Full transcript: John Collison on London Real
0:20 This is Silicone Real, the half-hour dedicated to the people of the London technology startup scene. My name is Brian Rose. I also host a show called London Real, which is a similar tri-log format. It’s a little bit longer in length. My co-host today and partner in the whole Silicone Real venture is Mr. Bryce Keene.
0:39 He is the founder and director of Albion Drive, and he’s also a member and co-founder of The Three Beards. And if you haven’t heard of The Three Beards, then I pray for you. because they are a London phenomenon. They host the Silicon drink about, which is a weekly get together for anyone who is in the tech community, or if you’re like in a zoo and you wanna go look at them. Because you can go, anyone can go, there’s no sign up, there’s nothing like that.
1:05 You also run a monthly events called Don’t Pitch Me Bro and Quarterly Digital Sizzle. So thanks for being here. Thank you, thanks for having me. Thanks for being part of this crazy venture. Good to be back, good to be back in the city.
1:15 Yeah, no, it’s very good. And our guest today is Mr. John Collison, who is the co-founder of Stripe, a company that makes it easy to start accepting credit cards on the web today. I ripped that straight from your site. No, it’s accurate.
1:29 That’s why we have it on the website. Perfect. You are from Limerick, Ireland. You live in Silicon Valley, which according to Bryce is not a place, but a marketing concept. So you live in a marketing concept.
1:41 That’s what Bryce said on his London Real show. I think you’ve attended Harvard a little bit and he’s also a pilot. John, welcome to Silicon Reel. No, it’s good to be here. I think I hit London during its one day of summer.
1:52 It was a good time. You brought the weather with you, right? I wish I could say it’s been like this all year, but it really hasn’t. But, you know, as immigrants to this town, we know not to complain about the weather. Oh, yeah, we’ll train this.
2:04 We’re better than that. You know, we’re all expats. You know, I must say, this rarely happens, but I already have some beef with John, and this is why. You know, he went to Harvard, and I went to MIT down the street, and we’re both pilots, But he is what we call a fixed-wing pilot, which means he flies airplanes. And I fly helicopters.
2:22 And the two groups hate each other. But they do? They do. All my instructors are always like, yeah, we don’t like those fixed-wing guys. Explain why we hate each other.
2:32 So there’s this thing where MIT students always talk about how they have this whole rivalry with Harvard, and they’ll play pranks in the Harvard statue. And then the Harvard students are like, who? Who, yeah. And it seemed like the helicopter pilot thing, I don’t like helicopter pilots, I guess, yeah. No, helicopters are cool, I mean, a little bit dangerous.
2:53 I go for the safer forms of transportation, but. No, fair enough. My instructor was always, you know, they just start a rivalry right away because, and it never made sense to me. He’s like, yeah, we can hover. And I’m like, all right, well, you know.
3:06 That was his big moment. Yeah, he’s like, we can hover. I’m trying to picture like a Top Gun moment, but I don’t know what the helicopter pilots would look like. It’s really weird. They just sit there hovering.
3:14 They’re like check this out lying in wait elevated. I don’t know I don’t get it But I’m glad you put those two ways actually the MIT guys don’t really think about the hard work guys How I know that Andrew right and how long you been trying helicopters? I started actually in Chicago probably about 10 years ago, and then when I moved to London I kept it up, but I actually don’t have my license yet But I’ve got about 60 hours and an r22 which is a two-man helicopter. It’s basically a lawnmower in the sky It’s a piston engine So you’re like you know so actually I have this checklist that I go through on London Real every day And that’s from piloting because you have to go through like every little thing because you forget that one thing, right?
3:46 You fall out of the sky. I’m sure it’s the same with the same and fixing and you’re right about the aircraft in that, you know occasionally, I’ll take take someone up for a spin and When we go flying, I think they have a very different picture in their head of what it is And you’re in this like 80 horsepower like, you know, two-seater with an 80 horsepower engine It’s what I trained in and like, you know, most cars have double that horsepower or they’re like these like totally tiny, precarious things. And it’s loud too, right?
4:12 Oh, it’s loud. Yeah, people don’t know what’s that loud. And it’s bumpy. Yeah, and it’s bumpy too. I mean, I was reading your story and you moved from Limerick to Silicon Valley when you were like 17 or 18.
4:20 I mean, that’s… Yeah, so… It’s quite a move. Basically, Patrick, my co-founder at Stripe and I, we started a company before Stripe called Octomatic that did tools for eBay sellers and then that was acquired in 2008 and then went back to Ireland then started college and then during college ended up starting working on Stripe because you know yourself when you when you start working on something it’s not like one day you decide oh I’m going to start a company the the whole gestation process is pretty gradual and so we’ve been talking about these kind of ideas and like with Stripe specifically we’ve been talking for a while about when we had been doing Octimatic our last startup like how miserable it was like the payments part of it but also how like Like the banks who you traditionally had to go through to accept payments online didn’t get it.
5:10 Like traditionally to open a merchant account if you wanted to swipe payments for your brick and mortar store, you would be there filling out all this paperwork and sending it off and a few weeks later you’d get approved. And then the internet came along and banks’ response to the internet was to put a PDF version of their application form online and you’re like, guys, that’s not what the internet is about. And so Patrick and I very much came out striped from the angle of engineers and the angle of what if we build a set of APIs for people doing stuff with payments and we built that set of APIs and we got one person using this and then two and then very, very gradually building it out.
5:47 And obviously the tricky thing was that we didn’t know that much about the financial sector, so we had to learn as we go, as we went. It’s a crazy place, the financial sector, because all the banks have been there forever. And I think by nature they’re trying to protect it. It’s the innovator’s dilemma. They don’t want to kill their own business model.
6:03 I used to work in the banking industry. It’s a very profitable business model, even when times are hard. So it must be tough. Yeah. And you’re exactly right.
6:11 It’s the innovator’s dilemma. Like, if you look at an industry like web hosting, you know, previously in web hosting, if you were to do anything, you’d have to like buy managed, you know, servers and like have them in a colo and you’re paying whatever amount per month. And that’s before you serve your first web request. And so there was this incentive to keep the status quo around because it meant that running whatever tiny small traffic website started at thousands of dollars a month.
6:40 And so the hugely disruptive thing about AWS or Heroku or all of these is they’re charging on a per unit of computing power basis or per web request basis. And so, like, for all the small users, for all the users who are getting that much value out of it, they’re not paying very much. And so it’s not in the traditional web hosting company’s interest for this whole model of promulgation. That is the classic innovator’s dilemma, right? It’s like, you know, acting against your interests by serving this, like, lower end of the market.
7:12 And so I think it was similar in financial services where, like, you know, the banks were interested in the kind of large e-commerce companies and everyone else they didn’t really care about. And those high monthly fees was all a relationship business where you had your account manager and everything. And the way the web is going, that is just not how payments online should work. And so we took a lot of our cues from other instances, like we talk a lot about cloud hosting, because I think it’s a good case, where you have a very old school way of doing business just completely released by a technology platform.
7:49 When did you first hear about these guys and what’s your read on them because you see all sorts of different companies every day, right? Yeah, absolutely. Well, I met John last time he was in London. So Stripe have just set up a European operation for the first time, which is really interesting. So they’re obviously branching out here and John was in town visiting a local team and got in touch with us and came down to a drink about and very kindly stood there for a good four or five hours answering just about everyone’s questions because he’s quite well known in the tech scene.
8:18 Why is that? Because I don’t think you have many, so the one element of, I think, with John’s story that you breezed over is that when he was 17, Octomatic was obviously got into Y Combinator, which is the most prestigious accelerator in the world. It’s given rise to all sorts. Reddit came from Y Combinator, Songkick, Airbnb, Dropbox. This is like, this place is sort of just off the charts as far as it goes.
8:45 Are these PayPal founders? Or is that a different… Is that a different program? No, sorry. Yeah.
8:50 Paul Graham and a few others started Y Combinator. They had had a very successful web business early on and they, I think they got a lot of what was important about web businesses and they really shaped the ecosystem. And then separately we ended up raising money from some of the PayPal co-founders. But yeah, YC was one of our first investors. So after they bought Octomatica, is that right?
9:13 So it merged, didn’t it, with another company? We merged with these two British founders, Harjit and Kulveer Tagar, and it was bought by a Canadian company, actually, by the name of Life Grant, a year later. That just makes me think of something. The whole reason we’re doing this show is because it’s about people and relationships. I’m curious, for you, they see a young guy who obviously isn’t afraid of coding and jumping into doing stuff.
9:39 They merged or bought your old company. Do you keep these relationships up with these people and how much of that is due to your success? your next venture? Oh yeah I mean I think and you do but I think that’s just like natural that’s normal everyone does right and so Harge and I are still pretty good friends and cool as well Harge is now actually a partner at Y Combinator so it’s like all full circle we were a Y Combinator company and Harge is now a partner there and so it’s pretty cool how these things work out but yeah it’s quite it’s quite interesting seeing I just actually met in met up with I I randomly bumped into a guy in White Barriard, which is where our office is based here on Clerk and Well.
10:18 I ran into someone who had helped us out in 2007 with some optimistic stuff, and it’s funny how these things persist. You’re back in London, you used to live in Limerick, now you live in Silicon Valley. Is any part of you, if you like, just cancelling that plane flight home and staying here in London? Well, it’s funny. I don’t think I would live in Ireland anytime soon just because San Francisco or the Bay Area and the US is so big and there’s so much to explore and I haven’t gotten a chance to live in New York yet or anything like that because there’s so much there.
10:52 And so, I don’t have any imminent plans to return to Ireland, but London I’m really liking. And I realize that’s the thing everyone says when they visit a place, but I actually do really like it. I feel like a lot of the specifically I really like the I mean the culture and the openness of people here and just like getting to know people and you know Bryce and I I mean we have only met each other once or twice and yet we’re like here you know doing this and next things and like it’s much easier to get to know people here and you also have like London has this like amazing feel about it just even the architecture and the infrastructure And, you know, in San Francisco, you take the bars, which is this like dirty, old, from the 50s, like screaming train that’s super loud underground and it’s miserable.
11:37 I don’t know if you’ve ever taken it, but here you feel like it’s gorgeously clean underground trains and like the, the parking spikes. I’ve been like cycling around the city all week. And so I think London is like super livable. I would have never thought someone from, you know, San Francisco area would have said, A, the tubes are clean or B, that you enjoy cycling in this city. So we’re having our moment.
11:56 I was cycling yesterday on Oxford Street and it was like a game of Frogger and the buses like passing each other and yeah. I think cars aren’t allowed on Oxford Street, you know, it’s dangerous. It’s crazy. Yeah, it’s all duck and wave. I want to just ask you a bit about Stripe and I want to just ask you very generally, like what’s been your biggest surprise and your biggest disappointment over the past, what’s it been, three years, two years?
12:22 Three years or four? Okay. The biggest surprise, the biggest disappointment, I think if you were to graph happiness or success of a start-up over time, it’s very spiky and very noisy and you have up days and down days and you need to be able to even it out or otherwise you’ll end up being miserable on 50% of days, it’s kind of like this is a mass and tallops thing in full by randomness that we’re oversensitive to the noise. And there’s a lot of noise in startups where you’ll have lots and lots of minute disappointments.
13:05 We haven’t had anything major go wrong at Stripe. We’ve never had some huge lawsuit, touch wood, or anything go catastrophically wrong with the product. There’s been lots of minor things that we’ve been disappointed with. but I think the whole point of a startup is that you need to be like good at taking that into your stride. And one thing that’s been really cool to see as the company has grown is, you know, when you start out, you’re at least like, you know, you’re two or three or four or five people working on this idea.
13:32 And it’s not even clear if this like idea is a good idea and it’s not even clear if anyone will use us. And, you know, it’s very much you in this like uncertain limbo of is this like a startup or is this like four guys wasting their time? And as the number of people working on it grows, you get this very cool sense of shared mission and shared common purpose. And that’s one of the nice things because that helps even out those bumps because even if you’re having a down day and things aren’t going well in your area, someone else is doing stuff.
14:06 And so we actually do a lot of stripe to try and to promulgate this. The fact that we’re now 55 people all working on this one shared thing. And so, for example, when you ship something at Stripe, like a feature or a product or a new thing, you’ll like send out an email to everyone. So we have this like ships at stripe.com mailing list. And that’s just like one of those little things where like you’re part of a larger collective thing rather than like you miserably kind of hammering away on your own part of it.
14:34 So which I realize is not answering your original question. So the whole company gets that email that we’re all launching this thing? Yeah, it doesn’t even have to be like a public facing feature. You know, like our lawyer will send shipped emails that we have signed some agreement, or our sales folks, or our support team that they have got down to inbox zero on tickets, or this kind of stuff. Inbox zero.
14:54 I mean, it’s important. I like that. It’s just extra communication, ultra-communication. Oh yeah, so we do, I mean, I could go on for a whole podcast about communication, because we have a lot of stuff around it, but in general, how we try to do it, Stripe is just surface as much communication as possible and be as much of a hive mind as possible, and so we have this whole intricate email list structure where you can share information across groups and you can be subscribed to, it’s like a subscription model where you can be like pulling in from all these different areas rather than you don’t have to be like listening to one channel.
15:25 So it’s not like, you know, you’re on the Sys team or you’re on the, you know, product team or you’re on the sales team or you’re on the support team. What happens is like a lot of stuff is organized by a mailing list and then you can like choose I’m going to like be part of these discussions and these discussions and so like, even though I don’t work on like systems infrastructure day to day, I’ll still keep up with the discussions. It means that everyone can be part of a lot of the larger things that are going on, rather than being segmented into their one area.
15:53 Which we think is cool. I think that’s a good strategy. I guess that’s probably like your open layout. You were saying you don’t have a receptionist, and is it just free flow of ideas? Well, I feel like, I really like Mad Men.
16:07 Me too. I worry about myself, because I like it so much. One of the reasons I really like Mad Men is like, Don Draper has this amazing ability to make completely meaningless things sound really interesting and attach a narrative to nothing at all. And so he’ll be talking about the most recent one, Hershey’s and what Hershey’s means and Hershey’s happiness. And I feel like sometimes people pitching ideas on collaboration can be a little like that.
16:33 And you’re talking about free flow of ideas. And 99% of a startup is not about free flow of ideas. It’s like having a clear idea of what you’re doing and executing on that and being able to like really get stuff done and get stuff done at a faster pace than everyone else. So it’s a little bit of the, you know, everyone sitting around talking about their free flow of ideas, but at the same time, we do think that one, like sharing information is just like really important because one thing we try to do at Stripe is like we don’t have like all these different layers of management, like everyone is working on their own individual thing.
17:05 And so people, no matter kind of how long they’ve been there or what they’re working on, It’s like an individual working on tasks rather than managing a team. And so, for example, we don’t have product managers at Stripe, which is a fairly traditional role within tech companies, where that person is responsible for just like specking the product and managing it, but not actually implementing it. Instead, there’ll be like a, you know, two or three, four-person engineering team, or like, you know, two engineers and a designer working on something, and they will, and like, one of the engineers will just do the product management part-time, so they will be responsible for making sure everything that is getting done that needs to be done for it to be shipped, they’re the ones responsible for talking to the users along the way and making sure that this actually solves the person’s problem.
17:48 But, so people have a huge amount of autonomy in how they do things. If people are going to have all that autonomy, one of the things you need is they need to very clearly understand what’s going on at the company and what our plans are for the next end months and also what everyone else is working on. So if I’m dependent on, you know, if I’m working on this product and we’re also going to need to get the like, you know, get some deal done and like sign some contract, I need to know like how up to speed the legal team is with this and all this kind of stuff.
18:19 And so the whole point of the mailing list structures and like the general free flow of information across the company is that people can work much better autonomously if they like can keep as much of the state of the company in their head as possible, rather than all these independent departments who don’t really know what the other one is doing. And so we also have fairly regular all hands meetings where there’s actually a lot of detail on what each team is doing. Even if it mightn’t be directly relevant to what you’re doing today, it’s pretty important to know the general direction.
18:50 Okay, I’m gonna hit you with a devil’s advocate question and then you need to come up with one too. And I’m just looking at the business model for the first time and I’m like, okay, I look at your company, you’re a new company, I look at your fees, it’s like 2.9% of transaction, and you’re very upfront about the 30 cents transaction and I say, that’s the same as MasterCard, that’s the same as PayPal, you’re a new company, how do I know if you will go and solve and I’ll get my money? I’m sure you hear all these questions all the time.
19:12 What do you say to that? Yeah, I mean, I can give you the standard answer is that, you know, if we’re- Or give me your answer. Well, you know, if we’re having, you know, newspaper interview, I’ll say that like, one, as the business, the money is always held in your name and so when you charge a credit card, it’s like your money, it’s not Stripe’s money. And so, you know, even if Stripe went insolvent, you would just like get all that money, which is like a pretty nice property to have.
19:38 But I think the general question you’re asking is about like, why do people use Stripe if it’s like priced the same as, you know, other things? And I think the reason is, Stripe really lets people build things that they either like, that they wouldn’t otherwise build. And so we see all these like cool use cases that you probably know Squarespace, the like an online type of- one of our sponsors, for London Real. Yeah, yeah, so Squarespace. Yeah, yeah, yeah, yeah.
20:02 A Squarespace bug. Squarespace use Stripe for a bunch of stuff, and they use it for managing their subscription payments. And so when you sign up for Squarespace first, you enter your credit card number and then you get a free trial and then you’re like billed every month after that. And they also use, they use it so that Squarespace sites can really easily start accepting payments. So imagine you’re like a photographer and you set up your Squarespace site.
20:28 You’re there adding your photos to it, and you’re like, oh, I want to actually sell prints online. You can use Squarespace’s commerce features, and you can just click, boop, link my Stripe account, and you’re accepting, you’re selling prints online two minutes later. And before this, Squarespace, if they’d wanted to let people do that, if they’d wanted to add commerce features, they would’ve had to have people go get a merchant account and fill out all that paperwork and maybe hear it back many weeks later.
20:53 And the point is, no one would really do that. everyone would fall out of the conversion funnel. Like, Squarespace, it’s just like, it doesn’t make as much sense to build this product to let your users accept payments if something like Stripe isn’t around. And so I think it’s not so much, you know, what, you know, why would I use you versus this versus this? It’s like the fact that you have this set of APIs that’s really powerful that you can do things that like other, you can’t necessarily do with PayPal or like a merchant account.
21:23 I think that’s why people use it. So you’re ultimately not a finance company or a technology company? Yes, oh, and we say that all the time. We say that till we’re blue in the face. And I think the interesting thing is we’re a technology company, and yes, there is a financial part of that, but that’s a little bit like saying, I don’t even have a good analogy for it, but transport for London is like a transportation company.
21:50 They’re not in the business of producing wheels or trains they’re like about getting people around, and so that’s why they get into all their other things. And similarly, like moving money around is like part of what we do, but the core of what we do is like providing better technology so people can build better apps, build better websites. And we’re seeing like all sorts of cool stuff being built with Stripe right now. So do you know Lyft and Sidecar, the ride sharing services?
22:11 Sidecar. Yeah, so the ride sharing services, they’re in a lot of places in the US. So like Lyft uses Stripe, and what they use it for is, it’s super cool. It’s this app, you take it out of your podcast, you sign up and you give them a credit card or something like that, then when you’re anywhere in the city, if you’re anywhere in San Francisco, you tap a button and a car comes to pick you up and they drop you off where you want to go and the fare is just deducted from your card on file.
22:38 The interesting part about it is these aren’t cabs. These are just normal people driving their cars. And so normal people can also sign up for this service. You can become a driver if you want to earn income on the sides, and so the people driving for them are a lot of students, a lot of people working part-time, all this kind of stuff. And so you can imagine if you’re Lyft, the real challenge here is like, not only do you need to like charge money, but you also need to like, you’re not the one collecting it, you’re not collecting it purely on behalf of yourself, you’re like paying out all these drivers.
23:03 And so Lyft used Stripe to say that, okay, we’re gonna store all these like customer payment credentials and then we’re going to like, when we charge $20, say, okay, you know, whatever seven, I don’t know what the ratios are, but like 17 of it goes here to the driver and we give three of it for ourself or something like that. And so they’re doing this like kind of complex multifaceted thing that like, I don’t even know if you can do that with PayPal or a merchant account. It’s interesting, because we look at it originally as a consumer, but then when you’re a vendor all of a sudden.
23:27 I was just gonna say, Ronnie, if you stop taking donations, you’re gonna be using Squarespace. I know, but it’s weird, because she’s like, Squarespace, now you can sell your photos, and everyone’s like, what? Yeah. Now you’re the best thing. But you’re totally right on the technology company part.
23:39 The interesting, the amazing thing about the internet is that it’s breaking down, you just break down all these geographic barriers. Like, you know, we were talking about UFC earlier. If you go on a UFC forum, it’ll be, you know, guys from the US and Australia and South Africa and the UK just like all talking together and like no regards paid to the geographic boundaries. And that’s kind of what we’re trying to do with Stripe, but for the like the internet economy and that right now the internet economy is like quite like fractured.
24:15 Like if the US money flows around within the US and South African money flows around within South Africa, how we’re trying to do is make it easy for anyone, anywhere to just start participating in the broader web economy and make that more interlinked and more global. And I know that sounds kind of very high level, but that’s actually a really meaningful thing. And so that’s why we’re in London, that’s why there’s four of us based here now, is that London’s probably gonna be the hub for as we start expanding into Europe and again making it so that if I’m just a developer in Denmark building a service that people really like, that I can start using it.
24:49 But we see this all the time where people, it’s like people all over the world that form the web community and the form the web we use today. Travis CI is a pretty popular continuing integration tool. There are some guys based in Germany. If you send out mailings to your users, you probably use Campaign Monitor, which is based out of Melbourne or Sydney? Yeah, Sydney, I think, yeah.
25:09 And so we want to have there be more of this, have the web be more global. London’s always been the currency capital of the world. You could say New York is for stock markets, but for currency, it’s always London. It’s right between Tokyo and New York, and it’s a smart place to be. It must be tricky, though, when you’re dealing with all these random countries and offshore dollar accounts and all that stuff.
25:30 I’m guessing it is. But anyway, I wanted to ask Bryce, I’m putting you on the spot. If you had to ask him a devil’s advocate question, what would it be? I don’t know, I’ve got more of a devil’s advocate question. I’ve got a different question.
25:40 It’s not so much devil’s advocate, so I want to know about, so one thing that you may have glossed over that is that second thing I’ve glossed I do a lot of glossing over everything all the glossing we’re having all the glossing is they say you guys drop all these big names and these big like like you know why come but it why why and I mean like you’re a lot of people don’t know these things but in your niches everyone knows these things well so what I want to explore one of the things about John Collison that I find quite fascinating aside from the fact that he’s a dude who comes to drink about and will spend five hours talking to people he doesn’t know it’s pretty cool which is very nice about it which thank you for that is that John’s co-founder Patrick is in fact his brother, if I’m not mistaken, mystery, intrigue, so in fact…
26:17 He was my brother before he was my co-vax. Well, see, timelines. He was just discovering. We’ve buffed up the timelines on my documents throughout the world. But the reason I find this interesting is I want to get to like, what was it like growing up in the Collison household?
26:30 When did you guys learn to code? Because we’re talking about why Combinator at 17 years old with a product that was then acquired. So the two of you together, there’s what, one year between you or two years between you? Two. Two.
26:42 I mean, one of the things we face most often, and the reason I bring this up and I was quite curious about your sort of childhood and growing up, is always one of the things that we hear a lot is the shortage of developers and developing talent. Now the two of you to get, it’s rare enough to find one person in a family who’s a wonderful coder, having two that are brothers and also co-founders, is I find really interesting, not only because it’s a local European thing, but of course the age you started and the business and then often. Yeah, I mean, I think the thing about, So Patrick learned to code when he was, I think nine, or started coding when he was nine.
27:14 I think learn to code has this like, you know, era of completeness and finality about it. He’s like completely inaccurate. I learned to code and then I was done with learning to code and I knew all the code and it was great at nine and 10 I moved on to philosophy. But so he started coding when he was nine. I was a bit later, I was, you know, 14.
27:33 And, you know, it was like both of us in the air today is messing around with websites. Actually we just, we both learned code from this book, the PHP Visual Quickstart Guide by Larry Elman and Larry actually just joined Stripe last week. Whoa. This week, which is pretty cool. Okay, that’s full circle.
27:53 Totally full circle. And like we have this like highlighted marked up copy from like 15 years ago. Did you ask him to sign it when he came in? Yeah, well we ran it for the first time about half a year or a year ago and I’m not sure if he signed up but we got a photo which was good. But anyway, you know, we learned to code then.
28:09 And I think the thing that’s valuable is it’s not like, some people learn to code at a young age and they take it to it like ducks to water and they end up having like amazing engineering contributions their whole life and that’s awesome. But specifically within the startup community and I think, you know, the general debate around, you know, you’re reading the papers all the time, like should everyone be learning to code and this kind of thing. I think there is a value to like, just like everyone should learn to write but not necessarily become a writer.
28:35 And I think there is, everyone learns maths in school, even though a lot of it, you don’t use calculus in most of your day-to-day life. And I think there is also an element of this in engineering where forming a building block for the things you do in the future and understanding the technologies change and the frameworks change, but understanding the general principles and ideas, I think sets you up much better. Because the thing about the maths you learn is that you’re not learning the specifics of how to do, I don’t know, did you do trading or whatever when you were in finance, or you’re not, if you become an accountant, you’re not learning accounting, but it gives you all the building blocks for that.
29:13 And I think learning some kind of building blocks, such that later down the road, if you end up doing stuff, really helps you. And the second thing that I think is valuable about knowing how to code is for startups, it gives you this self-reliance. If you wanna start an online publication, you probably start off by writing the pieces yourself, and even if you’re not the best writer, You kind of get the idea and you hire one or two writers and then it really gets under its own steam.
29:38 And with Stripe, it’s kind of the same thing where Patrick and I don’t very much code day to day anymore but you get that first version of the product that people start using and it’s hard to bootstrap that, right? And I know people who’ve done, it’s really impressive when people build a technical product or any kind of product without knowing to code themselves. You know, there’s one founder I know who I really respect and she has built like a number of companies at this stage.
30:06 She doesn’t know how to code. And so she was working with like a team in the Ukraine who was like a development consultancy. And so she would send over like specs and stuff and they would make it, they would go through this feedback cycle. And like, it’s a really impressive, it’s a really impressive feat. But again, it’s like dictating a novel because you don’t know how to write.
30:26 And then when you go, you have to go back and like edit it. You have to like read that back to me. And it’s so much clunkier. And so I think if you’re going to be starting a business online or starting a startup, being able to code and being able to dive in and poke at the things yourself is the most important thing, maybe, in the very, very early stages. Then when something’s later, it becomes more of a company, and there’s so many other factors at play.
30:51 But if you’re just starting a startup day one, it’s super valuable to be able to, you know, at some level, like there will be code involved and so you’re either like writing the code or you’re like having someone else write the code and that gets compiled to code, but it means you can like speak at the, like at the appropriate level. Or you’re hostage to someone writing the code, right? Or you’re spending your day searching for a technical code founder.
31:16 As we see a lot of… Yeah. But you pretty much said the same thing when we had your show. Yeah, yeah, yeah. And then you surprised me at the end, you said what’s the one thing and you were like, You know, just learn how to code early, you know.
31:25 Well, what do you think of- And I guess my point is that you don’t actually have to become the like world’s best engineer. Like I don’t actually know like that much. You know, I’ve never done any formal CS and I’m like not that great an engineer. But I think like having some minimum level is the really important thing. And so I guess that was my point in the comparison to the education.
31:47 I don’t think like, I think everyone should study CS as people study CS in college today. I think it’s kind of useful to have. Because my next question was gonna be who’s better you or Patrick, but competitive Patrick at engineering everything else Everything else is you and he does the okay. I got it. I’m moving us along I’m just gonna ask you another couple random questions We’re gonna wrap this up if you um if you sold stripe right now for someone godly amount of money And you had to sign a non compete you can’t compete in the industry and you got to take six months off And then we’re gonna give you 20 million pounds to go do something else. What would you do?
32:19 Interesting Could you take six months off? That’s a question. Some people can’t take vacations. No, I can take vacations. Go fly. I think there’s so many things that I want to say that sound like cliches because they’re like the hot topics, but for example, I think drones are legitimately pretty interesting. I know a handful of people now who are running like drone startups, and The really interesting things about drones is there are so many things that the drones are like bringing the internet into the real world, in that it’s kind of crazy that, I mean, trivial example, if you’re a cattle farmer, you can’t just be like, where am I cattle?
33:08 And that’s something that is impossible to answer, and that’s one of the places that the internet has not pervaded. And so one of the companies I know that’s doing drone stuff is doing a lot of his agriculture where it’s surveying and things like that, or they’re doing it in industry for mining or anti-poaching or all this kind of stuff. And so it’s like, you know, there’s so much data online and you can do so much stuff like Google can crawl the web, but you can’t like crawl the real world.
33:30 And that was previously extremely inefficient, you know, anti-poaching, the way it worked was like two guys in a, you know, an assessment like flying around the, you know, flying around the country and they would maybe spot a poacher occasionally, but there was like so much that got went uncaught. And so the idea behind drones is you’re like gathering more and more data and you can and have these kind of very cheap devices out there in the world, like connected to the internet, recording or doing something like that. And so I think that’s a good example of just a really interesting trend that is happening before us.
34:01 I mean, there’s also the scary surveillance aspect of drones. Yeah, it’s just that word that makes everyone kind of… So I was gonna say, for the ones who are, because you had a lot of listeners at London Real who are international, who were not necessarily tech, so I want to choose into this. Just wanna clarify, we’re not talking about military drones. Yeah, we’re talking about the small kind of quadcopter.
34:17 Yeah, yeah, so a drone is the colloquial word for unmanned aircraft, and so you have the military unmanned aircraft which shoot you from the sky, and then you have any other kind of unmanned robotic aircraft, and they’re getting pretty small these days. You have drones the size of a dinner plate, and a pretty common one is a multirotor, like a quadrocopter, where you have these four separate ones. I got one of those. And they’re pretty good aircraft. We had a guy drink about with one last week, actually.
34:43 Oh, really? He’s got the HD camera. He’s got the front flying it around, yeah. And I think the thing about drones that will have to evolve is that in the US, there are very clear expectations around what’s private and what’s not in the real world. There’s all this precedent and case law that a police officer can’t enter your house without a warrant.
35:03 But that took time for people to develop the concept of where are the boundaries and then cars came along. And now a police officer can look inside the windows of your vehicle, but they can’t get you to open the trunk without a warrant. because that’s like a private space, but like the backseat of your car isn’t a private space and we’ve developed all these kind of understandings of like what the expectations are as these new things develop. And I think in the online world, I mean, as we’ve seen with all the NSA stuff, we still haven’t like, like there’s like whatever you think there was a clear mismatch of expectations here where like, you know, people expect the government to not be collecting all data that goes over the wire and I mean, yeah.
35:40 And I think similarly with drones, there’s like the very scary aspect of like, okay, now there’s like so much more surveillance happening. I think that’s like fundamentally not a bad thing. It’s just like we need better expectations. But anyway, so I think drones are interesting. I could see myself doing something there, but I mean, I also just like really like planes and things so that may just be a pure fascination with like things that go flying.
36:04 A flying head. Just a couple more questions. This has been breezing by. What’s the best piece of advice you’ve ever gotten? Hmm, I mean, there’s lots of good advice.
36:13 So lots of it tends to be very context specific. In terms of general advice, the Y Combinator’s motto is make something people want. And I think that’s a reasonably good way to look at it in the valuable bits of that advice is they kind of leave out everything about kind of market sizing and revenue models and whatever until later. Because generally that can be figured out if you’re delivering value to people, presumably there’ll be some way to collect value in return.
36:42 And so I think that’s why, if you’re deciding, if you’re the YouTube guys in the really early days, you’re deciding, should I do this? You’re like, oh, well, online videos are expensive and maybe, will people pay a subscription or whatever? And they ended up just pushing that way off into the distance and they’re like, people really want to be able to share videos online and we’re making something people want and that worked out really well for them. And so I think that’s a reasonably good kind of motto for startups.
37:07 And similarly, you often find, you occasionally run into people working at startups work in these like complete Rube Goldberg machines and they’re like oh it’s a service and like sometimes like you don’t want to be impolite but you like legitimately gotta ask like do people want this and so people want this and so I think you know if you have one like completely general piece of advice I think that’s a that’s a decent one there’s been lots of stripe specific advice but I’m not sure how relevant that would be that’s a good one I like that do people want this yeah although is it make something people want yeah Yeah, that’s about it. And we’ve got a Y Combinator on here one day. You’ve got to talk to those guys.
37:43 What’s next for you? I mean, what’s this year looking like, six months, 12 months, or what are the big hurdles or the things you’re looking most forward to? Right, so I think we believe a lot in the core idea of Stripe, as we’ve talked about it, of anyone anywhere being able to start accepting payments for what they’re creating online. And so, unfortunately, that’s good in that it’s a very broad statement. It’s clearly a large market, and I think it’s clearly a thing worthwhile working on.
38:07 The bad thing about it is like it’s a very broad statement and so there’s just like a lot to do. And so we’re, you know, we have two countries launched publicly, we have two more countries in private beta, you know, we’ll be releasing a lot more countries over the next year. And we also have like the set of things you can do with Stripe is so broad that we also have a lot of kind of development of the platform. So like I said, you know, recently we started doing really cool things for marketplaces where as I was describing, you can charge money and then, you know, split it out of various people on the back end because so often the fast-growing web companies aren’t necessarily charging money for themselves and they’re not completely vertically integrated.
38:44 They’re connecting a buyer and a seller in a disparate location and they’re just running the network. And you see this trend again and again and again. There’s a really cool startup I just tried out in San Francisco called Get Around, which is like you probably know Zipcar, the car rental service. And Zipcar own all the cars and they manage the whole fleet and everything. Get Around is like Zipcar, but with normal people’s cars.
39:03 And so again, it’s like using the liquidity and scale of the internet to provide the service presumably more efficiently and cheaper. And it’s cool because they have like a greater variety of cars and they, you know, I think will soon have like a greater density of cars than Zipcar because they’re tapping into just regular folks. And presumably as well, it’ll be cheaper than Zipcar over time. But so I think many of the fast growing companies are marketplaces.
39:26 And so we built some features to make their lives easier. But the set of things you can do with a paid product is so variable. You can be having some subscription service or people paying you on a one-off basis or you’re an e-commerce store where you’re actually shipping physical goods or you’re in a marketplace and there’s all these different things. And so a lot of Stripe will be actually just making life easier for these businesses. And then, again, because we’re the backbone of those businesses, there’s so much we can do for them to make their life easier.
39:54 So right now, if you’re a business, doing accounting and tax is completely miserable. And I know this sounds kind of boring, but being able to just sync your data from Stripe with whatever is doing your taxes, that’s a really cool feature. And that actually saves a large amount of money. And so there’s a lot, there’s this trend underway where we’re going from a world where you have all your payment data again. It’s like banks, gateways, all these companies that don’t get the internet, like banks, if you use them for online payments, still send you a paper statement in the mail at the end of every month.
40:27 Like how they do it and so you’re wondering you know how much you’re wondering like how much of my money is coming from overseas users and they’re like paging through all the stuff and so being able to like moving all this stuff online turning it into you know we’re a technology company not a fans company and so taking advantage of all the technology and all the structured data we have is I think a lot of what we’ll be doing over the next year you know I was gonna turn it over to you for a final question but I just thought that when I’m saying this I was like I gotta get your take on Bitcoin mmm it’s probably is a whole show but it’s yeah that’s another like we have come up with ideas for so many whole shows here um uh but bitcoin the thing that i found really cool about so so what bitcoin is like genuinely like a technological breakthrough um uh and the the idea that like the fully decentralized nature of it um is actually kind of a phenomenal accomplishment in that before uh Bitcoin, when everyone talks about virtual currencies, really, you know, like these virtual currencies were just like balanced with some online, you know, you have like Facebook balance or you have, you know, Eagle balance or you have, you know, all these services, you have paid them money and they’re like, they give you a gift voucher.
41:37 And so there was nothing like that special or interesting about it. Like the thing that’s phenomenal about Bitcoin is that you hold these Bitcoins and like, so long as like there are people in the world who trade Bitcoins, you can trade them with them and no one can stop you trading with them. You know, Eagle can go out of business or Facebook can go out of business, whereas in Bitcoin it’s not that anyone’s going to go out of business. You have these and you can trade them with people and there are no intermediaries.
42:00 And so that is legitimately a very major breakthrough. At the same time, Bitcoin is still pretty early in its history and so I think there’s a lot of questions around, you know, if it ends up being so highly regulated that it’s just not that useful, it’s no better than credit cards, then I think that might stop its growth a bit. But the thing that’s really interesting for me actually about Bitcoin is the access component, where anyone anywhere can get bitcoins. And so if you’re a site accepting bitcoins on the web today, you know, you can accept payments from someone in India or in like Germany, even if they don’t have a credit card, so long as they have some way of getting bitcoins.
42:42 And so Bitcoin starts acting as this like universal connector where like I get bitcoins by some means maybe I like you know pay my friend cash because he has bitcoins or maybe there’s like a service in my country like a you know a financial service that turns you know it takes my local payment method takes and pays in Kenya and gives him bitcoins in return and then I pay the service with bitcoins and then they in the back end convert into dollars for their earnings and so I don’t think you’ll see like I don’t think you’ll see the word because if Bitcoin succeeds I don’t think you’ll see the word Bitcoin around a lot it’ll just like silently be there you know like providing value like you know when you buy you know when you buy anything when you buy an iPhone like foreign exchange was involved there because like you know there was a Chinese company manufacturing it and like money had to be converted into other currencies along the supply chain but you don’t think like mmm a new iPhone foreign exchange and so similarly when you’re doing an online payment even if Bitcoin sits underneath it I don’t think you’d be like thinking about Bitcoin or the word Bitcoin will even play there you might just have it what if you know you were paying for something and like it was honestly being converted to Bitcoin and then like convert it back on the other end I think that’s in the success case of Bitcoin is like a world where no one really talks about Bitcoin. Wow really interesting what
43:54 Did I miss Bryce? I got two I got two final questions okay go for it. Number one who’s your who’s your favorite startup right now one one say one one fintech and one non-fintech just for fun so one question or two that’s one okay Okay, so, I mean, I already talked about this, I’ll do the non-fintech first. I already talked a little bit about this, but I think the whole marketplace world or ecosystem is not a fad in that you look at Airbnb, like they’re just doing a really interesting thing where before it was, you know, before if you have, you know, in Ireland somewhere, if you have some spare space, you don’t have the like advertising power to, you don’t have enough eyeballs to make it worth your while to actually rent that out.
44:39 Now with Airbnb you have this platform with all these people who like want to rent space in like, you know Whatever town in Ireland and that that’s really powerful shift You basically have the like internet allowing these like large communities to interact that obviously were just like very very fragmented and heterogeneous And so, you know, like I said get around is like I don’t own a car in San Francisco and I like rent a car You know maybe two times a month using like Zipcar get around and so like the internet is allowing me to like use a car even though I don’t own one. And similarly with Airbnb for space, and similarly with Lyft and Sidecar for short-term ride-sharing. And it gets into all these kind of interesting things.
45:16 There’s a startup called Exac in San Francisco, which is like a cloud labor service. And so if you need someone to do something for you, and a lot of companies use them for temp services, you can just say, I need a person, and a person shows up, and you didn’t have to go through all the interviewing processes. So I think marketplaces are a real thing, and they’re here to stay and the internet changes that. Something like Lyft or Cycar or Halo here in London, that wasn’t really possible five or 10 years ago because people didn’t have good smart phones that were connected to the internet.
45:49 As we have better interfaces to the internet that are always with us, which is only in the last five years, I think that just enables a new set of things. Favorite fintech company, here in London, TransferWise seem to be doing really good stuff. I haven’t actually used it myself to convert money, but apparently they are just like breaking the banks. You know, it’s another case of banks have been eking out all this easy money on foreign exchange and transfer wise, again, just saying like, no, actually it’s going to be this way.
46:20 And I think that’s a really troubling trend for banks, which is like, they’re being unbundled by all these different companies. You know, you have, if I want to actually, you know, sell things in my like cafe or, you know, at a farmer’s market or whatever, I use Square or Izetal or one of these. If I want to sell things online, I probably use Stripe. If I want to transfer money, I use TransferRise. If I want to take out a short-term loan, I use Funding Circle or…
46:47 Onga or whatever. Or yeah, or in the US, there’s Prosper and Elon and stuff. And so you go from a world where you have banks with these stone columns on the high street providing all these services and this platform of services to all these different companies on the internet for each different thing. And gradually, if you keep removing things, I mean, look, there’s not a whole lot left. And so I think that’s a troubling trend for us.
47:11 Yeah, I mean, that was the one more question, but that’s kind of the last question. Is it good to a point where banks aren’t necessary? You don’t need to put the money here to move it to here. We can all be used. So I’m trying to think why services will stay with banks
47:28 For the next while. Certainly, banks, because of the way the regulatory environment has evolved, A lot of these, if you talk to TransferWise, they’re probably built on a bank, and so they hold the money in the meantime in a bank. And so, banks are pretty good at storing money, and they’re pretty good at being regulated and managing regulations. And so I think it will certainly see for a long time all these services that I mentioned, like Stripe Square, I settle one go, whatever, they all back-end to a bank.
47:57 A bank sits behind them at some point, but is in no way exposed to the consumer. And so I think you’ll see banks for a long time being like the platform upon which all these various services are built, I think the problem for banks is that that then becomes a commodity. If I just need you as like a dumb store of money, then it’s like a race to the bottom of like which bank can be the cheapest dumb store of money. And so banks traditionally have all this like claim that they’re like, you know, relationship businesses and if you know the ad on TV with like the handshake and whatever, at least it’s this way in America.
48:25 And as they move away from being like relationship businesses and more towards being a utility, And then it’s just like I can get electricity from this company or this company and I’m just going to look at the number of cents per quarter. Last question. Last question. Then we’ll wrap this up. So we’ve talked about some ideas and interesting questions and of course for any founder, one of the most interesting areas in startup is the VCs.
48:48 So again with the question, we want to know who in your opinion is the cool VC, cannot be one of your own investors, is the catch? Say who do you think is a cool VC? Who’s a VC that you would most want to have a beer with that’s not one of your investors. So that I would most want to have a beer with. Yeah. And why? I like this question. It’s like, yeah, because all the VCs have different, everyone’s always got a different opinion on the different VCs. So yeah, I mean our investors are, and this is not a question, but our investors are Sequoia, Andreessen, Redpoint, General Catalyst, those are the kind of institutional investors as well some like larger angels who, I mean they’re not really angels because they invest reasonably large amounts of money like Peter Thiel.
49:35 And all those are, all the people we work with there are pretty good guys. The other kind of fairly well regarded firms in the Valley are like, you know, Benchmark, Cozla, ones like this. People I’d want to have a beer with. Not to talk investment. It’s just like- Not to talk investment.
49:51 So first round capital, I don’t know if you’ve seen, they do these like crazy videos every year with like based on memes and they’re like slightly awkward but they’re They’re awkward in the fun family Christmas photo way in that they did Friday, Rebecca Black spoof. Oh, I think I didn’t see this. And they did The Old Spice another year, and so they seem like pretty chill guys. If you can, one of the guys was in the bath towel, being the Old Spice guy. I think that was Josh Copelman, and so he was there in his bath towel recording this.
50:24 And if you can do that for a video for millions of people to see, I think you’re probably And what about do you know what about European VCs? Yeah, I so I don’t know the European VC scene that well I mean, I would turn that question back to you like you tell me who we should be. Oh, no, I can’t I’m not We’re supposed to be impartial. I thought I thought I upon that one. That’s a great question. No, I like that I just it’s always interesting I’m always interested to say that because it’s all it’s it’s a funny world and in which Perception is often everything and half the battle is is is this somebody I’d want to have to be with Well, and this is the classic one of, you know, the polls in the 2000 presidential election shown that like John Kerry was the person that people thought was more competent and George Bush was the person they wanted to have a beer with.
51:09 That’s a terrifying analogy. Oh, it’s interesting, because I mean, I guess all money isn’t the same, you know, if you’re looking for a certain investment at a certain market cap, you have to think a little bit beyond. Yeah, no, it’s interesting. And VCs have managed to, you know, you think that it is, but VCs have really managed to, you know, you talk to anyone raising investment in the Bay Area, in the marketing concept of the Valley, and, you know, they’re talking about which engineers have, or which investors have this value and, you know, who has the best connections, and like what services each one provides, and the VCs have really turned the conversation towards like, you know, working with a firm and partnering with them, and, you know, what you value and which you’re going to go with, rather than, again, a sheer like utility, a sheer like numbers for stock game and I think that’s like that’s certainly very good for the investors right because they could get to compete on something other than price. Excellent. How do people get a hold of you? Do you want them to get a hold of you? I’m just jonathstripe.com they’re more than welcome to get a hold of me. At Twitter you’re at Collison and at Stripe. At Collison on Twitter which causes no end of confusion. Oh wow. Did you do that on purpose? No I did it on purpose.
52:14 So it was like you know a handful of people used not very often but a handful of people use NicknameMe collision when I was a teenager. It’s a cool name. I almost saw it a few times. I bunged up that tweet that I said before this started. You wouldn’t be the first. But yeah, I collision on Twitter John at Stripe.com on the emails. Awesome. You know, thanks so much for coming. You know, when I told a bunch of people today, I was gonna have John on. I was like, yeah, he was 17 and he sold his first company and now he’s doing this and some people get that look in their eyes. They’re like, oh, what am I doing with my life? And they’re like, I already don’t like him a little bit. But I had the complete opposite reaction. I read like John’s bio and I’m like, God damn, I want to talk to this kid because I love kids. Sorry, young man. I just love seeing young men doing things that I might not have been doing at that age. And so I’m really excited to hear your story about it.
53:06 Thanks for having me on. This is a fun chat. And Bryce made it happen. The man behind the scenes. Oh, you shush, Brian.
53:13 Well, this is a this is the first time you’ll see Bryce you’re gonna see him Hopefully once every two weeks or who knows when I’m subbing in for Colin as we continue this crazy journey Yeah, it’s still a silicone reel silicon reel. Did I miss anything? I think we’re good. I think that’s a wrap cool Yeah, if you want to listen only we’re on iTunes You know you can check us out on Twitter at silicone reel and we’ll be doing this every week Somebody from the technology startup community either here in London or coming through London, you know, like a John’s case So that’s it, it’s about the people.
53:41 There you go. Sweet. All right guys, thanks very much. Thank you.
