Ben Horowitz: Jack Dorsey Is Eating Payments Through Software

Today at TechCrunch Disrupt SF, Ben Horowitz, co-founder and general partner of Andreessen Horowitz, said that Jack Dorsey and his startup Square are changing the world through software, in the same way that other technology is being disrupted through software innovation. It’s part of Horowitz’s theory of how “software is eating the world.” (Dorsey, by the way, will be following Horowitz’s conversation with his own keynote in a few minutes.)

Dorsey is behind two of today’s hottest startups: He’s co-founder and Chairman of Twitter, and he serves as CEO of mobile payments startup Square. Square was founded in 2009 and has grown to be pretty huge since then. Last summer, Square raised $100 million and added Mary Meeker to its board. But it just closed its biggest deal ever last month when it partnered with Starbucks, raising $25 million from the coffee retailer and added CEO Howard Schultz to its board. That deal valued Square at $3.25 billion, but more importantly, it will put the Square Directory into Starbucks apps and in its in-store Digital Network.


In June, Square said it was processing $6 billion in annual sales. But it’s facing increased competition from other payment startups, as well as incumbents, such as American Express, Visa, and MasterCard. To face that competition, Square is aggressively lowering prices for small businesses that make less than $250,000 per year, allowing them to either pay the set 2.75 percent per swipe or pay one fixed price of $275 per month, with no charge per swipe.

Dorsey also founded Twitter, along with Ev Williams and Biz Stone, back in 2006. After a major management shakeup last year, he re-joined as its chairman. Since then, the company has been working on improving its mobile products and ramping up monetization. But it’s been doing so in part at the expense of its developer ecosystem, introducing changes to its API that could curtail development on its platform.