Jim McKelvey's New Book | Invested Podcast | Phil Town

TL;DR

Southwest Airlines and Square achieved success by implementing innovative strategies that differentiated them from competitors.

Transcript

Southwest was just trying to be a normal airline they just wanted to set up you know some basic air air service they didn't want to dominate the skies they didn't want to be like one of the top performing stocks of you know the decades from you know the early 80s to the mid nineties like they that wasn't their goal but they were prevented from copy... Read More

Key Insights

• ❓ Southwest Airlines achieved dominance in the airline industry by doing 20 things differently, from boarding procedures to aircraft selection.
• 😫 Innovation stacks involve a combination of unique strategies that set a company apart from competitors.
• 💪 Identifying companies with strong innovation stacks can be a valuable investment strategy.

Questions & Answers

Q: What made Southwest Airlines different from traditional airlines?

Southwest Airlines differentiated itself by implementing various strategies, from utilizing cheaper airports to eliminating first-class services, all in an effort to provide affordable air travel.

Q: How did Square respond to the Amazon attack?

Instead of changing their strategy, Square chose to continue doing what they were doing, which was a unique approach considering companies often struggle to survive when Amazon copies their product.

Q: What is the key to building an innovation stack?

Building an innovation stack requires being in a market where there are no existing solutions and being willing to do things differently to create a competitive advantage.

Q: How can investors identify companies with strong innovation stacks?

Look for companies that are doing 10 to 15 things differently from competitors, as a strong innovation stack can be a key factor in a company's success.

Summary & Key Takeaways

• Southwest Airlines set themselves apart by doing 20 things differently, from boarding processes to routes, which allowed them to dominate the airline industry.

• Square built an innovation stack by implementing multiple unique strategies, such as targeting cheaper airports, having a single type of service on planes, and utilizing a different reservation system.

• Innovation stacks involve doing 10 to 15 things fundamentally different from competitors, creating a unique advantage in the market.