this way speaks later today in Springfield Missouri what is expected be an event kicking off taxi from efforts to collect coverage on cspan starts at 22 220 220 220 tun. John nichols talks about his book horsemen of the apocalypse of phuket and most interest people in america which looked of people make a president trumps inner circle. Like booktv coverage starts at 7 p. M. Eastern tonight. Booktv recently visited capital to ask members of congress what they are reading this summer. Tell us about the books youre reading this summer. I would be delighted to tell you that. I am going to try to undertake something i think a great volume literally. There are the three books about Eleanor Roosevelt written by blanche weiss and cook, the early years, the middle years and then the prewar and the postwar years. That is going to be my project for the summer to try to read all three of these volumes. I think that Eleanor Roosevelt is an extraordinary influence on Public Policy and what we, you know, in her way and what she espoused and the differences between herself and franklin roosevelt. Its also another one, i dont know that i will get to it, its about a firebrand and the first lady, so as i say a big undertaking and im excited to be able to do it, and to learn from a great role model. Booktv wants to know what you are reading. Send us your Summer Reading list via twitter booktv or instagram, or posted to our facebook page, facebook. Com booktv. Booktv on cspan2, television for serious readers. We have this for you from the new Orleans Times picayune with one of us use pictures on the website as Tropical Storm harvey made a second landfall just west of cameron louisiana early this morning. The National Hurricane center said the storm came back on land almost two and miles east of houston with maximum sustained winds of 45 miles an hour harvey is forecasted to drop substantial amounts of rain on louisiana before moving on to arkansas, tennessee and parts of missouri pixe exomars could seeo ten inches of rain. Forecasters warned of possible tornadoes across a wide swath of the southeast as harvey rolled inland. Governor John Bel Edwards held everything about the storm and potential flooding also get rescue efforts. That will be coming up at 1 30 p. M. Eastern. About 9 30 a. M. The head of fema the coast guard commandant and Homeland Security Department Official briefed reporters about