How to make your business unbeatable ft. Square’s Co-founder, Jim McKelvey

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Welcome to our brand new newsletter! This is Grace Weekly, with the best take-outs we have collected for you, taken directly from our “Smart Venture Podcast” and our interviews with the best of the best.

Can you believe it’s been a week since we launched? We have some great stuff to get in your inbox. Last week we had Pepsi CMO Todd Kaplan and his great advice on how to start an amazing career in marketing.

For our 2nd week we have the Co-founder of Square and Jack Dorsey’s former boss, Jim McKelvey

Jim McKelvey is the Co-founder of Square and the founder of Invisibly, LaunchCode, and Third Degree Glass Factory. He is also the Co-founder and General Partner at FINTOP Capital, Deputy Chair of the Federal Reserve Bank of St. Louis, and a member of the Board of Trustees at Washington University in St. Louis.

“Let’s dance”

You’ll see, you’ll see. I swear this will become viral someday.

Parts of this newsletter are freely taken from our interview with Jim and adjusted for reading. Everything a person says in the interview only reflects his own opinion, not the newsletter or the company they work at.

GG: You wrote a tax book in college, were a glassblower, and co-founded Square with Jack Dorsey. You also interviewed your hero, Herb Kelleher. What's your favorite experience among these incredible life events?

JM: I think the events that impact me the most are the ones that don't make good stories. Crazy things generate good stories. And the best stories are ones where it goes wrong. That also leads to a lot of humility.

Crazy things generate good stories. Ask yourself “Is this the right time to stick my head in a turkey and dance?” You know the answer.

GG: Who do you consider your personal board of advisors?

JM: I've lost two of them in the last couple of years. Herb Kelleher was one of these people who inspired me and talked straight. Every time I had an interaction with him, I was impressed by his character and humor. He was successful, but kept it real and fun. That was an inspiration. The other guy that I idolized was my dad.

JM: I've never really had a lot of mentors because I didn't realize that I needed a different type of mentor - someone who was an innovator and not just copying others. I've learned that there's a different set of math that works when innovating and that sometimes doing the opposite of what others do can be successful. When I created Square with Jack, we wrote a pitch with 140 reasons why it would fail, but we still pushed forward. If you want to do something new, expect barriers.

GG: What advice do you have for finding a co-founder for a regular person?

JM: Try to find someone who complements your weaknesses. Don’t exclude potential partners based on age, gender, race, or other factors. When I met Jack and started working with him, he was 15 years old and very talented. Looking for a good partner shouldn't be based on data or spreadsheets. Don't get distracted by the numbers.

GG: Your book “The Innovation Stack: Building an Unbeatable Business One Crazy Idea at a Time.” is super awesome. I wish I had read this 10 years earlier.

JM: I wish I'd known a lot of that stuff earlier myself. I've had several conversations with people who said, “Boy, where was this book 20 years ago when I needed it?”

GG: You discussed Southwest Airlines, IKEA, and VOA as companies that compete on pricing. How do they maintain their competitive advantage by focusing on pricing?

JM: An innovation stack can allow a company to be more efficient and potentially have lower prices than its competitors. The question then becomes whether to price similarly to the market or make the product accessible to those who couldn't otherwise afford it. My research shows that companies that keep their prices low to allow new customers to enter the market end up dominating it.

GG: What advice would you tell your younger self?

JM: I wouldn't want to do things any differently, but it would be "you don't understand the power of what you've built because you don't understand what an innovation stack is. Once you do it, maybe you can rest a little more, but it's not going to be that comforting, because everybody wants a guarantee in life, and if you're doing something that hasn't been done, you don't get that. So even time traveling back to talk to myself, I probably wouldn't say anything except maybe "wear more sunscreen".

What’s a TikTok challenge? Why should I “dance with my hands”? You are crazy old man, crazy!

JM: Innovation involves tackling unknown problems and not having a set guide to follow. It's not possible to guarantee success, but the key is to be willing to take risks and try new things, even if the outcome is uncertain.

GG: Have you ever tried something new and not succeeded, but kept on trying? 

JM: It happens to me all the time as an engineer. Engineers work on things that are broken, we don't usually apply our skills to things that are already working. Many of the successful people I studied were ordinary people who found themselves in a situation where they had to come up with their own solution or fail. They kept working on it until it led to the creation of successful companies.

GG: Does it mean that it's a numbers game? Try out as many times as possible?

JM: I don't think success is just about trying enough times. It's also about trying the right way. You can't just keep trying and eventually succeed. It's about the approach you take. I believe in using a process, even for innovation, and not relying on luck. When you look at successful people, luck may play a role, but it's not something you should depend on.

“Grace Weekly - Better than sunscreen”

So what do we get from this great interview dear reader?

Top takeaways from our newsletter this week:

You’ll get a reward if you take the path of innovation.

Age is one of the biggest biases.

Try to find a business partner with the same attitude.

Focus on qualities and not backgrounds.

Don’t get distracted by numbers.

Don’t stick your head in a turkey.

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So what’s in store for you next dear reader?

We’ll see you next week in your inbox with the sweetest take-outs taken directly from our interviews with the best entrepreneurs.

Can’t get enough and want to hear the full interview with Jim? Head to “Smart Venture Podcast” and listen to the full episode.

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