Twitter Creator Takes on PayPal

Twitter founder’s next big thing. Jack Dorsey, the co-founder and former CEO of Twitter, says he “hate[s] getting change.” So yesterday, he announced the launch of his new start-up Square, a mobile payment service provider that will allow just about any merchant, big or small, to cheaply accept credit card payments. “Square is a small plastic device that plugs into a gadget’s headphone jack,” the LA Times explains. “Buyers swipe their credit cards through the machine, which then transmits the payment data to an application running on a connected iPhone or iPod Touch.” Applications for other smart phones will be available in the future. Dorsey told the paper that the company will most likely give the plastic devices away for free and charge $1 for the mobile application. Not surprisingly, TechCrunch went into a bit of a frenzy with the announcement. Michael Arrington wrote that Square is already worth $40 million (even while it is still in private beta). And MG Siegler also conducted a video interview with Dorsey and tried out the device himself.

The lowly beginnings of ridiculously wealthy entrepreneurs. They may have ended up as titans of industry, but they didn’t start out that way. Far from being born with silver spoons in their mouths, Mint.com has a list of the surprisingly unglamorous first jobs of 10 successful entrepreneurs. Michael Dell, Sam Walton, and Warren Buffett were all newspaper delivery boys early in life. The post even claims that at age 13, Buffett was savvy enough to “deduct the cost of his bicycle from his tax return.” Other entrepreneurs, like Ross Perot, had an even rougher start. Perot’s father, a part-time horse trader, put his six-year-old son to work breaking horses for a dollar or two apiece. (Hat tip to Digg.)

The best way to prevent brain drain? A start-up visa. Let’s say you’re a smart, well-educated entrepreneur living outside the U.S. who wants to come to America, create a company, and hire a whole bunch of people. Right now, U.S. visa laws make it exceptionally hard for immigrant entrepreneurs who are not well connected to get visas. This policy could lead to the first U.S. brain drain, according to Vivek Wadhwa, an entrepreneur and Harvard researcher who argues in favor of idea in a BusinessWeek article. The idea has also been championed by the Kauffman Foundation, Y Combinator’s Paul Graham, and Brad Feld of Mobius Venture Capital. Here’s how it would work: Qualified U.S. investors would make a commitment to fund a great idea for a start-up from a non-U.S. citizen, and, after being vetted by an industry-appointed board, the founder would get a permanent resident visa.

How Facebook games make money. Business Insider takes on the question of how Zynga has managed to turn itself into a money-making machine–revenues are said to be close to $250 million–by selling digital fish, farmland, and all sorts of other virtual goods. The answer? “[L]ike arcade games from the 1980s, Zynga’s social games charge people small amounts of money to reduce friction in games they are addicted to,” writes Nicholas Carlson. He digs into that observation with a 41 page slideshow that shows, in painful detail, how Zynga gets gamers addicted–and, more importantly, how it gets them to share the games with their friends. Get ready for pages and pages of Facebook spam.

Paul Graham takes on Apple. Everyone knows that geeks love Apple, but Y Combinator founder Paul Graham’s latest essay suggests that the love affair may be coming to an end. Graham takes on the company’s App Store approval process, which “has harmed [Apple’s] reputation with programmers more than anything else they’ve ever done,” he writes. “Now a lot of programmers have started to see Apple as evil.” The problem, Graham says, is that Apple makes it hard for software developers to revise their work, creating problems for start-ups and also ensuring that many of the apps on the iPhone are full of bugs. This, he says, could create problems for Apple in the long term and create opportunities for competitors. “An organization that wins by exercising power starts to lose the ability to win by doing better work,” he writes. “And it’s not fun for a smart person to work in a place where the best ideas aren’t the ones that win.”

A one-stop website for would-be government contractors. American Express OPEN teamed up with a host of other small business partners, SCORE, BusinessMatchmaking.com, and Women Impacting Public Policy to launch a new hub on government contracting. The program, called VIP, expects to help entrepreneurs access as much as $1 billion in procurement contracts. There’s a step-by-step guide, starting with how to register as a contractor and how to prepare your business to deal with Uncle Sam.

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