Speaker 1: This is Bloomberg Business Week with Carol Masser from Bloomberg Radio. Well,
Speaker 1: we've checked in with him a few times over the pandemic.
Speaker 1: Great to have back with us. Jim McKelvey. He's co
Speaker 1: founder of Square. He's still a board member. He's also
Speaker 1: author of The Innovation Stack, Building an Unbeatable Business, one
Speaker 1: crazy idea at a time. It's a great title, it's
Speaker 1: a great book. He's also founder and chairman of the St.
Speaker 1: Louis based Invisibly, an independent data centric company. They used
Speaker 1: its online surveying technology to gauge Americans opinions on reopening
Speaker 1: amid the COVID nineteen pandemic and more. Jim is also
Speaker 1: deputy chair of the fudow Rezer Bank of St. Louis,
Speaker 1: and he joins us on the phone from St. Louis
Speaker 1: on this Monday. So nice to have you back with us.
Speaker 1: How are you. I'm doing well, Carol, How are you doing?
Speaker 1: Doing okay? Just trying to kind of keep up with
Speaker 1: with all of the headlines. Um, tell me a little
Speaker 1: bit about your company, Invisibly and your involvement in the election.
Speaker 1: I find this fascinating, especially in a year where once
Speaker 1: again polls didn't necessarily predict the outcome, and I think
Speaker 1: we're all trying to figure out how can we be
Speaker 1: or what can we do to have a better predictor
Speaker 1: when it comes to the election. So tell us a
Speaker 1: bit about in Invisibly. So Invisibly it is a company
Speaker 1: that's mission is to get people more control of their
Speaker 1: online data. And in the process of building that, we
Speaker 1: built this little tool that did surveys. We didn't think
Speaker 1: much of it, but some Republican strategists got ahold of
Speaker 1: it about six months ago and they did a little
Speaker 1: test and discovered that the tool was shockingly accurate. So
Speaker 1: from a little two thousand dollar tests, the Republicans ended
Speaker 1: up spending well over a million dollars doing polls with
Speaker 1: this technology. And as you as you mentioned, I'm on
Speaker 1: the Federal Reserve, I am politically neutral, so my job
Speaker 1: is to see both sides well informed. And I did
Speaker 1: my best to reach out and share this news with
Speaker 1: both sides, and amazingly, the Democrats didn't listen. They didn't
Speaker 1: pay any attention at all. And I have several stories
Speaker 1: of this, But I mean the fact is that we've
Speaker 1: been able to call the election too within um A
Speaker 1: quarter point. And if you compare the data that for
Speaker 1: instance five eight, which is sort of an aggregation of
Speaker 1: the best polls did, they were off by almost three points.
Speaker 1: So it's nine times more accurate and frankly, way less expensive.
Speaker 1: And I just couldn't believe people weren't listening to us. Well,
Speaker 1: so how come, I mean, listen, you guys are all
Speaker 1: in on on data because you knew Ohio wasn't going
Speaker 1: to be close. I mean, it's really pretty pretty wild
Speaker 1: Arizona could be or would be a swing. So what
Speaker 1: was it about? And I know you can't give away
Speaker 1: all your secrets, but what was it about the data collection,
Speaker 1: the types of data, or the algorithms? What was it,
Speaker 1: generally speaking that you think made it a better predictor?
Speaker 1: I think the best way to describe it is it's
Speaker 1: like manners um. For instance, if somebody asked you a
Speaker 1: question and they're rude, you don't answer it. If somebody
Speaker 1: asked you the exact same question and they're polite and respectful,
Speaker 1: you might give them an answer. And I mean, I mean,
Speaker 1: manners is one of these subtle things. I got two
Speaker 1: kids at home time teach you the good manners and
Speaker 1: it's it's it's a hard thing. You can't just describe
Speaker 1: it in two seconds of a sound bite. But the
Speaker 1: fact is, it's who you ask, it's the way you ask,
Speaker 1: it's the question you ask, and it's when you ask.
Speaker 1: And all of these things, if they're handled correctly, can
Speaker 1: get you a very honest, accurate answer. So did you,
Speaker 1: in terms of doing this and developing this, Jim, you know,
Speaker 1: look at past poles and kind of how they did
Speaker 1: it to figure out maybe what was a better way? No,
Speaker 1: and and and funny enough, this is sort of what
Speaker 1: I talked about in the innovation stack of my book,
Speaker 1: and that is a lot of times when you stumble
Speaker 1: on something new, it's because you didn't copy what everybody
Speaker 1: else was doing. And we were not intending to be
Speaker 1: a polling company like this is not in visibly it's
Speaker 1: not our job on this thing that was shockingly accurate,
Speaker 1: and so uh, we went with it, but it was
Speaker 1: it was an accidental discovery, you know, sort of like
Speaker 1: a lot of stuff. Well, it's interesting that you say
Speaker 1: this too, though. Um. One of our colleagues, David Weston,
Speaker 1: had caught up with Frank Leance, who's well known for
Speaker 1: his polling, but he said we need to figure out
Speaker 1: a different way, and that you know, whether it was
Speaker 1: folks supported Donald Trump maybe didn't want to talk to
Speaker 1: certain polls because they didn't like the media outlet or
Speaker 1: didn't like the approach exactly. That what you're talking about,
Speaker 1: and that definitely skews the numbers. Absolutely, there there are
Speaker 1: a bunch of things that skew the numbers. It's when
Speaker 1: you ask, it's the way you ask, it's the question
Speaker 1: you ask. It's whether or not people feel safe and um, well,
Speaker 1: you put somebody in a stressful situation or you feel
Speaker 1: like they're being judged, they're not going to tell you
Speaker 1: the truth. Yeah, it's pretty fascinating. Well, so then, so
Speaker 1: what do you think about that in terms of applications
Speaker 1: going forward? As you said, kind of an accidental business.
Speaker 1: You didn't plan this. We've got about forty seconds and
Speaker 1: then we'll do some news and come back and do
Speaker 1: some more. But is this you know you anticipate kind
Speaker 1: of pushing this out as a business even more. Well,
Speaker 1: I just think it's good for the world. Like I
Speaker 1: think it's not just politics. I think knowing the subtleties
Speaker 1: of how your message as being received by people is
Speaker 1: super important and we just proved a big time. But
Speaker 1: you know, this is an election. We got to call
Speaker 1: our shots. So we made our predictions, posted them up,
Speaker 1: everyone can see them, and sure enough they were within
Speaker 1: a quarter point you know, so so I But I
Speaker 1: think the application here is anyone that has to communicate
Speaker 1: can now judge the effectiveness of that communication in almost
Speaker 1: real time. How does the world look to you, Jim
Speaker 1: right now? What kind of visibility do you have? UM?
Speaker 1: When we try to think about the virus, the economy,
Speaker 1: kind of the election, there's just so many big things
Speaker 1: going on right now. Well, I'm happy the election is over. UM,
Speaker 1: And uh, you know, as as somebody who's you know,
Speaker 1: sort of loot through the virus, both as a small
Speaker 1: business person, as somebody who's you know, funding vaccine research
Speaker 1: and watching the data at the FED. UM, I have
Speaker 1: to say this, you know, it's it's actually fairly hopeful.
Speaker 1: We had a solid economy before the pandemic U and
Speaker 1: this is the first time we've ever taken a robust
Speaker 1: economy and voluntarily shut it down for health reasons. So
Speaker 1: that's never been done before in history. And what I'm
Speaker 1: literally looking at the data that I'm going to present
Speaker 1: to the the Federal Reserve in about ten minutes. And um,
Speaker 1: we've you know, do the data here in St. Louis,
Speaker 1: and it's not terrible like it's it's it's obviously very
Speaker 1: very bad for certain people, but the economy does seem
Speaker 1: to be you know, bouncing back, so that's that's a
Speaker 1: good thing. Um. You know. The other thing not to
Speaker 1: be too upbeat about this is that, you know, times
Speaker 1: of crises are really good at accelerating trends that are
Speaker 1: going to come anyway. So if we would all be
Speaker 1: doing zoom meetings five years from now, now, we're all
Speaker 1: doing zoom meetings today. So it's a great time for
Speaker 1: um innovation and companies who are building the future really
Speaker 1: have a pronounced advantage. During times of crises, it can
Speaker 1: be uncomfortable, so as we go it right, that dislocation,
Speaker 1: as we go through, it's always uncomfortable. But but see
Speaker 1: that's the thing. Doing something new was always uncomfortable. But
Speaker 1: if you're doing something new, one of the are the things.
Speaker 1: And I guess we just talked about that with our
Speaker 1: you know, pulling technology, like we just there's great new
Speaker 1: pulling technology and and I couldn't get anybody to listen
Speaker 1: to us. Okay, I totally failed. And I you know,
Speaker 1: I've been at this for a while, and I know
Speaker 1: a bunch of important people, and I couldn't do it.
Speaker 1: And that's the thing. If you build something new, one
Speaker 1: of the most frustrating things is the world. We ignore
Speaker 1: it until if things are going well and um, right now,
Speaker 1: if you have a new invention, you have the chance
Speaker 1: of getting people to notice it far better than they
Speaker 1: would under normal circumstances. Because when when things are normal,
Speaker 1: you do what you did yesterday. You don't look for
Speaker 1: new stuff. You don't change When when the world is
Speaker 1: imploding and you're living at home and your kids are
Speaker 1: driving it crazy because you're homeschooling, like, that's the time
Speaker 1: you actually look out and said, hey, is there any
Speaker 1: other options? So, if you're in the business of innovation,
Speaker 1: which is always messy, it's a good thing to be
Speaker 1: in somewhat of a crisis. The one thing I love too.
Speaker 1: You go to your website, you say we followed data
Speaker 1: to truth. We are deliberately in a pennant this whole
Speaker 1: idea of truth. And we've had a lot of discussions
Speaker 1: on air about you know, when did truth? When did
Speaker 1: facts stop mattering? Um? You know? And so why why
Speaker 1: do you want to know the reason? It will take
Speaker 1: a two minutes. Well it'll leave you to you and
Speaker 1: a half after it, but that's okay, you come back later. Um. Sorry.
Speaker 1: But the fact is there's an economic reason why lies
Speaker 1: make more money. Uh, and that is, if you if
Speaker 1: you're in the business of selling advertising space, people who
Speaker 1: tend to believe more um fanciful data i e. People
Speaker 1: who believe fake news are also more valuable as advertising prospects,
Speaker 1: frankly because they are more gullible and therefore are willing
Speaker 1: to buy certain products that normal skeptical people will not buy.
Speaker 1: And I can prove this. I've seen the data. A
Speaker 1: gullible a gullible pair of eyeballs is worth ten times
Speaker 1: as much as a normal pair of eyeballs. So if
Speaker 1: you're creating content where you're making up falsehoods and those
Speaker 1: falsehoods are being digested by people, those people's eyeballs are
Speaker 1: actually worth more. And I'm sorry to explain the business
Speaker 1: plan of fake news to people, but that's actually was
Speaker 1: driving a lot of this. No, We've talked about this
Speaker 1: on social media that the churn. I mean, what drives
Speaker 1: the momentum, right, The activity is often not the boring facts,
Speaker 1: but it's more provocative UM stories they get out there.
Speaker 1: Then ultimately that increases, you know, the volume of activity,
Speaker 1: and then that increases the AD dollars. So so who's
Speaker 1: responsible for fixing this, especially when you think about how
Speaker 1: many people get their news from social media at this point. Well,
Speaker 1: I think there are several vectors for fixing it. I mean, one,
Speaker 1: we're taking it invisibly as a market solution. We're trying
Speaker 1: to build a market so that people can choose to
Speaker 1: spend their attention in ways that that serve them best.
Speaker 1: And we think an open market that's you know, free
Speaker 1: of government, is probably the best solution. But I also
Speaker 1: think that governments can can play in this world, that
Speaker 1: they can get in and regulate. Um. It's also possible,
Speaker 1: although we haven't seen it demonstrated yet, that some of
Speaker 1: the major platforms will step up UM. I you know,
Speaker 1: business partners, subject or see and I have a lot
Speaker 1: of respect for some of the things that Jack's done.
Speaker 1: So I think you've got multiple agents that can help
Speaker 1: fix this. Okay, one thing I want to just wrap
Speaker 1: up with and because you have you know, been involved
Speaker 1: with Washington University School of Medicine in St. Louis, you know,
Speaker 1: working on a vaccine. We've got some big news with visor,
Speaker 1: you know, the big picture of you know, what do
Speaker 1: you make of the collaborative and coordinated effort to find
Speaker 1: a vaccine and how it can really be leveraged in
Speaker 1: a great way when it comes to healthcare and dealing
Speaker 1: you know, with future vaccine development and just really getting
Speaker 1: at some of those tougher healthcare issues that are out there.
Speaker 1: I think it was wonderful. Honestly, I don't know much
Speaker 1: about life science, but I stepped up and started working
Speaker 1: with these people, and uh, what a wonderful group of
Speaker 1: people to be associated with there. They're sharing data, they're
Speaker 1: helping each other, nobody's you know, monopolizing their findings. It's
Speaker 1: really collaborative in a way that you know, Frank, we're
Speaker 1: not always that way out in Silicon Valley. Well that yeah,
Speaker 1: that's that's what I was gonna say. Doesn't you think
Speaker 1: it carries over to other industries when you realize when
Speaker 1: we all are in into the vaccine for that mean
Speaker 1: not gonna happen, not gonna happen. Yeah, who knows. I mean,
Speaker 1: you know, who knows. Are we gonna get it, get
Speaker 1: to get together? Probably not, Um, But the fact is
Speaker 1: that in times of crises, I think that brings out,
Speaker 1: you know, great behavior and a lot of people. And
Speaker 1: I certainly saw it by h you know, participating by
Speaker 1: with some great scientists who were really working tirelessly to
Speaker 1: say our lives. It's pretty remarkable. UM. Jim McKelvey, thank
Speaker 1: you so much. We always appreciate getting some time with you.
Speaker 1: Jim McKelvey. He's co founder of Square. He's author of
Speaker 1: The Innovation Stack, Building an unbeatable business, one crazy idea
Speaker 1: at a time. As he said, sometimes it just kind
Speaker 1: of happens. It's accidental. As he talked about with Invisibly,
Speaker 1: he's founder and chairman of the St. Louis based Invisibly
Speaker 1: and he's also Deputy chair of the Federal Reserve Bank
Speaker 1: of St. Louis. UM talking about getting ready to actually
Speaker 1: talk to the St. Louis FED and be not too
Speaker 1: concerned about what we're seeing in terms of the economic outlook,