And they show them the door and we were hanging out and talking. And decided we would start a company together. We were kicking around ideas. He didnt have an idea so we were looking for problems to solve. And came up with the problem of how merchants got paid. When did you come to that conclusion . Talking about your work as a glassblower when you realize payments were a problem for small merchants. That was funny because jack was just kicked out of twitter and my first reaction is he was like a little brother. I felt like i needed to stand up for what they did at twitter to have the first time was completely file. My first suggestion was lets get even with those guys it was just spite motivated. But jack to his credit said lets do something more positive and start a new company. So that was the impetus. Then we were looking for a problem the only thing we determined was our company would be focused my phone is a prop. These things focus on these things because the iphone had just come out. We knew it would be important so we hired an engineer from apple he was starting in two weeks so it gave us two weeks to figure out what we are going to do. We were stretching for ideas so i went back to my glass studio. I am a glassblower. I make stuff that nobody needs. I make art. As a matter of fact in dc i used to teach in the park 20 years ago i was the guy that taught you how to make a paperweight. But i was in my studio trying to sell a piece of glass and i lost a sale because i couldnt take an American Express card. I was angry. I lost it. It was a windfall. And i was talking and i have this attitude toward devices like this that this device is magic it turns into anything. A television, a radio, it will turn into that book literally tomorrow turn into that book. But it didnt turn into a credit card machine. I was so angry but also motivated to fix that. So lets make her iphones turn into credit card machines. So the name of the book is the innovation stack. It is an innovation stack and how do you learn about that from square . Is not something that we knew about when we started square but it is probably the most powerful phenomenon that i have seen in business. And we stumbled across it. The innovation stack is simply a way to interweave inventions together. Sometimes very simple but if you put enough together they take on their own life and create industries. So if you look throughout history at the Great Industries that have started , is almost always there is the innovation stack at the beginning. So i had no idea this was happening and as a matter of fact ive been having people review the book like yourself. One of the greatest compliments i got was from a very successful entrepreneur. We are in his living room and he has a painting on the wall. So im all intimidated and hes asking me about the bucket he finally says i wish i knew this when i was 20 years old. I said me to. But it turns out there is a thing that happened, this process when you start to solve a perfect problem that has not been solved before. Because most of what we do cut is copying most of the tools and training and comfort is with solutions that exist. You can build something that is truly different to create the innovation stack at least in my studies your company will dominate the world. In the book talking about innovation stacks its interesting to me that you focused on companies that dont associate with tech a lot of people draw that parallel because you focus on southwest, ikea, so why did you decide to focus on those companies outside the Tech Industry . I am a scientist by training. Very steeped in the scientific method. To do a reasonably controlled experiment to eliminate variables. One of the most powerful is the phenomenon of growth and technology. If you look at the potential for a company that does nothing that interesting but adds technology to a new business you can get outside success. I didnt want to study that so we start on started the pattern of the innovation stack want to Study Companies but not like google. They are successful or amazon fantastically successful but what creates a success . In some cases just the sheer disruptive nature of technology overwhelms anything else. So when people study Google Business practices like they can fund their own space program. Which is tremendous but management could be crummy but it still such a powerful force. So i wanted to exclude that and if you exclude that you are left to build the innovation stack that still dominated their industries. So i worked for word just to show the pattern is something that is systemic and innovation and not just the result of having amazon web services. People might be surprised to hear that it was going to start as a graphic novel. I didnt want to write a business book. I dont particularly like them. They are boring. They are a pondering tone. They are not scientific so i saw this and i thought i have to share this thing. But i didnt want to write a business book so i start looking at the stories of these companies that have done this in the stories were epic. They were fantastic. I dont have to tell this. I can use this. And that manuscript and they pretended they liked it. And once they sign the contract. And the talk went like this. Do you realize that the comics would not show up on a 4inch screen . And people besides that would listen to this as an audiobook as an audiobook it is useless. You cannot reduce a graphic novel to an audiobook see you will lose 70 percent of your audience. Just stick with what youve got. So they were right so we rewrote the whole thing. This is free. You cant buy this. If you go to the website i will give you a copy of this. But there is a murderer. There is a murderer on that page and the destruction. This is comic book stuff. Because the tales of entrepreneurship because they tend to be really good stories. Because there was a lot of failure and it made good stories. But how did you get that start on that scar . So i wanted to tell it in that format. Theres only one chapter. If you buy the book and so often because there was a lot of failure and there is humor. But on that point of the comic book and i know theres only one chapter if you were to write the comic book about square the val and certainly would be amazon. So when was it like when amazon was trying to directly compete with you in the payment space . And. Believe me i appreciate the irony of dissing amazon in the middle of trying to sell a book. [laughter] i will redeem myself at the very last second. So amazon looked at our market decided they wanted it and would take it. So they copy your product. They undercut your price almost always by 30 percent like the amazon brand and a couple hundred million customers. So amazon just ran the playbook. So we were terrified and went looking for solutions that we could copy it looked at all the companies ahead be in amazon. So netflix is a media giant so there are zero startups that i know of that survive this attack by amazon see you are truly alone. It was terrifying so we look at what we could do. They were undercutting on pricing. They were being amazon. So we looked at the options so then we realized there were all of these that were done for a very good reasons we kept doing it. And we didnt match the price we just kept going. And it lasted about a year and a half. So than on hollywood 2015 amazon gave up and they mailed all of their former customers a little white square reader. So that is what happened and thats what led me to the book as someone who was raised in a scientist i needed an explanation why did this happen . You just cant be lucky. So square had the innovation stack and there is a reason i had not seen it. And then oh my god that is it. That is what allowed all these other companies that i studied to survive vicious attacks. You dont think amazon was bad but Southwest Airlines was worse. And Herb Kelleher had it worse than i did. So you looked around and you couldnt find other companies that could be amazon. So you found people amazon beat but they were not willing to talk to on the record. I found many amazon victims and talk to them personally and got their stories and then said thats great. Can i quote you . Know. Even people in totally Different Industries that were not one now competing with amazon, everybody was so afraid that nobody would go on the record. Zero on the record firsthand quotes about what happened to them. Host why are people so afraid of amazon . You have to ask them. I know. Thats not for me to share but i will tell you it was so severe that i could get nobody to go on the record. So there are no quotes. Just mes. Host now with all the companies on the antitrust grounds and sec do you think amazon is a monopoly . Not a monopoly in the traditional sense but i think im not an antitrust lawyer. That any company that gets big enough that moves markets can be looked at. I am not a regulator i guess i kind of them now but and regulations. But on the other side of the tech platform and amazon in particular are very good at keeping the customer in mind. So what you are looking for is a tech platform that is very powerful that still maintains a semblance of responsibility. Google has done that. And that was different levels. So square cannot exist without the iphone and then relied on the ipad. How do you think of them in that context . Apple is superpowerful. They are really important to get along with. I have tremendous respect for appleby built a Company Based on the product that apple introduced to the world. So i have a tremendous amount of respect for them. You dont want to do stuff like we did in the early days that could of upset apple a lot. And the microphone jack. And then we thought there would be good with it in the way that protecting products for that. So apples lawyers would leave you alone. So we approach steve. Host tell me about the design of square and that process to create such a iconic design that was in the smithsonian. The square card reader which was this wide had a basic design flaw. It was one that i noticed and i chose not to correct which was when you swipe a credit card, it is it would result in a misread. So 80 percent of the time it would work 20 percent the card would wobble and it wouldnt work. So to solve the problem another reader is about that ride. So why did we build it wasnt for cost reasons but the reaction to the vice was very different. For use the big device people were hohum. If i use the small device that is now in the smithsonian, they were amazed. What just happened . Remember the first time you saw the card go through a square reader . You were impressed. Everybody was impressed. I got your attention. We took a giant gamble at square to build a product that mechanically did not work all that well as it could. But got your attention and blew you away. It is fun to have. People were talking about it. I think we have to go for the cool. And to this day squares readers would work better if they were wider because the 80 percent number really dropped after a little bit of practice. So by making a product that was less than perfect we trained customers to use the cost on use the product and the was they used it they would show off to their friends how good they were swiping the square. Host that reminds me with that is distinction between entrepreneurs and business people. But yes i was trying to discover that what allowed square to survive amazon. And tell the world. And to draw this aright is her tell the story and i immediately realized that the english language it did not have a word for the sort of process that i was describing the amount of business that has been done before. I have a friend of mine that started a coffee company. Who is an entrepreneur working as a coffee company. You know how to make a coffee shop. But if you dont you could go to a trade show and to shut one set up the espresso machines. Coffee is a solved problem. How do you differentiate Something Like that has never been done before . Another friend trying to launch satellites supercheap buying russian fighter planes loading it up with a missile send them up to 90000 feet in a mock to power dive and pulls up at the last second with the Kinetic Energy and fires the missile. So that you dont have to have a very big missile theres so much energy. And where are those trade show . But hes living with a different set of rules. So the word entrepreneur was originally used and popularized to describe the person that is doing something new. There is original use of the word coming to me just business. Because you started the business. And the economists were using 100 years ago. So i go back 100 years and say we we will use the word but in the archaic definition because thats the only word that we have to describe it. And i want to be able to differentiate and not copy. Because look, i didnt want to write the book. This is a pain in the ass. I had to write this because i look to the explanations to see there is an even a vocabulary to clean up the part you want to talk about. And then go find examples. So when you yourself sell into that category. So by my definition entrepreneur is solving a problem that has not been saw before or failed to solve a problem. I have a lot of problems that i still dont have solutions. But i also had the fortune of doing some stuff that had not been done and having it work. And the results are tremendous. Its truly a great thing when it finally works. Because technically at least the path i have taken was failure, failure. But then that success creates to other problems. If you do that enough, you will either run out of energy and i or you will succeed and you will be in possession of the innovation stack. You will have done so many Different Things and those will interrelate and influence each other that what you have will look like nothing else in the market and behave like nothing else in the market. Even when amazon decides to try to copy, they will not be able to. Even with all of their resources. And this pattern is what creates Great Solutions to new products. Host you mentioned you have known jack dorsey since he was a High School Student and working for your company so when did you first realize he had some of these qualities of an entrepreneur . From the day he was hired we were in a panic. We were queuing up everybody around the location from where the company was and his mother ran a coffee shop and sold the chocolate covered espresso. Because that is before ritalin was widely available. So we were munching on caffeine. And tenacity got it. Got it. I later discovered he is not bombastic but he is really good. And to have a relationship with him it was so defensive be what are your thoughts now theres a reason activist investor that once again to push him out of the company . What are your thoughts about that . You have tried that before. Let him run his company. You kick not a second time and then brought them back. I think they came to terms for the third time but come on who else but jack will run twitter . [laughter] guest single, no kids. Are you married . Host im not. Guest all th guest all the married folks out there will get it. You cannot have a family, not have kids but have to run another company. Im not saying family isnt a good tradeoff, but thats why i left square. I had my first child and i couldnt work 12 hour days anymore. It wasnt fair for me to stay around and put in an eight hour day and say see you later. So when my son was born, he isnt dragging along a minivan full of zippy cups. Host you mentioned your departure but i want to ask how has your life changed . Guest all of a sudden i was taller than ever in my life. People start treating you differently. My wife did change all that much because i was living in st. Louis, id already paid off most of my data so i wasnt in that. It turns out going from a lot of debt to know that is a big deal but no money to a lot of money is a big deal. So, th people started treating e differently and i noticed this is probably the biggest downside, i stopped getting good feedback so i spent three years writing a book and i think its a good book because i cant tell because everyone says your book is great and im like yeah well you were just saying that but i feel it if i were my previous self and less known i would probably be getting more feedback. Youve read it, you dont have to be honest, the cameras are on. Host it is an account of your own experience and i thought the research into so many other founders was interesting as well. Guest the book is not about me. Believe me, you dont want a book about me. The story is good, but the reason i concluded is twofold. It supports the thesis and theyvandtheyve got the firstd knowledge, complete firsthand you cant get it anywhere knows what it felt like. But the rest of the book by the way i wasnt going to write it t unless i found examples of the phenomenon otherwise it is just me talking about me and that is boring so it isnt a book on square. Its a book on a phenomenon that allowed us to creat create squan though we didnt know what it was and see if you built it without knowing what it is, why is it important to know the answer is it gets back to the core of the reason i wrote it. I wrote this when i was typing the words i had a person in mind. Shes incredibly competent, she is so good at, she is so much potential but is one of these people who disqualified herself from trying to do new things. If qualification is possible but if it is not, then you are in my world, then you are an entrepreneur. If i want to fly home today, my friend will be here today. He has a little plain. If i want to take control of that ive got to get certified , get medical, take 40 hours in training, paschal feast tests and do this stuff to make me a qualified pilot and even then so thats good. It would be bad for me to just get in the plane and say i will take over from here, scoot over. He doesnt even know if it is possible. There can be no qualifications to be a pilot because nobody has ever built a plane. So youve got two pilots, the pilot of 2020 of the first race flyer could equal the fight. She has been raised. Check the box. Learn from people who know it better than you. Thats good. Thats the way it should be. We have so many problems in the world if we have great people like my friend that i really wrote the book for disqualifying themselves because they do not feel qualified in a situation where they are never going to feel qualified to do something else. Every time, my hands, i get nervous and ive never qualified. I was a glassblower with an economics degree and i knew nothing about it. The biggest bank of the world started with a guy that was a produce vendor. He sold less. Biggest Furniture Store in the world started by a guy that was 17yearsold kicked out of his own country, 17yearold starts the Biggest Furniture company in the world. T