Fallibilist, optimist. Stripe CEO.
Stripe is a big company - how do they fit into the bootstrapper ethos of Microconf? First, Stripe is a product used broadly by Microconf founders to process credit card payments. Second, while Patrick Collison and his brother John Collison did raise funding to build relationships with banks, they built the company with minimal funding.
The Collison brothers took Stripe a long way as two dudes in a garage with minimal funding.
For several months, John slept in the garden of our one bedroom apartment.
Stripe is interested in interacting with the Microconf community because you're exactly the type of people Stripe should be optimized for. The fact that many of you produce revenue makes you very different from business in San Francisco.
Today at Microconf you launched LLCs on Atlas to help small businesses incorporate - congratulations!
For a while, the top feature request of Atlas has been to support LLCs (a relatively new invention).
We want Atlas to work well for companies that are going to do well, and not a lot of huge companies are LLCs, but early on in a company you don't know what's going to happen. C-corps have a lot of overhead.
LLCs are the optionality preserving incorporation option, so fit the ethos of the bootstrapper community better.
You've launched Stripe Atlas, now Stripe LLC, the Software engineering magazine Increment, and acquired Indie Hackers last year. These seem as an outsider like random things - what's the strategy behind these efforts?
I think people don't appreciate just how significant ostensibly small barriers of entry can be. Super mundane and basic barriers like paperwork that's too hard, or another stupid bureaucratic impediment can be the primary motivation behind small business decisions.
Our goal with Stripe is to increase the number of internet businesses. What determines the number of internet businesses in the world? Why is it that number instead of half that many or twice as many?
As far as we can tell, these smaller roadbumps are a main reason there aren't more internet businesses.
We're very inspired in the things Indie Hackers et. al are doing because we think it's making it easier to start businesses.
60% of customers on Atlas said they wouldn't have started their business if Atlas didn't exist, so we're continuing to look for opportunities like that.
You don't need to be Mark Zuckerberg to do something incredibly meaningful.
There's a prevailing Ayn Randian idea of entrepreneurs as an individualistic, lonely, committed furrow-plowers, whereas the reality is that the community of people around you that understand your problems and can help is underrated.
Word of mouth of Stripe spread fast. Was that cause by deliberate action on your and John's part, or did it just happen because you had a great product?
We were relatively naive in our marketing strategy. We happened to luck out because of the specific domain we were in and the types of companies we were serving. Entrepreneurs have a high proclivity for sharing new things that work. Most audiences probably aren't like that.
We also lucked out in that our competition was implausibly bad - sort of like comic book villains. They forced you to fax things to them.
The banking industry when we started was a lot like the healthcare industry is right now. We all roll our eyes at the current solutions knowing that someone is going to come along and roll over the existing market with a much better product.
We did try to be authentic. Similar to how people on stage adopt a british accent, there's a thing that happens to people writing in a corporate voice - they start talking about synnergy and use a whole other vocabulary. We tried to avoid that at Stripe. Expressing yourself honestly isn't something you can generalize, and it lands with people.
Are there any other marketing channels you've explored that have worked well?
Channel partners. Most users discovered Stripe through our integrations with other products, and those integrations were possible because we had great APIs. We think our expertise is in making APIs.
Once you have a Stripe account, you can use it as a type of passport that lets you plug into other internet accounts to get payment capability, like you can with WuFoo. Users of other products are now told that if they want to accept payments, they need to go create a Stripe account.
Similarly, companies like Postmates use Stripe Connect to build a marketplace. Stripe Connect isn't a great name - we don't have a great track record with names. Stripe was originally called
/dev/payments, and was alsmost called paydaemon.
You've talked about very small customers on Stripe Atlas and sophisticated customers - how do you build your product so the new people aren't overwhelmed but the huge customers are still getting what they want?
That's one of the core challenges of Stripe. Every feature you add makes the product worse for people who don't use that feature.
Stripe should be able to scale through every order of magnitude - from your first to your ten-millionth payment.
I'm pretty sure the right strategy is to go serve the customer at every scale, but how do you do that?
There are several torturous tactics we use, like partitioning features, using dynamic documentation that just shows you what we think you care about, slowly rolling out features, and using dynamic dashboards that only show you certain things in the sidebar.
We don't yet have a grand unified theory of how to scale like this - it's becoming an increasingly active discussion.
How much of your success do you attribute to being in Silicon Valley? Could you have had the same success outside of Silicon Valley?
Because we're serving technology companies, we're in a unique position of needing to be around other technology companies.
I think a smaller fraction of the world's best engineers are outside Silicon Valley now than in the last four years.
That said, I think it's less worthwhile to be in Silicon Valley now than in the last four years. One reason for this is that the cost of living is too high. Collaboration tools are also shifting the calculus towards distributed teams working better than they used to.
There are also top tier developers all over the world.
In the next twenty years, we're probably going to see less successful technology companies in Silicon Valley and more around the world. Right now, 4 of the 6 most valuable technology companies are in China.
Do you support open source projects out of goodwill, or are you getting an ROI from it?
A lot of things in the world aren't measurable but still have huge benefits.
At Stripe, we believe in improving open source software and projects like Indie Hackers even though we can't measure the ROI - it just feels important to us. Open source software isn't taken seriously enough by companies benefiting from it.
How'd you deal with financial regulation?
We knew nothing about financial regulation. If you talked with us for half an hour, you'd walk away thinking "wow, anyone can do it!" We were outsiders with no connections.
We briefly tried initially launching in Ireland, but quickly realized it wasn't going to happen. Banks there were like the 🙅 emoji pushing the security button under the desk.
It was difficult, but also a testament to America that a bank the scale of Wells Fargo would partner with us, even though we were like three squirrels in a trenchcoat masquerading as a real business.
That partnership was the biggest single regulatory barrier.
Hurdles after that just shaped how Stripe operates as a company. "Move fast and break things" doesn't work for us.
I love Stripe, and just crossed $1,000,000 processed, but hate seeing fraud and chargebacks. It's scary what people on the black market are able to do with credit card fraud. How do you think about that?
If your chargebacks give you heartburn, imagine seeing all of them.
It's net good that chargebacks exist because it gives consumers confidence to give a rando business their credentials to charge them an arbitrary amount. It's an amazing extension of trust that customers have this recourse if things go awry. The downside is that there's abuse.
There are fewer disputes per charge than there ever have been in the past - we think we'll get substantially better still over the next 12 months. Ultimately, though, there's something unsolvable there. It does need to remain easy for consumers to dispute a purchase. What interests me is if structurally we can move beyond that, but it's a complex ecosystem to shepherd.
Contact Patrick Collison at email@example.com.
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