Pay-to-Play
Today, the annual CNBC Disruptor 50 list named Stripe its number one company:
Today thousands of companies, including Amazon, Slack, Glossier, Shopify, and Under Armour, use Stripe’s software tools to securely accept payments from anywhere in the world. The company makes money by charging these customers a swipe fee of 2.9%, plus 30 cents for every transaction it processes (the same as PayPal). The money comes on top of $250 million raised in September.
Stripe was founded in 2010 by two Irish brothers, Patrick and John Collison.
I’ve written about my admiration for the company in the past. Link
The two Collison siblings are each smart and charismatic.
Coincidentally, John is the latest interview on the Invest Like the Best podcast:
Stripe’s mission is to increase the GDP of the internet, a lofty and deeply interesting pursuit. John is clearly a voracious learner across business and investing, which you’ll hear instantly. He started Stripe with his brother Patrick when he was just 19 years old, and has grown it to, at last valuation, a $36B business. In our conversation, we discuss conglomerates, the internet economy, the power of writing, and why board members are like Pokémon characters, each with different powers. It’s a lively and wide-ranging conversation with one of the entrepreneurs I’ve most enjoyed speaking with.
The big idea behind Stripe, which podcast host Patrick O’Shaughnessy captures in his complementary newsletter is this:
When an industry, technology, or product area feels mature and “settled” (like online payments in 2009 with PayPal and many others, or email clients today), it doesn’t mean that its a bad space to build something new. In fact, such inertia or perceived product maturity may be signs of a huge opportunity. In these cases, you should build from the ideal experience backwards, as Stripe has done with its payments API.
On the first interview on The Observer Effect blog written by Sriram Krishan, entrepreneur and investor Marc Andreessen namedropped Patrick Collison when asked about his reading habits:
In a recent podcast, Naval Ravikant talks about how he doesn’t finish books anymore. He let go of the guilt of needing to finish books. Tyler Cowen has said something similar. Do you finish every book?
Yeah, I really struggle with that. I have a whole bunch of books that I haven’t finished which I really should just toss. Patrick Collison talks about this, too. The problem of having to finish every book is you’re not only spending time on books you shouldn’t be but it also causes you to stall out on reading in general. If I can’t start the next book until I finish this one, but I don’t want to read this one, I might as well go watch TV. Before you know it, you’ve stopped reading for a month and you’re asking “what have I done?!” I think that’s part of it. This moral hectoring of ‘don’t do that’ which can only be so successful. The other technique is to read a dozen books at a time.
If you have a child or niece or nephew or cousin between ages 10 and 20, maybe you can share these pieces of advice written by Patrick years ago:
• To the extent that you enjoy working hard, do. Subject to that constraint, it’s not clear that the returns to effort ever diminish substantially. If you’re lucky enough to enjoy it a lot, be grateful, and take full advantage!
• Make friends over the internet with people who are great at things you’re interested in. The internet is one of the biggest advantages you have over prior generations. Leverage it.
• Aim to read a lot.
• If you think something is important but people older than you don’t hold it in high regard, there’s a reasonable chance that you’re right and they’re wrong. Status lags by a generation or more.
The suggestions still hold up even if you’re older.
Meanwhile, Apple ($AAPL), now valued at $1.5 trillion, may soon entirely ditch Intel ($INTC) as a supplier.
I grew up viewing Intel as innovative and embedded in everything tech.
Stripe and Intel are generations apart as far as founding dates.
Still, Ben Thompson’s final line on Stratechery today reminds us not to stop innovating:
Intel has prioritized profit margins and perceived lower risk for decades, and it is only now that the real risks of caring about finances more than fabrication are becoming apparent, for both Intel and the United States.
