Block (formerly Square): From a Lost Glass Sale to a $50B Powerhouse: How Jim McKelvie & Jack Dorsey Built Block’s Innovation Stack.
Company profile
Company business details
Motivation to build the product
Jim McKelvey’s epiphany came when he lost a sale in his glass studio because he couldn’t accept an American Express card. Frustrated that his smartphone couldn’t “magically” become a credit‐card machine, he teamed up with Jack Dorsey to build a device and software that would let anyone get paid on their phone.Problem that their product solves
Many small merchants lack access to affordable, easy-to-use credit-card processing, forcing them to turn away customers or pay exorbitant fees. Square’s end users are small businesses, artisans, and service providers who need a simple, mobile solution to accept payments. Solving this problem is critical for these operators to grow revenue, streamline operations, and compete with larger retailers.How they developed a primary version
McKelvey and Dorsey developed the first prototype in-house over three weeks, building a credit-card reader that plugged into an iPhone’s headphone jack and an accompanying payment-processing app. They created a minimal viable product themselves without outside hires, demonstrating live transactions to potential partners to validate the concept.Their unfair advantage
Their tightly integrated hardware-software approach, first-mover simplicity, brand trust, and ability to shape regulations created a strong regulatory moat and banking partnerships that are difficult for competitors to replicate.Strategies
Idea Validation Stage
Free 5-Day Ecommerce Idea Challenge
A no-cost, time-bound online challenge guiding aspiring entrepreneurs to find and validate their ecommerce idea. Participants sign up via a simple landing page, giving the company high-intent leads at the earliest stage of the buyer journey.
Pre-Launch (Product Development & MVP)
Strategic Launch Timing During Recession
Rather than waiting for a booming economy, Square’s founders chose to build and launch in the middle of a downturn. The recession timing gave them access to top technical talent at lower cost, less competition for hires, and greater willingness from early adopters to try new solutions—accelerating product development and go-to-market efforts.
Free 1-on-1 Coaching Calls
Offer of complimentary strategy calls (booked via Calendly) to prospects interested in ecommerce coaching. Positions the company as a trusted advisor and converts high-intent leads into paying coaching clients.
Launch Stage
Niche Targeting of Underserved Small Businesses
Square focused its early marketing and product efforts on small, offline merchants—like artisans and street vendors—who had no affordable way to accept credit cards. By solving the founder’s own payment-acceptance pain point, Square unlocked a large unclaimed segment and established strong word-of-mouth growth in that niche.
Limited-Time Summer Flash Sale Discount
A heavily discounted, time-limited offer (75% off) on a flagship course to spur enrollments and accelerate revenue during a specific promotional window, leveraging urgency and scarcity to drive immediate action.
