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jack dorsey demoTwitter co-founder and chairman Jack Dorsey focused on his new mobile payments startup Square during a question-and-answer session this afternoon. But as he looked at how Square is navigating some of its initial challenges, he also looked backward, explaining three of the key lessons he learned from the early days of Twitter.

Dorsey was interviewed on-stage at DEMO Fall 2010, the technology launchpad conference co-produced by VentureBeat.

San Francisco-based Square offers a small plastic reader that merchants can attach to their Android phones and iPhones, allowing them to process credit card payments. But Square has rolled out a bit more slowly than planned, saying it wants to make sure the product is completely solid before it goes into wide release.

“I want to to make sure Square is known for its availability, it’s known for its trustworthiness, it’s known for its minimization of all the bad things that could happen with a payment network,” Dorsey said.

Right now, Square is still in its pilot program, where i sends out devices out to interested merchants — up to 10,000 per day. Presumably it’s not hitting that 10,000 number every day, but Dorsey said it’s too early to get specific, beyond the fact that the company is seeing some “big numbers.”

There are definitely a lot of sensitive issues to juggle here, since Square is dealing with financial information, and Dorsey said he’s learned from Twitter’s early struggles. (You may remember that the microblogging service was notorious in its early days for long periods of downtime.)

The first big problem with Twitter’s approach, he said, was that, “We weren’t communicating with our users — we weren’t telling them why we were going down.” So whenever there’s a delay or a problem, Dorsey tries to share it with users right away. The second was that the company didn’t have good internal communication. In fact, Dorsey said one of the greatest fears with any company is not that it gets beaten by the competition, but that it fails to “move cohesively as one unit.” So at Square he tries to keep the team focused on well-defined goals. Lastly, in Twitter’s early days it had very little data or analytics about how it was doing: “We were pretty much flying blind.” Square, on the other hand, logged and tracked everything about its product from the start.

Check out the video excerpt from Dorsey chat on stage with VentureBeat CEO Matt Marshall.

And all of that should help Square achieve what Dorsey said are the company’s big goals — making purchases much easier for businesses and customers, and also creating more revealing more data around these transactions.

“I see Square as a way to bring more transparency to this world,” Dorsey said.

[photo: Dean Takahashi]

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