In 2010, two high-achieving Irish brothers in their early 20s, John and Patrick Collison — both already successful entrepreneurs — went to work on a payments software that would go on to be adopted by top MNCs such as Amazon, Apple and Google.
That software was Stripe. And today, the company has raised over half a billion of dollars in funding from prominent investors including Peter Thiel, Elon Musk and Sequoia Capital, and is valued at over US$9 billion. Stripe has also expanded its reach beyond the West, reaching into Asia and scooping up tier-1 tech clients such as Grab, 99.co and GuavaPass.
So what is Stripe’s secret sauce? How did a payments company scale to such dizzying heights in a short time? Why are so many top-tier companies so chummy with it?
Patrick Collison believes it is because at the core of Stripe’s ethos lies a developer-centric culture.
“We are serving developers … everything that preceded us — legacy bank providers, traditional incumbents — they weren’t thinking of the developer experience. For us, we thought: How can we enable the people who build the product for us to build the best thing?” said Collison.
Collison was speaking at a fireside chat with the Managing Director of Sequoia Capital (India) Singapore, Shailendra Singh, at the Working Capital, a co-working space in Singapore.
In the increasingly connected world, internet products are being built with a global audience in mind (unless, of course, you are in China and the market is about as huge as the whole of Western Europe combined and then some), so in order to stand out and compete, companies need to build the most optimal version of their product, with the best UI (User Interface) and full advantage of global capabilities.
“If you trace it back [to what makes a product successful], in each case, it is critical that you fully empower the developers,” he said. “We work alongside developers because we ourselves are developers.”
Collison added that simply relying on large sums of capital to building a good product would not cut it. He cited an example of how in the past, taxi companies had more resources and money than the forward-thinking ride-hailing companies that now overshadow them.
In the software world, he said, the product has a lot of intricacies, sensibilities and complex architecture
“Developing a developer-oriented product, having a good designer sensibility and aesthetics and so on, that is hard to replicate. It is very hard to copy a whole mindset and underlying philosophy,” he said.
Scaling a company
When you are running a company and things don’t go well, you go home miserable. But according to Collison, even if things look peachy, “you may feel just as bad”.
“It’s because things are constantly breaking,” he said.
“The story of any successful company is that basically every day, everything is being broken, but no so broken to point you have no company.”
People enjoy the thrill and challenge of being in a fast-growing company, but they have to realise that both good and bad things tend to grow exponentially in such a scenario.
“You are 10 times bigger and it’s great and your charts look wonderful, but everything except the charts is terrible — and that’s not a normal thing. In a startup, your normal intuition in life doesn’t really apply here; you can have a great product and fabulous people, and yet there will be so many other things that are broken,” said Collison.
And on that point, he noted how there are so many blog posts on online publishing platform Medium written by founders about how they eschew traditional management styles.
The only problem? The founders in question are often running companies that are relatively small: between 20 to 100 in employee size.
“Companies over 100 [in employee size] rarely write these posts because when they grow beyond a hundred they don’t tend to survive,” Collison joked.
When your company starts growing beyond a hundred people, the “tendrils of chaos” will eventually surround you, he said.
So how do founders soothe the pains of scaling? Get plugged into the ecosystem, Collison advised.
“Identify a person or companies that are one to two years ahead and approach them with practical questions … go to someone who solved your problem 18 months ago and is still surviving. Ask them practical questions like how do you track your goals? How do you manage HR? Many startups don’t do that until it is too late.”
Being an effective founder
Comparing himself to those smart robot circular vacuum cleaners that learn the layout of a house by basically knocking itself into every piece of furniture and wall, Collison said that he has made many leadership and management mistakes and was able to learn from them — a critical step for all founders.
Also, it allows founders to become effective mentors for inexperienced founders and guide them away from similar pitfalls.
The strength of a founder and their company also rest on their wingman, the co-founder. It takes two to tango, after all.
“John and I had every argument under the sun and then some, over years. Having someone you can be with yourself … where you can really have the connection,” said Collison, stressing the importance of having a compatible Co-founder.
Finally, Collison credited his “perennial optimism” for Stripe’s success.
“I personally am a perennial optimist; a paranoid optimist. I have visions of everything going wrong but I’m an optimist in the end. Most people in the world are relatively sceptical; they are not wrong — most things don’t work. Most people are correctly sceptical. So how do you cultivate unusual optimism? You need to foster a sense an ethos, even given all the iterations, and [ask yourself]: where can this go?”
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