The inventor of Twitter revolutionising finance

Given that he invented Twitter, Jack Dorsey has one of the lowest profiles in tech, says Vanity Fair. That may be about to change. He claims he's found a way of transforming how money changes hands with his new company, Square. Some think Dorsey is nave to take on the behemoths of the finance industry (see below). But he isn't fazed. If Twitter is the future of communications, he says, "Square will be the payment network. We're going big."

Dorsey, 35, is a "source of wonderment in the business world: a modern Edison in a cynical age", says Fast Company. His interests range from botanical drawing and ballet impressario Serge Diaghilev through to clothes design. A certified massage therapist, whose terse conversational style is perfectly reflected in the minimalism of Twitter, he can nonetheless talk for hours about Virginia Woolf's modernist novel Mrs Dalloway. He spends much of his time just roaming the streets of San Francisco. "Yet between Square and Twitter he has helped to generate $10bn in market value an impressive figure even for those who scoff at tech valuations."

The first thing you notice when you meet Dorsey is the nine-inch, S-shaped black tattoo that runs down his left forearm. Forget "the outlaw implications", says Vanity Fair: "This is a man whose first act each day is to text his mother." The tattoo reflects a passion for maths, music and anatomy. "It symbolises integrating everything," he explains. Dorsey's backers argue that this ability to "blend ideas" is what makes him such a compelling entrepreneur, says Wired. "He's often mentioned as the spiritual successor of [Apple's co-founder] Steve Jobs."

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

As a child in St Louis, Dorsey was obsessed with maps eventually designing his own with a graphics program. Tuning into CB radio, he learned how to make little dots representing trains and buses scoot round maps in real time, and was soon making dispatch software. "Dorsey's own dots connected slowly after that," says Fast Company.

He quit college, bouncing between programming jobs. After joining a San Franciscan software house, Odeo, in early 2006, he began experimenting with adding a human element to the digital picture of city life. "What began as a childhood fascination with maps morphed into Twitter."

"How do you institutionalise creativity?" Dorsey was asked in a recent interview. His co-founders, Evan Williams and Biz Stone decided some time ago that he didn't know and ejected him as CEO of Twitter in 2009, just as the service was becoming a household word. "Perilously close to becoming the Pete Best of social media", Dorsey watched "as they took an extended victory lap", says Wired. "It was like a punch in the stomach," Dorsey says. However, he is now back at Twitter and makes waves with Square. And these days, his dream job is to become mayor of New York. Watch out, Mr Bloomberg.

A brilliant brain, better with ideas than business

Jack Dorsey's biggest insights "have nothing to do with technology", says former business partner Greg Kidd. They're "social first". For Dorsey, the philosophical driver behind Square a cheap and easy way to accept credit and debit card payments by mobile phone is the same as the one that inspired Twitter, says David Kirkpatrick in Vanity Fair. "Just as Twitter made anyone a broadcaster or diarist, Square can make anyone a merchant."

Dorsey came up with the idea following a conversation with an old boss, Jim McKelvey, who had a sideline business as a glass artist. McKelvey had lost a $2,000 sale because he couldn't take credit cards. So the pair devised a tiny, square-shaped credit-card reader that could be plugged into the headphone jack of any iPhone, Android phone, or tablet. Users download an app to manage it, and away they go.

Unlike the complex, costly plans that banks and credit-card companies foist on storeowners, Square charges a flat transaction fee of 2.75% for everyone. Having signed up more than a million users since launching in 2010, Square is "one of Silicon Valley's hottest start-ups", says Steven Levy in Wired with the most recent round of funding valuing it at nearly $4bn. The signs look good, agrees Ellen McGirt in Fast Company.

Square already "processes more payments through its system than PayPal did at the same stage of its growth". Still, there are doubts that it can survive in a cut-throat market dominated by established players, says Forbes. Many believe Square is a firm "built to be bought" by "a major payment processor behind the curve on mobile payment".

Perhaps, in the long term, selling off the company would be the best outcome for Dorsey as he is still seen by some as a commercially innocent savant. Backer Sir Richard Branson agrees to some extent. "I do wonder if his talents are wasted running companies," he observed recently. It's time "his brilliant brain" was unleashed again.