Lessons from Jim McKelvey

A titan of innovation and a relentless problem-solver, Jim McKelvey, the co-founder of Square, has a treasure trove of wisdom for aspiring entrepreneurs and seasoned business leaders alike. His philosophy, largely encapsulated in his book "The Innovation Stack," challenges conventional business thinking and champions a path of authentic entrepreneurship.

On True Entrepreneurship

"The vast majority of entrepreneurial ventures did not steal their customers from any established business, but rather brought new people into a market. Optimism, innovation, and inclusion are the buzzwords of those who expand markets." [1][2]
"If you stay within this metaphorical wall, you are a sane businessperson. If you leave the world of the known, you are either an entrepreneur or a corpse." [1][3]
"Historically, the word entrepreneur used to mean somebody who started a business that was unlike any other business, i.e., they were doing something likely to kill them or not succeed." [4]
"True entrepreneurship is a brave and relentless quest. It's about identifying and resolving an issue that others haven't even noticed yet." [5]
"The first rule of being an entrepreneur is that you can't be an expert. Nobody is qualified to do something that has never been done before because nobody's done it. We don't know what the qualifications are." [6]
"All human progress is made by people who are unqualified." [7]
"You want this weird sort of humility-arrogance combination that's hard to describe." [8]
"Venture capital is for expansion, not exploration." [1][3]

The Innovation Stack

"Innovation stacked upon innovation stacked upon innovation gives you this weird thing where you end up with a market all to yourself, it's really hard to unseat a company that has all those innovations." [9]
"Solving one problem usually creates a new problem that requires a new solution with its own new problems. This problem-solution-problem chain continues until eventually one of two things happens: either you fail to solve a problem and die, or you succeed in solving all the problems with a collection of both interlocking and independent innovation. This successful collection is called an innovation stack." [10]
"As you solve one problem, it often unfolds into another—or even several more. This chain reaction of problem-solving births an intricate web of inventions, described by McKelvey as an 'innovation stack'." [5]
"The innovation stack is super powerful. It effectively creates a market that nobody else has." [11]

Problem Solving

"Look for problems, not opportunities. A company should always be a vehicle to solve a problem, not an attempt to predict market opportunity." [8]
"If you view every problem through the lens of the Serenity Prayer, a small subset of problems comes sharply into focus—those unsolved problems we have the power and courage to solve: they are our perfect problems." [1][3]
"It all starts with a problem that needs to be solved. I'm not particularly interested if somebody has an idea for a thing, but I am interested in a problem that somebody tries to solve." [6]
"Being pissed is a great reason to start a company." [12]
"The most interesting part of any market is its end. Why does the market stop at this point? ... This is also the point where entrepreneurship begins." [1][3]

Competition and Strategy

"Don't think about your competitors. If you drive fast enough, you don't need a rearview mirror." [8]
"Entrepreneurial companies are focused not on their competitors, but on their customers." [3]
"We literally did nothing differently – we didn't touch the controls when things started to get crazy with Amazon. It wasn't like we didn't want to – but we didn't have a lever to pull to make ourselves more competitive in the face of Amazon, at least not one we could think of." [10]
"Disruption deserves to be disrupted. 'Disruption' has become the high-fructose corn syrup of business, an overused ingredient sprayed on pitches and injected into keynotes in the hope of disguising the familiar taste of conformity." [1][3]

On Building and Creating

"Be a builder, not just an idea person. As a partner in two venture capital funds, McKelvey has never invested in a product he couldn't experience." [8]
"If you can't be persuasive to get people to believe your crazy idea, you can just go ahead and build it." [13]
"I don't plan, I build." [14]
"Leaping can cause you to grow wings." [3]

Failure and Learning

"I consider most of the stuff that I do a failure until it eventually succeeds." [4]
"I fail very fast I iterate very very quickly." [14]
"How often had I been too late or too early with the right answer? I saw a cascade of failures over my lifetime resulting from knowing how to do something, but ignoring when to do it. I decided to become a student of when." [1][3]
"Don't quit too early -- Those accustomed to success have a tendency to want to quit early." [15]
"When you're working on a problem you genuinely care about, that's enough to push you a step further." [15]

Mindset and Perspective

"We tend to believe that things are impossible that are very possible." [13][16]
"Don't get mad — move on." [8]
"If you focus on the reasons your business could fail, you'll get so down that you won't try. Just go after it, and everything else could fall into place." [8]
"Laws can be changed, minds can be changed, the world can be changed, and that's what entrepreneurs do." [8]
"Humility and audacity are allies." [17]
"Doing something that has never been done before is terrifying… all the people who love you will tell you not to do it… not because they're jealous, but because they're genuinely scared for you." [10]
"Fear is one of the things and you tend to lose touch with this after you're successful... you tend to forget that the road was treacherous." [14]
"Art is what can't be proven mathematically, right, it's where science ends. It's the part that makes you feel good, but you don't know why." [13]
"Glass really rewards risk." [13]

On Customers and Products

"Do think about your customers. Studying your customers is good. If you can be your customer, even better." [8]
"If you're looking for opportunity, look for people who are being excluded and find a way to bring them in." [11]
"We need to have a low price, so we have to save money on advertising, so we have to have an amazing product, and hardware so cool that people talk about it, and a product that they can explain without our help." [3]
"The Square experience from the hardware to the software to our website was so beautiful that people started talking." [11]

Leadership and Advice

"The greatest skill is probably your ability to learn and copy... so you don't have to risk innovation." [4]
"You should try and copy everything you possibly can!" [10]
"I've been totally replaced by people who are superior. It's very gratifying to watch your job done better." [13]
"I don't run any of my companies. I always partner with somebody who wants to operate." [13]
"Jim McKelvey advises aspirational entrepreneurs to listen to the stories of accomplished people with a healthy dose of skepticism." [18]
"Everyone needs someone to tell them not to wear so much Prada." [13][19]
"I am absolutely confident that St. Louis can attract major players in technology and make the companies that are here blossom." [13]

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