Hey, good morning. It is great to be here. I love doing this. Mexico is so much fun, it's beautiful. Thank you for this. This is the 11 o'clock morning session, the hangover special. I'm so happy to be here, so glad you guys got up early and came to the presentation. Let's talk about death. I'd like to begin with a death quiz. Does anyone know where the deadliest place in the world is? By deadliest place, I mean most things that can kill you per square unit of area. In the natural world, the Amazon is the deadliest place to be. In the business world, the answer is the same. A horrible thing happened to me when Block was only a three-year-old company, still a startup. We were attacked by Amazon. Let me give you the math of an attack by Amazon. When Amazon decides they want to take over your entire market, they copy your product, undercut your price by 30%, add the Amazon brand name, and then watch you die. This is successful 100% of the time. There has never been an example of a startup going against Amazon and surviving. It's terrifying because it's an asymmetric battle. You have no resources, they have every resource. You can't lose money, your competitor has effectively an infinite amount of money. So what do you do? This happened at Square three years in. We had a pretty good little business. Amazon decided to copy it, released a product, and everyone expected us to die, including some people on our team. We looked at our options, there weren't a lot. Finally, we came up with this. That was our response to Amazon. We didn't know what to do. We would love to be their size, have their balance sheet, their teams of excellent people. But it was such an asymmetric fight, we couldn't do anything. So we did nothing. And it worked. I was so happy for about a day. Then this question started nagging: why? What the hell just happened? When Amazon attacked us, I looked for any other company that had survived an attack by Amazon. I couldn't find any. There were no examples. So what was so special about us? Why had it worked? This problem bothered me for three years. I spent three years trying to answer the question of what the hell allowed us to survive an attack by Amazon when statistically that would be impossible. I actually discovered there was an answer. I thought it was something we did, but it turns out it was actually something we couldn't do. The power we discovered, the power we lucked into, was not this thing. It was the lack of a thing. It was the lack of something that I believe is one of the most powerful forces in the world. I tried to describe this to people, to explain what was happening. I discovered that there is no word in English to describe the process we lived through. The English language is missing a word. We use the word entrepreneur these days in a different context than it was originally conceived. If we think of entrepreneurs not as people who start businesses, which is the current vernacular, but in the original sense, the economist Joseph Schumpeter, who coined the term and popularized it, meant something different. The thing that unites all entrepreneurs in the classic definition is something that actually unites everybody in this room. Not just us, but everything in this room: this slide clicker, this glass of water. What is common about everything in this room? If you've read my book, please don't answer. Anyone want to guess? We are all copies. Everything in this room, every person, every chair, is unoriginal. You're all sitting in chairs right now. Whoever built those chairs didn't invent the chair, didn't figure out the proper seat height or cushion. Whoever made the material copied that from somebody else. We are all copies, successful copies of thousands or millions of generations of successful copies. The most powerful force in the world is copying. If you think about the chances of success doing something truly new, your odds of success are infinitesimal. So it is intelligent, rational, and basically wired into our DNA that we become excellent copiers. One of the things humans depend on for survival is our synchronicity with the rest of the herd. If you start doing something a little bit differently, you feel uncomfortable. That is a good feeling, you should listen to it, because if you try to do something for the first time, you're likely to fail. So what happens when you can't copy? I'm going to skip this part because it's really funny, but it used to be really offensive. So one of the ways we sell products is this idea of originality. I used to have people say, 'I'm original, I try to be very original.' If you trace the sorts of originality back, this is something that we were taught by Madison Avenue. The idea of being original is supposed to sell product. I had a really sexy ad trying to sell a product that nobody needs. Then things got PC, and I wasn't sure Trump was going to win, so I deleted the ad. I want you to imagine the sexiest ad you can, just dripping with sensuality, trying to get you to buy this thing. Ask yourself what strings those Madison Avenue bastards are pulling on to get you to make that decision to be original. The answer is your urge to copy yourself. The sexual urge is a copy urge. I was actually told to go copy myself recently. But what if you can't copy? What if you're in a situation where copying is impossible? There's no YouTube video, no seminar, no expert. You are forced to solve a problem but you don't have a formula for it. What the hell happens then? That's what happened at Square. We now call it Block, but at the time it was Square. It was just me trying to fix a problem I had. My problem was I was an artist, and that really is a problem. Artists sell stuff nobody needs. I lost a sale because I couldn't take an American Express card. I was very pissed off because it was an expensive piece of glass. I lost the sale, got upset. Jack had already been kicked out of Twitter the first time, and he called me up and said, 'Jim, I want to start another company with you.' I said, 'Cool, what do you want to do?' He said, 'I don't know, what do you want to do?' So we were kicking around ideas, we'd already decided to start a company. I lost this sale and I was so pissed off. So we built Square basically because I wanted to get paid. That was the genesis of it. It's a completely true story. But I was not the target audience for my product. My target audience was another glassblower by the name of Bob, a friend of mine. I would normally show you a photo of Bob, instead I'm going to show you a photo of Bob's car, because it reveals more. This is the 1992 Chevy Corsica. It is not Bob's Corsica. If it was Bob's Corsica, it would have a critical aftermarket item: a yellow bungee cord hooked under the front wheel panel and pulled over the hood, because the 1992 Chevy Corsica is such a piece of... that if you don't have a yellow bungee cord and you drive in St. Louis, Missouri, where we salt the roads during the winter, bad things happen. A bad thing happened to my friend Bob as he was coming to the studio one night. He was driving over the Mississippi River in the rain at night, and the bungee cord let go. At this moment, a lot of things happen very quickly. The wind catches the hood, the hood flips back over the windshield, completely obscuring his view of the road. Most people would pull over. This is not what my friend Bob did. He leaned out the window in a way that would be familiar to pet owners, but he was getting pelted in the face with rain. At this point, every sane person would pull over to the side of the road. It is not what my friend Bob did. He drove 17 miles at night in the rain, looking out this gap. This is actually Bob's Corsica. This is actually Bob. Here's the yellow bungee cord, and this is a four-inch gap between the dashboard and the hood. That is a St. Louis Cardinals cap. Go Cardinals. Go Bob. This is the guy I built Square for. What do we know about Bob from this one example? At the very least, this is a man who doesn't give up easily. Parents wish their kids had the tenacity of a guy like Bob. When the road disappears, he doesn't pull over, he keeps going. He's going to get to his destination even if he can't see. I show you the Corsica for two reasons. One, it reveals something about Bob's tenacity. But secondly, when things have been tough for my friend Bob, he has had to live in the back of this Chevy Corsica. I never understood this, because Bob and I are both glassblowers. I was a professional glassblower, I made my money selling stuff nobody needs. So did Bob. But there was only one significant difference. First of all, Bob's a better glassblower than I am. He's stronger, his designs are more creative. Bob's stuff is objectively better than my stuff in all criteria except one: I made a lot more money selling my stuff than he could. Part of this is because Bob has a spotty record. He doesn't get along too well with authority, he doesn't get along with banks, he can't take credit cards, he can't get paid the way normal people get paid. So when we started Square, this was the photo on my desk. We started with the idea that we would build something that would solve the needs of my friend Bob. We didn't know what the hell we were doing. I have a degree in economics and computer science, I know nothing about payments. Jack at the time was licensed as a massage therapist in the state of Missouri. Those were our professional credentials. We knew nothing about payments. What we didn't realize was that what we wanted to do was considered impossible. The payment system had evolved in such a way that there was no way to use existing tools, so we had to invent everything ourselves. We were forced to build something new. I talk about this in the Innovation Stack, and I have a whole hour presentation on this, but you're not going to hear that today because I want to cut to the chase on why I wrote the book. Even if you don't read the book, I will give you the central idea. We are all copy machines. You are wired to copy. You feel comfortable when you are in the herd, and that is good, that is the way you should solve most problems. But there will be a moment in your life where you run up against the edge of what humanity knows how to do. At that moment, if you choose to step into that void where we don't know the solution, where you have to experiment, where you're going to deal with a whole different world, every cell of your body is going to tell you to stop. Most people stop. The reasons I hear... The dedication of the book is to somebody I know who is extremely qualified to do wonderful things, but every time she gets to that edge where she feels unqualified, she hesitates and says, 'Well, I'm not qualified to do this.' And she's right. She is not qualified. Think about flying an airplane. The Wright brothers flipped a coin to see who would be the first pilot. Were either of them qualified? Could you be qualified? If you want to fly a plane today, go get trained, take a course with the FAA, you can get a certification. But at the time Wilbur and Orville flipped that coin, the only thing we knew was that the first pilot would not be qualified. Nobody is an expert when they do something the first time. I've met so many people who come up to this problem that is unsolved for the world, the world doesn't know how to do this, and they have the potential to do it, and they say, 'Oh wait, I'm not qualified,' and then they hesitate, and we never get that solution. That breaks my heart because I want to see problems solved in this world. I want you, assuming you're out there in this black void, to feel permission to step across that line. I spend 300 pages talking about what it's like, what the tools are, and how it's different on the other side of the line. But then someone asked me to do something crazy. They said, 'Why don't you talk about something you're doing using an actual application of all this ignorance, the progress that can be made only by people who are unqualified?' So I'd now like to talk about, well frankly, more death. Moving the needle. There's a phrase 'moving the needle,' I thought it was a great phrase. I have a whole talk called 'Moving the Needle.' I like to start my talks with quizzes, so here's another quiz. I was in Vienna, Austria. Sorry, it's not a very good picture because I was in a car at the time. It was a Tuesday afternoon, we were driving by this place, and I was able to snap a photo of this store. Who can tell me what's wrong with this photo? What's wrong? They misspelled 'aging.' Okay, what else? What is missing from this photo? Evidence. Yeah, that's true. There are no people. Seriously, think about this. This is a store that, despite their spelling, puts the word 'reverse aging' — that's why you go into the store, to reverse the terror of time. They will sell you that solution inside the store. Where's the line? Seriously. Tim Cook puts a third camera in the iPhone and we queue up for a day, you camp overnight because 'oh, 50 megapixel.' If they could do anything to reverse aging, I would be waiting for weeks. I don't care if it's not my whole body, I would take new knees, reverse my eye damage a little bit, I'd take new eyebrows. I'd pay for that. I'd wait a week for better eyebrows. You know how hard it is to look skeptical with these things? There's no line here, no people here, because we fundamentally get that this doesn't work. Nothing in that store works. It's all sugar pills and crap. That's why there's no line. The promise of anti-aging sounds like science fiction. If you look at what they're claiming now, these are three things I pulled from recent articles: we can reprogram our DNA, we can transfuse blood and reverse aging, there are some proteins that will slow down the aging process. It sounds like science fiction, but it's actually interesting. It's not science fiction, it's science and fiction. Turns out you actually can do this. This is tested, clinically validated, true to the extent that we can determine truth through experimentation. You can do this. Those work on rats. You could become a rat, we are in Mexico, you come down here and get pumped up with anything you want. But neither of those work in humans. They don't work provably. So the question is, how should we think about science fiction in the world of health? It's going to be a dark presentation. But I will give you some good news to start. There is a ton of good news, a mountain of good news. It's in every area of biology and discovery, all this AI protein folding, AlphaFold, all this stuff is amazing. We are experiencing the same sort of geometric improvement in the discovery of new cures at a rate that is going to save all of us from everything. These are tremendous. By the way, Moore's Law, if you're actually a scientist, Moore's Law is this curve. See that slope right there? Moore's Law goes like that. We've beaten Moore's Law. This is tremendous good news. Anything that ails you, there is a cure today. It works. There is only one problem, and I'm not making this up. There is Eroom's Law. Has anyone heard of Eroom's Law? You should. Eroom is Moore spelled backwards. I didn't make that up. That is what the life scientists, the people who actually live in this world, cynically coined the term Eroom's Law to explain the fact that despite all this tremendous growth in discovery, we actually get fewer drugs today than we have ever before. When I say drugs, I mean stuff that we know works. My mother died 36 years ago from a disease that if she was alive today would be cured with one pill. When Mom died, there was nothing we could do. Do you want to know how long it takes on average? This is a scientific study. On average, how long does it take before a discovery in the lab becomes something you can safely take, i.e., has gone through FDA approval, in years? Anyone want to guess? 15? 36 years. My mother has been dead for 36 years. But that is the amount of time we have to wait for that eureka moment in the lab to be something that saves a loved one. What the... I was writing this presentation, I had this screen up, and my daughter comes in. She's six, and she's like, 'Daddy, what does WTF mean?' I said, 'Honey, what to fix?' Could we fix this? Is it possible to do this? We have to think of health and drugs as two different systems. We've got discovery, discovery's working great, and then we couple that with delivery, that's what you can actually take. In the middle, there are all these problems. If you think of it like I do, because I'm an economist, I think, 'Well, what's the money? Let's follow the money and see if the money leads us to some sort of answer.' The money sort of looks like this. If you have a discovery, you have one of these circles that might save a life here, and you want to see if it works. I don't mean anecdotally, I don't mean fund your company, hire a marketing department, shove some sugar pills in a black plastic bottle and start peddling them on the internet. I mean you want to test it, you want to do controlled, double-blind, randomized testing, what we consider the standard of good practice. It's about $100 million to take that shot. So you've made a great discovery, but if you want to actually test it, now you need to stop being a scientist, stop being a researcher, stop being a pharmacist, and you have to go out and pitch, start a company, raise $100 million. Oh, and by the way, that $100 million just gets you a test, it doesn't get you a completed drug. On average, you have to do this nine times before you get one that actually works, so that's actually a billion dollars. The problem here, if you think of it just like an economist, is because it is so incredibly expensive, we're not taking enough shots on goal as a society. This is part of what's driving Eroom's Law. Eroom's Law is one of the economic problems. It's just too expensive to take a shot. So maybe we could fix this, but there's a problem: too many idiots. In the world of healthcare, we are all idiots. Does anyone recognize this? Michael Jackson. Do you know what this does? Anyone recognize the thing that he's in? Hyperbaric chamber. Oh God, I forgot who I'm talking to. You guys probably have these at home. I don't mean to make fun of the dead, but Michael Jackson was a smart man. He blazed trails. He was the greatest superstar in human history. Tremendous work ethic. He wanted to be healthy, was rich, hired a team of the best physicians to advise him, to tell him what to do because he thought, 'I'm rich, I can do this.' What did they tell him? Sleep in this. And you know who killed him? His doctor. His doctor prescribed propofol, killed the guy. That was a medical professional. And you think you're smarter than Michael Jackson? I use this slide, people like, 'Yeah, I think they're a little racist, I don't know, maybe they don't like pop stars.' Recognize this guy? There's another health idiot. I deeply, deeply respect Steve Jobs. Do you recognize this photo? This was his Stanford commencement address. We've all heard the address where he revealed to the world that he had pancreatic cancer. But if you listen to the address, Steve tells us that he beat it. He was cured. Now why does a guy as intelligent as Steve Jobs, who has the best physicians in the world, believe that he has cured his cancer? Well, turns out if you're really rich and you show up with a bunch of money, you pay a bunch of doctors, they will tell you whatever you want to hear. 'Steve, keep drinking the carrot juice, you're fine.' And he actually believed it. This is the problem in healthcare, because none of us are anything but idiots when it comes to healthcare. Healthcare is so wildly complex that even if you're rich and very intelligent and well-meaning and have been successful beyond human norms, you're still an idiot when it comes to your own health. This is one of the problems. How are we going to fix this? How are we going to turn the fact that we are all idiots into something that we could possibly use? Fortunately, the idiots have a tool. I got to credit this, it's totally stolen from Elon Musk. There is something called the Idiot Index. Who knows about the Idiot Index? A couple people in the back. It's a great thing. So what is the Idiot Index? It's Elon's way of assessing the actual cost of an item. If he's going to buy something, like a part for his rocket, he prices the item. If he doesn't like the price, he prices the components of the item. I don't want to talk about rocket engines, it's still morning. Let's talk about coffee, because we all drink coffee. What does coffee cost? If you live in a major city, coffee is about five bucks. I know you guys pay more, but I'm from St. Louis, I can get a cup of coffee for five bucks. If you actually take the cost of the beans, Arabica beans spot price, that is a commodity, you can buy it, grind it up, and if you do the math, you find that the material cost of a cup of coffee is about 10 cents. So we sell it for five bucks, which means the Idiot Index is 50. Now let's imagine a world where for some reason we wanted to lower the cost of a cup of coffee, and we wanted to radically lower it by 90%. Could you do that? Would it be possible to sell a profitable cup of coffee for 50 cents and still make a profit? The Idiot Index tells us yes. But that's just coffee. If you actually look at what it costs to do drug testing and development, the Idiot Indices go through the ceiling. I've got a couple examples here. Anything with an Idiot Index above 10 is an area where there's potential cost savings which could be realized. But how are we going to do this? How could we possibly cut 90% of the cost out of drug discovery? The answer is I don't know. I don't know, but I believe it is possible. I believe that the result of doing this would be that we would get more shots on goal, we would get more drugs. If the hurdle was only $10 million to test a substance, $10 million is still a lot of money, but there's probably a dude in this room that'll write you that check. So I started working on this problem because, well, I don't like to admit this, but I'm an idiot. I am an absolute idiot, especially when it comes to health. I can prove it. This is my medicine cabinet in St. Louis, Missouri. This is an actual photo from my medicine cabinet. Does anyone recognize this? Oh yes, I knew this group would be a safe place. I hope they're not sponsoring the event. But let me tell you about this stuff. This is supposed to... They've got four Nobel scientists on their board, and they did some study, and this molecule sort of makes your cells happier and younger and reverses aging. I thought, 'Oh cool, I'm rich, I can subscribe to this. It's like a hundred bucks a month.' So I subscribed to this and started gulping it down. I happened to be in a meeting with the number two medical school in the United States, WashU Medical School, my alma mater. We have the number two medical school by NIH funding, which is how you rank med schools. UCSF is number one, we're number two. I was talking to the dean, and he was talking about some research they were doing on these molecules. I very proudly said, 'Oh, I take Basis.' He's like, 'You do what?' I said, 'I take this stuff, costs $100 a month, and it's making me younger.' He's like, 'Jim, you're an idiot. We have a lab here that can prove that this stuff does not work. Not on humans, it works on that little lab study they published, but if you look at the science, which we do because we're scientists, it doesn't work. It absolutely doesn't work, and I can prove that. If anyone wants to bet me an arbitrary amount of money, it should be more than a million dollars just to make it interesting, I will take anyone. I know this is being recorded. The bet's on. It doesn't work. This led me to a crisis of who can I trust? I want to be healthy, I want to do good things in the world, but I also want to stay alive for my kids. As a guy with a lot of money, I'm no better than Steve or Michael Jackson or anybody trying to solve a problem. The money corrupts the problem. Throwing money at a problem tends to attract people who are attracted to money. So I'm just another idiot. I thought, 'Who can I trust?' I finally came up with an answer. There is nobody, but there is a 'what' that I can trust. The 'what' is a process, and the process is science. We have a process, a way. I know you may disagree with some of the FDA decisions, you and your marketing degree or maybe you and your MD. It doesn't really matter. The FDA pisses us all off the way the FAA pisses off every pilot, but our planes are generally safe and our drugs are generally safe because we have a process that is scientific. If we respect that process, it will lead us to answers, which is what we want. There are some great discoveries in the world. We want an answer, we want it to be tested scientifically. When I originally put this presentation together, I was actually trying to raise money. I thought, 'I'll throw $100 million in, I'll get a couple other rich guys to throw $100 million in, we'll sit there with a billion dollars, run a bunch of tests, speed up the process.' So originally when Jeff invited me down here, he was like, 'Oh, there are rich guys at Summit, come on down and pitch.' So I had these two slides. I've decided that that's really stupid, because money is not the problem. As a matter of fact, lack of money is not the problem. The problem, as I've come to see right now, is that at least in the world of drug testing, there's just too much money in the system that tests drugs. If you run the Idiot Index through the entirety of the drug certification process, the Phase One, Phase Two, Phase Three studies, the preclinical studies you have to do, you find Idiot Indices of a thousand. You find so much money in the process that I have to believe it is possible to write around this. I do not know what I'm doing, but I am right now putting together a small team, probably no more than four or five people, who are going to use our work and our complete lack of understanding of the existing system to try to do something new. I do have an ask for you. It's not money, it's talent. We are looking to put a team on the field of people who feel like change is possible. This is really tough to do. When I hire an early team, the way I started working with Jack Dorsey, I hired Jack when he was 15, and he did wonderful work for me at my first company. We became a pretty good pair. When you hire a 15-year-old, they don't come in thinking stuff's impossible. So anyone over 15 is welcome to contact me. I will give you my email address at the end, because I think this is a problem that we could solve. I think humanity deserves answers, and we certainly need them faster. I'm doing this because I want to save somebody's mother, or perhaps save myself, or perhaps feel like less of an idiot. I know this has been dark. Death is not a fun subject, it's something we always try to avoid. But this is the needle I'm trying to move. I am trying to get us to the point where we have known cures because they exist today, but ones that we can trust because they have been tested. Right now, our testing system is horribly broken. If you know somebody who would be willing to work in person, 12 hours a day, for a below-market rate, please give them to me. This is how you reach me. Thank you. I think I've saved 10 minutes. If we have a couple of questions, the guy back there first, and loud.
