Credit Cards, Streaming Music, & Adaptation

A Conversation with Jim McKelvey, co-founder of Square

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One Year Later…

I know it’s been talked about a lot, but it feels important to mark the one year anniversary of the beginning of this whole pandemic and lockdown. As of this writing, there have been more than 532,000 deaths over this past year from COVID, which is so hard to even comprehend. Countless more lives have been impacted through illness, job loss, or other side effects of this time. Even as it feels like normalcy is on the horizon, we still have a lot of work to do to get back safely.

I was recently interviewed for a radio program in Houston (you can hear it here) and was asked if I have noticed a common thread in my interviews with those who have thrived in this pandemic. To me, it all comes down to one word: adaptation.

For some people, the focus has just been about getting back to normal as quickly as possible. But the ones who have really succeeded over this past year realize that the old ways of doing things was no longer viable and it was time to pivot and quickly.

I posted a long reflection on Instagram about my own journey over this past year. The short version is that I am so grateful for all of the amazing experiences I have had, although so much of it was unexpected. I don’t yet know what our collective memory of 2020 will look like, but I hope that we can bring much of the good forward, while honoring the grief and suffering too.


Episode 75- Jim McKelvey

This week, I spoke with Jim McKelvey, who is a man that is tough to define. He’s a glassblower from Saint Louis. He’s an author. He sits on the board of the Federal Reserve. But perhaps most famously, he co-founded the company Square with Twitter CEO Jack Dorsey.

Square started out as a payment company with a single invention that turned a smart phone into a credit card terminal, making credit card payments accessible to many small businesses. Over the last decade, Square has innovated into POS solutions for retail and e-commerce, launched the Cash App that makes sharing money and investing accessible, and they recently purchased the streaming music service Tidal.

Jim and I started our conversation by talking about how the pandemic had brought changes to the way we all do business:

“It’s been a huge accelerant. All the stuff that I was expecting to happen over the next five years happened in five months. You know, video meetings and online retail and delivery. All the stuff that we could see the trends coming, but now they’re all part of our lives.”

Jim’s book The Innovation Stack came out exactly one year ago. It is part memoir, looking at his path founding Square and navigating the challenges of hardware design and arcane credit card company regulations, and part case study of other businesses that similarly found a market that was underserved and had to create a whole series of inventions to solve a single problem.

Jim points out in the book that as humans, we are designed to copy each other. We copy what works in life, often only adapting little pieces here or there to fit our custom needs. But for entrepreneurs, there may not be a road map to copy because they are trying to solve a problem that has not existed before. He sees a strong parallel between the innovators he profiled and the place we all found ourselves last year as the pandemic was surging:

“What I talk about in the book is this idea of not being able to copy and when you are forced to invent what happens, because we spend so much of our lives doing stuff that we know is likely to work if we just copy what’s been done before. The main theme that I explore in the book is what happens when you can’t copy? What does it force you to do? And we were all sort of collectively thrown into this world where a lot of the normal stuff didn’t work anymore, so we all had to be kind of innovative.”

Most of us prefer having a clear path in front of us to follow, one that has been comfortably worn by those that came before us. But sometimes, in moments of uncertainty like a global pandemic, we have no choice but to cut a new path:

“These moments of duress are ones where, if you are willing to step off the path, and maybe it’s because the path just disappeared in front of you, but if you’re willing to step off the path and become an explorer and an entrepreneur, that’s where I think great promise lies. And I’ve seen that again and again this year.”

Jim and I talked a lot about what it means to be an entrepreneur. In our culture, an entrepreneur is often romanticized as a maverick or an adventurer with great bravado that’s out to solve the world’s problems. Jim thinks that’s the wrong way to view it. Any of us can be an entrepreneur if we discover a problem that has yet to be solved and work hard to find the solution:

“We’ve got a lot of problems in the world that I think we’re going to need entrepreneurs to solve. I don’t want to be limited to the tiny group of people who feel bold and adventurous. I want people like me who are pretty timid, but also stubborn, to be able to say look, I don’t feel comfortable, but I’m going to do it anyway or hey, I don’t know how to do this, but somebody needs to and I guess I’ll be the first one.”

Square has undoubtedly had a big effect on small businesses, especially artisans and craftspeople. After this interview posted on Thursday, I heard several stories from folks that went so far as to say Square changed their life and allowed them to take their passions full time, which was pretty moving to hear.

I often find Square POS machines in local coffeehouses and bakeries. You’re probably familiar with them because they’re a large tablet looking device in a white case and the cashier usually will turn the reader towards you to sign with your finger and add a gratuity. I discussed with Jim that I enjoy being given this option, as I usually don’t even think to tip at a larger chain like a Starbucks. I asked Jim his thoughts on the effect of Square on tipping:

“What it does is it brings you into the moment. A tip really, at least for me, makes me think about the experience that I’m having so I don’t have this unconscious experience where I’m just buying something and you hand it to me and I don’t even acknowledge you as a human. I do like the fact that it wakes me up a little bit.”

I also wanted to learn more about Square’s recent acquisition of Tidal, the music streamer founded by Jay-Z. Square built it’s reputation by helping bring small merchants into the credit card market that had been previously shut out by the establishment. On its surface, I didn’t see the connection to music and asked Jim why purchasing Tidal made sense for a financial company:

“What you should look at is an industry where there are a lot of small merchants, a lot of small folks who have never been well represented. Performers and all the people that work with them. There’s a whole ecosystem of folks that make the music that we consume and it’s been very, very heavily weighted towards the big boys, the stars and the powerful labels. Does it have much to do with payments? No, not in my mind. But does it have the feel of this area that has ignored the little person for too long? I think so. And so that’s what I’m interested in.”

Jim’s book The Innovation Stack is out now. It’s a fascinating read and does not take the usual course of a business book. If you haven’t heard it yet, Jim’s interview is full of interesting stories about Square, glassblowing, and makers.


What’s Coming…

Perhaps you’ve noticed that I am a big fan of puppeteers and have now spoken to several folks in the puppet industry, like John Tartaglia, Halle Stanford, and Paul Rugg. I have another really cool puppeteer joining me on Thursday, Michelle Zamora. She is the lead puppeteer on the new Netflix kids’ show Waffles + Mochi, which looks at healthy eating and the role of food around the world. And, oh yeah, it stars Michelle Obama! I’ll talk with Michelle Zamora about the behind-the-scenes aspects of playing the title character Waffles on the show and some of her puppet influences.


If you have questions, comments, thoughts, ideas, or anything else that you’d like to share, please feel free to email me anytime: hracela@mac.com

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Stay Safe!

Heath