Jack Dorsey, the founder of both Twitter and Square, rebels against the Wall Street quarter-to-quarter mindset and plans to keep investing in Square until he sees fit to shift it to profitability. In an interview with the New York Times, Dorsey bridled when asked about a $100 million loss at Square last year.
“‘Loss’ is an interesting word. You can consider it a straight loss or you can invest in the company to grow the company so you can grow the network and the base of people using the service. We’ve chosen to spend money to grow the business. At any point, we can decide that we want to have a profit from our payments business and slow down the growth of our business. That’s not the choice we’re making, because we want to grow into a global business,” said the CEO who has made clear he has no nearterm plans to go public or to sell the company.
“First and foremost, we have never been in any talks about an acquisition with anybody for our nearly six years as an idea and over five years as a company. That has never occurred. Second, we have never had any plans of any substance about an I.P.O. We’ve had no plans to engage the market and investors, no plans on when. We believe right now that being a private company is best for us,” Dorsey said.
That decision—along with his personal wealth and a very long list of investors willing to reinforce that wealth–gives him the freedom to do what many publicly-held executives can only dream of doing: Running the business for the long-term and not feeling pressured to make decisions to boost the numbers for a specific quarter.
Dorsey also said that payments can be much more profitable than it is today and that the new mobile approaches—including Square—will change a lot of business plan assumptions. “Payments is always reported as a dirty, low-margin business. We invested in a lot of machine learning to minimize the risk and fraud potential. And our margins benefit from that, so the core payments business is extremely strong,” he said.
He also said that he now plans to offer NFC support, although he didn’t give a timeframe. Asked if the company’s current lack of NFC support would change, Dorsey said, “It’s going to change. We have committed to making sure our sellers are empowered to make every sale. As we see more attention on NFC in this country, that will be more and more the case.”
Dorsey also tried to explain why so few Square devices are seen outside of San Francisco and New York. “Why do you see other terminals? Because there’s a lot of merchants locked into punitive contracts. These are long contracts, two years or three years. Ultimately, I think everyone wants something more cohesive, connected, that works as one system. And that’s what we provide. I think we are building an ecosystem of tools that connect together.”
In other words, Dorsey is saying that once those contracts expire, expect to see lots of merchants flocking to different payments approaches, including Square’s.