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