00:15so it was terrifying getting here today
00:21and in the cockpit of an airplane there
00:24are hundreds of controls but there are
00:25two that are absolutely critical to
00:28getting you safely back on the ground
00:30one is the yoke sort of like a steering
00:33wheel except that instead of going right
00:34and left it also goes up and down push
00:37and the houses get bigger pulling the
00:41and this is very important as you're
00:43the second super important control is
00:49Lane speeds up pull back plane is
00:52supposed to slow down
00:55both of these controls failed as we were
01:01which got me thinking about death
01:04um I thought well that's a good good
01:06theme for a speech good way to unite the
01:09audience we're all going to die at some
01:15but probably not in the same way
01:19so so I was thinking
01:21where is the highest chance of dying
01:24like statistically if you carved out one
01:27square kilometer of Earth and you
01:30plopped yourself there what has the most
01:32venomous deadliest creatures per
01:35unit of area does anyone recognize
01:39this area behind me it's the Amazon it
01:42is the Amazon of course if you're in
01:44business the deadliest thing that you
01:58this is what happened to square so
02:01um we had a horrible thing happen to my
02:05little startup uh back in 2014. we were
02:08still a startup we had a little product
02:09and Amazon decided they wanted to take
02:12over our market so they copied our
02:15they undercut our price
02:17and they added the Amazon brand name
02:20expecting us to just die
02:23and uh so actually Keith was with us at
02:26the time we sat down we had board
02:28meetings we asked ourselves what could
02:31um we looked for any examples of other
02:34companies that had survived and attacked
02:36by Amazon when they were a startup
02:38um and we found nobody
02:41it was a completely empty set
02:48I'm trying to express what it feels like
02:50I thought I would use
02:54does anyone look at this shot
02:58and think the seals got a chance of
03:02no evidently according to the
03:04photographer this seal survived could we
03:07get the timer working
03:08otherwise I'll just talk all day
03:14or somebody needs to give me a phone
03:15because I got no idea what time it is
03:21we strategized we look for companies
03:23that had already beaten Amazon we
03:37no I mean literally what do you do I
03:41would love to be as powerful as Amazon I
03:43would love to have their balance sheet I
03:44would love to they have their talent I
03:46would love to have their their brand
03:49we've had none of that now we were
03:51pretty busy serving our customers but we
03:53had none of the resources that Amazon
03:56um so we just kept doing what we were
03:59and amazingly it worked
04:04so then the question was why why did it
04:08work how does a startup beat Amazon
04:15that we won but then this question just
04:17nagged me and it nagged at me for years
04:20um and I started looking for an excuse
04:23other than just luck because I don't
04:24believe you get that lucky
04:27um and I found this pattern that
04:31I was trying to describe to somebody
04:34and then when I realized what had
04:36actually happened to square was not
04:38unique it actually happens to a lot of
04:41companies not the majority of companies
04:43but certainly enough that it was not an
04:46but when I tried to describe this
04:49phenomenon to somebody I realized that
04:51the English language and unfortunately I
04:53only speak English but at least in
04:55English there is no word to describe
05:03I had discovered the ancient definition
05:05of the word entrepreneur
05:07the original definition of the of
05:09entrepreneur today entrepreneur means
05:11somebody who starts a business okay you
05:13start a coffee shop you're an
05:14entrepreneur you start a nutrition
05:17company you're an entrepreneur
05:18that wasn't what it originally meant
05:22um and the original thing that
05:26United entrepreneurs was something that
05:28I think unites everybody in this room
05:32and that is entrepreneurs lack
05:36access to the world's most powerful
05:40is the world's most powerful force what
05:42is the thing that always works
05:47copy it yes she can read congratulations
05:50no copying it's the way we solve
05:52problems so what is the thing that we
05:57everything everybody in this room
05:59everything in this room what is it that
06:05copies or copies there's nothing
06:07original if I ain't in this like
06:09this chip whoever invented this chair
06:11this is not an original chair I've never
06:13sat in it before but you know what it
06:15feels like a chair whoever invented this
06:18didn't invent the chair they copied it
06:20this I'm a copy I'm a very successful
06:23copy so are you we're genetic copies
06:26we are wired at our DNA at our basic
06:30level and certainly in our society to
06:33replicate because most new things don't
06:42you want to try something new
06:46your chances and I was going to try to
06:51try to hook people's interest with
06:55with a very inappropriate ad
06:58and I didn't want to have to go through
06:59sensitivity training again so I would
07:04how you are sold products
07:07by harnessing the most Primal urge there
07:12picture the sexiest most dripping South
07:15Beach ad you can imagine right behind me
07:19and then you ask yourself what are they
07:21what are they trying to what are those
07:22marketers trying to grab hold of
07:26it's our urge to copy ourselves
07:29it's just wired into us as a matter of
07:32somebody in New York the other day told
07:34me to go copy myself
07:38but what happens if you can't do this
07:41this is the thing that unites
07:44entrepreneurs are people who at least in
07:46the original ancient definition find
07:49themselves in a position where for some
07:51reason or other there's nothing to copy
07:54they can't copy for some reason they
07:57what everybody already knows how to do
08:00and in this situation
08:04and I mean forced to you don't choose to
08:06but it's sort of a last resort you
08:12so how did this path happen at Square
08:15because we ended up in a weird situation
08:18we were not able to copy our original
08:20product we weren't able to copy almost
08:22anything about the original square
08:24product we were forced because of a
08:27decision that Jack and I made
08:29uh to serve my friend Bob now um I would
08:32normally show you a photo of Bob it's
08:34better to show you a photo Bob's Car
08:37you won't see these on South Beach
08:39this is the 1992 Chevy Corsica
08:44um this is the official
08:46model from Chef this is the official
08:48photo from Chevrolet it is not Bob's
08:50Corsica if it was Bob's Corsica there
08:52would be a bungee cord hooked under
08:57this wheel well and across the hood and
09:00the bungee cord if you own a 92 Chevy
09:01Corsica and you live in St Louis
09:03Missouri is an important aftermarket
09:06because we salt the roads and
09:10the hood latch rusts out and if you
09:12don't have the bungee cord bad things
09:15and a bad thing happened to my BA my
09:17friend Bob one night as he was coming in
09:19to my glass studio to do some work
09:24he was crossing the Mississippi River
09:25the bungee cord let's go
09:28immediately the wind catches
09:31the hood and it flips it back over the
09:35windshield completely obscuring his view
09:39most people would pull over
09:42this is not what my friend Bob does
09:48kind of in a way that we'd be familiar
09:50to pet owners he probably has a dog
09:55so he's getting pelted in the face with
09:57rain like mother nature is telling him
09:59to get off the road this is not what Bob
10:01does he drives 17 miles at night in the
10:04rain looking out the gap
10:08between the dashboard and the hood which
10:10you can see neatly folded over the front
10:13of his car this is my friend Bob and his
10:14Cardinals cap there's the bungee cord
10:18and this was Square's first model user
10:23why do I show you Bob's car
10:28don't have a lot in common but we have a
10:30profession in common we are both
10:31professional glassblowers so I'm an
10:34artist I make stuff that nobody needs so
10:36does Bob except that Bob is a better
10:39artist than me flat out
10:42um he's stronger than I am he's more
10:44creative uh he's just flat out more
10:47dexterous he can execute and conceive of
10:49things that I can't do
10:51in fact there's only one area where I
10:55kind of outperformed Bob in the glass
10:57studio and that is I made a lot more
11:07that always bothered me
11:16is having a rough time he's had to live
11:19in the back of this 92 Chevy Corsica so
11:22that is not just his transportation that
11:25and I couldn't understand it because I
11:27made a very good living as a glass
11:29artist okay I made enough money to buy
11:31my own buy my own airplane okay you can
11:33make a great living glass blowing but
11:37and the question was why
11:38and the answer is that there are a few
11:40differences between Bob and me when it
11:42comes to dealing with bankers
11:44and that is though I don't often do it
11:46well actually I'm on the FED now
11:48well I do it a lot now but back in the
11:53I would put on suits and go in and get
11:55bank loans and I would get credit card
11:59rights couldn't get AMEX but you know
12:02got enough to keep the studio going
12:04um but Bob was excluded
12:06from this entire world
12:09and if you're trying to sell something
12:11like art which nobody really needs and
12:13you can't take the form of payment that
12:16you don't sell too much and you end up
12:17living in the back of a car
12:19so the question that Jack and I were
12:21wrestling with and this photo was on my
12:23desk when we were starting Square was
12:25could we build a system
12:28all these Merchants all these invisible
12:32people like my friend Bob who didn't
12:35have access to the same tools that the
12:39so that's what we built we
12:41built a an entire payment system
12:44that was completely outside of the
12:48banking world because the banking world
12:50was built to basically exclude
13:00let's talk about this flight that I took
13:03it turns out I was pretty lucky
13:05because when the controls stopped
13:07working the way they normally do when
13:09the throttle stopped speeding the plane
13:11up and slowing it down and the Yoke
13:13stopped bringing the plane up or down
13:14are there any pilots in the room
13:16you guys know what I'm talking about
13:19because Pilots these days are trained
13:21all Pilots these days are trained to
13:23recognize this area of reverse control
13:25it's this weird Quirk of aerodynamics
13:27where if I had a whiteboard in 20
13:28minutes I could explain to you why as
13:31you're getting close to the ground and
13:32you're slowing the plane down the
13:34throttle and the Yoke stop performing as
13:39but it's no big deal your life is not in
13:41danger when you fly because Pilots these
13:43days are trained to handle this
13:49but it's an invisible line there's no
13:51light that lights up you just have to
13:53know your airplane you have to know your
13:54air speed and you have to recognize the
13:56moment when you cross this particular
13:57AirSpeed and things don't work the way
14:01and this was the thing that I saw that
14:05all of basically my history which was
14:12uh pretty failure ridden history
14:16um I never knew that there was this line
14:19in the world of creating where on one
14:22side of the line the side of the line
14:24where we spend most of our lives
14:28or if we don't there's a YouTube video
14:31there's an expert there's a conference
14:32you can go to there is some person who
14:34knows how to do it if you get their
14:36knowledge then you too can copy your way
14:40and I think copying is absolutely the
14:42best solution to almost every problem
14:44it's probably the best thing you should
14:46it's probably the first thing you should
14:48do I hate people say I want to be
14:54okay you want to be Innovative go be
14:56Innovative with food all right there's a
14:58bunch of food that they've laid out for
15:00us saying that stuff run out into
15:02the garden find a plant you've never
15:04seen before and eat it
15:06that's Innovative right maybe nobody's
15:11maybe it's really good maybe you will
15:13discover something that gets you a
15:20look innovation's a last resort and
15:24the reason I've been sort of on this you
15:27know literal soapbox
15:28for years talking about Innovation is
15:31that I noticed this really interesting
15:33phenomena and that is we are so
15:36ingrained in copying and we are so
15:38taught that there is a formula and if we
15:40don't know the formula we are not
15:42qualified to proceed
15:45that I've seen a lot of potentially
15:47great entrepreneurs stop
15:50so I wrote a book about this
15:52um it's called The Innovation stack I'm
15:53not trying to plug you on the book I
15:55will tell you the reason
15:59is I've seen too many bright people stop
16:02and one of the most heartbreaking things
16:04when I wrote the book was I was in this
16:06guy's in this guy's apartment and it was
16:08in Manhattan he had a painting on the
16:10wall that was worth more than everything
16:14take my Square stock take everything at
16:16the time I was sitting at this guy had
16:21exceeded my entire net worth
16:25and he was reviewing my book with me and
16:27he read the book and he and he said he
16:29said Jim if I'd had this 20 years ago I
16:35because he had a company that was
16:37provide that was bumping down this road
16:39of innovation and I mean real Innovation
16:40and I mean a mess because if you're
16:43being truly Innovative you're doing a
16:44little eat a lot of plants that cause
16:49and he quit he says I gave up
16:59you should wait most of the time you
17:02should hesitate I think you would be an
17:04idiot today to go fly an airplane
17:06without getting trained because you can
17:08go out to Opa-locka and there are a
17:09bunch of cfis and they'll take you up
17:11and they'll train you and they'll teach
17:12you about the area of reverse command
17:13and they will show you how to fly an
17:18let's think about the Wright brothers
17:21were they qualified Pilots
17:31either Orville or Wilbur Wright could
17:34have been qualified to do what they did
17:43progress is always made by people who
17:50so if you have a problem if you see
17:52something you care enough about up which
17:53is like in my case getting my friend to
17:55not have to live in the back of his car
17:59it may set you down a path
18:02where people haven't gone before and if
18:05you find yourself on that path what will
18:07happen is every fiber of your being
18:09right down to your DNA and certainly
18:11your family and the people who care
18:12about you are going to say whoa stop
18:15and they may say you're not qualified to
18:17do that or they may say nobody's ever
18:21and yet that is what progress is
