00:00 This episode of the podcast covers the 2015 Square IPO and begins with the background of Jim McKelvie Jr., one of the co-founders of Square.

05:55 Jim McKelvie Jr., one of the co-founders of Square, had a previous company called Mira Digital Publishing where he hired Jack Dorsey as a 15-year-old intern, and they eventually decided to start Square together after Jim called Jack with an idea in late 2008.

12:05 Robert Morley, a professor at Washington University in St. Louis, initially approached Jim and Jack about an electric car idea, but instead introduced them to the concept of using mobile phones to accept credit cards, which got them excited and led to the founding of Square.

18:05 Square, initially named Squirrel, was founded by Jim and Jack, and before launching, they changed the name to Square and the design of the card reader to be a square, and their key innovation was enabling anyone to accept payments on their phone by getting really good at fraud prevention.

23:40 Square entered the market by providing an incredible user experience for merchants, unlocking new merchant opportunities, and reducing fraud, which differentiated them from competitors like Intuit and Verifone who were taking losses due to lack of underwriting and machine learning systems, and even shut down their competing product due to fraud losses, while Square's innovative approach of gradually increasing credit for merchants based on successful transactions allowed them to quickly gain trust and serve a large number of small businesses that couldn't accept credit cards before.

28:52 Square differentiated itself from the credit card industry by providing a better consumer experience and faster funds deposits for small businesses, which was a game changer and allowed them to quickly grow after their launch in 2010.

34:18 Square's deal with Starbucks forced them to become enterprise class and develop a suite of tools for merchants, leading to the expansion of their point of sale system and the addition of various features for managing and running a business.

40:08 Square's strategy is to continuously add features and services to their platform in order to make the lives of small business owners easier and help them grow their businesses, which in turn drives more transaction volume and revenue for Square.

45:42 Square went public at a $2.9 billion valuation, below the range they were aiming for, and the IPO was seen as a risky move given the state of the tech IPO market at the time, but since then the company's stock has soared and they now have a market cap of almost $10 billion.

51:32 Square's business model has zero churn on a per cohort basis, making it a predictable and sustainable business with a consistent revenue stream.

56:48 Square faced challenges in accessing capital through private markets due to inflated valuations and liquidation preferences, leading them to consider an IPO as a way to raise funds and continue scaling their business.

01:02:52 Square had to go public in order to provide liquidity for their employees and make their stock options valuable, highlighting the importance of valuing companies based on fundamentals rather than inflated valuations.

01:09:09 Square's IPO timing was seen as bad due to the company's financial missteps, but the company itself is highly respected and considered one of the best tech companies in the past decade.

01:15:42 The hosts discuss a podcast episode with Bob Iger, the Disney CEO, and recommend a book called "World After Capital" by Albert Wenger of Union Square Ventures.