How Jack Dorsey used Square to con venture capitalists

Jack Dorsey, the Twitter co-founder who currently runs mobile payment startup Square, this week gave a talk about entrepreneurship at Stanford's new Jen-Hsun Huang Engineering Center. Lots of good stuff about the early days of Twitter -- back when it was a podcasting company called Odeo, even though no one there had interest in podcasting -- and the founding of Square.

He also explained why payment startups might be the most lucrative of all startups, when all you have is an early proof of concept:

In a month we built a very early prototype of what is now known as Square, which is a credit card reader that plugs into the audio jack of your iPhone or your Android or you iPad… I could actually swipe a card and generate an electronic receipt via email and then send it out to a person. And I loved this because I would go around to all these angel investors and VCs and charge them $5 or $50 to show them my new idea. I made $600 from that by the way. It was awesome.

Here is video of the entire talk, about half of which is Q&A (go here if you're having troubles viewing):