To be clear, he's never had an exit and I don't see one for Twitter or Square anytime soon. There's hundreds of millions (billions?) of dollars of VC cash sitting in those investments without getting a return.
Meanwhile, Square announced in April it was trying to raise $250m at a $4B valuation (Source: http://techcrunch.com/2012/04/25/square-now-processing-5b-in...). They just finished that raise with $200m at a $3.25B valuation. That's a huge miss for such a big company. They're also burning cash at an enormous rate (see http://i.imgur.com/b1Sm9.png - leaked slide).
So just remember that he may be an amazing person, but the PR engine surrounding him so distorts everything that we hear that at least for me, I've stopped paying attention entirely.
PS: Don't even get me started on how much the press entirely screwed up the Starbucks partnership reporting. It's a tiny marketing ploy is all.
PPS: This is mostly just my opinion obviously. I prefer businesses to focus on creating a viable, long-term business instead of a clever marketing machine with an unsustainable revenue model.
(I don't plan to mention that every time I find a new one, but this is the most perfect example I've found since I thought of trying to detect them algorithmically.)
If a 3.25b valuation at Square's age is a huge miss, all but a handful of companies in history have missed worse.
Do you actually know anything about Square's "PR machine," or are you just assuming he has one because he's in the press a lot? I don't know myself whether for example they have an in-house group that does aggressive outbound PR, or whether they have an outside PR firm, or both, or neither. It's possible the answer is neither; I get mentioned in the press a lot, and YC has neither.
Do you feel that Square's raise was successful even though it was a lower amount at a lower valuation than it anticipated? Maybe not a huge miss, but that seems like a miss to me. Thoughts?
(PS: I am using the term miss in terms of raise/valuation, not in terms of company success).
As for PR, having worked hard to get press both with PR and without, I feel like I have a sense of when it is being used and when it is not. In this case, Dorsey's coverage seems extraneous, flashy, and sometimes out of nowhere. Why are there so many articles about him and Square from so many publications seemingly all the time? Why all this hype around someone that, while immensely impressive, is still only one of a large number of people doing amazing things? Why do we not see so many articles on Elon Musk and Space-X from every magazine on the planet? I can't seem to go a day without seeing a profile of Dorsey or about Square. Feels to me like a very well calculated PR plan. Again, I may be wrong and would appreciate your thoughts.
Thanks and sorry for the entrance into the dismissal corpus. Promise to do my best to stay out of there in the future.
First, raising capital and going public are two entirely different things. One is generally an exit event and the other is not. One garners returns for your investors and the other does not. Square is raising operating capital to continue operations, not selling itself publicly to create returns for previous investors. I would be much, much more impressed to see Square go public than raise any amount of money. Or much more impressed with a company that raised $0 going public.
Big rounds aren't what matters when I say miss. What matters is that Square was not able to raise at the valuation it wanted and what that signals regarding their internal finances and the valley's investment community in general (and even beyond since Square raised from companies outside SV).
And yes, Square/Dorsey seem to strike a great emotional nerve, but that's my point. That's not by accident. That's very carefully crafted marketing. And to get as much coverage as they do, they probably spend an enormous amount on internal or external PR. It's all carefully crafted to tell exactly the story that Square wants us to hear.
So yes, we know a bit about Square and Dorsey's PR machine, it's been reported on in the press a number of times.
These will be a lot easier to detect by who is upvoting/downvoting rather than by looking at the text, of course. I mention this because the term "corpus" usually refers to a body of text, whereas the metadata here is the gold.
The WSJ article says Dorsey "engineered" the card reader. The blog post says no, it was Dorsey's friend, Jim McKelvey, who engineered the card reader.
However, the blog post does not say that McKelvey, in turn, seems to have outsourced the engineering to Robert Morley, a hardware designer and EE professor in St. Louis (http://venturebeat.com/2009/12/15/professor-claims-square-to...).
This last connection seems plausible to me. I went to school with McKelvey and knew him slightly. Morley was a very well-known EE professor at our university, and a hardware hacker who founded a successful company called Micro-Term that made terminals, and later worked on hearing aid hardware which I'm not sure ever came to market. Exactly the kind of person a former CS major and glassblower like McKelvey might ask to do the design.
The most recent summary I could find of the "who engineered the Square hardware" question is: http://techcrunch.com/2010/12/02/jack-dorseys-square-embroil...
It is a filing by Square about the patent you mentioned that is held by Morley. Square is filing to have McKelvey added to the patent. Thus, Square as a corporation associates McKelvey with the device's invention, not Jack.
All of the points you make were implicit from that link.
PS - I'm a student at WashU, did you graduate from here?
I posted here because I thought someone might have something new to add to this story -- the above info seems to be all circa 2010.
Yes, BSCS, BSEE. My roommate worked in Morley's lab.
Now, you seem to have interpreted that statement correctly anyways. So do you have any evidence whatsoever that Square "makes money" (ie. turns a profit) from "every single user"?
As for the source, the slide was on TC and the report is available with a subscription at https://intelligence.businessinsider.com/welcome. I can't verify it, but everything I have seen/know about their revenue model makes it look genuine.
In the sociology of science, "Matthew effect" was a term coined by Robert K. Merton to describe how, among other things, eminent scientists will often get more credit than a comparatively unknown researcher, even if their work is similar; it also means that credit will usually be given to researchers who are already famous. For example, a prize will almost always be awarded to the most senior researcher involved in a project, even if all the work was done by a graduate student.
The news media tends to avoid complicated stories. Sometimes it's because the reporters and editors don't understand the story, but oftentimes it's because of A) space limitations or B) complicated backstories will confuse readers/audiences. Television news has an especially difficult time overcoming these factors.
But this is the WSJ. Complicated stories and cofounders/partners hitting rough patches (or being pushed aside) are the norm. In this instance, there's not enough data to determine what went wrong. But I find it hard to believe an experienced WSJ reporter would gloss over/leave out such important details.
-Communicating something in a way that makes it easy to understand.
-Making an attribution error.
-Making numerous errors and omitting crucial, relevant, details.
I'm not sure about the WSJ, but many news organizations have moved toward "page view journalism" and the quality shows. I have a subscription to the WSJ but I'm not sure how much longer I will keep it.
Doing an interview with a good photo pretty much kills a day. Multiply by an article a month, add fan mail and invitations to speak, and many sane people would prefer to stay in the background.
Sure it is. Microsoft invested in Apple while still competing with them.
With that reason, it makes sense for Visa to hedge their bets and invest in all parties of that market. With that they're in, no matter who wins.
Would that they did. sigh