Complexity is the defining business and leadership challenge of our time. But it has never felt more urgent than this moment, with the coronavirus upending life and business as we know it. For the next few weeks, we’ll be talking to leaders about what it takes to lead through the most complex and confounding problems, and about Brody Moments (from Jaws’ Police Chief Brody and his famous line “you’re going to need a bigger boat”) related to the coronavirus.
Today we talk with Jim McKelvey about his new book, The Innovation Stack, and how the coronavirus is impacting business leaders and entrepreneurs. He is the co-founder of Square, was chairman of its board until 2010, and still serves on the Board of Directors. McKelvey also founded Invisibly, a project to rewire the economics of online content; LaunchCode, a non-profit that trains people to work in technology; and Third Degree Glass Factory, a publicly accessible glass art studio & education center in St. Louis. In 2017, he was appointed as an Independent Director of the St. Louis Federal Reserve.
David and David: What is a Brody Moment you’d be willing to share from your past – whether during your time at Square or otherwise?
Jim: A Brody Moment is what got me started with our nonprofit LaunchCode. I realized that businesses can’t find enough computer programmers to hire, and that the shortage is growing every year. I opened a nonprofit to place programmers and said that if you can code, I can get you a job. I tested 400 applicants, found 40 qualified programmers who couldn’t get a job on their own, and placed 100% of them in a month. I thought I’d place half of them, and instead realized that I’d just figured out how to solve the world’s programming shortage, but only if I could scale up.
As it happens, my wife was taking an online Harvard Master’s Program in Computer Science at the time, and I learned that they put their courseware out there for free. That meant I could use the rigorous Harvard curriculum to train and test people, and promise jobs to everyone who passed. I announced that to the City of Saint Louis, and ended up filling an auditorium with 1000 registrants in the middle of the polar vortex when the city was shut down. It was clear I had to think bigger when it came to this business.
David and David: In The Innovation Stack, you paint a clear picture of what it feels like to be an entrepreneur, operating ‘outside the city walls’ to create something genuinely new. Do you think that somebody who’s been down that path before - a genuine entrepreneur - is better prepared for a Brody Moment, when a new solution is required, versus someone who’s only ever lived inside the city walls?
Jim: Yes, but only a little. If you’re doing something that has never been done before, you don’t have a guarantee of success or even of survival. But the difference between the entrepreneur and the novice is that the entrepreneur expects the journey to be uncomfortable. I wrote my book for the novices, not to give them knowledge of what to do, but so that they’re familiar with the situations they might encounter when they get in trouble.
David and David: In your book, you tell the story about when Amazon copied Square’s product, undercut your price and “was going to eat your brains.” You needed a response fast and recount a somber board meeting where the decision was made to do nothing. Can you recall the range of emotions you personally experienced at the time?
Jim: It was terrifying - I remember icy cold fear. Then a second wave of fear when I realized the survivor group was a null set - no startups had ever survived an attack by Amazon. The fear threw me into entrepreneur mode: We’ve got to fix this, to do something, to respond. We began a methodical assessment of what we could do, looked at everything we were doing, and saw that it was all for a reason, it all made sense in the context of the whole. For example, why would we change our price? We’d be upside down if we charged what Amazon was charging. That led us to believe that we had to keep doing what we were doing, which was weird because you want to fight back, and this was turning the other cheek.
Fortunately, we were frantically busy growing, doubling every other month, and that was a great distraction, being so busy without time to think. It reminded me of the Great Flood of 1993, when everyone was bagging sand and building levies. We were all fighting against the Mississippi, just filling a bag of sand and throwing it on the pile. That felt good and made you feel like you weren’t a victim.
David and David: The core concept of your book is the innovation stack and the interconnectedness of innovation. How does this concept apply when it’s not an entrepreneur, but any leader within a big, well-established organization who is at a defining moment and needs a new solution right away to avoid failure? What advice would you give them?
Jim: First, most people have the potential to be an entrepreneur. If you take the number of people who do entrepreneurial things, it’s a small percentage, but if you look at those who have the basic skills necessary, it’s probably 99%.
This is exactly different from what I was taught. Successful entrepreneurs aren’t that special or different. They can’t levitate through the power of their thoughts. Entrepreneurs are normal folks in extraordinary situations with the right solutions to problems who end up with innovation stacks. We unpack this in the popular press as hero stories, and as a result, we intimidate all these perfectly capable potential entrepreneurs and they quit. They hear these hero stories and disqualify themselves.
That’s one reason I wrote the book. When you’re in it, it’s not that complicated or hard. It’s not genius level stuff. It’s brutal to go through, but every decision is relatively simple. Therefore, it’s something that I believe way more people should be doing. I want to get all this talent off the sidelines, the 300 million people in the US who have problems to solve, and change the expectation that they should leave the solving to a half-dozen credentialed geniuses.
Be sure to check out part two of our interview with Jim McKelvey, where we continue discussing entrepreneurship and innovation at defining moments, like the present crisis.
Original article posted on Forbes on May 11, 2020
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