10 business lessons from Square co-founder Jim McKelvey

10 business lessons from Square co-founder Jim McKelvey

No one says no to Jim McKelvey.

The co-founder of Square got a “yes” from every venture capital firm he pitched on the mobile payments company, now worth $6 billion.

And his nonprofit LaunchCode, which links people with coding apprenticeships, has partnered with every company it’s approached — including about 90 in South Florida so far. The organization will have its local launch March 4 at Miami Dade College.

McKelvey shared his recipe for success Thursday at the LAB Miami as part of the coworking space’s “Brainfood” series for entrepreneurs. Here are 10 business lessons the Miami resident shared:

1. Don’t get mad — move on.

McKelvey said he was furious after his former summer intern, Twitter co-founder Jack Dorsey, was booted from the social media giant.

“It was OK to kick him out of the company — I could sort of understand that — but then they tried to write him out of the history,” he said.

McKelvey wanted to get even somehow, but Dorsey remained calm, asking: Why don’t we just start another company?

The duo went on to develop Square.

2. Look for problems, not opportunities.

McKelvey has, at times, made a living as a glass-blowing artist — sometimes selling bathroom faucets for $2,000 a pop.

When he realized how hard it was for small merchants like artists to accept credit cards, he decided to build a solution. He didn’t imagine that Square would help millions; he just knew he and his friends had a problem.

A company should always be a vehicle to solve a problem, McKelvey said, not an attempt to predict market opportunity.

“I’ve never been able to predict opportunity, and I’ve never met anybody who could,” he said.


3. Don’t think about your competitors.

Paypal could have copied Square, but it never caught up, McKelvey said.

“If you drive fast enough, you don’t need a rearview mirror,” he said.

Worrying about another company poaching your concept is a waste of time, he added, because the big innovators have better things to do.

“The people who have the capacity to copy your idea have five ideas of their own,” he said.

4. Do think about your customers.

McKelvey uses a beat-up, cracked smartphone and drives a 2000 Honda Insight. He hates his bank, but he sticks with it so that he’s never too far removed from the average consumer experience.

“Studying your customers is good,” he said. “If you can be your customer, even better.”

5. Have a “don’t do” list.

People are always trying to make their to-do list longer, McKelvey said. He uses the opposite tactic: He has a “don’t do” list.

“Good to Great” author Jim Collins taught him the technique. You make a list of all the things that kill your precious time, such as having lunch with someone you hate or slaving over something you’ll never be good at. Then you commit to stop doing them.

The “don’t do” list has helped McKelvey spend more time with his wife and preschooler, even if it means showing up a little late to the office.

6. The best entrepreneur is tenacious and humble — sort of.

The key characteristics of a great entrepreneur are tenacity and humility — most of the time, McKelvey said.

“You want this weird sort of humility-arrogance combination that’s hard to describe,” he said.

7. Be a builder, not just an idea person.

As a partner in two venture capital funds, McKelvey has never invested in a product he couldn’t experience.

His Square pitch — as demonstrated Thursday at the LAB — is a two-minute affair.

He asked for someone’s credit card, ran it through the Square device attached to his smartphone and emailed them the receipt. (In the process, an unsuspecting “Brainfood” audience member made a $5 donation to LaunchCode.)

It doesn’t pay to be an “idea guy,” McKelvey warned — build the product and come prepared to blow investors away.

“These days it’s so easy to build stuff … If you believe in it, you’ll build it,” he said.

8. Apprenticeships help the whole team, not just the learner.

The backbone of LaunchCode’s training system is to pair junior developers with senior developers for several weeks.

Many people scoff at the idea because they believe it will zap the productivity of the more experienced programmer. On the contrary, McKelvey said, pair programming is a low-cost way to boost the whole team.

“The senior person loses productivity for a week or so, but the junior person gets up to speed really fast,” he said.

9. South Florida is probably a good place to start.

While McKelvey has never started a company in South Florida, he has noticed that the atmosphere is a little more open to fresh ideas than his hometown of St. Louis.

“Down here, there’s a lot more acceptance to the new [and] a lot less arrogance of, ‘Well, this is how we do it,'” he said.

10. Don’t look for reasons it can’t be done. Just do it.

When McKelvey and Dorsey started Square, there were a long list of reasons it might not work.

“All the intelligent people were telling us it couldn’t be done,” McKelvey said.

But if you focus on the reasons your business could fail, you’ll get so down that you won’t try, he said. Just go after it, and everything else could fall into place.

“Laws can be changed, minds can be changed, the world can be changed, and that’s what entrepreneurs do,” he said.


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