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

I know firsthand how complex the tax that is for asset managers, and seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk. Rigeline offers a better way forward, one unified platform that automates away all that complexity across portfolio, accounting, reconciliation, reporting, trading, compliance, and more. All at scale. Rigeline is revolutionizing investment management, helping ambitious firms scale faster, operate smarter, and stay ahead of the curve. See what Rigeline can unlock for your firm, schedule a demo at RigelineApps.com. [MUSIC] Hello and welcome everyone. I'm Patrick O'Shaunasey, 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 edit the transcripts, show notes, and other resources to keep learning at join Colossus.com. [MUSIC] Patrick O'Shaunasey is the CEO and founding partner of Positive Sum, and the CEO of O'Shaunasey 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'Shaunasey 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'Shaunasey Asset Management may maintain positions in the securities discussed in this podcast. [MUSIC] 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. [MUSIC] I was talking to Will Thurndike about what was so interesting about Henry Singleton's life and career, and it was just wild adaptability. He just never held on to a strategy. He just adapted and updated 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 a found is there's two kinds of curiosity that have a lot of business value are probably important. There's also a lot of form of curiosity that don't have particular business value. Patrick coming to me with his latest scheme on carbon dioxide. There was a time when Stripe's conference room. It's true when we saw this. Yeah, I never know. How much would you pay for an increased battery? It's right, but there's a time when all the conference rooms have carbon dioxide and monitoring is in them as you could monitor that. It does get very high during a big meeting when it feels stuff is really noticeable on the CEO, exactly on the CEO's huge sector or you know, intercom disruptors or whatever the way. So there's lots of random ones. So I would say on the business curiosity front, one is absolutely like you say business are different at every scale and so Stripe has been different at 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 what's required to run Stripe. Well, really matters. And one thing we try to do is just spend a lot of time looking at all the other companies and what they've done. Just do you want to blindly emulate them, we should at least understand Tony, I remember Tyler Kown commenting about Magnus Carlson that he entered some chess trivia contest. There was just like literally a chess trivia and one it he knew the most chess trivia. I was over 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 histories. Extremely knowledgeable in that. I don't know if we'd win the business trivia, but I think we'd have a respectable showing because you'd 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 Heather's stuff. Anyway, that's one. The second is I was actually just reading the galley for Pearl Charlie's Almanac. You probably know Stripe Presses comes out in November. I was flipping through the galley of that and I was here as 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 can ask you to do this, 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 whenever you see somebody make some observation about capitalism you should replace that with people just because it's the nature of just voluntary arrangements of people. There's 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 unnerving 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 gone down pretty far. And so much of science today is about what you find going up and combining things in 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 with I would say biology. And 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 the transformer works, we're still learning what the emergent effective transformers can be. Anyway, that's all to say that I think to some extent business is just the emergent effect of volitional voluntary arrangements of people. And that just feels like an endlessly interesting thing to me. I don't think it's right because the payments company, I think payments and commerce and all these things are really important. But for me, my mental model of strife is, strife is an infrastructure company for facilitating transactions and exchanges and so forth between these different businesses. And we deliberately articulate our mission as increasingly 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 found so interesting, which is that Apple is Steve Jobs with 10,000 lives was the line discussed about it. Of all the major companies, maybe it was the one where the company was a vehicle for self-expression 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 of everything's normal. It's like all other businesses. I'm curious if you agree with that idea about maybe vis-a-vis strife specifically, but even more generally, should companies really just be vehicles for founder 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 run. 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 ad-laboration 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, Vash which Steve stood for. 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. The way to think about it is, sometimes, whilst people interpret as a very strong cult of a founder, it's 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 organ, 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 inculcating 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. I have me to launch it. Let's go to launch. On a non-launch day, this is before they got their launch. They don't want to go launch. They want to go to launch. I just love the flying concrete. Exactly. Figure out that part. Full release struck me is at SpaceX, I presume as you know, Tesla and other companies, this obviously can very much focus on. and what is possible from an engineering point of view and SpaceX and Tesla and various companies, our customers, we kind of get the exposure at Stripe as well. But it's a really high agency culture. And so for example, at Starbase, 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 up to playing a solar farm and everything like that. The guy giving us the tour at some point is who's nominally the psych manager is walking past and building. He's like, wait, who built that? (laughing) 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 solve it. 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 the founder. Maybe you need a founder to get it going. I don't know. I think this met in effect, the John Reffens 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 Economist, we often think about it. And they have super strong cultures that have endured really, really can lay the people. Yeah. But we can't. Yeah. Maybe you can maybe, economists founder, but I'm not an expert in the economist's 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 a 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, he can pass it off. It's really hard to do. Maybe rearticulate what you think that idea or flame is for strike beyond the growth of GDP of the internet. You had to put another click on it. Beyond growth of GDP. It's a good start, yeah. Very good start. Do you think that, if I'm working at strike and I hear that, what is the next causal 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, but it's a test like an example that is 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 Stripe's case, I mean, Patrick has been 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 product suite has gotten to 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 stash and grow an internet business. And then, what 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, it's try the high agency piece. But to your question about sort of, well, what's the, if you 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 call it there to be more companies started? And that's itself a pretty rich vein and why we do Stripe press, that's the way we do Stripe Atlas. It's why we try to give away anything useful we discover that we think can help lower barriers to entry. To some extent, it's why we expand to more countries. But other countries we expand to throw in necessarily big pockets of revenue or paying 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 then the second one is, okay, conditioned on some pool of companies existing, one of 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 the profit pools today that we can sidle up to and plan 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, as I remember with Jensen Huang, back a couple of months ago, and he used the turn of free, 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, got out of it. - It's fresh enough today. For a very long time, he was very underrated. When I 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 and video for several decades now. - About $37 billion a year in cashflow. - Exactly, incredible business. But hey, 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 dollar markets. When they first introduced CUDA, for example, it was a zero billion dollar market. - You're actually getting into something that I think is a belief that Stripe has that it's actually not that widely shared and it's a big part of how we've managed to get to where we are, is just that much more in-time 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 it. As you say, where are the profit pools? Which is like, when you think about it, a really unambitious way to look at the world, 'cause it's like, how can I say, your margin is my opportunity? - A lot of businesses inadvertently, implicitly, better on status. - Yeah, where is 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, you 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 to 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 Stripe's 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 what otherwise have had. You can see it in all the anecdotal stats as we go talk to customers. I remember talking to a 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, so 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 Stripe has that I think is actually help get to a lot of our reality. There's a huge legibility and more broadly just interestingness bias in the world for the-- I don't know how to do that. [LAUGHTER] The cause of attributions that we give to things are necessarily those that are sufficient mimetic interests that they can survive in the Mimic ecosystem. They haven't translate that too much more time. I mean, it's like given the choice between an interesting explanation for something or a comprehensible one or something, necessarily, once they're comprehensible, we'll survive and become the revealing explanation rather than things that are super boring and arcane. But I don't think reality has the same interestingness bias. 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 is, I don't think it doesn't mean it's not true, and it doesn't mean that it's not a huge deal. This guy in the UK, who was, I think I'm pronouncing it correctly, I don't know, the Joe's report, as in '60s, I think, pre-bate 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, stopping press em, where they should be literal for sure. - For sure, friction. - Not too many buttons on a website. - Yes. And so your question about how do you make this idea of increasing the GDP of the internet more concrete? There are so many pockets where friction. 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, you couldn't pay them using an 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 into selling India. It's like, well, there's some combination of data policy stuff, financial stuff, and tax stuff, whatever, that I'm sure, ever in a degree, to be nice to solve these, but we haven't gotten around to it yet. And I think implicit structural belief in strength. 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, 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 to Randios 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, but the city of Chicago, that's all fine and 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 dollars 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 to the friction, the ball bearings in the British economy. It's yet another thing that is miniscule by itself, but when you add together like the bacteria in your guts 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 meanfully change a lot of that, I think new things become possible. And so we have a lot of multinationals on the stripe that are year old five person companies. And again, when you think of multinationals, 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 market place based business models thanks to the internet. I think there's a few components, but one thing you need is the liquidity of the internet that you get these Airbnb's and Uber, you probably need smartphones, not just the internet. So unique the tech foundations, but then you also need to make it easy for people that actually transact with each other and do two way stuff and you know, stripe connect that is the market place 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 it's changing, it's changing 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 and 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 Walman 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 cost 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, there are options running to 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 can convince some investors to write them the 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. So 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 interested in they never really seem to have taken off, but it feels like there might be kind of new points in the space. I think there's stuff in the domain of funding models. Something like a Dow feels like it should work, maybe not Dowsen, particularly. 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 US is obviously with uniform commercial code and I think the US minus dash 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 of this stage versus that stage, blah, blah, blah, pretty quickly. The listener is clicking on the next podcast episode. We thought about are there things that Stripe could help standardize that are not standardized today? We can just be a coordination point. Obviously, this why seated in an awesome version, this would save. How much less investing would happen at the early stage absent the existence of safes? I don't know, but it seems plausible to me that 30% or something. It seems credible that it's significant effect or maybe if someone else is standardized, if maybe we'd have standardized in a worse point in the space or something, we would be able to hold podcasts episode about this, but I think it's a really interesting question. If you think about the, I like the idea of 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 size 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 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 Stripe is going, a lot of where we started with was make it easier for us to start up to do X, the least tax example, and just generally the billing system. A lot of what the Stripe billing team has been spending time on a fleet 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 detail about your product and then just send a URL to your friend or your first customer or whatever. And then maybe when you reach your hundredth sale or your thousandth 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 larger organizations, have opportunity caught to attach to their time. And if they can go and build some incremental new feature that aligns with the core purpose of their business, that's in general a problem or valuable thing to do, then 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 ask how can we improve Stripe? He asks for more no code functionality because they're structured 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 is 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 work with a number of traditional grocery stores and they're all competing with the InstaCards and the ships before they were acquired all of these small upstarted delivery and stuff like that. So it's like wow, the digital experience really matters. We got to figure out our app strategy, we got to figure out delivery strategy, things like that. But that's dynamic. I think ends up merging the considerations maybe more than they otherwise would. The big part of the ethos of this whole single thing 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. Will 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 presence 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 that 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 early technology industries in the sense that there weren't vast 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 and 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 go start a company about random myself so they can internalize. the gain or whatever. Of course, what actually happens with every case as far as I can tell is person discovers the thing, but 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 they're really, yeah, which take it seriously, whatever. And management refuses and is oblivious to it or 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 price. Okay, fine. If I have to go do this myself, I will. But it's almost out of the sense of obligation to the thing, to the discovery. It was interesting to see in the early chemical industry, you, the same dynamic. And so this just seems to be not a thing about sort of Silicon Valley. Exactly. But this deeper thing about human nature, you extract things like that. But I wouldn't say that Dupont just went of stripes top invoices. Tell you a funny story. Mom, when we were growing up ran a company, the her own business called SQT. This still exists and still does quality training and kind of quality assurance training ISO 9000 things like that. And in particular, a lot of still are a lot of American multinational firms with operations in Ireland that they would have 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 they're very important limitations. And I think it's not an original insight by us. There's a lot of people comment on the fact that so much of modern management, culture and theory stems from basically 1950s commanding 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 tells you obviously, 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. Correct. 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. Now, this building is going up around us. We're just going to ask the guys building that office tower. Is there a much better way to build building? They're like, no, what are you talking about? You'd probably find the foundation. We figured out how to build buildings. Then if you go interview someone as 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 10 heads for a year or something like that. And I always want to get them to denominated in kilograms. We need 500 kilograms or a thousand kilograms of engineers. But that's absurd. That's the point. So is five heads or 10 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 that is the opportunity for Stripe. Exactly. Yeah, it's going to say if the convertibility or real estate is between dollars and good software was straightforward, then the opportunity for startups generally, and Stripe in particular would 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 buffage with a billion dollars. It is with a billion dollars test. He talked about the tests 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 push 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 ask the US government. 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 of other sectors. But because let's say at least software to this intersection of creative work and mechanical industrial work, what your analogy, half building a bridge, half running a best dollar or something. 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 hope that there are 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 dollars making a movie. Oh, got you. You really need the otter. The whole thing is pointless unless someone has a vision. So often it's dry, we're discussing something and maybe yes and 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 fun tomorrow if there was a specific person with a vision. Of course, 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 main and so on. There's an illegible trait 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 and that things is an implicit belief system. And then I can science the 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 2. 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 university. So 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 prizes on Nobel's here. I think we're all one in either medicine or chemistry. That's two prizes a year. And so I think it's this incredibly vivid demonstration of how there's something that they knew or that was somehow embodied at their lab. There 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 will be one thing. And I think my 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 context 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 may just on the Hollywood point, if I don't know if you've ever looked at this, but not knowing much about Hollywood. I found it very interesting. There's an oral history of CAA, the agency that I found to somehow be a really good, absolutely, big, idea of packaging. Just that is the 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 sound as that PDF if you're a representative of McKinsey, which is the kind of thing that I just want to have in it. I'm sure it's in the dark web somewhere. If you're enough, big coin at your disposal. The professional services, just so I was reminded that you'd discuss that 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 as how do you have people who are experienced with Tribe do a good job of spinning up, people who are, but there's a case team leader at a consulting firm. They are really responsible for both the work which is done by the more junior people and for those people's development. 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 anyone 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 see 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 for 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-serve product for a fairly ubiquitous need in a domain where it's actually hard to be self-serve. If the audience is creators and founders and business owners, they tend to be kind of exacting in their judgments. It's kind of have 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, your youngest brother mentioned that he's seen a physiotherapist. The physiotherapist mentioned they were eating straight. I presume that physiotherapists are not using Databricks. I think some of those probably just have been made sure they weren't. Yes, yes. Yeah, really want to meet this person. The fact that we work with Amazon and Ford and Hertz and these giant companies Databricks, of course also serve the enterprise, but that we also kind of think that the low end is part of it. People that strive really care, catchphrase that's right, but 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 brand thing until you can in any narrow individual case, you can coast on not caring. If Apple sent you a poorly designed invitation or something, you would still go because the overall halo of credibility that they've accrued over multiple decades will carry them through even a single perlexio to thing. But that means that the local incentives to care are actually not that strong. This collective action is 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 that strive, but it became this thing with a tremendous amount of momentum and endurance. And people that strive today are still maniacal about padding issues and spacing issues and consistency issues were used. This word over here, but that word over there, it adds up. Is there a detail you're most proud of 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 influence of 10 years ago, we'll still see Tweet occasionally where we saved somebody a few hours because not only do we tell them they're thinking it'd work, we told them, probably think they're most likely trying to do instead. It'd be controversial here. I think it's very harmful to bring consumer product thinking to a space like Stripe or I think B2B space generally because I think there's implicit or explicit, you just have users by the wheelbarrow, you treat them in aggregates, you talk about mouths, everything is statistically tested. One of the active users for those who don't expect technologies. Again, people in the value of say, "Mouse," as they're referring to the people who are using the product, but you are just, I'm not a number of a free man, you're a number. Everything is statistical and everything is linked in with dark patterns. It's like a complete profile. Everything is nudging you towards some business outcome. What we really try to constantly clopper people over the head with the 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. They've a pretty sophisticated understanding of their space and business and finance and everything like that. You can just see it if you go talk to any of them. Another value that's tried that we try to really inculcate is talking up to the user when you're writing product marketing copy. You know, Patrick and I were soliciting a lot of time reviewing that. You're not trying to bamboozle them with some high-flueton 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, hoxsterism, it's not slogan earring. It's having a technical discussion with someone who really knows their shit. Patrick mentioned this weekly all hands. We every week have user ask this fireside we call us where we'll just for you know, 10 or 15 minutes, again, they're busy. We'll interview them about their business, how they started, 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 only 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 knock, because we got 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 1% 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 cosy or something, but it's not normal. It's something with a lot of cutosis 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, to kind of exactly the opposite, the neighbor domain where when you hear 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. The only thing 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, shrug 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 to us our bum diggering up our dad for a while ran a hotel, small hotel in the shores of Luckdurgan, 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 and say, "Oh my God, this waiter is terrible." Because like 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. Yeah, I've had things forgotten, but I have 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 have 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? Does that something we can simulate? What makes more businesses? My dad was not a entrepreneur. I'm your parents both. Maybe there are stats on this so 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're going to do the twin studies, Fence and twin studies. I remember when you were playing in the garden under like six in eight or something. You used to often play. We don't have to play in that age. We had to play in the garden and we'd play as, I don't know if you were starting a company, but I guess running a company. I guess just because that's where our parents are. That 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 or you're old and childhood. Even if it is somehow trivial with our parents, I don't know maybe it's genetic. Maybe we lack the risk of Earth's gene or something, but we've underdeveloped prefrontal cortices or something. But yeah, it's probably not so eloquent to the mental. There's also probably an honor. You probably remember seeing this with your dad. Starting a business goes in in out of fashion and famously after the social network, I ever decided they wanted to go start a business. At least I think a lot of what we saw growing up was, honestly, maybe you're just the work ethic. There's other things in the customer's centrality and things like that. But if you just take a single thing away, it's absolutely just hours on the problem that you have to put on it is maybe useful to see firsthand. And 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 out of you. We work quite hard and stride. But I think we work less hard on stripes than our dad did at the hotel or our mom did at this training company and just we are 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 has it shifted in interesting or surprising ways as you 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 a, for my ringweight, now she retired nominally a few years. 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 helps a hospital. Our youngest brother has a, today, Rosby, my own physical disability. So she became very interested in its treatment and how to do that well and very long story short and that I'm writing a book about successful treatment for cerebral palsy. And through that, learn that well, 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, a bit 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. If I'm not a minute, she's not the rest of us to watch as adults. You asked Emma about old organizations that are coming to be learned to laugh on. 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, Emma is doing is also working at some stuff for the Anthropocryphal in Ireland, improving cerebral palsy care. And again, it's amazing the degree to which different treatments are happening 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 state of the art in a lot of domains. It really has, I guess, the entirety of the leading manufacturing rollout in the United States in 70s and 80s, but just bringing things up to the state of the art. Did 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 all strange to remind people who join, because Stripe is, say 12 years post-launch, and so they might appreciate 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, where even further from solving them, then we were at the outset, where in the very beginning of Stripe in late 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 peer methods, usually run by central banks, but you know, all of the different wallets and national payment schemes, and so forth to the advantage, the good news is they've brought immense numbers, like billions of new people online and in franchise 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 where 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 composing 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 these 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 of the end-dimensional matrix of functionality in tail of the NASH, we still have a long way to go. And then the second part of your question was, what do you want to start to be? Well, 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, like that kind of looking backward. Have you read Tim Moose book, The Master's Edge? I really like that book, and there's lots of writing, I've learned lots about the history of radio, 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-barreced entry, exactly low-barreced entry, 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 today. Well, see if it happens to the internet, that's kind of unsettling Moose, that Tim Moose 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 as 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 will 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 just becoming the global economy generally, where you're continuing to make it accessible for new entrants to come in and compete on level playing field with all the existing folks, I'd be pretty happy with that. I love that, I think it's Peter Teel'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 of them might have been crypto, now might be AI, might be something else, material science or biotechnology or something, I don't know. How do you think about that 0 billion gents and Huang idea with Peter Teel idea up against AI is obviously the thing we should focus on as you think about Stripes 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 ChatGbT, 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 have fashion and infrastructure and culture and these different sedimentary layers evolving and changing on different time scales. 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 striking at the internet, really never grew in any given year as an insane race. 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 restructurize. And with everything on the horizon, it's still the case that they're going to be businesses and transactions and exchanges and associated challenges and complexities that I always said money can be exchanged. It comes 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 about the fact that basically all of the AI companies are implementing revenue models at the outset of necessity because it's the expansion of running trends 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 Stripe for the most basic payment but they're using all the higher level functionality on top of that because they have sophisticated needs and they're specific companies. It's jump back for a second just to your pre-excression at sort of how you want Stripe to be. And we've talked a lot, I guess, with the course of this conversation about prosperity and 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 may have not said or touched as much that just in your invocation of the rocking chair and seepia tones and so on looking back, something about beauty and craft. If Stripe is a monstrously successful business, but what we make is beautiful and Stripe doesn't embody a culture of incredibly exacting craftmanship, 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 peonery or financial returns, I think 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 rival was good. We can just have an architecture, but my intuition is that more of striped success than one would think is downstream of the fact that people like beautiful things and for rational reasons. What does a beautiful thing tell you? 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 slap-dash way. 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. It's a reason there's a very intricate filigree on the one dollar bill. Then I think the kind of, like there's something at 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 the domains and so on. I think there's this senseless, warm and fuzzy thing. It's very rational. I think there's this 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. They're just continuing the lost their way. It's not necessarily so. It's not really convinced to me that the financial returns to craftsmanship and beauty, which I believe are greater, are not greater. It's still there. I still do it. Life's too short. If you think back on Stripe's history and had to identify the most important and packedful memorable conversation between the two of you, what would it be? Individual conversation, I mean. I remember a conversation we had, remember even the restaurant. We had that in the summer of 2010 when we'd been working on Stripe for seven months and the question was, "Is that right there?" No, no, no. Whether you were going to drop out or not. Yeah. Or I guess we were going to drop out, but John was the one more in the fence. It was this broadly somewhat dispassion conversation as just how big a deal could Stripe be. We just got excited about it in the beginning. It's fun and cool to solve this problem. We were talking almost for the first time at like, "Well, where could it really go?" If this is not just a little random side project, what could it become? And that was the first time we'd ever sort of really taken a step back and talked about in much more encodement, in a large form, some of these same ideas that we're discussing here. I really remember that one. The flip answer is conversation back in 2009 when we were walking home from dinner and just decided to start working on Stripe. And as I said, "Ah, I couldn't be famous last words." I think a more serious answer might be in the conversation as on Valencia Street, the Wine Bar, where you were Marose and you were just down maybe two or three years into Stripe. Is this even working? Is this even worthwhile? Not growing fast enough? 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 just like a lot for any way. I don't know how you do it. I don't know how much 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, it's like, "What are you talking about? It's great. It's going to be fabulous." But I think just because he was maybe a more pessimistic humor at that point and I was in an optimistic humor. And if you're just naturally will have highs and lows, you'll tend to cancel each other out and to 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'd get more interesting multi-decades opportunities. Because again, I think we think with Stripe, we've spent the first 10 years getting the table stakes stuff out of the way. And now the next 20 years, you could do it with 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 history that comes to mind? Very continuous business. Everything we do starts very small and it just compounds for a long time. And Atlas is now a double digit percentage of all Delaware and corporations in the US. And that's like including multinational and corporate subsidiaries. Exactly. Of the true startups, I don't know 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 that's doing super well. And I think it's going to be a huge deal for our users in a bunch of different ways over the next couple of years. We've been working on versions of this product since literally 2014. I think after a decade, it's going to be 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 is 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. We were explaining why you should care about a business that sells to developers and startups. We had a slide in there where an office in Amazon will never use Stripe. There's a lot of developers out there. There's a lot of startups and so this can still be a big deal. 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 lunch time with our counterparties over there and lots of other similar large companies in a similar way. That's maybe part of again, how the product thing works where I think Patrick probably spends more time internally with the technology team is where in the abstract, how should things work? What do we want? 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 my feature requests from Jaguar Land Rover or from Hertz or from Heathrow Airport versus Instacard. Exactly. You name it. It's the complexion of the customer base. A lot faster than you can have surprised me where this John says, these companies want to be and have realized the important. Mark and Jason wrote The Software is Eating the World Peace in 2009 and the Wall Street Journal published this. I think for instance 2009. Yeah. I think it's very interesting that the Wall Street Journal published it in a sense that in a while way is that a contrarian point of view and it's hard to put ourselves back in the mindset of '09, that the idea that software might be important was in fact this combative sentiment to express in the Wall Street Journal opinion pages. When stripes started out, the idea that we were focusing 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 advantages, the possibilities of the internet and the possibilities of ML and the possibilities of these global customer bases and so on. They know that if they don't execute it, some crop of startups is going to come along instead of do it in their sector for them. 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 positive in their eyes. It's a funny inversion where the same trait went from being detractor to really being a selling point and they want to hear one of the upsets doing so that they can go and roll it out themselves. And honestly, I've been impressed where it's take Hertz as an example, we were discussing the 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 the United Health Care and Optum and big companies. Yeah, and I think a lot of these companies who have 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 engages in 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 as you're hair back like, oh my God, I can't believe they did this. This 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. Interest, infection, vulnerability, and that's kind of 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 been a scholar of business and when you're living together in an apartment in San Francisco, I'd be shuffling to bed and yelling out to me from the bedroom. You'll never guess what they said on this earnings transcript or whatever. John and 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 Talman's and joining us, CFO, in a couple weeks as of the time of this recording about him and Saus, he will 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 strike 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 would be a mistake of me to be getting in their way, but want to find some way to have some kind 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 his, he 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 will be there very late the night before our conference, ensuring that the talks are in good form or whatever. But I think how that leads over is people really want to do great work because of the expectations that they know Patrick has of them and thus now they have of themselves. And I think again, as we talk about culture, this is a really nice cultural thing, it's striped with tons of really talented people and again, people who are meticulous in their craft at strike. But again, I think Patrick goes set an expectation under culture there where people 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, I mean, probably there's lots of those, but maybe another view of Stripe would be that every organization, we're all 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 inaugurated. 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 of us actually are sort of on either end of the continuum here and we're probably even less different on this continuum as individual similarity highlights to contrast with the things that we play off each other or something as 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's the way the scene answer is actually. - You added an hour to the pipe class or 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'm preparing answer. - Everyone else is prepped for this. So you're going to have to think about it. - Yeah, 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 proximate one and managed to find a way to, basically we had lived in its catchment area when the school was founded. - I'm sorry, 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 I get first to as I just wanted to read my books during class and I thought I was being very deviously and effectively fervent of 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 and whatever took the test, I wasn't paying much attention to the class and then the stage I wanted to take some time out of school, mostly to spend it on working on this programming language and he found a way to categorize this so that it worked. - And did it. - He's still a real school. (laughing) - Yeah, so actually I did a lot of it physically in the school and parts of it he could argue while he's at school, didn't ask me to go into the classes then at the end I wanted to go to college in the US 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 and 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 this one of someone noticed something about me and did something customized and shaped me in a certain way or bet on you what they didn't need to. 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 it. I don't know if this was your intent to ask in this question or if this is now a dual side benefit. - No, where the question came from? - So I do this as a hobby. Still, as my favorite hobby, effectively. I'm focused on 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, look 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 kind of 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 the higher intention to say that. - Oh, that's really funny. Well, I think you're now creating more kind moments. - Yeah, 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 though 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. (upbeat music) - If you enjoyed this episode, check out joincolossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. 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