Jim McKelvey founded Square in order to capture more sales at his glassblowing studio. Now his mid-size tech company is one of the most dynamic and exciting startups in the country. In this interview, McKelvey describes the advantages of carving out a spot in a new business ecosystem (St. Louis) and the value of focusing on universal problems as the core of a mid-market business.
I started blowing glass in 1986 when I was an undergraduate at Washington University. It was this amazing material, it was very difficult to work with, there were no rules, there was no book, you know, you just had to practice and I got sort of obsessed with it.
I’m Jim McKelvey. I’m the co-founder of Square, and the co-founder of Third Degree Glass Factory. I was trying to sell a piece of glass to a lady who only had an American Express card, which I can’t take in my studio, so I lost that sale, and that afternoon I was holding in my hand, an iPhone and I looked and was like, this device in my hand could have saved that sale if we only had this system, and that was the inception of Square.
At the beginning we really didn’t know what we had. It wasn’t a case where we said this is going to change the world. We built something that was initially sufficient to meet my need and then we kept listening to other people who were using it and taking in that feedback, and as Square has grown we’ve now got over 500 employees.
10 years ago when I was very active in St. Louis, there wasn’t much going on frankly, up until 5 years ago, back in the time when Jack and I were starting Square. We tried to build part of the company in St. Louis but we weren’t able to do enough—the ecosystem just wasn’t right, there weren’t enough investors, there weren’t enough talented programmers, the ecosystem hadn’t evolved.
When I moved back to St. Louis in 2010, I ended up with this epiphany that St. Louis could be re-energized, and I started to meet people who had the same vision. We’ve had a tremendous surge of talent and just, energy, and it turned out that it just needed a little bit of time for the ecosystem to catch up.
I work now with a couple of companies that are past the startup stage, but if they had moved out to Silicon Valley, they would have been dead. St. Louis 100 years ago was the innovation capital of the country so a lot of that entrepreneurship existed once in the town. It gets deluded over the generations, like if you inherit money, it’s very hard to risk it. The idea that most of the people I know who have inherited money, their idea is just don’t screw it up, don’t be the generation that blows it. So those people don’t take very good risk.
One of the things that’s happened in St. Louis is we’re starting to create some new fortunes. Well if you’ve made the money yourself, you’re certainly willing to roll the dice and invest in some other stuff, so we’re seeing that wheel start spinning, and that’s been super helpful. The innovation is I think driven by mid-market companies, companies that have established products and some good ideas, but they’re still small enough to innovate and move.
My best two pieces of advice are, don’t look for opportunities, look for problems. The thing I like about solving problems, and focusing on problems as the core of the business is that they’re easy to see, like you know if you’re doing the right thing.
The second piece of advice is to build it without asking for permission. If you ask for permission—if the ideas really good and you have to get permission from somebody, you’re probably not going to build anything really magnificent.
These days its so easy to build products, you know contract manufacturing, CAD/CAM, 3D printers—there is tremendous potential that wasn’t available even 5 years ago, so you can build it, you don’t have to explain it.