In 2009, a glassblowing artist and former computer scientist in St. Louis named Jim McKelvey lost a sale because he couldn’t accept American Express cards. Frustrated by how difficult and expensive it was to take credit card payments, Jim set out to find a solution for small merchants like himself. He co-founded Square with Jack Dorsey in 2009 and together they reimagined the payment processing industry by turning a mobile phone into a credit card reader. In our conversation, Jim shares how Square survived the competitive threat from Amazon, the innovation stack that enabled their survival, and how we are thinking about innovation all wrong. His new book, The Innovation Stack, is available now.
Show Notes
- The difference between an entrepreneur and a businessperson (1:53)
- The origin story of Square and the “perfect problem” it set out to solve (3:35)
- What is a “perfect problem?” (4:40)
- An entrepreneur’s relationship with fear (6:25)
- (8:11)
- Why Jim never hired anyone from the payment industry when he started Square (11:09)
- What Jim looks for when he is hiring (14:30)
- The problem with “disruption” (16:08)
- Why innovation should be thought of as a last resort (17:15)
- Copy when you can, innovate when you must (19:10)
- What happened when Amazon came into the market (21:12)
- How Square survived the threat from Amazon through its innovation stack (26:12)
- What is an innovation stack? (28:53)
- Embracing daily discomfort with a sense of humor (32:00)
- The problem with chasing innovation as an end goal (35:06)
- Have humility and audacity (37:06)
Resources / People Mentioned
- The Innovation Stack by Jim McKelvey
- Square
- LaunchCode
- Invisibly
- Jack Dorsey, co-founder of Twitter and Square
- Herb Kelleher, co-founder of Southwest Airlines
- Southwest Airlines
- Bank of Italy
- Ikea
- The Wright Brothers
- Churchill by Andrew Roberts
- McKelvey School of Engineering
- Elon Musk, entrepreneur
Recommended For You
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- Marc Randolph on Starting Netflix and The Evolution of Ideas
- Guy Raz on The Unexpected Paths to Success from the World’s Most Inspiring Entrepreneurs
- Ginger Hardage on How Southwest Airlines Built a Legendary Company Culture
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