There are few startups that are more the product of one man’s vision and imagination than Twitter and Square.
Jack Dorsey, the inventor of both, is clearly a “vision” entrepreneur. Much has been written about his original, brilliant idea for Twitter and how it came from working in dispatch and, even earlier, from a childhood fascination with cities and computers.
And it’s fascinating to look at what the two startups have different and have in common, and how Square learned from Twitter’s successes and setbacks. It’s like reading two books by the same novelist that have completely different subject matters, and yet are eerily similar. In many ways, Square is like Twitter’s mirror universe twin.
Here’s what’s similar about them:
- They both start with a really simple, why-didn’t-someone-think-of-this-sooner idea. Why not let anyone post short status updates to their friends? Why not let anyone accept plastic payments? Indeed: why not?
- They’re both incredibly ambitious. Twitter wants to, in Facebook’s parlance, “connect the world”, and actually has a much better chance than Facebook, because it’s so simple: short bursts of information; anyone can follow anyone. Square wants to carry all of the world’s monetary transactions.
- They’re both “information networks.” That’s how Twitter sometimes describes itself. Dorsey’s original vision for Twitter came from working in dispatch and seeing a stream of tiny bursts of information of everything going on in a city in real time. But Square is also an information network. In public talks, Dorsey talks of being able to build a real-time visualisation of transactions going on in Square, and of using Square to build a real-life equivalent of Google Analytics for merchants to better track what people buy and when.
- They’re both democratizers. Twitter, of media. Square, of financial transactions.
Here’s what’s different about them:
- Square has a built-in business model. This is the obvious one. It’s almost as if Dorsey was so tired of hearing endless speculation about how Twitter would make money that he said to himself: “Next time, I’ll have a solid, obvious business model from the get-go so I don’t have to hear that crap anymore.” And so he has.
- Square is FAT. Twitter was the archetypal “lean startup”, before the expression became popular. A team of three people (none of whom were Evan Williams or Biz Stone) got together and hacked together this raw prototype, threw it up, and saw where it took them. Users and developers came up with @replies, hashtags, mobile apps, etc. Users turned Twitter into a web and app-based media platform instead of the SMS-based status update service it was first intended as. Twitter’s job was just to try to keep up. Square is the opposite. It has to be: it’s not a social media startup, it’s in the highly serious (and highly regulated) payments space. Dorsey talks about how Square is many startups within a startup: there is hardware, and software, and security, and compliance… And instead of launching something incomplete based on an idea and see where it evolved, he built the startup in stealth for many many months until it was completely polished and refined. When Jack Dorsey built Twitter, he was wearing a nose ring. When Jack Dorsey built Square, he was wearing Prada suits and Rolex.
- Square shares zero investors with Twitter. At least VCs. Boy, Dorsey is really unhappy about having been fired from Twitter.