Growth Chair Circle | Jim McKelvey - Co-Founder, Square & Board Director, St. Louis Federal Reserve
19th October 2020
In the latest in our Growth Chair Circle series, we were delighted to interview serial entrepreneur, inventor, philanthropist, artist and Board Director, Jim McKelvey.
In 2009, Jim was a St. Louis glassblowing artist and recovering computer scientist and lost a sale because he couldn't accept American Express cards. Frustrated by the high costs and difficulty of accepting credit card payments, McKelvey joined his friend Jack Dorsey (the Co-Founder of Twitter) to launch Square, a start-up that would enable small merchants to accept credit card payments on their mobile phones. Jim was Chairman of Square’s board until 2010, and still serves on the Board of Directors.
In 2011, his iconic card reader design was displayed at the Museum of Modern Art. In 2016, McKelvey founded Invisibly, an ambitious project to rewire the economics of online content. In 2017, he was appointed as an Independent Director of the St. Louis Federal Reserve and he sits on the Digital Advisory Board of Fannie Mae.
He recently published The Innovation Stack: Building an Unbeatable Business One Crazy Idea at a Time (Portfolio, Penguin Random House, 2020)
You launched Square in the last financial crisis in 2009. What advice would you give to founders planning or considering starting up now?
All the world-changing companies I found when researching The Innovation Stack faced some sort of major disruption: World War, City-levelling earthquake, Trip to the Supreme Court, etc., so it is not uncommon for tough times to birth great companies. That said, starting up in a recession is different. Resources are plentiful but money is not. At Square, Jack and I had some savings and were extremely thrifty until we got the product to market. My advice would be to keep a very lean team.
What support did the Square board give you in critical growth phases?
Our board members provide critical insights, and critical connections. Occasionally, they are just critical. I think the greatest thing the board did was to approve us “doing nothing” when we were attacked by Amazon. After Amazon copied our product and undercut our price, most people expected Square to die. Almost everyone expected Square to react. But we didn’t. We didn’t even match Amazon’s price. The board supported the toughest decision they could: when facing an existential threat, they allowed us to just carry on. A year later, Amazon gave up and sent their formed customers little white Square readers.
You now sit on a number of boards as an independent Non-Executive. As an entrepreneur, what motivates you to do that?
A board seats is probably the most efficient way for me to work with a company. I am not a good manager, but I can create new products. I only join organizations that welcome new ideas and have the will to take risks.
What drives you to sit on boards like The Fed and Fannie Mae in particular?
Fannie Mae and the Federal Reserve impact the lives hundreds of millions of people. Even if I only contribute a tiny amount, the impact is tremendous.
You've just published The Innovation Stack. What do you hope people will take away from reading it?
I want people to be inspired to try something new. Innovation is rare, but it is possible. There are so many misconceptions about how true change is made. Two of the biggest are the Hero Story and the assumption that great entrepreneurs are volunteers. Both of these lies make “normal” people feel like they cannot do anything different, either because they lack qualifications or are not bold adventurers. In fact, most of the heroes I met were just normal people who reacted to terrible situations by building something new. They discovered a special process that creates new industries. We can all do that.
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