At Square, an obsession with the 'magic' of hardware design

Jesse Dorogusker spent eight years at Apple, which made billions selling hardware. He left for Square, which gives away his designs for free. Is this guy nuts?

Square CEO Jack Dorsey showing off Square Stand at the unveiling of the new hardware last month in San Francisco. Jesse Dorogusker, Square's vice president for Register watches from behind. Daniel Terdiman/CNET

SAN FRANCISCO -- After eight years as director of engineering for iPhone, iPod, and iPad accessories at Apple, Jesse Dorogusker could have gone just about anywhere he wanted for his next gig.

He chose Square, the mobile payments company that, among other things, gives away its signature credit card reader for free.

By Dorogusker's own admission, that's a "terrible hardware business" model. So what inspired someone with a solid gold resume to leave a company that makes billions on hardware for a place that gives away his work for nothing?

For Dorogusker, it was the opportunity to join one of the hottest startups around, where, thanks to the money Square makes processing more than $15 billion in annualized transactions, he can focus on figuring out how to build high quality hardware tools at volume and give them away for free, all to inspire people to use Square's payments service. "To me," Dorogusker told CNET, "that was a really much more fascinating problem than build a product at a cost, sell it at a price, calculate the margin, report to [Wall] Street, and repeat."

Plus, Square's leadership clearly shared Dorogusker's philosophy of hardware design. Though it has manufacturing partners around the world, it does all the electrical, mechanical, and firmware design in-house, and it's at the intersection of those "where we think the magic of the product is," he said.

To date, Square has released just two hardware products -- the card reader (now in its third major iteration) and its brand-new Stand for Register , a countertop iPad holder that allows retailers to easily accept payments either with a credit card or wirelessly.

Square vice president for Register Jesse Dorogusker. Square

As vice president of Square's Register division, the buck stops with Dorogusker on all things hardware (and software), and he has a team of about 15 people who, like him, spend their days obsessively focusing on trying to come up with physical tools for helping consumers have a better experience paying for things.

Dorogusker won't talk about what Square's next hardware offering will be, but he does allow that he and his team are always working on "multiple things." And that's good because Square only hires hardware engineers who are hungry to build, as he put it, people who have to build, and who must build.

But Dorogusker is willing to drop hints about the next directions Square could take in hardware: So far it has only released general tools that serve many different markets, from health and beauty to medical to retail, food service, garage sales, and beyond. "We have not yet built hardware that is specific to any one vertical, any one industry," he said. "But we have that option. We have that power."

An example of such a tool? Dorogusker pointed to dedicated point of sale systems often found in restaurants or taxis. "There are opportunities in all those spaces," he said. "Just look at the objects in a taxi and you'll shake your head, maybe cry a little bit, as we do."

Square's Stand for Register allows retailers an easy way to take credit card payments or wireless payments via iPad. Square

Is this idle banter? Who knows, given that Square is tight-lipped about its product pipeline. Then again, founder (and Twitter co-founder) Jack Dorsey got people buzzing last year when he was spotted in a New York taxi with Mayor Michael Bloomberg, leading to speculation about whether the company was going to be involved in replacing the city's standard taxi payment hardware. There was even hard evidence of a pilot program that was abruptly canceled.

The philosophy of building hardware
When it unveiled Stand last month, Square made a very big deal out of it. Some may have wondered if such a tool merited so much energy, but the company clearly feels that it needed to give its thousands of retail customers something that offered what Dorogusker called a "tangible connection, not only to credit cards, but to the countertop, [and] to the physical space."

Stand took more than a year to develop, and Dorogusker's team was already thinking about the next versions of it long before the first was announced. That's normal though, especially in an environment staffed with engineers who are anything but patient. "You have to have a very driven and clear roadmap of what you're building today and what you're building after that," he said, "and anything you build is a snapshot in time of your best idea and the best technology available."

But one thing Dorogusker has little time for is the limits of the laws of physics. Square was built, as other "great companies" have been built, "on the premise that you can't accept all of those underlying assumptions as true," Dorogusker said. "You have to find ways around them...you have to go faster."

Inspiration is everywhere
For someone like Dorogusker, designing hardware is hardly a 40-hour-a-week occupation. Not when everywhere he goes in life, potential inspiration for future design jumps out at him.

"It usually happens not at the product level, but at a much, much smaller level," he said. "My particular obsession is probably the way things open and close, the way they click."

That's why he loves his eight-year-old German car, he said. Although it may not be all that impressive, Dorogusker loves how its doors close, "the sound, the feel, the certainty, the confidence. I had other vehicles [where I'd always ask] Did that door close?...I never do that with my car."

That might be why one of the most carefully crafted design elements of Stand is the subtle but satisfying click it makes when it rotates into its home positions at 0 and 180 degrees. Dorogusker becomes almost romantic talking about prototyping that click, a "moment of daintiness as it kind of snaps into place."

Now comes the challenge of iterating Stand. All Square will say now is that the next step is a version of Stand for Apple's Lightning connectors. The company launched Stand with compatibility only for iPad 2 and iPad 3, and expects to add fourth-generation iPad functionality this fall.

It may not sound like that should take half a year, but Dorogusker speaks from his long experience at Apple when he explains just how big a deal switching from the 30-pin adapter common to all iPods, iPhones, and iPads for so many years to Lighting was. After all, he said, the 30-pin connector was the basis for tens of billions of dollars of products, a massive supply chain ecosystem, huge amounts of hardware and software development, and more. But Square is adapting.

And don't worry about that frustrating Dorogusker. "It's a fine, fun problem," he said. "I love developing products. It's my favorite thing to do."

 

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