In Oakland in 2000, Dorsey started his company to dispatch couriers, taxis, and emergency services from the Web. His other projects and ideas at this time included networks of medical devices and a "frictionless Service market". In July 2000, building on dispatching and inspired in part by LiveJournal and by AOL Instant Messenger, he had the idea for a Web-based realtime status/short message communication Service.
At the 5th Annual Crunchies Awards in 2012, hosted by TechCrunch, Dorsey was named Founder of the Year.
Dorsey was announced as a new member of the board of Directors of The Walt Disney Company on December 24, 2013. The press release referred to Dorsey as a "talented entrepreneur" and explained that his experience is aligned with the corporation's "strategic priorities." In January 2018, it was reported that Dorsey would not seek re-election at Disney's March annual meeting, due to increased difficulty at avoiding conflicts of interest.
Dorsey, along with co-founder Jim McKelvey, developed a small Business platform to accept debit and credit card payments on a mobile device called Square, released in May 2010. The small, square-shaped device attaches to iPhone, iPad, iPod Touch, or Android devices via the headphone jack, and as a mini card reader allows a person to swipe their card, choose an amount to transfer to the recipient and then sign their name for confirmation. Square is also a system for sending paperless receipts via text message or email, and is available as a free app for iOS and Android OS. The company grew from 10 employees in December 2009 to over a hundred employees by June 2011. Square's office is located on Market Street in San Francisco. In September 2012, Business Insider magazine valued Square Inc. at US$3.2 billion. Dorsey is CEO of Square, Inc. On October 14, 2015, Square filed for an IPO to be listed on the New York Stock Exchange. As of that date, Dorsey owned 24.4% of the company.
Dorsey was ranked by Fox Business as the #4 Worst CEO of 2016.
In 2017, 24/7 Wall St. listed Dorsey among the 2017 Worst CEOs in America.
In March 2018, Jack Dorsey announced that an improved version of the verification system is coming to Twitter. The purpose of redesigning verification is to let people verify more facts about themselves, emphasizing proof of identity. The overhaul may be in place before the U.S midterm election of 2018 and help in verifying the identities of the candidates.