Invest Like the Best with Patrick O'Shaughnessy - Patrick Collison & John Collison - A Business State of Mind - [Invest Like the Best, EP.348]

Episode Date: October 17, 2023

My guests this week are the co-founders of Stripe, Patrick and John Collison. My conversation with John in 2020 is still one of our most popular. A key theme that emerged from that first discussion was John’s boundless curiosity for all things business and this conversation continues that thread. We talk about setting a strategy and culture that attracts ambition, why the returns to sweating the details are high, and how they view Stripe’s progress against their mission to increase the GDP of the internet. Please enjoy this great and wide-ranging discussion with John and Patrick Collison. Buy a ticket to Patrick and David Senra's live show this Thursday in NYC. Listen to Founders Podcast Founders Episode 311: James Cameron Subscribe to Colossus's New Show: Art of Investing For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 drivable global models hand-built by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.  Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:03:16) - (First question) - Stripe's curiosity-driven growth fuels enduring success and expansion (00:08:34) - Why companies should resonate with founders' ideas but also have strong enduring cultures (00:012:27) - Stripe aims to reduce friction and expand global commerce by solving practical barriers (00:25:59) - Simplifying processes for startups and large companies to drive growth efficiently (00:29:11) - Analyzing the enduring stories of ancient companies (00:35:44) - Success in Hollywood and academia depends on unmeasurable vision and knowledge (00:40:11) - Stripe's ubiquity, self-serve nature, and collective care drive its unique status (00:43:16) - Success in tech is grounded in user-centricity, care, and connecting with customers (00:48:17) - Parental influence on becoming entrepreneurs is complex (00:50:21) - Adult perspective on parents, admiration for their work, and ongoing philanthropy (00:52:30) - Stripe's challenges include complexity due to diverse payment methods and global programmable accessibility (00:57:27) - Aiming for long-term durability, Stripe prioritizes beauty and craftsmanship in its pursuit (01:02:50) - The most memorable conversation they had between them (01:05:30) - Why the launch of Atlas was a defining moment in Stripe’s history (01:06:35) - How their 25-year-old selves would react to what they are doing now (01:10:19) - The various ways in which they feel proud of each other (01:14:35) - The kindest thing anyone has ever done for them

Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest like the best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com. Patrick O'Shaughnessy is the CEO and founding partner of Positive Sum, and the CEO, of O'Shaughnessy asset management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive sum or O'Shaunacy asset management. This podcast is for informational purposes only and should not be relied upon as a basis

for investment decisions. Clients of positive sum or O'Shaunacy asset management may maintain positions in the securities discussed in this podcast. My two guests today are John and Patrick Collison, co-founders of Stripe. My conversation with John in 2020 was for a long time our most downloaded episode. In this conversation, we went in a totally different direction, talking about Stripe, the global internet economy, and beyond. This year, along with John Malone, John and Patrick were recipients of the Singleton Prize,

given annually by the Singleton Foundation to active CEOs. The Foundation was recognizing John and Patrick as up-and-coming CEOs in the mold of Henry Singleton, who I spent years studying and who heavily influenced my own thinking on business and investing, both in my quantitative investing days and today. This was one of those conversations that I went into with tons of topics to cover, only to get through close to zero of them because I became so wrapped up in other interesting topics with two of the smarter people that I've ever encountered. I hope you enjoyed this great and wide-ranging conversation with John and Patrick Collison. I was talking to Will Thorndyke about what was so interesting about Henry Singleton's life and career, and it was just wild

adaptability. He just never held onto a strategy. He just adapted and updated and updated. with his strategy for the prevailing conditions, and it whiplashed around all the time. And then he did it for a very long period of time. The classic, don't interrupt compounding unnecessarily. And I'm really curious about how you think about that vis-a-vis stripe when such a big part of its compounding potential is born of your two curiosities about the world and about business and about technology and how you make sure that it's set up in the right way so that Stripe is the recipient of the reinvestment of your curiosity so that, yes, payments is probably endlessly fascinating. And maybe if you just stayed in the payments lane forever, it would be interesting enough to you both that you stick around and the

business and the team benefits from your curiosity. But how do you think about that, which seems to be a common theme in technology businesses, that technologists tend to be very omnicurious, interested in a lot of things, pursue a lot of things. And there's leakage. There's enterprise value leakage or something. How do you think about that 40 years hence and what stripe can become? I think for founders, there's two kinds of curiosity that have a lot of business value are probably important. There's also a lot of forms of curiosity that don't have particular business value. Like Patrick coming to me with this latest scheme on carbon dioxide, there was a time when, you know, Stripe's conference room. If it's true when we saw this, it's going to produce so much value.

You never know. How much would you pay for an increased capacity at Stripe by 30%. There's a time when all the conference rooms had carbon dioxide monitors in them. So you could monitor that. It does get very high during a big meeting when it feels stuff. That's a real thing. It's noticeable on the CO2 detector or, you know, endocrine disruptors or whatever the way.

So there's lots of random ones. But I would say on the business curiosity front, one is absolutely like you say, businesses are different at every scale. And so Stripe has been different as two people to 50 people to currently 7,000 people. I think you have to be curious about what is required to run a good company at that stage and kind of what's required to run Stripe well really matters. And one thing we try to do is just spent a lot of time looking at all the, other companies and what they've done. Not that you want to blindly emulate them, but you should at least

understand. It's funny. I remember Tyler Cowan commenting about Magnus Carlson that he entered some chess trivia, though it was just like literally about chess trivia and won it. He knew the most chess trivia out of anyone who's in this contest. And that's not a coincidence, I think, that the world's number one player has also studied the most about all the chess history is extremely knowledgeable on that. I don't know if we'd win the business trivia, but I think we'd have a respectable is showing because you have to understand what makes Apple versus Amazon. You cannot imagine two companies that work more differently than the two of those. One is totally functional, one is this GM model, and yet they're both really successful models. And so I think it's useful to have a framework

for how that stuff works. Anyway, that's one. The second is I was actually just reading the galley for a poor Charlie's Almanac. You probably know, Stripe Presses comes out in November. I was flipping through the galley of that. And he has the famous speech about the multiple mental models and just cribbing the best mental models from different industries. I don't know if you think that every founder has to do it, but I do think it's probably effective to be able to just know the top mental models from finance and for engineering

and from product and from sales and stuff like that. I don't see how you could be that effective without being pretty curious on how do I learn the most important mental models from this particular domain or function? I think it's a really perceptive question and I've never thought consciously about it before. I think there's the line about

that whenever you see somebody make some observation about capitalism, you should replace that with people. It's the nature of just voluntary arrangements of people. I guess in science, I don't know if there's a true, but maybe it's true that we've had a lot of success going down and unearthing the most fundamental laws and disaggregations and decompositions, whatever. And now it's not like we're fully done. There are still some unanswered questions, but the returns to going down more seem to

have diminished. We've got down pretty far. But then so much of science today is about what you find going up and combining things. different ways. And so computer science is an emergent science where we elucidated the Turing machine or whatever almost a century ago now, but we're still finding new ways of writing interesting software. Or similarly with, I would say, biology. We know how the atoms in biology work, but there are all these emergent effects that start to ensue as you have cells and systems and organs and everything. AI and deep learning. We know how the transformer works. We're still learning

what the emergent effect of transformers can be. Anyway, that's all to say that I think to some extent business is just the emergent effects of volitional voluntary arrangements of people. And that just feels like an endlessly interesting thing to me. I don't think of Stripe is a payments company. I think payments and commerce, all these things are really important. But for me, my mental model of Stripe is Stripe is an infrastructure company for facilitating transactions and exchanges and so forth between these different businesses. And we deliberately articulate our mission as increasing the GDP of the internet.

It's not something specifically about transactions. I think viewed that way, just how do you have there be more businesses in the world and how do you have those businesses be more successful? I think that's a sufficiently rich vein to mine that we're not going to run out of curiosity, aperture in the near term. You mentioned Apple. There's this line about Apple that I find so interesting, which is that Apple is Steve Jobs with 10,000 lives was the line discussed about it. And of all the major companies, maybe it was the one where the company was a vehicle for self-expressing of the founder in the most extreme way.

I'm curious to what degree you think that should be the case. The best companies end up being vehicles of self-expression for the founders, and that should be preserved. It's an outlier to begin and don't let it go towards the peak of the distribution where everything's normal. It's like all other businesses. I'm curious if you agree with that idea about maybe vis-a-vis stripe specifically, but even more generally, should companies really just be vehicles for founder's self-expression? I think yes and no.

I think yes, in the sense that I think a company should be the resonant frequency of some tuning fork, clearly rung. Presumably, the founders are chronologically the first people to respond to that wavelength. But I think it has to be, it's only going to work if it then becomes an adglomeration of people who share that idea and turn the Apple example around. I think it's hard to argue that Apple hasn't pretty meaningfully sustained that which Steve stood for. And so I think a company has to stand for an idea, but I don't think it's going to work if it's overly individuated. Another way to think about it is sometimes what people interpret as a very strong culture of a founder is just a company having a very strong culture that the founder is a metonym for. Apple has this extremely strong design focus, and the designers are quite central in the or, you know, it's this very functional design, and there's probably, I don't know, about 50, 100

designers who are extremely important in all of the products that happen. And Steve was a big part of inculocating that culture, but that's a culture that can, and indeed that Apple does exist separate from that. Another example I like is Patrick and I both visited Starbase. For a launch? No, I haven't been to a launch. I'd love to go to a launch. on a non-launch data, this is before they got their launch.

You don't want to go to launch until all the flying concrete. Exactly. To figure out that part. What really struck me is at SpaceX, I presume as, you know, Tesla and other companies, there's obviously very much the focus on what is possible from an engineering point of view. And SpaceX and Tesla and various companies are customers. We kind of get this exposure at Stripe as well. But it's a really high agency culture.

And so, for example, at Star Base, they're in the middle of nowhere right on the border in Texas. And so they have all these issues with too many mosquitoes. So they're breeding dragonflies. in paddling pools to eat the mosquitoes. And obviously, there's no housing there. So they're just building their own housing. And they need energy. So they're deploying a solar farm and everything like that.

The guy giving us the tour at some point would say, who's nominally the site manager is walking past some building? He's like, wait, who built that? I was just very impressed by the high agency culture, which again, people associate with Elon, I think, correctly. But at this point is cultural. We're asking, how do you solve problems? Who do you go to when you can't solve something?

And the person we asked it of was confused. they're like, well, you just figure it out and you just saw that. And so, again, this wasn't something that comes from talking to Elon. This was just something that now deeply exists in the culture. And so good cultures are often not regressed to the mean. They are differentiated. They have something that people strongly believe in a way they strongly act that is different from every other company.

And that, again, Apple shows that it can certainly persist beyond a founder. Maybe you need a founder to get it going. I don't know. I think this metonym, the fact that John references is a huge deal. And so I think there's maybe this availability bias refocused too much on the companies with very identifiable founders where there aren't such convenient memorable labels for shorthand embodiments for some of the other places. The New Yorker and the economists we often think about.

They have super strong cultures that have endured really powerfully. No, I can name the people. Yeah, maybe you can name the economist's founder, but I'm not an expert in the economist history, but it's not clear to me that there's been particularly some monotonic degradation of the culture since. In fact, if anything, I think you can maybe make the contrary argument. I like the reframing of maybe not as self-expression, but almost like some sacred flame. That's the idea that the founders are the protector of that flame, so to speak. And hopefully, Tim Cook, you can pass it off. It's really hard to do.

Maybe re-articulate what you think that idea or flame is for Stripe beyond the growth-the-GDP of the internet. You had to put another click on it. Beyond grow the GDP. It's a good start. Do you think that if I'm working at Stripe and I hear that, what is the next causal link? thing that happens because I'm thinking about that idea. We're now getting into things that I think we're just exploring live, but many of these cultures that we're describing are not unique cultures in a whole bunch of different ways.

They're actually strong cultures in quite similar ways. One, what we're talking about is quality and producing higher quality sustainably and being unreasonable, basically. Clearly Apple, the economist, the New Yorker, places like that. And the other one we're talking about is high agency, and again, making it so that you're not just okay with that. It's a good example of this where, again, high agency in the way where they weren't just satisfied with subcontracting all of the parts of the car to subcontractors. It's the best wing mirror that you can buy from the wing mirror subcontractor. Instead, they brought a lot of stuff in-house. And I think in Stripes case, I mean, Patrick can speak to some of the examples, but definitely, I think, a lot of where we've gotten to date and how Stripe has one market share to this point.

There's a bunch of stuff we can talk about on the quality point, and similarly on the high agency point. A big part of how the Stripe products we just got into where it is today is not just self-defining as, okay, we're in this industry or this is what we do, but always be willing to come back to the customer problem of, okay, we want to make trading online easier. We want to make it easy to start and grow an internet business. And then Quad holds up businesses. Okay, everyone's complaining about sales tax and VAT and everything being hard. I guess we're getting into the software business now and we're solving sales tax. for people. There's a bunch of stuff you have to learn about, but we'll just go figure it out. I think we definitely try to inculcate that at the high agency piece.

But to your question about sort of, well, what's the, if we want to make that idea somewhat more concrete, what's the next incremental version? The one that I usually go to next is this one that we just referenced of how do you cause there to be more companies started? And that's itself a pretty rich vein. And why we do stripe press. That's some of why we do Stripe Atlas. It's why we try to give away anything useful that we discover that we think can help lower, you know, barriers to entry. To some extent, it's why we expand to. A lot of the countries we expand to, there aren't necessarily big pockets of revenue or payment volume or something there today. But we're pretty optimistic about the possibility of new ventures being undertaken there that in future years will be of some significance.

There's that kind of version of it. And the second one is, okay, conditioned on some pool of companies existing. What are the binding constraints on their success and growth? And we really try to gear people towards what doesn't exist as opposed to what does. That is, rather than thinking about, well, where are there profit pools today that we can sidle up to and plant some flag and try to displace others, I think it's both easier and honestly just more fulfilling to think about, well, what are the profits that nobody's making? How can we build something that would enable that to happen? Global GDP is about order of $100 trillion. Where's the next $50 trillion of GDP going to come from?

And how can we causally responsible for helping that happen? And in front of the question that way, I don't want to sound grandiose. The world's big place and many actors are responsible for enabling that. But on the margin, how can we help push in that direction? Now, I was having dinner with Jensen Huang back a couple of months ago, and he used the turn of freight. We were discussing this idea because I think Jensen's, well, now probably he's not underrated. But I think for a very long time, especially not today.

For a very long time, he was very underrated. When we talk about the founder-run technology companies in Silicon Valley, Mark Zuckerberg and Mark Benioff and all these characters, but Jensen was usually not on that list, even though he's been sort of quietly running Nvidia for several decades now. Well, producing $7 billion a year in cash flow. Exactly, an incredible business. But any, we were discussing this idea of trying to really encourage people to look for the new opportunities,

and he was saying that Nvidia much prefers zero billion dollar markets to $10 billion markets. When they first introduced QDA, for example, it was a zero billion dollar market. You're actually getting at something that, I think, is a belief that Stripe has, that is actually not that widely shared and is a big part of how we've managed to get to where we are,

is just that much more internet commerce is possible than currently happens today. And it's global commerce. And you're like, okay, yeah, sure. But people get mad into Tam analyses and business school types are just always talking about, as you say, pool, which is like, when you think about it, a really unambitious way to look at the world,

because it's like, how can I say your margin is my opportunity? A lot of businesses inadvertently, implicitly bet on stasis. Yeah. Whereas in Stripe's case, we measure a lot of the incrementality. We go talk to people who started their businesses on Stripe or, you know, use Stripe Atlas or something like that. And we ask them, what kind of impact did Stripe have on this? A majority report, a very significant impact and a pretty significant number say, I think it's unlikely I would have started my business without this set of tools. And then, of course, you might say, okay, Stripe is useful as the low end getting off the ground. It makes it easy.

But a large company that is up and running, they have everything figured out when it comes to payments and Stripe won't be able to help them. But actually, that's also not the case. And when we've run AB tests on people using Stripes' payments infrastructure rather than whatever unoptimized payments infrastructure that had themselves, the latest numbers we have are a 10.5% conversion uplift. So again, 10.5% more commerce taking place on this particular site than would otherwise have had. You can see it in all the anecdotal stats as we go talk to customers. I remember talking to customer a little while back that had just turned off

their store in Mexico because fraud was too high and rather than deal with it, they just decided to not make the store available in Mexico. That's crazy when you think about that. In 2023, we have not figured this global commerce out. And so that is the underlying belief that Strype has that I think has actually helped get to a lot of where we are today. There's a huge legibility and more broadly just interestingness bias in the world. I don't know if it runs a podcast. The causal attributions that we give to things

are necessarily those that are of sufficient mimetic interest that they can survive in the meme ecosystem. They have to translate that two more times. I mean, it's like given the choice between an interesting explanation for something or a comprehensible one or something, necessarily the ones that are comprehensible will survive and become the revealing explanations rather than things that are super boring and arcane. But I don't think reality has the same interestingness bias.

This is, I think, a huge driver of where businesses choose to sell is the mechanics of fulfillment, logistics, tax, remittance, all this stuff. I don't know that's that interesting to talk about. I don't know how much there is to even say in a totally generalizable way because the specifics in each case are different, but the fact that's not interesting doesn't mean it's not true and doesn't mean that it's not a huge deal. There's a guy in the UK who was, I think I'm pronouncing it correctly, I don't know, the Jost report as in the 60s, I think, where he basically concluded that friction,

actual mechanical friction was costing the UK several points of GDP. Because if you just look at things not oiled or lubricated correctly, ball bearings, not being pressing or they should be literal friction. Literal friction. Not too many buttons on a website. Yes. And so your question about how do you make this idea of increasing the GDP? the internet more concrete, there are so many pockets where there are just like prosaic reasons

as to why gainful activities are not taking place. I haven't checked the latest here, but at some point when I went to check this, Google Cloud was not available in India. You just couldn't pay them using any Indian payment method. And I don't think that's because Google Cloud made a strategic decision as, well, we definitely don't want to be available and to sell in India. It's like, well, there's some combination of data policy stuff, financial stuff and tech stuff, whatever, that I'm sure everyone would be nice to solve these, but we haven't gotten around to it yet. And I think implicit structural belief in stripe is actually the sum total of those things, in fact, adds up to a lot.

I don't want to get overly wonky about it, but I'm curious what is more interesting to you, the reduction of friction around known things to start a traditional business or whatever, versus exploration around what the next technology is of business, the next LLC or the next law, or something that would unlock a lot more. It would be a step change, not just lots of one and two percent increases. What's the next corporation? Yeah, what's the next?

Seems like a ridiculous question. But the corporation was so incredibly important. It was an invention. I think it's a really good question, and maybe it seems too grandiose or something to spend too much time thinking about that, but I think it's a very good question. I think we start with removing as much friction as humanly possible.

And again, there's just way more of it than you could possibly know. Do you know about the Chicago lease tax? No, tell me, please. Anyone who leases more than $100,000 to Chicago residents has to pay a lease tax, revenue tax. And that's all, and it's lovely by the city of Chicago. That's all fine well and good. But they define lease quite broadly, including SaaS, basically. So any SaaS company that sells more than $100,000 of SaaS, which is probably a few million

a year total, has to pay the city, has to go implement this city of Chicago lease tax. And again, this is yet another thing that a business has to go do. And kind of like the cost of the friction, the ball bearings in the British economy, it's yet another thing that is minuscule by itself. But when you add together, like the bacteria in your gut actually weigh a loss, all told, the weight of all this kind of adds up. So I think we start with let's remove all the friction. However, when you actually meaningfully change a lot of that,

I think new things become possible. And so we have a lot of multinationals on Stripe that are year-old five-person companies. And again, when you think of multinational, you think of giant skyscraper, campuses. That's the image that comes to your head when you hear the word multinational, whereas we have all these businesses that are now selling globally from day one on Stripe as a result of it being easier to do so. The other one that we think is exciting is marketplace-based business models, thanks to the internet. I think there's a few components, but one of the things you need is the liquidity of the internet that you get these Airbnbs and Uber, you probably need smartphones, not just the internet. So you need the tech foundations. But then you also need to make it easy for people to actually transact with each other and do two-way stuff and, you know, Stripe Connect, the is the marketplace payment product that didn't really exist before that. And so I think you get these new kinds of businesses that are much, much easier than before. I think you're saying at some point a change in degrees a change in kind, which I think is true. But I really like this question as well. And actually, if any of your watchers or listeners have suggestions, we'd be very interested. I think Atlas was this in that I think we know because they tell us that there are thousands of businesses that have been started in.

countries where high-tech entrepreneurship has not previously been as common or as popular that wouldn't have been started, if not for Atlas. Steve Randy Wallman, who writes really interesting materials about economics and finance and so on, he had this blog post in 2013 or something that really stuck with me about how credit financing is fixed cost to the borrower, asymptotically fixed costs within some range or something, has the unbounded risk of destroying your business. Equity capital has unbounded costs, but does not come with the embedded risk of possibly blowing up your business. It's interesting to think about the possibility of a continuum there. To what degree it's necessarily dichotomous? If you think about a small business, effectively,

their options run into that dichotomy. And if you just take a restaurant, why is it the case that, one, the restaurant probably can only get access to financing that might blow up their business? And certainly, maybe they kind of convince some investors to write them to their first check or something, but there isn't a whole lot in the middle. And I think one interesting story from the last 15 years on the internet is the proliferation of crowdfunding, obviously, different variants of that and so forth. I think the question of, are there interesting new funding models that could be invented is a good one. Dominant assurance contracts, I thought we're all interesting. They never really seem to have taken off, but it feels like there might be kind of new points in the space. So yeah,

I think there's stuff in the domain of funding models. Something like a Dow feels like it should work, maybe not Dow's in particular. We do discuss different versions of this. I think standardization is often underrated, and one of the best things the EU has done is just standardized things that were previously for no particularly profound reason. In the sense of like an internet protocol as standardization, we all just agree this is the way we do things, and so everything's interoperable as a result? Yeah, basically. The U.S. is obviously with the uniform commercial code, and I think the U.S. minus that

would be just like a way worse place to do business. But again, in a hard to articulate way, it sounds very arcane as well. the product liability requirements at this stage versus that stage, blah, blah, blah. Pretty quickly, the listener is clicking on the next podcast episode. We've thought about are there things that Stripe could help standardize that are not standardized today? We can just be a coordination point. Obviously, this, YC did an awesome version of this with SAFs.

How much less investing would happen at the early stage absent the existence of SAFs? I don't know, but that seems plausible to me that's 30% or something. It seems credible that it's significant effect. Or maybe if someone else is standardized, maybe we'd have standardized in a worse. point in the space or something. We want to be the whole podcast episode about this, but I think it's a really interesting question. If you think about the, I like the idea, the $100 trillion, where's the next 50 coming from? I'd love to hear what you've learned about business formation and small business

versus reducing frictions for existing medium or large-sized businesses and letting them get way bigger than they would but for that outstanding friction. So even that, like Chicago example, sounds like a pain in the butt, even for like a real established business, maybe the faster way is to make it easier for big companies versus make more small companies. So what have you learned about big versus small and what matters in this goal to grow the GDP of the internet? In terms of where a stripe is going,

a lot of where we started with was make it easier for a startup to do X, the lease tax example and just generally the billing system, a lot of what the Stripe billing team has been spending time on off late is companies like Atlassian and Cloudflare and all these very large public companies who are going to moving their billing infrastructure over the Stripe billing.

so that, as you say, they can not just move the payment, moving of money, but all the business logic can live in Stripe so that they don't have to build and maintain it themselves because it's the maintenance that crushes people. We're continually surprised when we build things that we conceive of as being for the low end, how frequently they get enthusiastically adopted at the high end. So, for example, payment links is we want to lower the barrier to entry to Stripe, making a couple of sales, why do you need to build a payment form? Why can't you just sign up for Stripe and put in some details at your product and then just, send a URL to your friend or your first customers or whatever. And then maybe when you reach your 100th sale or your 1,000th sale, okay, I'll do the work, build a proper thing here or whatever. Payment Links is pretty enthusiastically adopted by large companies for basically the same

reason in that it's like the Soil and Green principle, everything is made of people. And there are humans inside these large organizations. And those humans, even in large organizations, have opportunity costs attached to their time. And if they can go and build some incremental new feature that aligns with the core purposes, their business, that's in general, probably a more valuable thing to do than go and, like, build this payment form. Whenever we've built no code functionality, or just generally speaking, things that lower barriers to entry where the original persona that we have or had in mind was somebody kind of starting out, we keep being struck by we had a user at our weekly.

All Hands meeting last week, they're a pretty significant company. I don't know the exact employee count is, but I believe in the hundreds. His ask to us, we asked, how can we improve Stripe? He asked for more no-code functionality because they're strapped for engineering resources and they just want to be able to take things off the shelf and snap them to grid. So that's been eye-opening for me. It's also a dynamic where the very largest companies that we work with are often competing with startups and seeing new upstarts come along. And so the buying criteria are no longer as different as you might think because they know that their customers might just go to, We work with a number of traditional grocery stores.

And they're all competing with the Instacartes and the ships before they were acquired, all of these small upstart doing delivery and stuff like that. So it's like, wow, the digital experience really matters. We've got to figure out our app strategy. We've got to figure out a delivery strategy, things like that. But that dynamic, I think, ends up merging the considerations, maybe more than they otherwise would. The big part of the ethos of this whole Singleton idea,

what got me interested in was the ability to study, like you said, I love the Magnus Carlson example. It's so perfect. Like, he wins the trivia for jazz. This is great. When you think about the deep lore of companies and companies that you've studied, I'm thinking Dutch East India company, that kind of thing. What very old companies have you been the most interested in, learn the most from, been

the most curious about, and why? I think they're almost all interesting. The question is almost, is there something that your present circumstances that gives you reason to care and to find it memorable? I read a fairly lengthy history of DuPont, the chemical company, not that long ago, and it's super interesting. And as you pull on that thread and the history of the chemical industry and how it kind of came from the dye industry and Eastern France and Western Germany, and then the various changes it went through and how it gave rise to the pharma sector and the whole thing is just super interesting. The chemical industry was one of the airly technology industries in the sense that there weren't that many businesses with such uncertain R&D.

where you didn't know what the properties of the chemicals you would discover would be. And so maybe I had some of the characteristics of some of the questions and problems faced by modern technology companies. And so perhaps it's interesting to see some of those parallels. It's interesting to see that, well, we republished this book by Mike Malone a few years ago, the big score in early history of the semiconductor industry. I think it may be surprising and striking in that book is maybe your naive model would be that somebody discovers something, one of these companies.

And they're like, wow, it's a really important thing. I'm going to go start a company around it myself so they can internalize the gain or whatever. Whereas what actually happens with every case as far as I can tell is the person discovers the thing like, wow, this is awesome. We should totally go do this. We, the company they're at, and they try to convince their management that there's a really good, which take it seriously, whatever, and management refuses and is oblivious to it or it doesn't think it'll work or is important or whatever. And then after two years of trying to convince everyone around them that this is important, eventually in frustration and out of a desire to just have the thing exist in the world,

they go and do it themselves. But it's not awesome. I get to start a company. It's, Christ, okay, fine. If I have to go do this myself, I will, but it's almost out of this sense of obligation to the thing, to the discovery. It was interesting to see in the early chemical industry

the same dynamic, and so this just seems to be not a thing about Silicon Valley, exactly, but this deeper thing about human nature, you extract things like that, but I wouldn't say that DuPont is one of Stripe's top influences. Tell you a funny story. Mom, when we were growing up, ran a company, with her own business, called SQT, that still exists and still does.

Quality training, a kind of quality assurance training, ISO 9,000, things like that. And in particular, there are a lot of, still are a lot of American multinational firms with operations in Ireland that they would have had a significant demand for doing quality training for their employees. But there's definitely a lot to learn from the, and it's like a business cliche, but Six Sigma, Lean Manufacturing, Process Optimization, Sphere, it's a lot to learn, but there are very important limitations. And I think it's not an original insight by us that a lot of people comment on the fact that so much of modern management culture and theory stems from basically 1950s

command and control manufacturing organizations and we have aped their ways of working. And in particular, you're used to working with stuff that can be measured, which sounds kind of obvious, you know, but I have inventory. It's at various stages of the production process. And for example, I can think about a balance sheet. The thing works or doesn't in a fairly binary way at the end of the process.

Exactly. We can determine what's this part manufacturer correctly. And we're working with all this extremely legible space. And what we find so interesting about software engineering as a domain is no one can do it that well. There's buildings going up around us. If you were to ask the guy's building, that office tower, is there a much better way to build building? They're like, no, what do you talk about? You pour the foundation.

Then you do this. We figured out how to build buildings. Then if you go interview someone at Google or Microsoft, or I'm not singling out any large company, you ask them what percentage productivity do they think they're running at compared to the total theoretical productivity? I think they generally tell you what, 20% or something like that. And part of it comes from the lack of legibility in what you're working with. I sometimes joke here that whenever we talk about resourcing and how we should resource very initiatives at Stripe, people often want to talk in terms of heads.

This is a thing that needs five heads or ten heads for a year or something like that. And I always want to get them to denominations in kilograms. We need 500 kilograms or a thousand kilograms of engineers. You're like, but that's absurd. That's the point. So is five heads or ten heads. This thing needs a technical solution that could require one month or could require one year if you screw it up and do it badly.

But again, we lack the legibility. We lack the meta understanding of software engineering as a domain to be able to have good ways of reasoning about that. And so I think the fact that everyone in the industry finds software engineering so challenging to measure, to do well, is part of the fun of it. I mean, the places where we do do it well. And part of the opportunity for Stripe. Exactly.

Yeah, I was going to say. If the convertibility or ELASTC between dollars and good software was straightforward, then the opportunity for startups generally and Striping, particularly, would presumably be way more limited than it is, and that lots of companies can afford to spend way more on building good financial infrastructure than we can. This is the famous Buffet with a billion dollars. It is with a billion dollars test. He talks about the test of a good industry is one where imagine some rich guy gave his son a billion dollars to go blow on building a company in this industry. There are lots of places like real estate or whatever where you can actually

have a pretty good swing at it and they will make life harder for you. Whereas I think there's lots of people who have tried to put a billion dollars competing in this or other software industries, and it's really hard to just turn a billion dollars into high-quality software. Just that's the discovery. Right. To that point, I think we've probably learned as much from because software, I don't want to say uniquely because I don't know enough about other sectors, but because, let's say, at least software to this intersection of creative work and mechanical industrial work.

What's your analogy? Half building a bridge, half writing a bestseller or something? Yeah, yeah. This is a different version that you could use. We've learned a lot from science and learned a lot from creative domains generally. I think studying Hollywood from this lens is very interesting. I don't think that there were like directly transferable ideas, I think. What's an example like about Hollywood that would be interesting?

In Hollywood, I don't pretend to be an expert in Hollywood. You also can't just spend $500 million to make a good movie. Oh, gotcha. You really need theuteur. The whole thing is pointless unless someone has a vision. So often at Stripe, we're discussing something, and maybe yes, in theory, we should do something in this space. But the real question is, is there a specific person who has a vision here? And there's a hundred things that we would love to go fund tomorrow if there was a specific person with a vision.

Of course, as Hollywood shows and as is intuitively obvious, the vision's not enough. You have some degree of execution ability and whatever skills are required in the domain and so on. There's an illegible trace of, do they have the vision? I guess, is the vision a good one, where if absent, the whole thing is just somehow going to be a failure, there's something about the unquantifiability of taste and judgment and how that makes, generally I think that's tough for organizations to deal with because you can't build robust processes around that, but at least in Hollywood, but that corporate desire to build robust processes about things is an implicit belief system. And then like in science, a fact that really stuck with me is Gertie and Carl Corey ran a lab at

the University of Washington in the couple decades after World War II, six of their students went on to win Nobel Prizes. Wow. University of Washington is a good university, but you can't tell a story as to, it wasn't the single best universities, they didn't just skim the cream of the very best students. It's not just about, I think, the characteristics of the students coming in. There aren't that many Nobel Prize is won. Nobel's here.

I think we're all won in either medicine or chemistry. That's two prizes a year. And so I think it's an incredibly vivid demonstration of how there's a lot of, you know, something that they knew or that was somehow embodied at their lab that was transmitted to these people, there was incredibly important that made them collectively the students in their careers vastly more successful on average than the rest of that population. And again, I think this is something that is hard to quantify. It's hard to even put your finger on what it is, but it's this really rich demonstration of the potency of tacit knowledge. I think for complicated intellectual

work in general, that tacit knowledge that has to be transmitted through mentorship, is the rule, not the exception. And a lot of our intuitions, like for example, our desire to enable tenure at Stripe is substantially informed by this where if we're in a superficial domain where, I don't know, you can come in basically knowing it already, and then after two years you're not that much better

than the person who started last week, that would be one thing. And I think might prescribe one set of personnel and HR practices, but we're in a domain where I think the returns to experience and the returns to knowledge are really extensive. Having six years of content, in our domain gives you a tremendous advantage over somebody who just arrived. I think we're informed

by some of these other places and maybe just on the Hollywood point, if I don't know if you've ever looked at this book, not knowing much about Hollywood, I found it very interesting. There's an oral history of CIA, the agency, that I found to somehow be a really good introduction to the whole thing. I also love the whole thing's idea of packaging. Just that as a technology, packaging doesn't happen in business all that often. And I always wondered why not. There's a lot in Hollywood that I think is super interesting. One of the random ones to talk about is it's not published as a book, but you can get a Sanistad PDF if you read around your perspective on McKinsey, which is McKinsey fans. I've heard of this one, but this one I haven't read. I'm sure it's in the dark web

somewhere. If you've enough Bitcoin at your disposal, the professional services, just I was reminded as you discussed tenure, professional services firms really take training seriously, law firms, accountancy firms, consulting firms, and they take it much more seriously than I think most Silicon Valley companies, I think that's something we definitely looked at is, how do you have people who are experienced the tribe do a good job of spinning up, people who are, but there's a case team leader at a consulting firm, and they are really responsible for both the work, which is done by the more junior people and for those people's development. And they have to do so much of it because a lot of people graduate out that they get

really in the practice of it. But I think there's something really interesting to study there of companies that by virtue of their business model and by virtue of just how they work, have to take training up new people incredibly seriously and just spend way more time on us than your traditional tech company where the people have a four-week boot camp and then off you go. As I was thinking about Stripe on the way up here, what is it about the business that's different or unique? I won't pick on any one other developer-facing tooling company or something, but there's plenty of other companies that built products originally designed for developers that didn't achieve this status of almost Stripe is a state of being. It has this ambient

quality about it, that you can just see it in the way people talk about Stripe as a company, which of course has a lot to do with both of you, but also it's achieved this thing as an entity separate from the both of you. And I'm curious why you think that is. And how much of that is a lucky random side effect, how much of that was really deliberate based on decisions you made or the kind of company that you wanted to build? Because whether you wanted to or not, it has come to embody a certain era of technology business in a way that if you looked at other companies that also build similar-ish products, let's say, four developers in the early days, did not achieve that same thing. I'm curious to what you would attribute that difference.

I think part of it is we're a self-served product for a fairly ubiquitous need in a domain where it's actually hard to be self-serve. If the audience's creators and founders and business owners, they tend to be kind of exacting in their judgments. It's kind of has to be because they are with respect to their own thing. And so I think a lot of the other developer-oriented companies take Databricks, unequivocally an awesome company. But Tommy, our youngest brother, mentioned that he's seeing a physiotherapist. The physiotherapist mentioned they were using Stripe. I presume that physiotherapist is not using Databricks. And so I think some of it is probably just a bit nature. We also if they were, though. Yes, yes. Yeah, I really want to meet this person.

The fact that we work with Amazon and Ford and Hertz and these giant companies, Databricks, of course, serve the enterprise, but that we also kind of exist at the low end is part of it. People at stripe really care, catchphrase at stripe of really, really, really caring. I think the returns to care to sweating details and so on are also unquantifiable. And part of the problem with them is it's a brand thing. And so you can, in any narrow individual case, you can coast on not caring. If Apple sent you a poorly designed invitation to something, you would still go because the overall halo of a credibility that they've accrued over multiple decades will carry them through even a single poorly executed thing. But that means that the local incentives to care are actually

not that strong, this collective action, this public goods problem within the company where you can benefit from everybody else's work. And so I think the aggregate long-term returns of caring a lot are super high, but the individual local returns are low, and that creates this collective action problem. Most companies think failed to solve it. And I don't particularly credit us. I think this is deeply embodied by a very large fraction of the first hundred people at Stripe, but it became this thing with a tremendous amount of momentum and endurance. People at Stripe today are still maniacal about padding issues and spacing issues and consistency issues where use this word over here, but that word over there, it adds up. Is there a detail you're most proud of this type in Stripes history?

Well, the one that people often cite is we show you your API keys in sample code, and a lot of errors in Stripe will tell you what we thought you were trying to do, not just what the actual mistake is. And it's funny, even though some of those were implemented 10 years ago, we'll still see Tweeto occasionally where we saved somebody a few hours because not only do we tell them that their thing didn't work, we told them what we think they were most likely trying to do instead. To be controversial here, I think it's very harmful. to bring consumer product thinking to a space like Striper, I think, B2B space generally, because I think there is implicit or explicit. You just have users by the wheelbarrow, you treat them in aggregates, you talk about mouths, everything is statistically tested. On the active users for those who don't use technology.

But, you know, again, people in the value say mouse as their way of referring to the people who are using the product. But you are just, I'm not enough. number of a free mat. You're a number. Everything is statistical and everything is linked in with dark patterns. It's like, oh, complete your profile. Everything is nudging you towards some business outcome. And what we really try to constantly clopper people over the head with its stripe is these are people starting a business who are generally really talented and they have some great idea and they have a vision for it and they're making it happen. And they have a pretty sophisticated understanding of their space

and business and finance and everything like that. And you can just see it if you go talk, to any of them. We have another value that's right that we try to really inculcate is talking up to the user. When you're writing product marketing copy, you know, Patrick and I was still spent a lot of time, you know, reviewing that, you're not trying to bamboozle them with some highfalutin statements. You're trying to explain to a busy business owner who, again, go back to Charlie Munger's multiple mental models, is constantly switching between product and business and finance all these things, why this thing will solve some specific need that they have. But it's not hucksterism. It's not sloganeering, it's having a technical discussion with someone who really knows their shit. Patrick

mentioned this weekly all hands. We every week have user at this fireside, we call it, where, well, just for 10 or 15 minutes, again, they're busy, we'll interview them about their business, how they started it, how they got there, how they're using Stripe, what they'd like to see do better, you know, us do better, everything like that. I think that's important to stay connected to this, because again, I think the classic technology product management domain is a bit I would say it's not respectful enough of who the users actually are and how capable they are.

I think that's maybe too normative. Maybe it works fine for those businesses, but not our business? Exactly. The thing that we have to take seriously is any sign-up could in principle be in not that many years in the future 5% of our revenue.

And so allowing... Because they got really big, not because we go really small. Allowing any of them to fall off the wagon and just shrugging our shoulders, if the distribution of possible sizes of our users was normal. I think you could shrug your shoulders.

And if one percent of them, something goes wrong, then, okay, that's unfortunate. We'd like to be less, but like it's fine. But our tails are really heavy. It's koshy or something, but it's not normal. It's something with a lot of putosis. And worse, the concern you have to have is if something is going wrong for these customers,

maybe it's actually biased and correlated so that it's the ones who are more successful, who are more likely to encounter the issues. And so therefore, I think your intuition has to be, To John's point, kind of exactly the opposite of the consumer domain where when you hear at a single case of something going wrong, your ears really prick up and you get interested because, huh, maybe it's the companies that are selling a ton in this new market. What we had in the early days of Stripe was businesses implementing these multi-sided

ecosystems were consistently running into compliance problems and payout problems and mechanical problems, whatever. And an attitude of, well, not that many of our customers are doing that, truck would have meant that wouldn't have discovered this incredible opportunity that has been a huge deal for us. We're big into anecdotes here. There's probably the correct amount of data in the world. People have realized that data is important, but sometimes they underestimate anecdotes because it surfaces the questions that you should be asking. Data is good if you have a specific question and you want the answer to us. But I mentioned about our bummeda growing up, our dad for a while ran a hotel, small hotel on the shores of Lockdurg and Ireland. And what I find funny is, you do not need

to run a complex user research study to know if you're doing a good or bad job in a hotel. You can do that. You can just walk around. Oh, my God, this waiter is terrible because these people have been waiting half an hour for their food. You just walk around and the questions you should be asking, slap you in the face. Sometimes literally. Exactly.

Depending on bad things have gotten. But faulty towers. But in the tech case, again, people do a lot of the data analyses. People talk about management by walking around. But they talk about it in an internal management context. You've got to do the management by walking around with the customers and in the actual market. How much more likely do you think it was that you became entrepreneurs given that both your parents were? Is that something we can simulate?

What makes more businesses? My dad was an entrepreneur. I'm an entrepreneur. Your parents both were. You both are. Maybe there's stats on this. We can just answer the question. But for you personally, how much of an influence was it that they were both doing that?

And you watched them. You got to do the twin studies, found some twins separately. Exactly. Yeah. I remember when you were playing in the garden, when you were like six and eight. or something. We used to often play. We don't internet at that age, so we had to play in the garden. And we'd play as, I don't know if we were starting a company, but I guess running a company, I guess just because that's our parents. Our dad was a fireman. We'd have been firemen.

It's hard for me to say no. It had no effect. When I think back to those anecdotes, I never think we're first engineer year old in childhood. And even if it is somehow attributable with our parents, I don't know, maybe it's genetic. Maybe we lack the risk-averse gene or something, but we've underdeveloped prefrontal cortices or something. But yeah, it's probably not It's probably coincidental. There's also probably an element. You probably remember seeing this with your dad. You know the way starting a business goes in and out of fashion. And famously after the social network, everyone decided they want to go start a business. But at least I think a lot of what we saw growing up was, honestly, maybe even just the work ethic. There's other things in the customer

centricity and things like that. But if you just take a single thing away, it's absolute just hours on the problem that you have to put on it is maybe useful to see firsthand. I think that probably subconsciously seeps in. And again, I think you probably saw it with your dad. And I think maybe if you haven't seen that front, maybe you're operating with a disadvantage if you haven't just seen that firsthand to really ingrained it with you. We work quite hard on Stripe, but I think we work less hard on Stripe than our dad did at the hotel or our mom did at this training company. And just we're not at the office for most of the weekend. He was at his office necessarily. And so even just that, we get to take weekends. I've seen you talk a lot about your

relationship with your parents and their businesses and everything growing up. What's it like as adults? How is it shifted in interesting or surprising ways as you've become adults and getting married and the whole deal? What has shifted most and what's it like now? Well, it's interesting to watch now with a bit more adult perspective to see where maybe our childhood perceptions weren't correct. And we used to make fun of our mom growing up for working a lot and in an admiring way. Now she retired nominally a few years. successfully. Exactly. She's had multiple failed attempts to retire. She tried to retire a few years ago and now somehow has found herself. I think she helped a hospital. Our youngest brother has a

today, relatively mild physical disability. So she became very interested in its treatment and how to do that well. And very long story short, ended up writing a book about successful treatment for cerebral palsy. And through that, learned that while there are these other conditions that don't have good treatment manuals for them. And so she's working with a Floyd, in fact, by a hospital of Minnesota, where they're collaborating to produce a whole series of books on the treatment of different physical conditions. And so I think five of those books will come out for the next 12 months. And this is her retirement. Definitely not Minnesota. For us to watch as adults. You asked them about old organizations that coming to learn to law from. Was it the Royal Society

who had the mission of reducing the gap between best practice and standard practice? Good question. I don't remember. Part of us what mom is doing is also working at doing some stuff philanthropic in Ireland, improving cerebral palsy care. And again, it's amazing the degree to which different treatments are happen on a geographical basis for no real good reason. The condition doesn't know where you are. And so they have some of the leading treatments in the world for cerebral palsy are in Australia, where they've developed these interventions that work really well. And so they're now working on rolling them out. I mean, it's not just these. They're also doing some research and stuff like that in Ireland. But I get very excited about the idea of how can we advance the state of the art

but even just bringing things up to the stage of the art in a lot of domains. It really has, I guess, the entirety of the lean manufacturing rollout in the United States in the 70s and 80s was just bringing things up to the state of the art. If you think about the future of Stripe, you guys are so lucky you have so much time to do whatever the answer to my next question is, what do you want it to be that it's not yet and or what do you want it to be more of, like most specifically in the decades to come? An important thing that Stripe today is that we're always trying to remind people who join because Stripe is, say, 12 years post-launch, and so they might depreciate this necessarily,

that just measured against the goals we set out to solve when we started, there's still not only a lot to do, but in certain ways we're even further from solving them than we were at the outset, where in the very beginning of Stripe, in say, 2011, accepting online payments or moving money online basically meant facilitating pretty basic, pretty straightforward credit card transactions. But now over the last couple of years, there's been this incredible proliferation of payment methods, usually run by central banks, but all of the different wallets and national payment schemes and so forth that have added. The good news is they've brought immense numbers, like billions of new people online and enfranchised them to participate in the internet economy.

But the flip side is they've made the landscape so much more complicated. And we're now in this funny position. We're even very sophisticated. companies are often inadvertently restricting their customer bases to be only a relatively small percentage of what they could be if they're sort of comporting themselves properly. So just assessed against kind of the most basic criteria of is Stripe making it easy for a business to accept revenue from, let's say, at least 90% of internet users, the standard for that has gotten an awful lot higher. And while Stripe is now way more powerful than it ever was in the past, it's interesting

that just the complexities of the world are also advancing considerably. And that's before you get into all the other stuff that's happening around different tax things and regulatory things and data privacy things. Now you need to have an Android app and an iPhone app and the complexity of the whole landscape is considerable. So we want Stripe to be a global, programmable money movement engine for all of these different use cases and possibilities available to businesses everywhere in the world and capable of executing transactions on behalf of people anywhere in the world. And as we just think about the n-dimensional matrix of functionality entailed in that, we still have a long way to go. And then the second part of your question was what do you want Stripe to be?

What I'm getting at is say you're retired, hopefully better than your mom and you're in your rocking chair. And you want Stripe to be described as X, Y, and Z. You'll be able to feel like you can rest easy, you've done a good job because Stripe is blank or has done blank. blank, like that kind of looking backward. Have you read Timu's book, The Master's book? Yes. I really like that book, and there's lots of random. I learned lots about the history of radio that I didn't know.

And so it's always fun in that way. But when you think about it, as you reflect on it, you should be scared because basically the takeaway from the book is every other information network that has been started has started out with lots of innovation and the healthy ecosystem. Low Barrier Entry. Exactly. Low Barrier Entity. and has ended up as a monoculture regulation captured oligopoly with two or three big players that get to extract rents.

And that has happened with every other information network to date. But we'll see if it happened to the internet. That's kind of unsettling note that Tammu leaves you on. The internet is different. And the internet is, I think one could argue, a bigger deal than all those other technologies for lots of reasons. But the warning signs are there, and you see this a lot where a lot of internet commerce stops at national borders, which should not be like the packets don't travel any slower as they cross them.

The gravity equation in trade says that trade falls off with the square of distance. And that maybe makes sense if you're shipping beef, it goes off. It's complex to ship across countries, you have to refrigerate, everything like that. It makes less sense when you're shipping software. And yet the gravity equation still exists in digital trade. And so, again, I think part of our hope would be there is a real plausible world where we end up with four or five big internet companies that are the internet companies that have a really outsized share of the online activity happening there. And it's not that it's illegal to start a company. It's not that impossible to start a company.

But the barriers are so high to break through that no one is preventing you from starting at telco. but nobody does because the barriers and the costs are so high, that would clearly be a really bad outcome and should make us sad. And so I think if we could feel like we contributed to the next 70 years of vibrancy in the internet economy, which of course is just becoming the global economy generally, where you're continuing to make it accessible for new entrants to come in and compete on a level playing field with all the existing folks, I'd be pretty happy with that.

I love that. I think it's Peter Thiel's notion, that diagram of the investing, perspective, the best things being seems like a bad idea and is a good idea. The intersection is where you want to live. And I'm curious, I think last time we talked in this format, you said something about the most impressive thing about the big internet companies is that they've ridden multiple waves. They weren't one-trick ponies. They successfully evolved. I wonder how you square those two things. The waves maybe seem obvious. Maybe one was, might have been crypto. Now, it might be AI, might be something else, material science or biotechnology or something. I don't know. How do you think

about that zero billion Jensen Huang idea with the Peter Thiel idea up against AI is obviously the thing we should focus on as you think about Stripe's Future. I think the nature of the problem for a Facebook or for a Snapchat or a Pinterest or something is actually quite different because they're serving a consumer sensibility. It's ultimately a kind of entertainment product, there's utility and messaging and so forth, but some significant portion of use is entertainment. And there's a lot of, in principle, fungibility across different pursuits there. And on some level, watching Instagram stories is competing with Netflix. Maybe it's even competing with chat GPT.

I don't know. Because consumer taste, by its nature evolves, I think that necessarily puts one into this mode of wave writing. Whereas Stripe operates at a lower level of the pace layering diet. you've fashion and infrastructure and culture and these different sedimentary layers evolving and changing on different timescales. And at the infrastructure layer that Stripe operates on, things change more slowly. That's bad news in the sense that it's not possible to have these insane, meteoric appreciations in the overwhelming majority of cases. But the flip side is, if you get things right, you can compound for a very long time. And I've always found it strikingly

the internet really never grew in any given year at an insane rate. It's just been this incredibly durable 30% a year compounding for several decades. 1.3 to the 40 just ends up being a large number. So I think Stripe has more of those dynamics. And you can see this if you look at businesses like Visa or MasterCard or something where they're obviously conceived in a pre-internet world. And yet the wave of the internet, it obviously changed their business in various ways, but it didn't fundamentally restructure it. And with everything on the horizon, it's still the case that there are going to be businesses

and transactions and exchanges and associated challenges and complexities. Homer Simpson, money can be exchanged for good services. They come with that, exactly. So I think Stripe, because of its position in the ecosystem, needs to strike the right balance between spotting the opportunity in these waves,

and we're excited at the fact that basically all of the AI companies are implementing revenue models at the outset. of necessity because it's expensive to run inference and training and everything. And basically, all of those companies are doing it on Stripe. It's hard to find an exception. And not only they use in fact for the most basic payment, but they're using all the higher level of functionality on top of that because they have sophisticated needs and they are sophisticated companies.

Jump back for a second to just your previous question. It's sort of what I'm going to strive to be. And we've talked a lot, I guess, with the course of this conversation about prosperity and that growth and why we care about that and how we think Stripe can be implicated and all that's obviously important and true. But the thing we haven't said or touched on as much that just in, you know, your invocation of the rocking chair and sepia tones and so on looking back. Something about beauty and craft, if Stripe is a monstrously successful business,

but what we make isn't beautiful and Stripe doesn't embody a culture of incredibly exacting craftsmanship, I'll be much less happy. I think the returns to both of those things in the world are really high. I think even beyond the pecuniary or financial returns, I think that just the world is uglier than it needs to be. It's a free lunch where one can just do things well or poorly and beauty is not a rivalrous good. We can do this in architecture, but my intuition is that more of striped success than one would think is down to the fact that people like beautiful things and for rational reasons. Because what does a beautiful thing tell you? Well, it tells you the person who made it really cared and you can observe some superficial details,

but probably they didn't only care about those and then everything else in a very slapdash. way. And so if you care about the infrastructure being holistically good, indexing on the superficial characteristics that you can actually observe is not an irrational thing to do. There's a reason there's a very intricate filigree on the one dollar bill. Yeah, right. And then I think the kinds of, like there's something of the talent selection, the people who like good APIs and good architecture, like good software architecture, tend to prize things being done nicely and well on other domains and so on. So I think there's this bundle of... It's just a warm and fuzzy thing. It's very rational. I think there's a bundle of self-reinforcing loops such that it is a sensible thing to do.

I think people behave quite differently in spaces that are beautiful. Banks had it figured out a hundred years ago where bank buildings should be nice. We're just continuing that tradition. They lost their way. Financial Services. If someone really convinced me that the financial returns to craftsmanship and beauty, which I believe are greater, our nash greater, it's still good. I'd still do it. Life's too short. If you think back on Stripe's history and had to identify the most important, impactful, memorable conversation between the two of you, what would it be? Individual conversation, I mean. I remember a conversation we had, I remember even the restaurant.

We had it at in the summer of 2010 when we'd been working on Stripe for seven months. And the question was... Right there. No, no, no, no. This was whether you were going to drop out or not. Oh, yeah, yeah, yeah. or I guess we were on a dropout, but John was the one more on the fence. And it was this broadly somewhat dispassioned conversation as just how big a deal could

stripe be. And we just gotten excited about it in the beginning of it's fun and cool to solve this problem. But they were talking almost for the first time about like, well, where could it really go? If this is not just a little random side project, what could it become? And that's the first time we'd ever sort of really taken a step back and talked about in much more inchoate and larval form some of these same ideas that were discussing here. I really remember that one. The flip answer is conversation back 2009 when we were walking

home from dinner and just decided to start working on Stripe. And as I said, you know, how hard can it be? Famous last words. Yeah, I think a more serious answer might be in that conversation on Valencia Street, the wine bar where you were morose and you were just down maybe two or three years into Stripe. Is this even working? Is this even worthwhile? Not growing fast enough? Things like that. I think that actually maybe gets to one thing we're very lucky to have is a good team dynamic where I think it's really, it's just like a lot for any, I don't know how you do it. It's a lot for any one person to have on their shoulders. I think two people will naturally have various cycles that they go.

And I, of course, is like, what are you talking about? It's great. You know, it's going to be fabulous. But I think just because he was maybe in a more pessimistic humor at that point and I was in an optimistic humor. And if you're just naturally will have highs and lulls, you'll tend to cancel each other out and act as dampeners for each other, or even just act as someone to talk through the issues with and stuff like that. I feel very fortunate that I think not that many people have real

partnerships that they can work on something worthwhile on the multi-decade horizon. And again, maybe if more of those partnerships were formed, we get more interesting multi-decade opportunities. Because again, I think we think with Stripe, we spent the first 10 years getting the table-stakes stuff out of the way. And now the next 20 years, you could do it up into the really interesting stuff where you have the platform and the ability and the fighting fit army to actually go execute on it. But a lot of people just don't get to that point. The same vein, setting aside maybe the very earliest years, is there a defining moment in the business's history that comes to mind? Very continuous business. Everything we do starts very small and there's compounds for a

long time. Atlas is now a double-digit percentage of all Delaware and corporations in the US. And that's like including multinationals incorporating subsidiaries. That's all Delaware corporations. Of the true startups, I mean, I don't know what the exact number is, but it's a lot. We launched Atlas in I think 2014 or 15. And so it's just 80 years of compounding to now be really big. But everything we do has that shape. It's a product that I'm really excited about this year that I'll leave nameless for now. It's doing super well. And I think it's, is going to be a huge deal for our users and a bunch of different ways over the next couple of years. We've been working on version of this product since literally 2014.

I think after a decade, it's going to be, say, next year, if that's its 10th anniversary, it's going to be phenomenal, but it just took iterating for that long. We're not a business of discontinuities. You think about the way you spend your time today and you could go show your day to the 25-year-old version of view. In what ways would that 25-year-old version be most surprised about how you spend your time? now. For you, presumably meeting with customers. Yeah, there's a lot of customer time, which I find very energizing. And I did a lot of it back then as well, but I think maybe I would have been surprised by how continuous that. It's also like who they are. Yeah, that's one real big surprise.

And again, it converts over into how we spend time and who we spend time with. We've been really surprised the degree to which basically large companies have ended up needing Stripe. And so, in our series A pitch tech, we were explaining why you should care about a business that sells to developers and startups. And so we had a slide in there who were like an obviously, you know, Amazon will never use Stripe. But there's a lot of developers out there. There's a lot of startups. And so this can still be a big deal. And of course, we've now been working with Amazon for five years. And it's a super productive partnership. I would do all sorts of things with them. And I spent a bunch of time with our counterparties over there and lots of other similar large companies in a similar

way. And that's maybe part of, again, how the product thing works where I think Patrick probably spends more time internally with the technology teams where, in the abstract, how should things work, what we want, you know, a well-designed global money movement system to be. And I'll probably spend more time with customers there saying, I really need you to solve X for me. And those two can meet in the middle when it comes to product development. You're getting my feature requests from Jaguar Land Rover or from Hertz or from Heathrow Airport. Versus Instacard. Yeah, exactly.

Or Ford, you name it. It's the complexion of the customer base. A lot faster than... Yeah, I have surprised me, as John says. These companies want to be and have realized the import... Mark Andreessen wrote the software as eating the world piece in 2009 and the Wall Street Journal published it. I think it's very interesting that the Wall Street Journal published it in the sense that in what way is that a control. Prairie and point of view, and it's hard to put ourselves back in the mindset of 2009.

The idea that software might be important was, in fact, this combative sentiment to express in the Wall Street Journal opinion pages. When Stripe started out, the idea that we were focused on the needs of startups was certainly a detractor in the eyes of established enterprises, whereas now it's inverted so completely, where every company of any size and significance and of the businesses that have retained any degree of agility, which is most of them, they all have plans for how to take advantage of the possibilities of the internet

and the possibilities of ML and the possibilities of these global customer bases and so on. And they know that, well, if they don't execute it, some crop of startups is going to come along and sort of do it in their sector for them. And so now when we go and talk to the CIO of some giant, retailer or some large manufacturing company or something, the fact that we're working with actually the world's most innovative, at least new companies, is a very strong kind of positive in their eyes. This funny inversion where the same trait went from being to tractor to really being a selling point. And they want to hear one of the upstarts doing so that they can go and roll it out

themselves. And honestly, I've been impressed where take Hertz as an example, we're discussing and then yesterday, they're doing a really big deployment with Stripe. They're really excellent to work with. We're doing a bunch of stuff with United Healthcare and Optum and big companies. Yeah, yeah. And I think a lot of these companies, to a greater extent than people who appreciate, have actually hired some really good talent. Maybe 20 years ago, they didn't have people who really get software. Now, in a lot of cases, they do. And a lot of our engagements with those businesses are just really productive. One of the coolest things in my life recently is that I have kids of a certain age now where the kids are starting to do things that make me very proud for the first time.

They're developing agency and they're doing things where it blows your hair back. Like, oh, my God, I can't believe they did this. It's made me really love asking people this question about pride, not in themselves, but in other people. I would love to hear from each of you what about the other makes them most proud. You're talking to Irish people. Exactly. Introspection and vulnerability.

It's coming from an Irish person. It's giving me a license to ask the question. Well, look, I mean, this is very relevant for this discussion. John has been serving as our interim CFO for most of this year. And I think it has always been true that John has a scholar of business. And when we're living together in an apartment in San Francisco, I'd be shuffling to bed and he'd be yelling out to me from the bedroom. You'll never guess what they said on this earnings transcript or whatever. John, I'm brushing my teeth.

There's a way for both of us, we're normally engaging in the business as co-founders with one layer of indirection. And so we're very lucky to have Stefan Tomlinson joining as CFO in a couple weeks as of the time of this recording. The time it's out, he'll in fact have started. But it's been very fun for me to watch John actually temporarily inhabit the role of CFO. And I think it's been significantly to Stripe's benefit. And so we're both extremely excited about Stefan. In the same way that I'm always trying to find a productive equilibrium with our product leaders where we need to empower them, and a lot of those people are really fantastic, and it would be a mistake of me to be getting in their way, but want to find some way to have some end of

productive meddling. I think similarly for John, I've been encouraging him to make sure that we retain sufficient productive meddling on the finance side, because he's very good at it. When we had all that discussion about quality and craft and everything, that's all Patrick. And in particular, he has a remarkable eye for it and cares about it. It kind of has to be good because something will be wrong in the universe. He'll be itching. He'll be sitting awkwardly in his chair if the stuff isn't good. And we'll be putting the hours.

We'll be there very late the night before our conference, ensuring that the talks are in good form or whatever. But I think how that bleeds over is people really. want to do great work because of the expectations that they know Patrick has of them and that now they have of themselves. And I think, again, as we talk about culture, this is a really nice cultural thing at Striper's tons of really talented people. And again, people who are meticulous in their craft at Stripe. But again, I think Patrick has set an expectation and a culture there where people can maybe start out wanting to do excellent crafts because it is expected by him of them and they end up wanting to do it themselves.

I was describing a capability of Johns, there's lots of those, but maybe another view of stripe would be that every organization, you're always trying to balance these dichotomies. I think lots of things are dichotomies and trying to find a reasonable intermediate point, but maybe an important one and somehow one that we straddle is I'm grim and austere and joyless complaining about the misplaced pixels and all the rest. And John, everyone who knows him, is cheerful and extroverted and sociable and is bringing 100 of his closest striped friends to the bar next door on Tuesday because it just opened and we need to inaugurate it. I think for an organization of humans that do great work,

you actually do need both, where you're not going to achieve super high expectations absent the standards, but it also needs to be a group of people, which you want to spend time in it. Look, I don't think either us actually are on either end of the continuum here, and we're probably even less different on this continuum as individuals. Similarity highlights to contrast or something. Exactly. Where we play off each other or something is a duo, but I think there's an interesting way organizations need both of those.

The more Irish-appropriate question might have been, what does the other do that makes your eyes roll the most easily? Oh, well, that would be the same answer is actually. You'd add another hour to the podcast for that. I think it's been incredibly fun. I know we're coming up on time. I had the pleasure of doing this with John before, and I have a traditional closing question,

so I get to direct it at you this time since he's already answered it. What is the kindest thing that anyone's ever done for you? I should have known this was coming, but I didn't prepare an answer. Everyone else has prepped for this, so you get to have a minute to think about it. Apart from my parents, my principal at our secondary school, which is the high school plus plus that I attended in Ireland, which was a public school and a very good public school, but a public school that actually wasn't the closest public school,

but our relentlessly resourceful mom thought it was better than the most approximate one and managed to find a way to, we had lived in its catchment area when the school was founded or something. Utilityville from 1991. So she found some way to persuade them to take us. Anyway, the principal consistently let me violate all sorts of policies and rules and turned a blind eye to many things over the years in such a way that I had a fabulous time in my five years there. And like at first it was I just wanted to read my books during class. And I thought I was being very deviously and effectively furtive, having nobody noticed.

No one knows. Exactly. In the small little classroom, there's no way this teacher could spot this. but I learned subsequently that he had just quietly instructed all the teachers to not complain about my ignoring, I guess, the classwork and just reading my book. I did the homework or whatever, took the test. I wasn't paying much attention in class. And then at this stage, I wanted to take some time out of school, mostly to spend it

working on this programming language, and he found a way to categorize this so that worked at the school. Yeah, so actually, I did a lot of it physically in the school in parts so he could argue while he's at school. He didn't ask me if he was going to the classes. Then at the end, I wanted to go to college in the U.S. and not do the standard examination that everyone in Ireland does and so on. And again, he kept finding ways to make it work in theory.

Very tragically, he died a few years after I left school, suddenly at a premature and early age. And so I did thank him, but I always felt regretful. I never felt that I had sufficient opportunity to thank him. It's amazing how much this category of answer comes up. The two major ones are, one of someone noticed something about me and did something customized and shaped me in a certain way or bet on me when they didn't need to. In some ways, the same thing. It just comes up over and

over again. I hope more and more people do that for others. I think you're doing a huge service by highlighting those cases to a bunch of people who are in the position to do us. I don't know if this was your intent and asking this question, or this is now cool aside benefit. No, where the question came from? So I do this as a hobby, still, as my favorite hobby. Effectively, I'm focused not investing, but this is something I love to do it. And I didn't know how to do it. I'm not a journalist or anything. And so I was really into the mythology, Joseph Campbell's Heroes Journey or whatever. And it's all this same story for all these great historical myths. And so I thought I would ask a question in the podcast that covered each of the nine stages of the hero's journey. And one of them

of stage three or four is random helpers come and assist the hero on their quest before they get to the belly of the beast. And so the question was just, what's the kindest thing. But I had these nine questions and the rest of them suck. I don't ever care. That one always got an awesome answer. And so that's the only one that lasted. So that's where it came from. I wish I had to hire intentions. Oh, that's really funny. Well, I think you're now, yeah, yeah, yeah, creating more kind of moments. Yeah, yeah. Well, it's a testament to how interesting just the core thing that you have worked on and will continue to work on is that we didn't even get to in two hours, AI and all these other amazing things happening in the world of technology.

but I'm really glad that we focused on the core thing because that's what got you here and that's what you're focused on for the future. I'm deeply appreciative of the time and all the insight and all the detail that's gone into it. So thanks so much for your time. Thank you. This is really fun. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations and more, as well as share the best content we find on the internet every week.