Jack Dorsey Exclusive: Bloomberg West (09/17)

Your next video will start in
  • Info

  • Comments


Sept. 17 (Bloomberg) -- Full episode of "Bloomberg West." Guests: Jack Dorsey, Hightail's Brad Garlinghouse and WhoSay's Steve Ellis. (Source: Bloomberg)

Welcome to the late addition of "bloomberg west," where we cover the media companies reshaping our world.

I am jon erlichman.

Our focus is on innovation in the future of business.

A new game plan at electronic arts.

Ea has named andrew wilson as the ceo.

We will get reaction to the move and find out what it means for the gaming heavyweight.

An exclusive, emily chang speaks with jack dorsey about his other fast-growing business, square.

Find out it's the famous company will follow twitter down the ipo road.

And who says getting traction in hollywood?

Why it is becoming a tool for celebrity and their fans.

Electronic arts has found its next leader, naming andrew wilson as the new ceo.

He is an ea veteran who joined in 2000. he oversaw the high-profile sports business.

Ea says it considered candidates inside and outside the company.

He succeeds john ri tcello, who was ousted this year.

It has been expected the new ceo will need to focus on the transition from packaged games.

Despite the concern about that transition, better than estimated resorts have fueled their stock to this year.

For more i am joined by cliff edwards, who covers the gaming industry for bloomberg news.

Cliff, is this a surprise?

The industry is quite surprised.

The internet candidates were peter moore, the chief operating officer, and frank, who is andrew wilson's bossed.

What we know about wilson and why he got this job?

He is a young guy.

He is running the crown jewel of the business, the sports business.

He is in charge of one of the franchises that has done really well for ea, fifa.

Fifa was up 70% of its revenues last night from 13%. -- 17% of its revenues last year from 13%. also their origin business which is where ea wants to go.

I think they are trying to signal the investor community they are serious about digital and they are putting a young guy in place to do it.

If you think about the gaming landscape right now, you have social gaming companies like zynga.

You have traditional gaming companies like activision.

Ea has positioned itself in between.

They have really gone down the path of making that transition.

They want to be mostly digital in the next 3-5 years.

That was something he was working on hard buddy ran out of time.

They picked a person that understands the new world.

What are some of the short-term things the company has to do?

We highlighted the fact the market has applauded some of their recent results.

Some of their franchises, john madden just went on the market.

What is the priority?

Wilson has a mixed track record.

Madden is not doing as well as was last year.

Their nba title, two years running, were canceled.

We have to see with an nba title does.

Thanks for the inside, cliff edwards joining us with the new hire at ea.

After cofounding twitter, jack dorsey is focused on growing start up square.

Next, our exclusive interview with jack dorsey and a reminder you can watch it streaming on your tablet, phone, and bloomberg.com.

? detroit was once the innovation capital of the world but has ceded that title to silicon valley.

We are here with leaders across the country talking about how technology can help places like detroit.

One of those people is jack dorsey.

We could not ask him about twitter's ipo because twitter is in a quiet period that we asked him about his other company square.

This is a guy that wants to change the world not once but twice.

Square is about giving small business owners the power to accept payments from anywhere.

I asked him, why come to detroit?

I love the city.

My father runs a small business and he builds machines for medical devices.

He spend a lot of time appear, did a lot of contracts appear.

-- up here.

Heelys told me so much about the city.

I had never been to detroit -- he always told me so much about the city.

I had never been to a troy.

The attitude -- to detroit.

The attitude of people is great.

Your father is an entrepreneur, which is so great with what you're doing with twitter.

You definitely see that here as well.

It is the city of innovation.

Massive success.

It is right down the street, the henry ford museum.

There is a real highlight innovation in the city that is finding itself again.

You are part of a series or you're going to cities like detroit, new orleans, what can square do to help?

Cities in need.

The biggest thing is we have a responsibility to build simple tools for merchants.

But also a responsibility to give them a start of a conversation.

It gets a bunch of merchants around the city together.

We have 600 people coming tonight to talk about what works and what does not than what the challenges have been.

How to retain customers.

And just mistakes and tricks and tips along the way.

It is one of the things i love about silicon valley and san francisco.

There this culture of support around entrepreneurship.

The attitude is hidden -- here.

It is just building that fabric in that venue, to keep having that conversation.

We see the same problems no matter how big the company is.

Twitter, facebook, instagram, vine, square, a coffee store, they are worried about the same things, new customers.

Retaining customers.


Getting to new people.

Hiring people.

Parting ways with people.

Think about building a team.

We are just sharing.

Our taxi driver from the airport was using square.

He loves it but is not supposed to be using it.

For whatever reason, the taxi commission, how do you deal with those issues given unr -- are in all 50 states?

As long it is driven by people that are using it and they are going to city hall talking to the regulators saying this is something that is important for my business.

It is important because it is growing my business.

Are you part of that discussion?

We support it.

We have had local government there.

In st.

Louis we had the mayor.

We had a bunch of city counselors.

They were engaged with the conversation.

We would love to work with government to change these conversations and make it easier for people.

You started out focused on small business, coffee shops, taxi drivers.

You have added agribusinesses like starbucks.

Where are you seeing the most adoption?

In the small brick-and- mortar.

Who are growing from an individual to multiple employees and one location to multiple locations.

So we have tons of retailers and coffee stores and salons and all of these other things that started small but are now growing.

More and more we're seeing a lot of brick-and-mortar's. a lot of neighborhood stores use it.

And we're getting a lot of value because it is one system.

One ipad in the business grows and then they have to cash registers and then they have three.

And then they want to sell online so they flip the switch and we built a page for them and they can sell online anywhere across the nation right away.

What is the latest number on users and how much money you process?

We have millions of people activated -- you can tell me how many millions?

And asked -- the last number was over 4 million.

That is inclusive of brick-and- mortar merchants.

We process 15 billion annualized from small merchants.

That is not with small merchants.

It is a very large number.

And we see it growing.

You charge 2.75% but i understand for smaller transactions under $15, do you lose money?

Our philosophy is trying to accept whatever form of payment comes over-the-counter.

Cash, a check, a charge card.

We want to make the charge card simple so you never have to think about the interchange.

This degree of rates you have to pay as a merchant.

So we hide all of that and say you paid 2.75%. your money is in the bank accounting next morning.

That is all you have to worry about.

And then in the background, we have to do whatever we have to do for those cards.

We have been able to build a growing business.

Long-term, you do not see this as a challenge?

Had the overcome the money you lose?

Technology helps us reduce the cost in the system.

We want to continue to drive down the cost.

That is just better technology, understanding risk and fraud.

That is where a lot of the charge comes in.

For the bigger merchants like starbucks, is that a focus for you, signing up the bigger merchants?

The greatest thing is starbucks came to us.

We don't have a partnerships team.

Starbucks came to us and said we want to you square because you focus on the customer experience.

We know that drives more people to our stores.

They are using the application all of our other merchants are using.

That is meaningful to us.

We want to scale from small to large.

This is a cutthroat business.

Hard to compete with the credit card young -- companies.

Would you ever give them a break on 2.75? we always want to drive that down.

We do not see ourselves building a payments company.

Payments is just one part of it.

We think there is value we add around the analytics, the data, around simple things to enable you to build your business and make decisions.

Whether you are very large or small, these things are meaningful.

It is more important than just the payment.

As you said it is about the user experience.

You know you're getting a seamless experience.

Some of your competitors are integrating with point-of-sale providers and the hardware makers.

Why not do that?

We are always looking at those opportunities but we want to provide something that is seamless and easy and that is comprehensive.

A lot of our competitors are looking at various parts of the system.

Someone is building the credit card terminal, some in his building loyalty and coupons, analytics.

We just decided that was not for us.

There are all those scenes and it slows down the transaction and it slows down commerce.

If you build it and you and you can speed up commerce and have more of it.

You can retain those customers as well.

Right we see square hardware in starbucks?

Our focus right now is on the smaller folks, those goading -- going from one store to 10 stores.

That is what we're focused on.

Jack dorsey.

Coming up, more of my interview with him.

I asked him about apple when apple unveiled its new iphones.

Jack dorsey was there.

Coming up on "bloomberg west." ? "bloomberg west welcome back to "bloomberg west." i just got up with -- welcome back to "bloomberg west." i just caught up with jack dorsey.

The twitter sphere went crazy, speculating about a potential partnership with twitter.

Iphones and ipads are critical to the future of square and twitter.

I asked him why he was there.

I like apple.

I was invited down to look at their new technology.

I thought it was exciting.

Newton technology enabled -- new technology enables companies.

I think we will see innovation from the platform apple continues to build.

What color phone do you want?

There are so many choices.

They introduced a fingerprint sensor.

Have you used at?

I have not tried it.

We use it with our terminals.

It can be temperamental but it is more secure.

The thinking is having a fingerprint sensor is part of the iphone could lead to a payment platform.

What would that mean foursquare?

A partnership with apple?

People are always quick to jump to authentication in payments.

If you think about everything we carry on our phones these days, there is a lot of sensitive information.

The phone carries all of that.

If you have a way to protect it in a better way, which i think is the intention of the fingerprint, not better security but just more human and natural and more organic, you protect all of that.

It is not just about payments for your pictures or your e- mail.

You want to protect all of those things.

I don't jump to that conclusion because there is a fingerprint sensor you go into payments.

I think that is one tiny aspect of what people might do with that device.

4s, it means people are protecting their phone and better ways.

-- for us, it means people are protecting their phone in better ways.

Speaking of security, security is always important.

We have been talking about security with the nsa and this discussion of the government's relationship with technology companies, even coercing them to giving information.

I imagine payments would be valuable.

What is square's relationship?

We talk with them around building small businesses and the economy, that is about the extent of it.

Security, more or less, is an evolution.

It is not a destination.

It is constantly evolving to something that is better and people can understand more.

That we are always 10 steps ahead from somebody who is trying to break into security.

That is what we're focused on right now.

Our interface is let's stabilize and prop up and grow the small business economy because we see it as a grim for the national -- as important for the national economy.

Does the government ask you for information?

If they get, how would you handle those requests?

We have specific policies.

It is not just a square conversation.

We enable credit card transactions.

A lot of this is with visa and mastercard and all of our partners and the banks issuing the cards.

It is not a single party that would have to go through one request.

We have not had to do with that yet.

What about square wallack?

This has been a big part of your vision -- wallet.

This has been a big part of your vision.

How is square wallet doing?

It seems like it has taken a backseat.

It is something we love.

It is something we want to see more of in the world.

He believe it is the future.

It is something we see our competitors doing.

It is a behavior, it is a new behavior.

Those that use it, they use it nonstop.

We love it because you download it and you link your credit card once and you leave your phone in your pocket and you walk up to the counter and say you want cookies and cream ice cream.

It is like opening a tab with the entire city.

Or at a sporting event at a farmers market.

Can i put it on jack?

I have to be there.

We see it as something that is easier and more secure.

More human.

We definitely think it is the future.

It is just a matter of time.

We are working to accelerate it.

International expansion.

You are in japan now.


What is next?

We are looking.

We want to make japan successful.

We want to make the u.s. successful, canada.

We are learning a lot.

We are not like a typical technology company where you can release it in the world uses it and you see this amazing growth.

We have to have relationships in each market with the acquiring banks and the issuing banks.

So when are you coming to china?


We would love to.

It is a question of serializing these markets and learning from each one of them.

As we get better, but we are looking at so many of them.

Ship and pin cards are huge in europe.

What do you do with that?

We have always had the idea of any form of payment over the geithner -- over-the-counter, the europe should be able to accept it.

We will have to answer that.

We will have to answer it in the u.s. as well.

It is certainly coming here within the year.

We will have something to answer that question.

My interview with jack dorsey.

Coming up, we know twitter has filed to go public.

It will square be next?

I asking that question coming up on "bloomberg west." ? welcome back to "bloomberg west." i am emily chang.

Coming back from detroit where i just sat down with jack dorsey.

It has been a long road from cofounding twitter to becoming ceo and going on to start another company square.

I asked him about his leadership style and what he has learned along the way.

I do not really separate them.

I think the service we are building can never fall down.

If we go down, we lose money for our customers.

We have a responsibility to stay up and facilitate all of these merchants.

That is our focus, and availability.

Making sure the merchant gets the sale.

We spend a lot of time talking about infrastructure.

And then there is a thin layer and simple interface the product on top of it.

We want a product that disappears.

It is so intuitive you do not think about it.

If we do that we are building something that gives time back to people.

Hopefully our technology is so easy and so fundamentally intuitive people can focus on what is meaningful to them, deciding if they're going to introduce a new flavor in their ice cream shop or marketing with social media or had to engage new customers.

How to think about a loyalty program.

That is where we want them focused.

Not on the point-of-sale.

We review that every day.

How big a loss was that for you?

It is always a big loss when you lose anyone in the company.

Keith was transformational for as.

He came in as employee 26 and had a dramatic impact on the company.

I think of a great company of having multiple founding moments.

The original one, the original founders.

A company will only thrive if it has multiple founding moments and keith has provided one in the company.

We are going through another one with some of the folks we just hired.

This is natural for companies.

We took keep away from a career -- keith away from a career in investing.

He seems to be doing well.

You are in new york recruiting.

You mentioned some of the new talent.

How competitive is it out there for new talent?

More competitive than never.

Extremely competitive.

It is people starting companies.

I think a lot of people put emphasis on the founding moment and being an entrepreneur.

I think one of the things to remember is entrepreneurship is not necessarily about starting a company.

The definition of the word is to take risks in order to do something meaningful.

So you don't need to be an entrepreneur, you don't need to start a company to be an entrepreneur.

We explained this message to a lot of people we are talking to.

We are going to a lot of campuses talking about how we are entrepreneurs, building tools.

You are an entrepreneur and a ceo.

Being a ceo is not easy.

What is your style and what have you learned along the way?

I approach my role as an editor.

Barring a lot from your industry, print.

I have three main jobs to pay attention to.

Umber one is editing the team.

Making sure we're the best team and also we are parting ways with the folks, the relationship does not make sense anymore.

That is one of the hardest thing to do.

Part ways.

Number two is the internal communication.

How we work together.

And the extranet communication, which is the service itself.

We want to tell one cohesive story.

I think about the editorial around that.

And the number three is keeping money in the bank through investors or revenue.

And editing that story as well.

The editorial concept has always worked well for me because just the word and it means to take away and to simplify -- edit means to take away and to simplify.

I want to do that as an individual and in my companies.

Getting down to investments, square has raised money, 3.25 million dollars.

It is great in the short term and the stock.

It also puts pressure for some kind of an exit.

What do you take into consideration?


The market decides.

We have conversations with the investors.

We talk about what we would like to see and where we are going to build and how valuable it is to us and what we think the value is and they give us feedback here in it's an honest conversation -- feedback.

It's a non-discounts a and.

-- an honest conversation.

We do not think about these as goals, we think about them as milestones.

These are things we need to do so we can continue to build our network.

We want to spend as little time as possible on it so we can focus on building the company and building products.

For all of our customers.

We have a done a good job.

When a square going public?

Is square going public?

Again, we do not think about that in the company.

We think of this is a milestone.

The best you can do as a company right now is build a discipline within the company to be ready at any moment to go through another one of those events.

An ipo process is like any other process of fundraising.

It is a fundraising event and should be seen as such.

It is not a goal.

When you reach goals to stop.

This is something we continue to build.

Eventually we will get there.

Right now we are building the practice within the company.

I think square is ahead a lot of companies in that regard because we are building a financial company.

We have to put a lot of discipline into the company to start with.

We had to do it from day one.

Now that we are in year four, it becomes easier and easier.

That was part three of my interview with ceo and cofounder jack dorsey , you can catch the full interview on your phone, tablet, or bloomberg.com.

? this is "bloomberg west." microsoft has given its search engine a new look.

The company unveiled the new website logo today.

Among the changes, bing will display search results in two columns instead of three.

It also matches the font used on other microsoft products.

It has been rolling out changes twice a year as it tries to win users away from google.

The revamp was not the only major news from microsoft today.

Announcing a plan to buy back as much as $40 billion of its own stock and increases its dividend to 22%. cory johnson has more now on how the buyback news could tie the hands of microsoft's next ceo.

He is in new york this week.

What say you?

Bing is changing, the share buyback is changing.

What is in changing is the share price, which is a problem.

A lot of these are efforts to improve them.

For this company, it has a business affect because historically at microsoft people went to work to get rich.

That has not happened.

The stock is only up 15% in six years.

The thing that has changed is the dividend.

They have been taking more of the accumulated cash.

The dividend has gone from $.13 a quarter six years ago to 28 scents.

Owning a share of microsoft does not mean you get future growth, now you're getting 3.4% return based on the current share price.

Microsoft does not want to be a value stock.

They want to have a rising stock price to attract the best and the brightest in technology, to build a better business.

To that point, say they wanted to spend money on talent.

On paper it looks like they are spending $7 billion to buy the nokia handset business and maybe $40 billion on stock buyback.

Is it correct they will end up spending $40 billion?

We do not know if they are going to get around to that.

They are not required.

They can put out the announcement and never get around to it.

Unlike some companies that play that trick, they have actually spend the cash over time.

But that has not kept the share count down.

The share count has gone from 1.9 billion shares to 2.6 billion.

In spite of big buybacks.

They merely stem the tide.

When they acquire new employees, when they sign up for employees to new stock options, that increases the flow.

They use the cash to decrease the flow.

It is merely stemming the tide.

This is a company that will have a new ceo.

They have been making announcements left, right, and center.

Does this will give us a clue of who might be the next ceo?

I think it does.

Anyone on the outside who was to come in and change the company is more likely to be an internal candidate, like tony bates who runs a skype.

Or satya nadella or qi li, in charge of microsoft office.

They are inside already, marching in the direction steve ballmer has wanted them to.

As the board takes away options, takes away $40 billion, ties them to the nokia handset business, the future changes.

Those options are going away.

A few names to watch.

Thanks a lot.

Cory johnson in new york.

Let's get another view on the microsoft news.

Can a makeover give it an edge against google?

He is now the ceo of hi cal, which just acquired adept cloud.

Always good to see you.

What kind of battle is bing facing?

It is tough.

Anytime you have a competitor like google leading the industry and continuing to renovate, -- to innovate, it has a lot of headwind.

I think the industry is better with more competition.

As for what are you -- for what you are up to, this acquisition, what is it about?

We feel like customers benefit for more transparency.

We have prioritized having you more control and transparency.

If anything, as more people use dropbox they realize they want the transparency.

Adeptcloud gives us the next relay or for high-end security to manage your data inside of your data center.

We were talking about battles and surge.

People have been talking about the billboard which is says your files and should be never dropped nor bosed.

-- boxed.

One of the things we hear, for example, dropbox is a great place to store my stuff.

Hightail is a place to share your ideas so you can interact with people inside and outside your firewall.

On this issue of security, talking about a new device categories, watches, where the file show up is changing quickly.

Has security been an issue for you in the past?

Is that why you're a moving down this road?

It is something we have invested in from day one.

The ability to expire a file after one download has been a popular feature.

I can detect a file so only you have the password.

These are things that have been foundational to the company.

We're giving ourselves a new elena kagan activity to invest in.

The subject of the -- a new powder keg of activity to invest in.

The subject of the nsa.

Is this of concern to you?

I look at this the same way many silicon valley leaders have.

I think it is necessary for the government to be more transparent about what they are doing and why, in the same manner our customers care about control.

I think the lack of transparency is what many people have raised a concern, so loudly among the silicon valley leadership.

Let's talk about the name.

When you made the name change, it is a really important thing.

What has been that process so far as making the change, the feedback, everything that goes with that?

Any name change is for the faint of heart.

We felt we had outgrown the you send it name let alone the functionality for tomorrow.

Instead of thinking about you stare -- a store it, sign it, we needed a name that encompassed all of those things.

Hightail is a name we could get around.

It connotes agility and speed.

We feel good about it so far.

It has gone well.

Always good for you to stop by.

Brad garlinghouse, the ceo of hightail.

Some celebrities are using who saves.

We will explain the business behind it.

Next on "bloomberg west." ? this is "bloomberg west." celebrities help fuel social platforms like twitter but following a well-known name does not always fully satisfied a fan tossed appetite -- fan's appetite.

There is a new app for fans who say -- steve ellis joins us to talk about it.

Welcome to the show.

Why did you start whosay?

Great question.

We believe , and our clients know, they drive media engagement around the world.

With the fantastic direct to fan platforms that have come down in the form of social networks, if you go back further over 50 years, they have driven magazine sales, newspaper sales, television as well.

There was a chance to finally create something new directly from celebrities.

There is a long list of celebrity users.

Tom hanks, steven tyler, how are they using whosay?

It is good to understand what we set out to achieve.

Today we have an iphone application.

It is a new digital magazine by celebrities.

For fans.

So what they are able to provide as a way to customize and experience in a digital magazine format.

They get a mixture of real-time updates, authentic personal content from their favorite people mixed with our in-house editorial.

We will do stories about they work they do and the work they're going to do.

You have some high-profile investors.

Amazon, comcast, and this is a business you started with caa.

What do they get out of this?

They were instrumental in helping me navigate and learn the process of hollywood.

And of course they have been critical in helping me do things the right way.

They are in this process like all of our other partners as a cofounder.

We service agencies across all of the landscapes.

Twitter has become a very big business, in part because of the celebrities who were early adopters and are now fueling it.

It feels like anyone and everyone is on twitter.

How do celebrities stand out, especially if they are coming to some of the popular platforms lake?

We would love to be partners with them.

I think it is important authenticity drive everything.

Fans today are aware when you're marketing or being yourself.

We have a great many clients who treat social network activity with authenticity.

Danny devito was one of my favorites.

He shares pictures, very successfully.

Everybody finds their own process.

Fans can tell when you're being yourself.

Whether that is frequent or infrequent.

If you're being yourself it makes a difference.

How big of a business can what you are doing ultimately be?

We look to that process very clearly.

In print there are many successful celebrity magazines.

In digital there are many celebrity outlets and many of them make a significant sum of money.

Most important is to gives fans a something they have never had before.

This new experience they can customize.

Definitely the new hollywood.

We appreciate your time.

Steve ellis, the founder and ceo of whosay.

The bwest byte, one number that tells a lot.

Cory is in new york tonight.

219,920,000 dollars.

The cost of the last 12 months and the release of " grand theft auto." the sometimes funny but violent video game could be hurt where people 13 were killed in a navy yard.

I wonder if it will have an effect on their sales.

It is weird to look at the violence in the game, for all of the players who are not mentally deranged, given what happened in washington.

Which would be a big deal given there is estimates in a billion dollars in revenue in the first month.

Thanks to emily chang for her work in detroit today.

You can get the latest headlines at the top of the hour on bloomberg radio and all the time on bloomberg.com/technology.

See you tomorrow.


This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change