Speaker 1: Tim Stanovick and Carol Master live in the Bloomberg Interactive
Speaker 1: Broker Studio in New York. Our next guest is a
Speaker 1: familiar name to so many of our Bloomberg audience, although
Speaker 1: it has been quite a while, Carrol since you and
Speaker 1: I last spoke to him. Jim Mcalby is the co
Speaker 1: founder of Square, also the founder and chairman of Invisibly.
Speaker 1: It's a company that helps people manage their data. He
Speaker 1: joins us now on the phone from St. Louis, Missouri,
Speaker 1: and great to have Jim back with us. Jim, how
Speaker 1: are you doing great? Vaccinated and happy? Cripple or double
Speaker 1: Oh yeah, same with us. We're waiting for that third. Well.
Speaker 1: It's interesting. We have talked a lot with you about,
Speaker 1: you know, the use of data, and this is something
Speaker 1: that you you know, it's front and center with you
Speaker 1: when it comes to data collection, managing it, data protection.
Speaker 1: And I think it's a timely conversation to continue having
Speaker 1: kind of always, but also in a week or so
Speaker 1: that we're now talking about Facebook, it's name change and
Speaker 1: it's focused on the metaverse. I've talked about the metaverse
Speaker 1: more than I have in a long time. UM, that
Speaker 1: to me says Jim, even more data collection. How do
Speaker 1: you see it is? I'm just curious what meta stands for.
Speaker 1: I know, I know, but is this a good thing
Speaker 1: or worse thing? Can regulators keep up with it? I
Speaker 1: mean regulators are always going to follow behind popular trends.
Speaker 1: I mean it happened with the automobile. You know, we
Speaker 1: started building whatever we wanted, and eventually the gut got
Speaker 1: involved and said, hey, look you need to put seat
Speaker 1: belts on this thing. And the government you know, had
Speaker 1: a big fight over whether we should have say seat
Speaker 1: belts and say cars, and eventually we came to an
Speaker 1: agreement that hey, look, airbags are good things. Um, I
Speaker 1: think regulation is probably necessary. And it comes a little
Speaker 1: bit later because you got to see what problem is
Speaker 1: you're trying to regulate. You don't want to just start
Speaker 1: regulating when there's nothing wrong. What about when it comes
Speaker 1: to specifically the metaverse? I mean, what kind of regulations
Speaker 1: could you foresee being necessary for the metaverse? I don't
Speaker 1: know what the metaverse is. You're not the only one
Speaker 1: speculate on that, not. You know, sort of the platforms
Speaker 1: right now have a business model that is sort of
Speaker 1: contrary to personal interests and basically on the platforms, uh,
Speaker 1: you're the product, and you get monetized in ways that
Speaker 1: are to the platform's benefits and not necessarily to your benefit.
Speaker 1: And I'll give you the sort of the classic example,
Speaker 1: which is that if your measuring engagement and you say, well,
Speaker 1: the best thing we can do is keep our users engaged. Um,
Speaker 1: and then you realize that one of the ways to
Speaker 1: keep people engaged is to upset them, to feed them
Speaker 1: news and messages that anger them so they get more
Speaker 1: you know, engaged, but they're angry. That's probably bad for
Speaker 1: the individual. Like I don't want to go around being angry,
Speaker 1: but if Facebook wants to make me angry, they have
Speaker 1: the power to do so because they basically control what
Speaker 1: I see. That is disturbing and you know it makes
Speaker 1: me angry, right exactly. Well it's interesting too, well and
Speaker 1: I think, well exactly, But what's interesting right now is
Speaker 1: right when we go to sites in something, we now
Speaker 1: are able to say, Okay, here's the data I want
Speaker 1: you to be able to have access to. Right, We're
Speaker 1: getting a little bit more. Say it feels like, although
Speaker 1: I'm never quite sure when I'm dealing with a digital world,
Speaker 1: really how much say I ultimately really have but it
Speaker 1: feels like we have a little bit more power. I
Speaker 1: mean ultimately you really feel that way? Which way that yeah,
Speaker 1: that you have more power? Now? No? No, no, no,
Speaker 1: I'm saying that like I'm questioning even though like I'm
Speaker 1: being asked when I go to a site like how
Speaker 1: much data and how do you want to? You know,
Speaker 1: I still feel like in a digital world, I feel
Speaker 1: like there's just so much out there that we have
Speaker 1: no control over. You really want in line enlightened incentive.
Speaker 1: So if the platform that is giving you that so
Speaker 1: called power is really making day, is really making money
Speaker 1: by manipulating you, then they're not going to give you
Speaker 1: that power. What will typically happen is the government will say, well,
Speaker 1: you have to give users this much control, and then
Speaker 1: they'll data dump, you know, fifty screens of asky code
Speaker 1: on you and say here, have fun with it. Go
Speaker 1: you know, learn to write and binary and you're just
Speaker 1: not going to be able as an individual to do that.
Speaker 1: You need somebody who's essentially working on your behalf, and
Speaker 1: right now we don't have that. We don't have a
Speaker 1: uh an agent that represents you. Carol in the you know, uh,
Speaker 1: into transactions like Tim's not represented. You know, I'm an agent,
Speaker 1: but that's what you guys are working to do it invisibly. Correct.
Speaker 1: We're trying, I mean, we're we're we're experimenting with you know,
Speaker 1: invisible digital agents that work on tiny, tiny amounts of currency,
Speaker 1: like the tiny little transactions where you know, I'll buy
Speaker 1: or sell your attention in a way that suits you,
Speaker 1: and I'll do it in a way that totally is
Speaker 1: not annoying you know. So in other words, I'm invisible
Speaker 1: most of the time. But at the point where I
Speaker 1: do something wrong and you notice that, you can call
Speaker 1: me up and go, hey, you screw that negotiation up,
Speaker 1: don't do that again. You're like, don't don't sell my
Speaker 1: kids data. But you're you're absolutely fair to trade on
Speaker 1: my sexuality, you know, if you want to or don't
Speaker 1: monize my sexuality. Um, but you can. You can trade
Speaker 1: on my age and my demographics and all this other
Speaker 1: Like you tell me what's fair game and then let
Speaker 1: the agent sort of work on your behalf. What's interesting
Speaker 1: is we're in an era and I'm thinking about the
Speaker 1: data collection that's just going out. Well, certainly it's happening
Speaker 1: in China, and they have incredible oversight of what they
Speaker 1: can collect from their people. I think about the people
Speaker 1: who have you know, tapped into twenty three and me
Speaker 1: and giving away a lot of information. I mean, I
Speaker 1: almost it's just a very weird, weird world where I
Speaker 1: think people are still giving away so much and do
Speaker 1: they realize the value of a jim. They certainly don't.
Speaker 1: And one of the things that we had real trouble
Speaker 1: with it invisibly was figuring out ourselves what it was worth.
Speaker 1: And it just reminds me of the days when we
Speaker 1: started Square, Like Jack and I had no idea where
Speaker 1: the money was going. Took the better part of a
Speaker 1: year to find it out, and that was in the
Speaker 1: money business. You know, it's even worse than this data
Speaker 1: world where you know, originally all partners that we had
Speaker 1: were just misrepresenting their numbers by factors of ten. So
Speaker 1: the numbers I was getting were just wildly inaccurate. And
Speaker 1: and the problem is that there's so much slop in
Speaker 1: the system that, um, you know, an AD could be
Speaker 1: worth a penny, it could be worth twenty cents, it
Speaker 1: could be worth you know, a fraction of a cent.
Speaker 1: You and you just don't know, so you have to
Speaker 1: let these little markets determine what those prices are because
Speaker 1: everyone's going to make up their own number, whatever number
Speaker 1: suits them. So it's the wild West and we're just
Speaker 1: trying to figure it out now. Jim, I want to
Speaker 1: go right back to invisibly and try to understand exactly
Speaker 1: how you're able to do this. I understand how you
Speaker 1: can do this on behalf of a customer, a user
Speaker 1: of the service, but what kind of cooperation you're buying
Speaker 1: do you need from the side or the the app
Speaker 1: or the platform that this is serving as an agent
Speaker 1: of the user on behalf, Well, we need full permissions.
Speaker 1: So it's a totally permission system where users give us
Speaker 1: access to the data and then we have to negotiate
Speaker 1: with our content providers to get access to their content.
Speaker 1: So it's it's totally open. It's just done in tiny,
Speaker 1: tiny increments, um, but we think it's possibly a remedy
Speaker 1: to some of the problems we're seeing with the platforms.
Speaker 1: But look, very very early days. I don't want people
Speaker 1: to run to invisibly dot com and say, oh my god,
Speaker 1: mclby solved that. No, no, no, we're still experimenting. Um,
Speaker 1: this is a lot of the stuff that I talked
Speaker 1: about in the book, which is like I spent a
Speaker 1: lot of time doing stuff that's never worked. And the
Speaker 1: thing about stuff that's never worked before is that all
Speaker 1: of a sudden it starts working and then you go,
Speaker 1: oh wow. But right now we're in the fits and starts.
Speaker 1: We've got a product that's been pretty popular, but honestly,
Speaker 1: it's going to get a lot better and we're still
Speaker 1: very very early days. Well what is it in terms
Speaker 1: of what you see on your platform and what people
Speaker 1: may be in terms of the data that I guess
Speaker 1: people are getting more comfortable with in terms of sharing
Speaker 1: or they're not. I mean, you guys collect so much
Speaker 1: data that we talked about it when we're going into
Speaker 1: the elections that you were getting some great insight about
Speaker 1: what was going on in the election. So I am
Speaker 1: curious in your platform, Jim, what other insight you are
Speaker 1: are getting access to. So it's it's the interesting Carrol's
Speaker 1: what you just said before, which was before the break,
Speaker 1: you said how scary it is how much information we
Speaker 1: all shed on a daily basis, And it's true, and
Speaker 1: we asked people explicitly for things like access to their
Speaker 1: bank account information, access to their browser history. Would you
Speaker 1: install a plug in? Would you do this stuff that
Speaker 1: you know I thought, which could be you know, very
Speaker 1: very invasive, And a high percentage of people are saying,
Speaker 1: if you'll treat it well and and actually compensate me
Speaker 1: for it, sure, because they have the off switch. I mean.
Speaker 1: The trick with invisibly is that the user controls the
Speaker 1: off switch if they if they don't want to trade something.
Speaker 1: So it's a way for people to come on and
Speaker 1: sort of explicitly control what it is, uh that they trade.
Speaker 1: And look, it's primitive, early days, but the basic idea
Speaker 1: here is that your data is very valuable. But how
Speaker 1: how valuable is it? We don't really know. We we
Speaker 1: haven't had a market that's been clear. So let's start
Speaker 1: to have that market and then let people make their decisions.
Speaker 1: So what do you pay people for the information? Oh?
Speaker 1: Fractions of a cent, tiny bits, I mean, but it
Speaker 1: depends on the information. Like in some cases, we've got
Speaker 1: one sponsor that's uh, that's offering you know, tens of
Speaker 1: dollars for an action. And I'm not gonna tell you
Speaker 1: what because I'll get all these people who preudulently tell
Speaker 1: you that. But like, there are those actions that result
Speaker 1: in you know, tens of dollars, but we're really talking about,
Speaker 1: in many cases fractions of a cent. What's the business
Speaker 1: model for the company? Oh, build it and taken it,
Speaker 1: take a percentage. I mean, it's it's it's it's the
Speaker 1: classic agent model. You know, we're going to be your
Speaker 1: agent on on on both sides of the transaction, buying
Speaker 1: your attention and selling your attention. And what we want
Speaker 1: when we're buying it is to get you access to
Speaker 1: everything you could possibly want. And our first, you know,
Speaker 1: our first sort of big target is paywald news. Like
Speaker 1: I can't tell you the number of people who you know,
Speaker 1: get tricked into, you know, wanting to read an article
Speaker 1: alot and gets slammed into a paywall that preventsive we're
Speaker 1: reading the article. And so we're going to try to
Speaker 1: negotiate eventually one day passed to all those articles that
Speaker 1: you don't even have to be aware of the fact
Speaker 1: that you've got, so you would be you would be
Speaker 1: paying for it or who would be paying for it,
Speaker 1: because you know you'll be paying for it from this
Speaker 1: tiny little invisible wallet you had, it's kind of it's
Speaker 1: got a balance in it, but you're talking about fractions
Speaker 1: of assent here. So if you want to be bothered
Speaker 1: with it, great. And if you say to me, look,
Speaker 1: I don't want to pay for everything. I think everything
Speaker 1: should be free, I'll say, okay, Tim, let's talk about
Speaker 1: what free is free as you give me your tension
Speaker 1: for free and let me sell that, and then I'm
Speaker 1: gonna take what I sell that for and I'm gonna
Speaker 1: shove it in your wallet. I mean, if that's if
Speaker 1: that's free to you, cool. If not, I mean, he
Speaker 1: give us a visa card and we'll just hook up
Speaker 1: your up to you know, cook up to the cash
Speaker 1: app and you can pay. You're like, like, however you
Speaker 1: want to fund this, it's up to you. And and
Speaker 1: and you know, you you can change your mind, like
Speaker 1: you can say, well, look, don't bother me in the
Speaker 1: middle of the day. But you know, if I'm waiting
Speaker 1: for a plane or something, or got five minutes to kill,
Speaker 1: maybe I want to watch and ad and earn twenty cents,
Speaker 1: you know, Jim, to some extent, we do do we
Speaker 1: already do that on some of I think about whether
Speaker 1: it's Uber eats or a platform. Right like, I use
Speaker 1: it and then I get a credit and I get
Speaker 1: I get, you know, little perks to do. I mean,
Speaker 1: we kind of already are doing that in some ways,
Speaker 1: but maybe not really understanding what we're giving away. Yeah,
Speaker 1: it's it's a behavior that's common. The problem is that
Speaker 1: it's a behavior that we're used to doing in in
Speaker 1: dollars and tens of dollars and hundreds and thousands of dollars.
Speaker 1: But it's not something that we're used to doing in
Speaker 1: fractions of ascent, and so we don't think it works
Speaker 1: at fractions of ascent unless some agent that works on
Speaker 1: your behalf, because nobody wants to be bothered by a
Speaker 1: quarter cent here and ten cents there. It's just too
Speaker 1: small to really annoy me with. Hey, Jim, I gotta
Speaker 1: ask about crypto, especially in regard to regulation, because of
Speaker 1: what Square does with crypto, and and how Square has
Speaker 1: been thinking about crypto for years. I know you've been
Speaker 1: thinking about crypto for years. What is it? What does
Speaker 1: the US government need to do, What do regulators need
Speaker 1: to do when it comes to regulating crypto? Well, I
Speaker 1: think government regulators and I've talked to a bunch in
Speaker 1: the last week about this very topic. Need to understand
Speaker 1: that it's coming in multiple forms, including those forms named
Speaker 1: after various dogs, UM, and that there's some really really
Speaker 1: positive things, but it's going to be disruptive to the system,
Speaker 1: and the way we regulate something that's new determines how
Speaker 1: it unfolds. And so I'm hoping that we'll get a
Speaker 1: lot of thoughtful, UM sort of forward looking policies that
Speaker 1: that allow the innovation to continue. I mean, you don't
Speaker 1: want to squelch out the innovation because that's super valuable UM.
Speaker 1: And it's it's easy to say that in the question
Speaker 1: is what do you do to protect us from you know,
Speaker 1: in some cases ourselves. Jim, forgive me. You just go
Speaker 1: about forty seconds. What's the mind blowing utilization of crypto? Ultimately?
Speaker 1: And I bring it up because every time we talk crypto,
Speaker 1: were like, I'm quite sure I totally understand it yet
Speaker 1: And as I get from much smarter people than myself,
Speaker 1: what is kind of the mind blowing concept of crypto
Speaker 1: that that you should maybe keep in mind that's potentially
Speaker 1: going to happen. Just kind of quickly, what what crypto
Speaker 1: is going to do ultimately is allow many people who
Speaker 1: have been disenfranchised to get into a system that's safe
Speaker 1: and fair. And you don't realize because we're all, I mean,
Speaker 1: you're all your Bloomberg listeners. You guys are all probably
Speaker 1: well to do. Okay, I'm well to do. Everybody in
Speaker 1: this broadcast is not in the target market that's going
Speaker 1: to be most effective by these are people who have
Speaker 1: literally been preyed upon their entire existence, and we'll have
Speaker 1: access to the things that we take for granted. And
Speaker 1: that's that's going to be the big mind blowing thing
Speaker 1: and won't be mind blowing for folks like us, because look,
Speaker 1: if you're part of the regular banking system, you're fine,
Speaker 1: you don't neither sen like. But if you have been
Speaker 1: shut out, this will be an an for you in
Speaker 1: the future. Alright. Really appreciate Jim McKelvey. He's co founder
Speaker 1: of Square, founder and chairman of Invisibly, and also a
Speaker 1: member of the board of the St. Louis Fed. Thank you,
Speaker 1: Thank you so much.