Jim McKelvey and Jack Dorsey created Square in 2009 in St. Louis, Missouri. McKelvey’s new book, The Innovation Stack: Building an Unbeatable Business One Crazy Idea at a Time, shows company problem solving needs to be a daily mindset for growing businesses. Representatives from Missouri Partnership recently participated with McKelvey in a London Tech Week virtual event and blog, and with his permission, much of this article came directly from his book.
The Godfather Day
In the summer of 2014, Square was just over five years old. It was still a simple business that had started in St. Louis, Missouri: We gave away a cool little white square credit card reader, charged 2.75% for our service and had a happy collection of small businesses using our product.
Then the doorbell rang, and Jeff Bezos delivered a severed horse head via free two-day shipping. We discovered that Amazon had copied our hardware (albeit as a black rectangle), had undercut our price by 30% and was offering live customer support.
We needed a response, fast. Nobody had ever written a playbook on how to beat the alpha predator, and even if they had, they would still need to sell it on Amazon. We had to figure out how to respond by ourselves.
Check out the full article to see what exactly Amazon was doing, and how Square reacted.