Transcripts For CSPAN2 After Words Jim McKelvey The Innovation Stack 20240713

Group in the middle of solvable problems that have not yet been solved. Thats what i call the perfect problem because that in fact is the focus of what i think entrepreneurship is. In other words, you are looking for a way to solve the problem that is solvable but has not been done. Youre going to have to do something new but you dont get a copy. What happened with jack, jack dorsey and i i hired jack when he was 15, he was a High School Student, came into work at a company that i still have and i dont run any of my companies they just sell them, this ones been around for 30 years and jack and i worked together and he went off to college and he got kicked out of twitter and the first time i guess. And they showed him the door and he came back to st. Louis and we were heading out and talking. And we decided we would Start Company together. So then we were kicking around for ideas, he did not have an idea and i did not have an idea so we look for problems i solve and we came up with the problem of how merchants got paid. When did you come to that conclusion, you talk in the book about your work as a glass blower, tell me about the moment that you realize that payments were a problem for small merchant. It was funny because as i said i was just kicked out of twitter. My first reaction, jack was like a little brother to me, he was somebody i felt like i needed to stand up for and what they did to him and twitter the first time was completely vile. So my first suggestion was was quite to San Francisco and get even with them. It was like despite motivated. But jack to his credit said what it would do something more positive and start a new company. That was the impetus. And then we were looking for a problem. Then we determined our company was going to be focused i have my phone i got a use as a prop, and these things, what are we gonna focus on these things because the iphone had just come out and we knew it was going to be important so we hired an engineer from apple and not give us two weeks to figure out what were going to do. And we cannot think of anything. We were stressing for ideas and i went back to my glass studio, a glass blower and i make stuff that nobody needs, i make art, that stuff that nobody needs. As a matter of fact in d. C. I used to teach acklin echo park. For cspan viewers, you been there 20 years ago, i was a guy who taught you how to make a paperweight. I was in my studio trying to sell a piece of glass and i lost the cell because they could not take an American Express card. I was angry, i lost the great windfall i was talking to the lady about a device. I had an attitude towards a device like this, this device is a magic device, turns into anything i want. If i wanted to turn into a television becomes a television, map, radio. It will turn into that book tomorrow if you want. It did not turn into a credit card machine. And so i was angry but i was also motivated to fix that so i called up jack on that device and i said lets make our iphones turning to credit card machines. Thats what became square. The name of the book is innovation stack, what is innovation stack and how did you learn about that from square. And innovation stack is not something that we knew about when we started square but its probably the most powerful phenomenon that ive seen in business. And we stumbled across it. It is simply a way of interweaving inventions togeth together. Sometimes simple inventions. But put enough together and they take on their own life and they create new industries. If you look throughout history at the Great Industries that have started, almost always theres an innovation stack at the beginning i had no idea any of this was happening and as a matter of fact i wrote this book and i been having people reviewed like yourself and one of the greatest compliments i got was from a very successful entrepreneur. He was interviewing me in the skies living room and he is a painting on the wall that is worth more than my house. I was like oh my god. So im all intimidated and hes asking me about the book and he finally said i wish id known this when i was 20 years old. And i was like me too. It turns out there is a thing that happens, a process that can happen when you start to solve a perfect problem, something that has not been solved before because most of what we do is copying and most of our tools and training and comfort with solutions that exist. When you get out of the world of copying, you can build something that is truly different in the process is different and it creates in innovation stack. If you build an innovation stack, at least in my studies, your company will dominate the world and it will run whatever business youre in. In the book when you talk about innovation stack, it was interesting that you focused on companies that we dont associate with tech i think a lot of people draw the parallel and you focus on southwest, ikea, others. Why did you decide to focus on those companies outside of the Tech Industry . I am a scientist by training i am a my father was a scientist. Ive been very deep in the scientific method. If youre gonna do a reasonably controlled experiment you need to eliminate variable. One of the most powerful variables is a phenomenon of viral growth in technology. If you look at the potential for company that does nothing that interesting but add sufficient technology to an old business you can get outside success. When i saw this pattern of the innovation stack, i want to Study Companies but i dont want to Study Companies like google. If you look at google, they are whopping they successful or amazon, all these companies are fantastically successful. And in some cases, just appear disruptive nature of technology overwhelms anything else. And they can fund their own Space Program and their management can be crummy, its still a powerful force of technology. I wanted to exclude that. If you exclude it, what youre left with is business about history that a bill in innovation stack that has dominated the industry. I go back basically i start 100 years ago just to show that the pattern is something that is systemic in innovation and not just a result of having Amazon Web Services and viral growth. Some people might see this on their selves and they started as a graphic novel per can you tell me a little bit. I did not want to write a business book. I dont particularly like Business Books, theyre boring. They are the ponderous selfserving homes, their nonscientific. I saw this and i thought i had to share this. And then i did not want to write a business book so i started looking at the stories of these companies had done this in the stories were epic. They were fantastic and i dont have to tell this is a business. This can be a graphic novel. So while what i originally sold to penguin was a schizophrenic manuscript that was graphic novel than text in it for backandforth randomly and penguin liked it or i should say they pretended they liked it. Because they signed a contract. Once they sign the contract, they on the book. So then they took me to this windowless Conference Room in manhattan and we had a little talk. The talk went like this. There like you realize your cute comics are not gonna show up in a fourinch ravine. And people besides are going to listen to this as an audiobook and as an audiobook, it is useless, you cannot take a graphic novel and reduce it to an audiobook. Right there you lose 70 . If you want to lose, they were right. So i rewrote the whole thing but i still had all these great comics. I actually made my own comic i will give you a copy this is a banker, there is a murder. There is a murder on that page and there is a funeral and heres the destruction of a major city. This is comic book stuff and the reason i wanted to do a comic was because the tales of entrepreneurship and the tales of these companies that build and donation stocks tend to be really good stories because theres a lot of failure and failure makes good stories, nobody wants to hear about success. Boring. But failure, how did you get that scar, thats a good story. So i wanted to tell in this format and although theres only one chapter that survives is a comic, if you buy the book or give the comic. Im not going to sell this but you can have it. In their good stories, they are fun and so often i find that we ignore the fun part of what its like to do something that has not been done because theres a lot of failure and you have to have a sense of humor but mistakes, everyone is talked about that. Only one chapter is turned into a comic book, it seems to me it would be amazon what you tell me what it was like when you realize that amazon was trying to directly compete with you on the payment space. I appreciate the irony of dissing amazon and youre in the middle of selling a book. I will redeem myself at the very last Second Period so amazon did what they do, they looked at our market, decided they wanted and decided to take it. When amazon takes a market, they do to things, the copier produ product, they undercut your price almost by 30 and then the ad whatever else they have like the amazon brand and a couple hundred million customers in all this stuff and then they want you to die. Amazon did this, they ran the playbook. And so we were terrified and some things like netflix already giant. But startups, forget it. They had survived this attack amazon. Its like you are truly alone. It was terrifying, we looked at what we can do, there was not that much he could do amazon was undercutting us and they were being amazon. And we were terrified. But there was not much that we chose to do differently, we looked at all of our options and looking all the options, we realized that they were being done for a very good reason so we just kept doing it. We did not match them on price, amazons price is 30 lower than our price and we do not match their price, we kept going. And it lasted for about a year end a half and at the end on halloween, 2015, amazon gave up and they mailed all of their former customers a little wide square reader. I could not believe it. This never happens. This does not happen. But its what happened. And that is actually what led me to the book because as somebody who is raised as a scientist, i needed an explanation. I needed to answer the question, why does this happen, you cannot just be lucky, there must be some phenomenon and it turns out square had in innovation stack, we did not know it at the time and there was no label calling and innovation stack and theres a bunch of reasons i had not seen it but once i saw i was like that is it. Thats what allows us to survive amazon and all these other companies that i study to survive vicious attacks. Amazon was bad but will happen as Southwest Airlines in the early days was worse. We did not end up in federal and state court herb keller had it worse than i did. I wanted to ask you, you mentioned you looked around and you cannot find other companies that had been able to beat amazon and in the book you also say that you found some people who amazon beat but they were not willing to talk to on the record about it. I found many amazon victims and talk to them personally and got their stories and then said that is great, could i quote you even people who are in industries competing with amazon. Even that they were so afraid of amazon, nobody would go on the record, firsthand quotes in this book about what happened with amazon. Why are people so afraid for amazon. You have to ask them. That is not for me too share. Youd have to ask them. I will tell you, it was so severe that i could get nobody to go on the record. Right now were sitting in washington where theres antitrust ground at the moment when you look at congress, do you think the amazon is monopo monopoly. Not a monopoly in the traditional sense but i think they definitely exhibited some of the behaviors of market dominance. And im not a lawyer, i dont have a legally valid opinion on this thing. But any company that gets big enough that it can move markets ought to be looked at. And again, im not a regulator. I guess i kind of am now, i sit on the fed and im a big believer in regulation. I think regulation is probably good in a lot of situations. And on the other side these tech part from an amazon in particular are very good at keeping the customer in mind so i think what youre looking for is a tech platform that gives very, very powerful that still maintains a semblance of responsibility. I think amazon has done that and google has done that and i think facebook has kind of not done that. So they deserve regulation and different levels. I want to ask you about apple, square could not exist without the iphone and later much of the business relied on the ipad. How do you think about them in that context . Apple is superpowerful and they are really important to get along with and im tremendous respect for apple, we built our Company Based on a product that apple had introduced to the world which was this thing, thats an apple invention. I have a tremendous amount of respect and theyre not somebody that you want to piss off. You dont want to do stuff like we did in the early days which could upset apple a lot, we had a little connecting thing on the bottom and we put the square reader and through the microphone jack and that was a nono. We thought we would get trouble but we thought our product is so cool that they would just be good with them. Steve jobs had a protect enter production of jobs that he liked. If steve thought your call you were fine. Apples lawyers would leave you alone. So we approach steve. Tell me a little bit about the design of square had a basic default under design flaw. I chose not to correct when youre swiping a credit card, it was so narrow that the card would wobble. As a result would be a mystery. 80 would work in the 20 and was a wobble. To solve this problem until another reader this wide and tested it and everybody was 100 without we build a tiny little and it was not for reasons like that. But the reaction was very different. If i use the big device and if i use the small device the one in the smithsonian, they were amazed. Remember the first time he saw cargo through square reader. I got your attention. We took a giant gamble at square to build a product that mechanically did not work that well as it could but just got your attention and pull you away and look so cool and fun to have and people were talking about it and they said i think you just have to go for the cool, and to this day squares readers would work better if they were wider but they are cool, they are great and the funny thing is that 80 really drops after little bit of practice, went to practitioner get a good reading. So we discovered by making a product that was less than perfect, we trained customers to use our product and once they were using it, they were showing off to their friends how good they were, swiping the square. Thats a major gamble, it reminds me of one part of the book of the distinction between entrepreneurs and business people. Can you talk a little bit about that. I was trying to discover what allowed square to survive amazon. In the process i sold the innovation stack. I wanted to tell the world about it. I have to draw this or write it but i have to tell the story. I immediately realized that the english language does not have a word for this process that i was describing in the process i was describing was building a business but not a business that has been done before. How do you describe somebody who goes out and start the business, thats an entrepreneur but i had a friend who started the Coffee Company and hes an entrepreneur, he opened up a Coffee Company at the coffee shops. Coffee shops have been a around for centuries. You know how to make a coffee shop and if you do not, you can go to a tradeshow where they will teach you all the stuff that you need. In higher this vendor to set up your espresso machine, coffee is a problem. How do you differentiate somebody like that from somebody who is doing something thats never been done before. I have another friend who is launching satellites for supercheap so hes buying old russian fighter planes and stripping the crab out of them, loading them with the missile and send them to 90000 feet and puts them in a power dive and pulls up at the last Second Period he has all the Kinetic Energy and 70000 feet up and he fires the missile. If you fire a missile from 7000u dont need a very big missile because theres so much energy to begin with. He think they can launch satellites cheaper. Where is his tradeshow . Where is im buying old russian fighter jets and sending them into the stratosphere, there is nothing. He does not get hes living in a different set of rules. Hes living in a world where i needed to be able to describe that. It turns out the word entrepreneur was originally used and popularized to describe the person who is doing something new in weird and it might not work. It was the original use of the work. It has since become demeaned business. You can say youre an entrepreneur because you started the business. That is the correct use today. But an economist that was using 100 years ago that 70 was doing something different. So in the book i go back 100 years and we said will use this word and will use in the archaic definition because thats only word i can describe it. I wanted to differentiate what it is like to not copy because i think i did not want to read the book, writing a book is a pain in the ass and its very tough for me. Im a slow writer. I was not like i need to write another book by had to write this. I look for the explanation phenomenon that i seen, nobody has ever explained and then i understood why. How are they going to explain it, theres not a vocabulary to clean off the part that you want to talk about. So i needed to dust off the definition of entrepreneur and then going find examples that supported my thesis. When did you realize that you yourself fell into that category of entrepreneur versus businessperson. I am still realizing it. By my definition entrepreneur is people who solve problems or have not been solved before. And sometimes fail to solve problems that have not been solved before. I am in that category not a lot of problems that i work on and i dont have solutions to. But ive also had the fortune of doing some stuff that hasnt been done and then having it work and then seeing the results and the results are tremendous. Its a great thing when it works, when it finally works because typically the path that ive taken is failure, failure, something kind of succeeds but then that success creates two other problems, you do that enough, one of two things will happen, you will either die because you run out of energy or resources or time or you will succeed and when you succeed you will basically be in possession of an innovation stack. You have done so many Different Things in those Different Things will interrelate and influence each other that what you have will look like nothing else in the market and it will behave like nothing else in the market and even when amazon decides to copy what you just did, they will not be able to, even amazon with all the resources and talent, they cannot do it. This pattern is what creates Great Solutions to new product. You mentioned earlier that you know jack dorsey since he was a High School Student and was working for your company. Tell me when did you first realize that he had some of these qualities of an entrepreneur. He had the first quality that was demonstrated the first night because we made him pull an allnighter since the day he was hired, we were in a panic and we made as a matter fact thats how we got to him because we were who bring up everybody from around the location where our company was and his mother ran the coffee shop that sold the chocolate covered espresso beans to keep everybody awake, this is before ritalin was widely available. Wed stay awake by munching on caffeine. And marsha sold us the beans and she let us hire her son. I think she regretted it because we sent him home at 5 00 a. M. That morning from his first day at work. So thats ointment jack. Quality one, tenacity, got it. Survive on little sleep, got it. He later discovered that jack is incredibly confident. He is quiet, he is not a bombastic person but he is really good. It just shows through. You mentioned earlier you have a brother like relationship with him and youre so defensive of him the first time he was pushed out of twitter. What are your thoughts now that there has been a recent activist investor push once again to potentially push him out of the company and what are your thoughts about that . You guys have tried that before, you kicked him out twice, let him run his company, you kicked them out once it didnt work, you kicked him out a second time and brought him back, you didnt kick him out the third, i think they came to terms. , who else but jack is good to run twitter well. I dont know anything about twitter, i dont have anything to do the company but i would say this, jack is a fantastic leader, hes a guy who thinks very deeply in the whining about that he is running public companys. I think square has been phenomenally successful and i see why he works there. I see why hes working at his other company and i would leave them alone. Got it. What do you think its about him that gives him the ability to run these Large Companies successfully . He is single. [laughter] single and no kids. Are you married . Rain not. All the married folks out there will get it. If i said you cannot have a family, not have kids but have to run another company, no problem. Im not saying the family is not a good tradeoff but im saying, thats why left square. I had my first child and i cannot work 12 hour days i would know my kids and it was unfair for all the people working those hours to stay around and put it in eight hour day and go home, see you guys. I cannot do that. That was when i left after my son was born. So i think jack has a tremendous work ethic but he is not dragging along a minivan full of city cops. I want to ask how your life change when the company ipo. I was taller than i ever was in my life. People start tuning indifferently, my life did not change all that much because i was living in st. Louis, i had already paid off most of my debts, so i was not in debt. It turns out going from a lot of debt to know that is a big deal, going from no debt to a lot of money isnt that big a video, at least for me i dont spend that much so that was weird. The people started treating it differently. I noticed that this is probably the biggest downside. I stop getting feedback. I spent three years writing a book and i think its a good book but i cannot tell because everybody says your book is great and im like well maybe youre just saying that. I think if i was my old artist self when i was much grumpier and sort of less known, i would probably be getting more feedback than the book might suck so i dont know, you read it, but you dont have to be honest, the cameras are on. Its a fascinating account of your own experience and also your research into so many other founders was fascinating as well. I hope its not about me, the book is not about me, you dont want to buy a book about you. The story is good but the reason i include the story is twofold. One it supports the thesis into i have firsthand knowledge, i have complete firsthand read cant get anyone knowledge in a public what i say. But the rest of the book. By the way i was not going to write it unless i found examples of the phenomenon elsewhere but is me talking about me and thats boring. So it is not a book on square, its not about me, its a book on a phenomenon that allowed us to create square even though we did not know what it was. And you would say if you built square without knowing what it is, why is it important to know. The answer is it gets back to the core and the reason why i wrote it. I wrote this and i was typing the words, had a person in mind, i know who she is, she is incredibly competent. She is so good she is so much potential and shes one of these people who disqualifies herself from trying to do new things because she has a lot of qualifications to do the new thing and its heartbreaking because being qualified is the right answer if qualification is possible. If it is not, then youre in my world, then youre an entrepreneur and then youll do stuff that is really weird. All give you an example. If i want to fly home today, my friend flew me appear, he has a little plane. If i wanted to control that little plane, have to going get certified, have to get faa medical and 40 hours of training and pass all these test, i have to do all the stuff that make me qualified pilot and then i can only fly if theres no clouds. So that is good, it would be bad for me too get his plane and sale take over from here. Schoonover. Today you can be a qualified pilot and you should be a qualified pilot but what about the wright brothers. What about the first person whoever flew, how are they going to steer the thing, he doesnt even know he doesnt even know if its possible. He does not know because there can be no qualifications to be a pilot because nobody has ever been a pilot or built a plane so you have two pilots, the pilot of 2020 better have a medical, he better have all the training, the pilot of the first rights fire could not be qualified, back to my friend, she has been raised and trained as we all have that we need to be qualified to do the things that were going to do. Checking the box. And learn from people who know it better than you. Apprentice, that is good, thats the way it should be except in the case if youre doing something that has not been do done, we have so many problems in the world that have not been solved if we have great people like my friend who i really wrote the book for disqualifying themselves because they dont feel qualified in a situation where the never going to feel qualified and nobody will feel qualified, ive done a bunch of stuff that hasnt been done. Every time my hands wet, i get nervous and im never qualified, was a qualified to start a Payment System, i had zip about payments. Jacks only professional credential, hes a massage therapist. The biggest bank in the world started with a guy who is a produce vendor. He sold lettuce. Biggest Furniture Store in the world. He was 17 years old. Kicked out of his own country but a 17yearold start to biggest Furniture Store in the world. He is not qualified to do this. But it turns out qualification is effectively irrelevant if youre doing something so i just wanted to reach out and give a taste of what it is like in stories that hopefully will entertain you but make you feel when youre in the middle to do something that youre not qualified to do and its okay and others who are not qualified to do the great things that they did were in similar situations. What did it feel like when you read the very beginning of starting square and realizing how much he needed to learn about the payments space, i remember theres one antidote in the book where youre working on the product and you realize you think were breaking 17 different laws. How did you overcome that hurdle. I ignored it, we ignored it, i stopped counting at 17, we discovered on the very first day what we were doing was against the rules and i turned to the guys and said what were doing is illegal. And it turns out it was not just illegal in one way, and violated 17 different rules and regulations when visa required you to handle the card present transactions to all of our baking relationships and tons of stuff. In 17 laws and rules and rags. Which we have since complied with. I say that in washington. We are noncompliant and heavily audited. But it took us a year end have to get compliant. So we built anyway, we turn the machine on even though the machine was not licensed, there is no ul certification when i plugged the first grade reader into the first iphone. There was no spark an explosion. It turns out it worked, the system worked because the system worked, we had a thing that we can point to to get to the people whose laws needed to change to accommodate us to change the laws or the rules. In some cases we would change our world and our system to become compliant but there were a few cases where we were in violation of something that had to be changed in order prescribed to exist. We would show them to be defaulting that worked, it does violated the rules, you need to change the rules and they did not. And other founder starts out in a highly regulated space and has to break some rules of the beginning as the founder of Southwest Airlines and those are some of the most fascinating parts of the book, i thought your trip down to texas to meet him. And i know he passed away a year ago, i would love to hear your thoughts on what his legacy has been in the business world. I miss herb keller, he was so generous, i probably got the last living interview with him. At least the last one i ever heard. He welcoming down to Southwest Airlines. At the time had a theory and i have this Historical Data and great data from history. The great thing about data from history, guys who died in the 40s cannot argue with you. If i am dead wrong, he will not return from the grave to go on cspan and contradict me. That will not happen. But thats a copout. I had a theory and i wanted to take it and hold it to somebody who has been there and say you have lived through something that i think was similar, what was it like. He was incredibly generous, he was super fun, he smoked two packs of cool mentals when we were down there. And this guy said hell yeah, same thing happened to me only worse. And if somebody doing something nasty to square or who had like five that were worse. It was like watching the world through a magnifying glass, a smokefilled magnifying glass. He was so cool and so fun and he reminded me of how much fun he was. And i tried to capture that in the book and i had a graphic novel thing for her and i was not like her mom gotta make your superhero. He asked them permission to do that and he said no. He said he felt it was not dignified. So i said okay man, hes going to have a cake i just got a tattoo. Herb did not want to be portrayed like i did for jeannie. But what a man and what a Great Company trade if you know what the role of air travel was like before southwest it was exclusive provenance of the rich. In the incident concluded the only rich people wanted to fly and he studied the people on the planes and so therefore only rich people want to be on planes without asking questions, what if you ask him about affordable. , do we want to visit his dying mother. Herb change so many lives. Probably save so many lives. People that can go on southwest and get Cancer Treatment at Cancer Centers where they comply back to be with her family. These things are lifechanging. You build in innovation tech, you do this and you materially improve the lives of millions of people. In herb was the living example of that. I am so sorry that we lost him. There is a great story in the book when youre getting out of the car and you pick up a cigarette pack off the ground and you find it for you. I never asked for an autograph in my life. I have one friend who is in the mba, i would never asked him for his autograph. And i was so starstruck by herb keller that i wanted his autograph but i filled up my notebook so there is most left and he striving me too his airport in his car, it is just trashed and full of empty s and cigarette boxes and i handed it to the man and said will you autograph a pack of cool mentals for me and hes like sure. So he grabs a pen and he signs the thing and thats my most prized possession. It is sitting in my office and this little case that i am building. It is very special. You mentioned the innovation stack can change lives, when you think about that, what do you think the legacy of square is and how is it change peoples lives. Square has allowed people to go into business for themselves. Were right in the middle of the coronavirus, i dont know when this will air but life will change. A lot of people working for Big Companies may not be working for them after a while. Selfemployment is a viable option but only viable if you can get paid. Let me tell you if you sell something that cost more than 100, nobody carries that much cash anymore. And checks are basically dead. If you dont take an electronic or plastic form of payment, you will not get the money. In square by enabling that basic tool has started the process. And we piled on by adding all the fantastic schools and now, i iran my glass studio using a dozen disparate square tools, i i dont want to make this a commercial, no thought about that. I have those is a small copy. It allows me too compete for the ads. I do the stuff that theyre doing. I dont have to worry about having the best hr system. Where will help me handle that. You give it to the Little People and they can compete with the Big Companies. So thats what i find so gratifying when i see a Small Business person who is doing what she loves to do in the business is working because she has this thing that she is making or selling or doing and were making easy for this. So she can ignore the rest of it. That is just lifechanging. After i moved back i learned the problem was interesting because it turns out that education doesnt work in computer programming. It works for Everything Else but if we need welders we can train welders in the under supply of welders will go away. If you need programmers and you say we will open a school for programmers for some reason that doesnt work. The reason we know it doesnt work is the problem has been getting bigger, a shortage of programmers has been getting bigger for the last 20 years. Well, 30 years actually. We had plenty of training during that time. The problem with the training, there are a bunch of problems but a main problem is, employers want higher, newly minted programmers because they can do too much damage if they dont know what theyre doing. If they have no experience they dont get a job and no job and they dont get no experience but its a catch 22. We started launch code and launch code is a Free Training Program that gives you the skills you need for free but the most important thing about launch code is that we started not as a Training Program but as a job placement system so if you had the skills, launchpad would get you the job no matter your credentials and we figured out to get away to do do that and we built an innovation stack and figure out what someone who never figure out before is how to place people with competent coding skills with zero experience. And and a way that doesnt hurt that company. Were not asking companies to be nice or kind or pay it forward or any of that crap but pure greed motivated companies, higher launch coders because its good for those grid greedy companies. It is greed based. The job placement we coupled with education and we added another innovation which is to make it free. Turns out free innovation which is part of launch codes innovation stack, im sorry, Free Education which is part of the innovation stack is magical because it does two things. It opens up the doors to everybody and we find talented people everywhere, people you would not expect and people you would not look at or test or test the way you would expect but they are great and we can prove they are grace. And then we give them Free Education and they can get a job and kick ass. You raised some skepticism in the beginning of the interview about Business Books spirit yes, not all of it but i read enough. You kinda know. With that skepticism in mind what is the biggest take away that you hope potential on pursuers take away from your book . If you do something significant you will not feel qualified to do so and i can explain exactly why you feel that way and show you a path out and then i will show you this thing called innovation stack which you can build and if you build it you end up transforming your industry. You dont even transform it but create a new industry that is different than the other industries. You are almost beyond the attack so weve seen this again and tesla is a great example in current today and a dozen examples out calpurnia right now that probably hundreds of examples in this country but its a powerful thing. If you see the thing and recognize that you will be a little bit less scared and i say a little bit so i dont want people to think the book is a guidebook and note checklist but its not a howto guide but basically the confession of somebody who has been there coupled with supporting historic evidence and then all tied together around this idea that innovation, true innovation, stuff that hasnt been done before feels differently and we dont discuss it. What is that like . Well, lets talk about that. Hopefully if you read it and you find yourself in a situation where you can solve a perfect problem you wont disqualify yourself. Like that guy its heartbreaking, this guy is a multimillionaire, super successful, painting worth more than my mouth house and he told me that he shot one of his companies down when he was six steps into an innovation stack and he said if i had read your book i might not have quit so early. I sat there for a second and thought what would the world be like because he was trying to solve a big problem and he quit and said i cant do it. He said but that is because i kept getting this negative feedback and people telling me and all the stuff i talk about in the book and he quit. Here is a guy who is successful and is a complete bad ass in a fight could use his name youd be impressed but i cant use a saint because i did not get his permission to tell the story. Dont disqualify yourself. Or at least know when to disqualify yourself or have a sense of what it looks like because it will feel different. Obviously, the book just hit shelves but have you shared this idea of an innovation stack and seen it play out successfully with any other budding entrepreneurs . Im not trying to hoard the idea. I thank you could piece together all the interviews you dont have to buy the book but could piece it together and im not trying to its an easy way to disseminate knowledge but yeah, i share this all the time and i work with entre nous errors and encourage them and i actively sometimes discourage them to see if they can handle it and in the best advice that i can give is that new solutions are really messy, ugly things and that we been trained to want validation in advance and that will kill you and stop you every time. Just get over that. Then i hope that people will care about something enough to actually stick their next out because what i found again with at least the great entre nous is a study is that none of them are doing it for the money but may be a little bit but none of that are doing it for the fame or their public facing benefits a are, not that those are necessarily benefits but they are doing it because they care deeply about solving a problem. If you care enough about a problem it will give you this tremendous motivation. And giving away another chapter right here. You dont even have to buy the book. The point is you get that motivation to solve a problem that you really care about and that motivation if you care deeply about the problem will drive you in a way that money, fame or any other motivator cant and a lot of time feeling that because its a lonely path. Especially when people even your family members. I come home to this day and tell my wife some things are working on and she rolls her eyes and says that or work. You got to have something to stand on. You talk about how there are so many copycats especially in Silicon Valley and theres a distinction between the copycats and the real disruptors and innovators. What is the company that you have seen recently that you think is a real disruptor and that you are excited about . I love let me step back and talk about cats. Copycats. Ive got no judgment against copying. I love copying and i think copying is exactly the way to do anything. Everything in this room and im pretty sure but yeah, everything here is a copy. And some of it is fake and those arent real tvs but its a copy and that is right because people have book tv studios and have figured out that they need to have air conditioning in this place that we dont sweat and this tv studio that we are in right now is a copy of other tv studios. This desk in his chair and there copied and thats good because they all work. This chair is serving as a perfectly good chair. I love copying and i will always copy if there is an existing solution. But i dont believe it should stop at copying. I dont believe that we should only copy. I believe that if you limit yourself to only the world of known solutions you will deprive all of us of this new thing you could potentially so companies are doing look, i love tesla. I frankly love space x. Ive only met a couple times but you know, the guy who sits there and goes im going to land a rocket like that and im going to land straight up and down and im not going to take off the session and fished it out of the ocean but he says i will stick the landing. The first five times or seven times or i dont even know how many times but you saw those videos and it blows up. He sticks the landing. The tesla is not a traditional [inaudible] the tesla has a massive innovation stack and you think its just a battery and electric motor and you are dead wrong. They are reinjuring the way the chassis goes together and the way the suspension works and the way the Software Works and how you approach a car and there are hundreds of things that are different and theres an innovation stack and tesla but gm will have a hard time copying. I have two minus respect companies especially because they usually get so much abuse in the early stage. You want to see company with the innovation you should almost look for those that are most mocking. Weve only got a couple minutes left so lets talk about perfect problems and i wanted to ask what is the next perfect problem that you have identified that you want to solve. The one im working on now is journalism. Specifically the problem that we as individuals have lost control of our Online Identities and we no longer have control over part of ourselves but right now i exist as this server and a bunch of Ad Tech Companies and big platforms and i dont know what is in the file and i dont know what will be used for my good or used against me and its bad for me as an individual. What is also bad for me as an individual as i lost my Economic Voice and what i mean by this is i cant pay more for good content unless for crap. Heres the problem. Most media these days is monetized using advertising so the subscriptions work for a bunch of handful of publications but most provocations and most videos are supported by washington post, washington post, financial times, New York Times and the economist. If it is not one of those five so actually your institution i think it was celeste [inaudible] tried to talk me into doing this and back in 2016 building a micro Payment System and the reason he wanted to do this and the reason ive done this is because all of us as Consumers Want to be able to pay more for good stuff and less for bad stuff because thats how we signal what is good. Im about to go have lunch in dc and will spend my money at some restaurant and i will eat vegan because i. E. A plant based diet and if i buy expensive vegetables and pay more for a plant burger that i went for a real hamburger thats a vote for a plant based diet. Thats a vote that gets tabulated and if i pay 20 for a burger that 20 votes for this sort of thing. We tabulate all those votes and that is what gives us quality in everything but it doesnt work online because the screwy thing about online consumption is that if i trick you into watching something for ten seconds i make the same couple of pennies off those ten seconds as if i create ten seconds you loved so you are a journalist and thats what you do for living but you need to get paid any Fact Checking up a whole Organization Behind you and they need to get paid and you know who will pay for that . Consumers like me who consume your stuff. I need to pay you more because you have a Big Organization that has to create this quality. Its not a judgment of who is right and who is wrong but simply a way of saying humans need to be able to express their preferences otherwise we will be left with crap. Think of it again in terms of food. If we pass a law in dc that every meal was ten dollars would you like it . What happens . You said i go to a great restaurant in fancy steak shaft but no, they were just went out of business because they cant put a fancy steak in front of you for ten dollars. Now, you wont starve because what will happen is the Business Model at the replaces is that we will make the cheapest crap we possibly can and sell it for ten dollars. That is the world we live in and journalism. But i think is a crime is the fact that what we become is this commendation of a little bit of what we eat and the rest is what we put in our heads but the model for what we eat pretty much works in the model that what we put in our heads, the material you created as a journalist is now being economically incentivized by this system that rewards sheep and thank god, jeff is rich and amazon is a Great Company because amazon made jeff rich and jeff employs you and probably loses money in the deal. Thank you, jeff for employing cats but the point is we should not have to live in that world and thats what im working on right now. Thats unfortunately all the time we have today for thank you so much for joining us to talk about the new book and again, its the innovation stack. Tonight about tv beginning at 8 00 p. M. Eastern, highlights from our monthly indepth seri series. It is followed by former Consumer Financial Protection Bureau director Richard Cordray who details the creation of the bureau. Then journalist Michelle Malkin offers her thoughts on u. S. Immigration policy. Watch tv tonight and over the weekend on cspan2. This memorial day weekend on the tv saturday at 3 25 p. M. Eastern bestselling author James Patterson talks about his efforts to assist bookstores impacted by the coronavirus bid plus his latest book, house of kennedy and on sunday at 4 00 p. M. Eastern foundation for liberty and american greatness founder and president nick adams on his book, trump in churchill. Defenders of western civilization. At 4 30 p. M. Eastern Time Magazine National Correspondent talks about her latest book, pelosi which looks at the career of speaker of the house of representatives nancy pelosi. And im p. M. On after words facebook cofounder chris hughes talks about his book, fair shot, about his plan to reduce poverty and strengthen the middle class. On monday at 8 30 p. M. Eastern bestselling thriller writer David Baldacci talks about his writing career and books on indepth. Watch tv this memorial day weekend on