I am so excited to be here with Jim McKelvey and Jack Dorsey, Square's two co-founders, to talk about all things Square and how it started, what the origination was, and how we're thinking about the developer community. So for those of you who don't know, Square started because Jim, who owns the glass blowing factory, was unable to process a payment and was really bothered by that, understandably, about losing customers, and started pairing up with his pal Jack, and they came up with this solution. I'd love to hear from the two of you how you first connected before Square even was born.
So Jack came to work for me at a company that I actually still have, but at the time we were very poorly managed and supplemented our bad management with his mother's product, which was chocolate-covered coffee beans, which we would chew up and keep the staff awake. So Marsha Dorsey was effectively our dealer. And we found one day that her son liked computers, that's all we knew. And so my partner, John, invited Jack to come over to work with us, and he happened to show up in the middle of this chaotic mess and pulled an all-nighter with us the first night. So we sent him home at 5:00 in the morning, and I guess I'll let Jack finish the story since I think it goes on from there.
What, I got yelled at by my mom. She hated Jim, cursed his name to this day, but has forgiven him for some things. But no, my parents always encouraged me to follow my own path, and computing was one big part of that. And Jim's company and that work was a great way for me to experience what I ultimately wanted to do, which was programming. And I was super early in programming computers at that point.
Another story some of you may not know is Square's very first customer was a woman named Sherry who owned Lily Bell Flowers in San Francisco. And when Jack and Jim finally had a prototype for their hardware, they approached her at a market and asked her if she wanted to try it out, taking credit card payments. She showed a little bit of hesitancy and wasn't quite sure, but just as they were having that conversation, a potential customer walked up to her and said that he didn't have any cash but he would go get some and come back. And so they waited around and waited around, and lo and behold, the customer never returned. And so that really helped just fuel even more so the need to create this hardware and provide this to sellers who were trying to capture every type of payment. So I'd really love to hear, how does this kind of customer centricity lead to innovation?
Well, it wasn't one time that we did that. We went to Sherry multiple times and asked her if she would try what we're working on, and she repeatedly said no, until the point when she lost a sale. And that was the biggest insight. We originally thought that we were building a credit card reader that plugged into the phone and had an easy app that got you to the Visa or Mastercard or acquiring gateway. But ultimately what we learned in that moment—and we didn't, I don't think we realized it in that moment—but what we learned over time was it wasn't about building the credit card reader, it was about making the sale, helping us to make the sale. If we focused only on building a little plastic device that plugged into the headphone jack and build some software around that, we'd be a very, very small, not very impactful company. But because we focused on a deeper problem, which was how do we help a seller make the sale in the first place, we expanded our entire universe of solutions. So a credit card reader is one solution, a point of sale is another solution because it allows someone to see their entire business and get analytics around how they're doing and make better decisions. Lending is another solution, which came in the form of Square Capital, and so on and so forth. So by going a little bit deeper into the observation, what we were seeing, we created something much more viable than what we started with.
Yeah, it was also interesting when we got the first iPad, because instead of being restrained to, you know, this much screen area, we had a full iPad worth. And so that naturally led us to thinking about all the other things that our customers had to do. We had some customers at that point, but not very many, at least not compared to today. And it's really interesting if you think of payments as this wonderfully honest form of communication. You know, what you spend your money on are things you value. What you think you spend your money on is almost as important as what you spend your time on in some ways. And so it's a really interesting insight into what matters for a business. And if you start connecting to that, it naturally leads to a very rich ecosystem.
That's awesome. Talk to me about how you engage with the developer communities as you were building up Square. Were there certain forums that you all used or communities that you contributed to? How do you think that's changed, if at all, to today?
When we first started, we didn't—I mean, we consciously decided not to engage with the developer community because we had a bunch of experience with APIs in the past and like how much they could potentially be abused. And given that we were dealing with money and moving money around, we wanted to make sure we had a lot of control over how our system was working. And we didn't have enough people, staff, engineering resources to make sure that we could build the right constraints to start. So we didn't really start with the developer community until a few years in. And again, it was a conscious choice. Our first focus was one specific customer, which was a seller who otherwise would not be able to accept a credit card. And we just stayed focused until we had a much stronger base and a greater understanding of where to go from there. And then as we got the right engineering talent and we understood like what we were building and we understood like what the right endpoints were, we started building out the developer community. And a lot of it came from, you know, just making sure that anything we build internally, ultimately, could we export it externally. Like we should be a client of our own platform, ideally. And that's how we originally started building the system. And you know, in many cases we succeeded, in some cases we failed, but we were able to learn very fast and build a platform that I think, you know, not only exposes a bunch of new functionality to the world, especially around commerce for sellers, but also encourages entirely new ways of doing commerce and doing business. And that's just on the seller side. We have much more work to do on the Cash App side, which is super exciting as well.
I'd also add that, you know, there's sort of an inherent respect for the development community because both Jack and I are engineers. So it's sort of odd to have a company founded by two technical folks. But I remember back even when Jack was working with me almost 30 years ago, he was contributing to the open source community. He was writing for Linux. I remember Twiddler, the corded input device that you wrote a driver for. And that plus open source has been an area of, you know, sort of deep respect. And so I think although we kind of came to it late, I think we came to it well. And I think you see that respect in the products that Square offers and the way we treat developers.
