It’s an all-too-common story in the cutthroat digital world: a spunky startup develops and launches a killer product that goes viral in all the right ways. Then, within a year, a major competitor like Facebook or Spotify releases a copycat product that cuts the legs out from under the original.
Back in 2014, Square (now Block) very nearly met the same fate. In the company’s infancy, just as it was beginning to create a market for mobile digital payment processing, Amazon released its own offering that did the same thing with nearly half the processing fees.
Jim McKelvey, Co-founder of Block with Jack Dorsey, knew what that meant for his business: “When Amazon does this to a start-up, the start-up dies,” he said in an interview with CNBC. “We didn’t have the things that they had, so we couldn’t do what they were doing.”
With the benefit of hindsight, we know that Block was one of the lucky ones. Amazon Register was pulled off the market within a year, and Block has managed to hold its ground at the top of the field ever since.
So just how did McKelvey and Dorsey manage to save their company from “death by Amazon?” As it turns out, there was no big trick beyond sticking to what made the company a hit in the first place.
“We just kept doing what we were doing and basically ignored them,” said McKelvey. “And it worked.”