Jim McKelvey - The Innovation Stack: Solving Real-World Problems with Fresh Eyes

Good luck brother. Thank you Beth. Sister? I don't know. I've been asked to do a lot of DNA tests lately. Thank you for inviting me to do this. I'm really excited because I don't often get to talk about payments anymore. So, I thought I would start it off on a high note by doing a little quiz on death. Just to warm you guys up a little bit. So, here it is. Who can tell me what the deadliest part of the world is? So, what I mean by that is pick an area of the planet. This is a little clue. Where the most things per square mile exist that can kill you. Iran's a good... That's a very good answer this week. But in fact, that is correct. That is the Amazon. And if you actually look at the number of things that will end your life, there are more concentration in the Amazon than any other place in the natural world. This is Amazon the rainforest, but it is in fact actually exactly the same in business. Amazon is probably the single most deadly competitor. They don't buy companies. They steal companies. They basically take your product, copy it, add the Amazon brand name, undercut your price by 30%, and then they plug it into this massive network, and watch you die. And when they do this to a startup, it is 100% successful. No company has ever survived this attack by Amazon. And Amazon, when Square was still a startup, we were 3 years in, did exactly this. They copied our product, they undercut our price, and I was trying to figure out a way to describe what it feels like to be attacked by Amazon. This was as close as I could come to a visual image. But the real question, okay, great, you're under attack by Amazon, you're a startup. What do you do? That's the big thing. And so, the first thing that we did, the board got together, Jack and I got together, we got all the people in a room. Okay, Amazon's coming after us, what do we do? And we looked for any company that had ever survived an attack by Amazon, which is how I know there were none. So, then we go through your list of options. Okay, well, I would love to have their balance sheet. I don't have their balance sheet. I would love to have their teams. I don't have their teams. I would love to have a listening device in most of your homes. I didn't have that either. So, if you actually look what a startup can do when being attacked by Amazon, the list is very short. And this is what we came up with. That's what we did. And it worked. And this was so amazing. Because we wanted to do something, but we didn't really... there wasn't anything else we could do. So, we basically ignored Amazon, and they stayed in the market for about 13 months, and after basically a year competing with us, they just gave up. And actually, they gave up in a pretty cool way. They mailed one of our little Square readers, one of those little white things that we don't use anymore, but they mailed one of those to all of their soon-to-be former customers. They said, 'We're out. We're giving the business to Square. Have fun.' And we were elated. But, after a couple of days of euphoria, this question started nagging at me. What the hell just happened? Because startups don't survive Amazon. Nobody had done it. And I felt extremely lucky, but I also was gnawed at by this question. Why did we survive? Was this just luck? And I don't believe that everything can be just attributed to luck. I figured there must be some phenomenon here. So, this question basically consumed my life for the two years after the attack. And I started looking for patterns. I started looking for any tiny, frail... wasn't necessarily companies. It could be an idea, a species, a... I looked at businesses, anything where you would see this tiny, frail thing that's attacked by a monster and survives. And ultimately wins. And I saw a pattern. And it was not what I was expecting to see. And so, that's what I'm going to share with you today. This is, you know, sort of the origin story of Square. But, it's more importantly, I think, if you want to have something to take away from this, it's a very surprising pattern that explains why we were able to beat Amazon and how other companies occasionally are able to do similar sort of amazing things. And I discovered the original meaning of the word entrepreneur. So, these days, we use a modern definition of entrepreneur. So, if you're an entrepreneur these days, anyone who starts a coffee shop is an entrepreneur. You open up a bakery, you're an entrepreneur. You do any business. If you start a business, we say entrepreneur. Okay, that was not the original meaning of the word. About 150 years ago when the economist Schumpeter basically popularized the term, entrepreneur was this other thing. Because if you started a business, they called you a business person. If you started this weird thing that had never been done, that's what was reserved for entrepreneurs. And the thing that I found that united all these companies that had these amazing survival stories was that they lacked... it wasn't something that they had, but it was something that they didn't have. And they didn't have access to probably the most powerful force in the world. Okay, so I'm sorry, it sucks to come to one of my presentations because I always call on people even when they're trying to avoid eye contact. So let's play a little question. What is it that unites everything in this room? I mean, I'm looking around... this is maybe not 100%, like 99%... from the stage to me to you to that chair to this monitor, like what do we all have in common? Well, we're all present. Yeah, we're all here. We're all copies. The thing that unites everything here... So, I'm not that original. First of all, I'm descended from thousands or millions of successful survivors that led to this McKelvey and there's another McKelvey back there. I mean, talk about a good setup, you know? Couldn't ask for a better one than getting introduced by a namesake. We'll see what the DNA test reveals. But like the whole point of DNA is what? It's a copy machine. It's a record and it's a little zipper and it zips back together and it makes a copy. Not a perfect copy, but you know, everything else. Look, I'm standing on a stage. The stage is made of plywood. The plywood was made from trees. All those trees were copies of successful living trees. And believe me, the person who put this stage together this morning didn't invent the stage. There is nothing original about this. And I'm going to have dinner in an hour and I do not want the chef to be innovative. I don't want him to go out and say, 'Oh, here. We found this plant that no one's ever eaten. I'm going to feed it to Jim.' But the entrepreneurs and the companies that I studied all had this weird thing was that for some reason they couldn't copy. And so this powerful force that unites the universe and gives us solutions that work was unavailable to them. So if you're not able to copy, then you're left with the last resort, which is to invent, to innovate. And I think we do a real disservice talking about innovation as something that's cool. I wrote a book on this topic. I'll tell you a little bit about it. But one of the things that I rail against is this idea that innovation feels cool or should be cool or you should feel innovative. You know, I think a lot of the vendors... I haven't walked the trade show yet, but I've seen a few of the things and they're always trying to encourage you to do something innovative, encourage you to do something new. Generally that's a bad idea. If you've got something you can copy that works, start with that. But if you can't, then you're forced to innovate. And that was the thing that I found that united all these companies. They couldn't copy, therefore they were forced to invent. And that was the story of Square. And the story of Square... So when I was introduced, she told you that I was a professional glass blower. This is true. I am an economist, computer scientist who then spent several years literally making art. That was my job. And I define art as something nobody needs. So I made my living selling stuff that nobody needs. And the origin story of Square, which is 100% true, is I was in my studio. So Jack Dorsey and I go back a long ways. He used to work for me at one of my other tech companies. So Jack used to be my summer intern. He got kicked out of Twitter the first time, called me up, said, 'Hey Jim, let's do something else.' And I was like, 'Cool, what do you want to do?' We didn't have an idea. But then we decided we'd go build a company together and I was in my studio trying to sell a piece of glass to a lady who had an American Express card but no Visa card. And I said, 'Well, I don't take Amex, their interchange is too high. Can you give me a Visa or MasterCard?' She's like, 'No, I don't have one.' And I lost this sale. And it was a big... So the trick to selling art is don't tell them how much you hate the piece through your price. So I hated this thing. It was ugly, it was hideous, and she was going to pay me $2,000 and I lost the sale. I was very pissed and I reached into my pocket. Actually it was a phone sale, but I was talking to her on a device very similar to this. And my attitude towards this device is very strange. This device should magically turn into whatever I want. It turns into a book or a TV or a map. It turns into a flashlight or a phone. But in 2009 it did not turn into a credit card machine and save my sale. So that's the story of Square. I called Jack on this thing and I said, 'Hey man, I want to get paid. Why don't we build something so that I can get paid.' It's very selfish. But it worked. But that's not the real story behind Square because when I was building this, I was actually building a system for my friend Bob. And I would normally show you a photo of Bob. But I'd rather show you a photo of Bob's car. This is the 1989 Chevy Corsica. Now this is the official photo from GM. It is not Bob's Corsica because if it was Bob's Corsica there would be a critical aftermarket item. You'll have to imagine this because I don't have a laser pointer. But on Bob's Corsica there is a yellow bungee cord that hooks under the front wheel well and goes over the hood. And the bungee is important because the 1992 Chevy Corsica is a real piece of... And in St. Louis where we salt the roads all winter, the hood latch rusts out. So if you don't have a bungee cord, a bad thing can happen. And a bad thing happened to my friend Bob. He is also a glass blower. And he was coming into the studio late at night. He was driving over the Mississippi bridge in the rain. And the bungee cord lets go. And you can imagine what happens. So the wind catches under the hood and it flips it up right over the windshield. Road disappears. Bob however does not pull over. He leans... Any pet owners in the crowd? Yeah. He leans out the window and is trying to drive like this, but it's raining. So, he's getting hit in the face with rain. Almost everybody at this point would give up, pull over to the side of the road, and get help. This is not what my friend Bob does. He drives 17 miles at night in the rain looking out, and this, by the way, is Bob's Corsica. Could you see the gap between the dashboard and the hood, which is folded over the windshield? So, there's my friend Bob wearing a St. Louis Cardinals cap. You see the yellow bungee cord at the front of the Corsica. And he's a glass blower. Just like I was. And I didn't make a very good living blowing glass. But, the reason I show you this photo is that this is the photo that I had on my desk when we were building Square. And I was building this for my friend Bob because the reason I show you Bob's car is because it gives us insight into Bob the person. Now, what do we know about Bob? Parents in the audience should see a quality that might be redemptive in this man. Persistence, right? Grit. Like when the road disappears, he doesn't quit. Like he doesn't give up. Bob keeps going. He's getting hit in the face with the rain. He doesn't quit. He keeps... Like this is a quality I'm a parent. I wish my kids had that. I wish they would keep going in the face of adversity. Bob is not a guy that gives up. But, the other reason I show you Bob's car is that from time to time Bob has had to live in the back of this Chevy Corsica. And that I could never understand. Because he was a glass blower and I was a glass blower and I will tell you that he is a better glass blower on almost every metric than I am. He is way stronger than I am. His stuff looks better. It's more fun. It's just more creative. The only metric that I win against Bob is sales. I make a hell of a lot more money than he does selling glass. Such that I was able to buy my own airplane from revenue in the studio and Bob meanwhile is living in the back of a Chevy Corsica. And so when we were building Square, the question I asked myself is why can't Bob make a living? Why can he make this stuff but not sell this stuff? And the answer is, well, you know, the financial system was not set up for people like Bob. Okay, Bob does not present well to bankers. I mean, I guess I got hired by bankers today. I must present very well to bankers. But Bob couldn't take a sale. So this is what we started to build. And when we started to build for people like Bob, we very quickly realized that the system that we were encountering was designed to exclude people like this. Now, the first week of Square, I started doing research on the credit card processing market and I found this very slide. This is from the Philadelphia Fed and it is the actual Nelson report. You guys probably know the Nelson report in this group. Showing where the money goes in transactions. Now, this is a little bit out of date. Actually, it's 20 years out of date. But it shows what we saw at the time. And I know not to put a slide with this much math into an afternoon presentation, but I will do it really fast. Look at the little triangle of the upper left. That represents merchants that sell more than a billion dollars. Compare that to the number of merchants who sell small amounts, under $100,000. We have 5 million of them. About 100 at the top, 5 million at the bottom. If you compare the amount of money that they transact, the pyramid inverts because the large merchants, the Walmarts, the Targets, the Starbucks, they're doing billions of dollars where those small merchants are doing a fraction of that. But then the real crime is in the right pyramid. The right pyramid shows the profit that is made by all these people out here on small merchants versus large merchants. And if you do the math, if you take 315 million and you divide it by 780 billion, and then you take 2.37 billion and divide it by 130 billion, you will find that that ratio is 45 to 1. A small merchant is 45 times as profitable if you call the fees profit as a large merchant. That's where the money comes from. It comes from very... See? That guy's upset. So, we saw stuff like this. And we saw all sorts of things in the system that were sort of stacked against Bob. One of my favorites, and I just have to show this. When we signed up for our very first merchant account, JDJM was the LLC that I set up with Jack. Jack Dorsey Jim McKelvey LLC. This was the beginning of Square, and I just needed a merchant account because we were writing software and needed to test out some rails. So, I signed up with these guys, you know, went online just like anyone would as a small merchant, and I signed up. And I know it's hard to read, so I'm going to zoom in here. When I went to close the account, we did use the account for a couple of months to test the rails out, and then I went to close it because we didn't need it anymore. And I called them up, and I said, 'Hey, we need to close the account.' And they said, 'You can't do that.' And I said, 'Well, I'm not going to use it anymore. I'm certainly going to close it. Let me close it.' And they said, 'No, you can't close it. You signed a 3-year contract.' And I said, 'Well, I'm not going to use it for 3 years, and you would only let me sign a 3-year contract. So, what do you want to do?' And we went back and forth. They finally said, 'Fax us your closing form.' And this was what they sent. And I will zoom in here under the reasons for closure. Scan down to reason number six. Misrepresentation. Now, do we have any native English speakers in the audience? Yeah, you, sir. Is there another word in the English language for misrepresentation? Maybe a smaller word? Scam. Lying. Yeah. Okay. Ask yourself, how bad does an industry have to be before you put lying as a check box on the form? Like, it is such a standard practice when we entered this business to lie to small businesses that they just decided, 'Oh, wait. We'll save everybody the time of having to write, Oh, you lied to me. And we'll just put a check box on the form to make it easy because so many people were being lied to.' Misrepresentation was such a fact of life that it shows up on forms like this. So, it was not that hard to imagine a better system. But, then we had to go build the thing, and the problem was we didn't have any access to any of the stuff. There was no idea... Beth was a... she works for Visa Payfac. Guess what Visa didn't have in 2009? The concept of a Payfac. None of the stuff that we needed, the electronic agreements, all of the stuff that we were using, none of it existed. And so, we were forced to build it all ourselves. And this is what Square had to build. These were 14 things that we built in order to have our system even work. Without one of these, the whole thing wouldn't have worked. And this was in fact the pattern that I saw at all of these companies. Every one of the companies that I'd studied, and I found a bunch of them, were in the same situation. They were trying to do something that hadn't been done before. And if you're trying to do something for the first time, there is no trade show, there's no YouTube video, there's no expert that you can hire. So, you're forced to invent. And the problem with inventing is it usually doesn't work. Inventing usually ends up killing you. But, if you're lucky enough to get one of these innovation stacks where you have invented enough and you have something that's truly new, well, then you're in a really great place because you have joined the world of companies that have absolute defensible monopolies for as long as they choose to run their businesses in the right way. And I put up some examples here. Did you know the Bank of America was the most innovative financial institution in the world? Originally, they were called Bank of Italy and that opening slide was their founder. I'll tell you about him in a minute, but there are dozens of examples of this phenomena throughout history where because they couldn't copy, organizations were built on these things I called innovation stacks. And so I studied all this and it was amazing and there was one problem and that was everybody that I had studied was dead. The only guy who was still alive from one of these companies because I basically did historical research. There was one guy who was still alive. His name was Herb Kelleher. And Herb was the founder of Southwest Airlines. And you know, I'm enough of a scientist to know that there's a huge bias that you can introduce by just looking at data and not talking to people. And so I asked Mr. Kelleher if I could talk to him. And so I went down to Dallas, Texas. It's really cool to visit Herb because you actually fly in on Southwest Airlines. You get out on Herb Kelleher Way. And then Herb picked me up. And we spent an afternoon in his office. And it was a great afternoon. I remember most of it. But Herb was a legendary... this guy was larger than life. He was amazingly gracious. He had this booming baritone voice and he chain-smoked...

Cool menthols the entire time. And about halfway through the day we're talking about Southwest, talking about Square, talking about he was on the Fed as well. So we're just having a great time and he said, 'Jim, I think you're really onto something.' He's like, 'How are you going to share this with the world?' Now, I've got to admit something. I was raised Catholic and although I have never spoken to God directly because of my Catholic rearing, I know how it's going to go down. If it happens, God will speak to me in a gravelly baritone voice from a cloud that probably looks like a pack and a half of cool menthols.

So, you got to imagine me sitting in Dallas, Texas. Herb Kelleher says, 'How are you going to share this with the world?' And I was like, 'Mr. Kelleher, I will write a book.' But, I'm not just going to write any book, okay? I'm going to write a graphic novel. Because these stories, the stories of entrepreneurship, the stories of people who don't get to copy are great stories because a lot goes wrong, okay? There is death. There is destruction of major cities. There are murders and rapes and burnings and it's just good comic book stuff. As a matter of fact, all that stuff that I talked about is just how banking started. Like if you think banking was this shiny shoe industry, no, no, no, not 150 years ago.

The person who invented banking is this guy, A.P. Giannini. He was a produce vendor in California. All the banks were in New York. He lived in California. This dude never went to school. He dropped out of school at age 13, sold lettuce and almonds, and ended up so frustrated with the system that wouldn't serve the needs of the people who were his customers, he ended up inventing what we think of as a modern bank. Branch banking, his invention. Banking for women, his invention. Tellers you could talk to, his invention. Open hours that people could go in, his invention. The history of Bank of America is amazing. It is a great story. And so, I did this whole thing in pen and ink, my whole book was a graphic novel. And I get to Herb's chapter, and I called him up because he was still alive at the time and I told him what I was going to do.

He says, 'Jim, if you're going to do something so trivial, you can leave me out.' He did not want to be portrayed as a cartoon character. He's like, 'I think you're trivializing something that's important and if you're going to do that, don't include me.' And I was not going to leave Herb Kelleher out of my book, so I threw away every drawing and I just wrote a boring 300-page normal business book. But Herb did me a great favor.

Because if you think about the context of a graphic novel, who is the protagonist of the graphic novel? It's a superhero, right? It's somebody with powers, right? It's usually they got a really lucky dose of radiation, but my guess is if I got that many gamma rays, I would not be able to fly. I would probably get six forms of cancer and be dead in a week. But hey, it worked for the Flash, you know? And because I had chosen to tell these stories as stories of superheroes, what I was doing was missing basically the entire point of my research, which was that there are no superheroes in entrepreneurship, they're just people who are down to their last resort. Okay? If you can copy, good, copy. I am not against copying. I totally love copying, but sometimes you will find yourself up against a problem that the world hasn't solved yet.

And at that moment all of your DNA, all of your friends, all of your social relationships, everything you've done your entire life is going to say, 'You're not qualified to do this. Don't.' And that makes a lot of sense. That is a self-preserving reaction that you will have. And these days I fly airplanes, it's sort of my hobby. I love flying airplanes, and I'm a very good pilot. But I've had a lot of training. And you would be an idiot. So, first of all, flying an airplane not hard. If you want to fly an airplane, you can get trained today. And you could become a qualified pilot. And you would be stupid to just jump in a Cessna and say, 'Oh, this looks pretty easy. I've had flight simulator at home for 3 years.' and take off.

But ask yourself about the Wright brothers. I mean, Wilbur and Orville flipped a coin to see who was going to be the first pilot. And the loser got in the plane and flew. Now, ask yourself, were they qualified? Were they qualified pilots? No. No, thank you. I know. We're going to wrap it up. I'm going to go straight to questions here in a minute. But yes, look. This is the thing. Nobody's qualified to do anything the first time.

And this is my big message, which is that we've been taught this, I frankly think it's a lie. It's a lie that sells us products that you have to be innovative, that innovation should be good, should feel cool. And the thing that worries me, and the reason I spent two and a half years writing a book on this topic, is that if you read the book, or maybe you just listen, or maybe you just think about it, here's what's going to happen. Most of the days, you're never going to encounter a new problem. Most of your problems have been solved by other people. Find those other people, learn those lessons, do it, okay? But maybe sometime in your life you will come up against some problem that has not been solved already. You sit there and say, 'The world needs this and it doesn't exist.' And if you want to solve that problem, you are going to have to invent something. And let me tell you something, inventing sucks. You will spend most of your time failing and quickly trying to correct and figure out why it's still not working. And you have no guarantee that it's actually going to work. There's no guarantee that just because you read my book or try really hard that you're going to get to the end where you built this thing that then functions. But that's what drives humanity forward. That's what we need.

And so the reason I come to these things and the reason I answer questions and the reason I write is to encourage more people when they find themselves a couple of times in their lives against that frontier of what humanity knows how to do, to step across because it is scary, but that's what moves us forward. Thank you very much. I'm going to take some Q&A and I actually brought some... Oh, thanks. I know you all got to get to the airport. TSA's messed up. I actually brought some copies of the comic. So I threw away most of the book, but I left A.P. Giannini, since he was long dead, I left his chapter as a graphic novel. So if you ask a good question, we have some comic books for you. And I'm happy to take any questions. Please, go ahead, sir. Oh. Oh. Oh, you don't have a question, but you want a comic book. Well, then I'll give the guy a comic. He had the balls to ask the first question. I think we have eight comic books. Yes. Go. I'm going to have to invent a question real quick then. I'm sorry, what? I'm going to have to invent a question real quick. So No, no, you don't. No, that's okay. You got your comic. You know what? Look at the guy behind you. His hand's open. He's got a real question. Here you go. Or maybe not.

Oh, how much should I trash PayPal from the stage? We saw the same thing. When we looked at the opportunity ahead of us, we said, 'Why in the world is PayPal not doing this?' Now, at the time, Visa and MasterCard both had card present aggregation prohibitions, which we had to have changed. But look, if you know anything about the history of PayPal, the PayPal mafia was Elon, it was Roelof, it was Peter Thiel. They're like master criminals now, they all have a freaking island meeting somewhere that I'm not invited to. But that's a badass group of lawbreakers and that's what built PayPal. Max Levchin, we had some serious gumption in that room. I think that left. So, I think culturally the organization got to a point where they really couldn't do much but copy. And I mean, look, PayPal should have done it. Stripe should never exist. Like if you think, the great failing of PayPal is not Square, it's Stripe. Because Stripe just came in and go, 'You suck and we're going to do exactly the same thing you do, only way better with two guys who aren't even citizens.' So.

Oh my god. I've just put together a new team. I do it all the time. So, one of my efforts, this isn't in payments, but these days my wife and I are giving away all this money. So, the way the McKelvey family works is if you want to be given money, you talk to Anna. But I still get to build stuff. So, I basically go around the world looking for stuff that I think is wrong that needs to be built. So, one of the things I'm working on is a plastic-free diaper. Okay? Because I don't know if you know this, but diapers last for 1,000 years. Like the kids, good for maybe 100, and the diaper that's on the kid is 10x as durable. And so, I thought, 'Well, could this be done without plastic?' And it turns out it can, it's just really, really hard. But the first thing I did was hire all the diaper experts that I could. I mean, I can hire a lot of experts. I had all these P&G scientists and guys from Kimberly-Clark, and all they could give me... I made them read my book. I talked to them. I was like, 'We got to do this.' None of them could think outside the industry norms. So, I fired all of them, got a random group of engineering students from Washington University. And I just locked them in a room for a summer. And it was really fun. And two of them survived and they joined. And then I supplemented that with a guy who is too smart to ever have held down a job. I've got a guy, I don't know if you've ever met one of these... If you've met a super genius, they're probably unemployed. Smart people can hold jobs, but there's that level beyond smart where you get fired from everything. One of my friends is that and I got him. So, those are the people who are building the diaper and the line goes up, our prototype line is being put together as we speak. Zero plastic. There is less plastic in one of our diapers than in a paper cup. Which by the way is lined with plastic. Yeah, plastic. So, I mean, yeah, I'm still at it. But let me ask for one little thing. The reason I do that is because you're so predisposed. We all are so predisposed to copy what is done. It's almost impossible if you know a subject well to imagine some other way to do it. It just destroys you. So, experience in most cases is very helpful. Not if you're trying to invent. Ignorance and, you know, I have just the ignorance. That'll get you there.

Oh, thank you. So, look, I believe very quickly we will have AI that can do dishes. And that's scary because the idea of automating manual work is really frightening when you think about the number of people who do that. If you also think about the number of people who just collect data and sort of process it in a way that is inferior to three of the four major LLMs right now, that's also terrifying. So, look, I'm not this AI super booster that thinks, 'Oh, it's all going to be great.' That said, Block makes AI agentic tools. You can use Goose. Like I use Goose, which is a phenomenal free product that we give out, to build everything now. It's just fantastic. I would say that it's the best time in my life to be making things. Because what I found is that I no longer need to convince people that I'm right. I can just build it and show them that I'm right. Or sometimes that I'm wrong. So, that's really great. What I think we need to do though is have a lot of people who get empowered to solve their own problems, which is again one of the reasons I'm proselytizing from the stage on inventing and problem-solving because I'll tell you the most heartbreaking story of my book publication was, I wrote the thing and then I didn't know if it was any good, so I got a bunch of friends and acquaintances to read the thing and I went to this guy's apartment in Manhattan and on his wall was a Rothko painting that was worth more than everything I owned. Now, this is post-IPO, okay? I was already really rich. This painting was worth more than everything I owned. Take everything I owned in my entire life, my whole family's net worth, sell it for full retail, it was worth less than this one painting that's on this dude's house with some other paintings that I'm sure were even more valuable. Anyway, I'm sitting in his living room. And he tells me the most heartbreaking thing. He says, 'Jim, I wish I'd read your book 20 years ago. Because I was building one of these things. We had this idea. We were working down. It was exactly the way you describe it. And we quit.' He's like, 'If I'd known it was supposed to be that hard. I was expecting it to be easier than it was. We quit early.' He said, 'I would be really rich now if I had done it.' And I said, 'I really feel for you, man.' And I kept looking at the Rothko, but I just don't want talent to drop out. So, AI, what I would say is, 'Look, you got no choice. Nobody in this room can stop it, so get on the bandwagon.' Look, it's nice. It flatters you every day. I mean, isn't it great to have a little affirmation? And you can't shut that off. Like I've tried and tried and tried. It just keeps coming back and telling me I'm the best. Like I am more popular now than post-IPO Jim. And I thought it wouldn't get better than that. You know? But look, this is the world we live in. The tools are amazing. And you do not need to be qualified to do great stuff. So, off you go. Yeah.

Well, we tried it very early because, look when we started we did the following thing. We went to Amex. And they said, 'Why should we do this?' And we said, 'Because of the Amex story.' And they were like, 'What Amex story?' And I said, 'Well, the one I tell every person who comes into my studio, which is like put that goddamn Amex card back in your wallet because it costs me too much money. And get out your Visa card because that's how I want to get paid.' And the Amex guy was like, 'Oh!' I was like, 'Oh, you know it's true.' He's like, 'Yeah.' I was like, 'Great. We're not going to charge more for Amex.' And so we got Amex. So we had Amex. Then we had to have MasterCard and Visa. So we thought we could get Visa because we were both San Francisco, we figured somebody would know... Visa was not able to think. Okay. MasterCard was the people who bought the vision. And look, we were hugely accretive to their whole... They should have accepted us and they did accept us, but they had to change their required rules to do so. And then once MasterCard did it, Visa did it. And look, I'm knocking Visa of 15 years ago because frankly Visa is now one of the more innovative and open-minded payments orgs. So, you know, they switch. It depends who's running it. There's no cerebral cortex at Visa, you know? It's like who's in charge? Who do you get it? How do you present? And so, yeah, look, I think they're not actively killing innovation. But look, big organizations are not as nimble as small ones.

Are you talking about the staff reduction at... Oh, yeah, that made news, didn't it? I mean, look, the tools are amazing. Productivity, if you're using the tools, is ramping up and some people don't use them. And what we see because we see you is we watched a swath of our employees become hyper-productive and another group not. We're good at math. And the other thing is we didn't want to go through like a little layoff here, a little layoff there. That's just culture killer. So, what we did was we got really serious about it, went through the whole org, top to bottom, and then said, 'This is what we need.' We paid them 6 months, we gave them a year for a week, you know, week for every year they were with us. They got to take their devices, they got $5,000 cash. I mean, we weren't doing it to save money. We were doing it because it sucks to be unemployed, but it also sucks to be underemployed, to not really be needed. It's just no good. So, look, I'm sorry it went down that way, but I thought we handled it really well. And I was really proud of Jack for having the balls to do it in an upfront way. I mean, because he took a lot of... This is the great thing about being me is that nobody knows who I am. Thank you. That's a good way to end. Oh, I'll take one more. Yeah, sure. I mean, I don't know. You're the sponsors. You got one? Hey, can I... Sure. Yeah.

Oh, that's a phenomenal question. Yeah, so in the book I call... I look at something called perfect problems. See, I'll save you 300 pages of reading right now. Here's the way I think about the problems that are in the world. Some problems are solved. We can ignore them. They're solved. You can make a great business copying other people's solutions to stuff. Open another coffee shop. It's been done, but it's profitable. Off you go. Solved problem, I'm not interested. Ignore that. Then, unsolved problems, from here over to here. Now, somewhere here, these are unsolvable problems, like teleportation. Like, I really want to be able to teleport because I got to go through freaking Atlanta Airport in a couple hours, and that's going to suck, and I really want to be able to teleport, but teleporting might be here on the scale. It might be impossible to teleport, at least based on what I know about physics. Can't be done. But, then there's this group of what I call perfect problems, which are solvable, but unsolved. I think that's a really interesting place to live. I've lived my entire career there. But, I'm an easily angry guy. Like, I'm a guy who gets pissed off at stuff. I see stuff. It's like that's wrong, I want to fix it. That's wrong, I want to... Why doesn't somebody fix... I am just driven by dark spirits. And look, my friend's sleeping in his car. I take this really seriously. This guy shouldn't be sleeping in his car. He works hard. Why can't he make a living? Well, like, I figured it out. Okay? And we're filling up the world with diapers. And I got another one that's pissing me off right now. Do you realize we get 30 drugs a year as a species? Like, we get 30 new drugs. You think all this drug discovery, all this act? No. If you look at the stuff that's actually going through double-blind placebo-controlled clinical trials, you get about 30 substances a year that are going to save your life. We should be getting a thousand. So, I've got another effort. So, what I do personally, and it works great, is I just find stuff that pisses me off. And if you do that, then you don't need the financial incentives to get up every morning and just jump out of bed. I'm working harder than I ever have. And I think it's problem-driven. And if you're an engineer by training, you're used to working on stuff that doesn't work. So, I think if you have a little bit of that mindset of oh, I'm going to get to go in today, and let me tell you what, the day we figured out in the diaper lab how to hack farm waste to make it almost as good as a super absorbent, which we did about 6 months ago, guys were crying. They were so happy. Because we didn't know if it could be done. And some guy figured out how to do it. I mean, that's a great way to live. Thank you all very much.