Stripe: Disrupting the Traditional Banking System
How Stripe is transforming the internet banking—at scale
What’s your favorite fintech company?
Mine is Stripe, and for good reason. Stripe did something its competitor couldn’t. And that’s why sending, accepting, and managing money online became smooth and effortless. There’s something unique about Stripe that its competitors don’t. And that’s also why Stripe is a go-to platform for managing payments online for most startups, businesses, and enterprises.
I had no intention to write about Stripe, but then this happened:
Stripe acquired Bridge, a StableCoin platform for $1.1 billion. And I asked, Why Stripe, Why? If you don’t know, Stripe acquiring Bridge is the largest deal in the Crypto industry to date. Huge, right? But then you may ask, what’s the point of investing a large chunk of money in the crypto sector?
And that’s where things get interesting!
See, Stripe has always had a beef with traditional banking, as they always wanted to provide a better banking infrastructure to the internet businesses all around the world. But they also knew that they couldn’t do it through the traditional banking system.
So they believed in Stablecoin.
This is the point where Stripe can completely change the way people operate and manage money. So, to understand it, I dug in—to really understand not just why Stripe acquired Bridge but also to dissect what Stripe does uniquely, how it thinks differently, its business model, marketing, culture, and what makes it uniquely different and better than its competitors.
And I can tell you, whether you’re a founder, builder, leader, or investor, Stripe has a lot to teach you about building and scaling a product—by understanding Stripe, you can leverage the learnings and knowledge in your own work and company.
So get your popcorn ready, and let’s dive in!
The History of Payment
Before we understand Stripe, it’s important to understand the history of payments.
To set the stage let’s start with this: The first paper money was used in 806 in China. Years passed, improvement happened, the banking system emerged, and fast forward in 1981, the first B2B electronic transaction was made. Then in 1994, the first online payment was made. And you know the rest is history—Paypal came in 1998, Bitcoin was created in 2009 etc etc.
But if you notice carefully, you’ll realize that the history of online payments is not too old. Actually, it all happened after the Dotcom Bubble, and most online payment companies, for example, Square, Venmo, and Stripe were created after the 2008 Great Recession.
However, what you really need to understand is that the older the year, the harder the sending, receiving, and managing money was. People had to juggle through Bank branches, comply with all the useless regulations, and not break any rules—In the hope that their money was secure.
It was all chaotic at the same time frustrating.
But as the world evolved, the internet enabled options for people to interact with their money the way they wanted. For instance, Mercury is a platform that allows you to manage your money online—without having to run around a bank branch or follow any lengthy process to open a bank account.
The same thing is true for Stripe. Since its launch Stripe has made the process of accepting and managing payments online drastically smooth and easier. Although banks and regulations will always be there—as long as people don’t adopt a possible alternative to traditional banking—Crypto (StableCoin) payments via blockchain.
Fortunately, we are almost there.
What is Stripe
Stripe is no longer just a payment company.
Because it does so many different things than just accepting payments. In Stripe's words, “Stripe is a financial infrastructure for businesses to grow their revenue.” And with that, Stripe's mission is to “Increase the GDP of the internet.”
Here’s how Stripe describes itself
“Stripe is a technology company that builds economic infrastructure for the internet. Businesses of every size—from new startups to public companies—use our software to accept payments and manage their businesses online.”
If you’re thinking Stripe is just another payment company, you’re dead wrong. Though, it was, when it first started back in 2010. But now Stripe understands that “Accepting payments” is just a commodity business, which would never allow it to grow and scale the company.
However, the primary reason people use Stripe is for accepting and sending payments online. But what’s interesting is that when you become a Stripe customer, you unlock many other features (Products), for example, Stripe Treasury and Stripe Capital, which its competitors don't have, and this instantly stands out Stripe from its competitors.
Stripe is fourteen years old, and the vibe is still the same. You can see it from Stripe’s CEO, Patrick Collison:
The Founding Story
Patrick and John Collison, the two Irish brothers who were born in Limerick and raised in a small village called Dromineer in Ireland. Both were intelligent kids from the beginning—got their hands on electronics from an early age.
When Patrick was 16, he won an annual science competition and was awarded the BT Young Scientist & Technology Exhibition in 2005 for developing a LISP-type programming language called “Croma.”
Both brothers had already developed a deep interest in programming, computers, technology, and electronics before they started their entrepreneurial journey—Mostly attributed to their father Dennis Collison who was an electrical engineer.
In 2007, Patrick and John came to the US for their further studies, where Patrick joined MIT and John, at Harvard. This is when they built their first “Mega” software company called Auctomatic, a tool for tracking operations for eBay sellers, which they sold for $5 million in 2008 to Live Current Media (a Canadian media company) when they were just 19 and 17.
They also built and sold many mobile apps directly in the App Store.
Having these ground-level experiences, the Collison brothers realized that it’s so easy to sell apps on the App Store, but it’s damn hard to make transactions and payments on online websites. This has always bothered them, and they wished that there was an easy way to send and receive payments online.
Coincidentally in October 2009, they attended a Startup School organized by YCombinator to inspire young entrepreneurs and founders. After attending the event, both brothers were walking home from dinner that night and discussed the possibilities of starting something that they’d later call “/dev/payments” AKA “Stripe.”
In the following YouTube video, Patrick shares a few thoughts his brother John told him that night that goes something like this: “John told Patrick…We just go build a prototype of this, you know, like how hard it can be?” A small discussion between both brothers that led to the birth of Stripe.
Early Days
It wasn’t Stripe yet.
Collison brothers realized that PayPal focuses on the end customer, financial platforms focus on the big enterprises, and no one really focuses on the developers—the people who actually build things for people online. And since they were developers themselves, they knew the pain of accepting payments online for developers.
So they chose to build a payment platform, which would allow developers to accept payments in just seven lines of code. Yes, with just seven lines of code! The reason was simple: they wanted to make it as painfully simple and easy as possible for developers to accept payments on their websites.
They simply called it “/dev/payment”.
Here’s what it looked like:
Collison Brothers built an MVP, raised $20,000 from Y combinator, and did the first transactions of $40 from the guy named Ross Boucher. The guy was using Paypal to make payments but Patrick told him to fully switch to /dev/payments to process payment, and he did.
However, the name /dev/payment did not last long.
It was not only weird to pronounce the name (slashdevslashpayment?) but also, the regulations didn’t allow the Collison brothers to establish a business through that name mostly because it had “Slash (/)”, which led to the change of the name from /dev/payments to Stripe. There is a reason why the Collison brothers named it Stripe.
They believed in the simplicity and ease of the product. The simple design, simple process, and easy-to-use interface—that’s what they aimed to make the Stripe about.
Stripe
By the time the Collison brothers officially launched Stripe in September 2011, it was already polished—working as smoothly as possible for accepting payments, especially for developers. This is what Stripe’s homepage looked like back in 2011:
And as you might know, the company has kept growing since then—scaling the product, tapping into different business models, getting billions of funding, and once valued at $95 billion, which I’ll talk about later in this article.
Now a few important things you should know about Stripe:
Stripe was founded in Palo Alto California in 2010, but they moved the HQ to South South San Francisco in 2021.
Stripe has more than 8,000 employees.
It has dual headquarters (HQ) one in South San Francisco and the other in Dublin Ireland, below is the image of the South San Francisco headquarters.
Currently, Stripes supports 46 countries for businesses to operate, however, its cross-border payments (a way to send payments to freelancers, creators, etc) work in 195 countries.
Stripe currently processes $1 trillion in total payment volume in a year, which is just mind-boggling. Stripe touched that mark in 2023, and hope it continues to grow over the coming years.
The Business Model
Stripe has well established itself as a platform for platforms.
As Stripe grew, so did its revenue. What started as a platform for developers to just accept payments is now serving dozens of different services to businesses, startups, and enterprises all around the world.
Remember Stripe’s mission? To increase the GDP of the internet. Well, Stripe knew that they couldn’t do it just by allowing businesses to accept payments on their platform—they have to evolve and introduce more products—just like Amazon did—from just being known for the bookstore to becoming a tech giant that provides a bunch of services like AWS, Amazon Prime, etc.
It’s the same thing true for Stripe. Stripe went from just being known as a platform to accept payments to helping businesses incorporate their business in the US, get funding, allow them to use Credit Cards, manage billing and subscriptions, and whatnot. The following graphic shows all the major products Stripe has launched over the course of years till 2021.
And as a result, what started as a simple payment gateway platform for developers is now the go-to financial platform for startups and businesses because of the services and facilities Stripe provides.
Let’s talk about Stripe's business model.
Payments: Stripes has to earn a tiny portion of every single payment you send or receive. This is the core business model of Stripe—this is primarily what Stripe is about. The standard pricing for payments is 2.9% + 30¢ on each transaction. However, there are cases when this pricing varies, for example, when making transactions through domestic cards.
Atlas: So many startups and businesses want to incorporate their business in the US, especially people who live in a country where Stripe doesn’t fully work or have major setbacks accepting payments online. Stripe got this. Stripe helps people incorporate their business in the US through a seamless and effortless process with just a one-time $500 and a $100 annual maintenance fee. And it’s pretty successful, so far Stripe has helped 60,000+ startups incorporate business in the US through Stripe Atlas.
Capital: Since Stripe is a platform for platforms, it truly understands that businesses and startups need cash flow to run. Stripe Capital helps businesses get loans from Stripe with no lengthy application process. And what’s best, businesses don’t even have to worry about late, repayment, or origination fees. Instead, Stripe has a flat fee that ranges from 6% to 20%.
Connect: If Stripe isn’t fully working in your country, and you want to use Stripe to receive payments from a website, for example, Medium or X. This is how Stripe helps you to get paid for your work. A company like Medium and X (Twitter) sends (even if Stripe isn’t fully available in the writer’s country) the writers’ or creators’ payments to their bank account via Stripe Connect, which we call Cross Border Payments. How does Stripe make money from it? Stripe charges $2 per user and 0.25% + 25¢ for each transaction.
Issuing: With over 200 million cards created, Stripe Issuing is the preferred banking-as-a-service infrastructure provider for disruptive startups. Stripe offers virtual and physical cards for businesses to build expense management programs that their customers and users can use. Per virtual card costs 10¢ and a physical card costs $3.50.
Payout: With the help of Stripe Payout you can programmatically send fast payouts to your sellers, freelancers, creators, or service providers around the world. For example, StyleSeat pays out hair stylists instantly for the jobs they’ve done.
Sigma: When you use Stripe, you don’t need to use a third-party analytics tool to track your data on Stripe. Because Stripe has Sigma, which is an analytic tool that helps you track your financial data with ease. All you need to do is pay a $10 per month infrastructure fee and you’re good to go.
Radar: A fraud prevention and risk management machine that tracks all the frauds and scams occurring on Stripe and lets you know about them so you don’t get trapped. This is also directly good for your business since it protects your business from fraudsters. How does it work? For example, a person does a fraud to a business that uses Stripe, and when this happens, Stripe instantly learns this, feeds the machine, and makes sure that the fraudster never could do the same again with any other Stripe customer. So if the fraudster tries to do it to your website or business, they won’t be able to do it because Stripe has already detected the fraudster. How does Stripe make money from it? It costs 5¢ per screened transaction waived for accounts with standard pricing.
Terminal: Stripe doesn’t just serve you online, but offline too. Many online businesses also collect payments offline. And Stripe gets this. And that’s why they launched Stripe Terminal, which helps businesses accept payments offline. Terminal costs 2.7% + 5¢ per successful charge for domestic cards.
Treasury: Stripe Treasury is a banking-as-a-service API that lets you embed financial services in your marketplace or platform. Stripe has partnered with banks to enable ACH and wire transfers, FDIC pass-through insurance-eligible accounts, and faster access to payment funds, all within your platform. With a single integration, enable your customers to hold funds, pay bills, earn yield, and manage cash flow.
Tax: Let’s be honest, Tax is complicated and frustrating for most businesses. That’s why Stripe made it easy for businesses to track all the Taxes and make it easier for them to record. Stripe Tax lets you calculate, collect, and report tax on transactions from around the world with a single integration. Pricing starts at $90 per month, 1-year contract.
That being said,
One thing you should not forget is that most of the major products Stripe has—are not created or built by Stripe, instead, Stripe has acquired other companies, changed their name, and operates them under Stripe.
TaxJar→Stripe Tax (Acquired by Stripe in 2021)
Bouncer→Stripe Radar (Acquired by Stripe in 2021)
Index→Stripe Terminal (Acquired by Stripe in 2018)
Payable→Stripe Connect (Acquired by Stripe in 2017)
Oops! That was a lot. But that's also why we call Stripe—a platform for platforms!
And it’s so fascinating how Stripe has evolved over the course of years. If you had told me 10 years ago this would be Stripe, I would’ve thought you were mad. But guess what, here we are! Though these are the Stripe business model, does Stripe do anything for free? The answer is: Yes.
Stripe Press is a product that publishes books about entrepreneurship and business to influence and inspire new founders and entrepreneurs. So far, they have published a dozen books including the most popular one: Poor Charlie’s Almanack.
Stripe Climate, is a product that helps contribute to removing Carbon from the atmosphere. It’s a non-profit product of Stripe that allows businesses to contribute “the amount they want. Stripe sends that fund to support the organizations that work to make the atmosphere better by removing the Corbon.
Stripe understands this: Everything is not just about making profit and revenue.
Believing in Cryptocurrency (StableCoin)
Stripe has always believed in blockchain technology.
In 2014, when Stripe wasn’t even a big tech company—made the decision to accept payments in Bitcoin. However, the landscape was totally different back then and most people weren’t aware of what Bitcoin was, which made it hard for people to adopt it.
But this didn’t hold Stripe back from believing in Cryptocurrency. Despite the hurdles and challenges, Stripe kept the operation until 2018—given the reason that Bitcoin is good as an Asset, not good for exchange because of its high volatility. But Stripe didn’t lose hope and still believed in the potential of blockchain. The tipping point came when the crypto boom started in 2021, Stripe saw an opportunity to re-enter the Bitcoin market again.
And since then they have been allowing businesses to accept payments in Bitcoin.
But you might wonder, why Bitcoin instead of Dollar? Well, the reason is simple, there are many countries and places where Credit Card penetration isn’t as good as the developed countries, which makes it hard to make payments online for people living in those under-developed countries. So Stripe believed that Bitcoin could be a potential substitute for the dollar or local currencies.
The only problem is that Bitcoin is too volatile to make payments with. This means the value of exchange can be pretty negative, or positive for the businesses that are accepting payments in Bitcoin. This is also one of the reasons people hesitate to make payments in Bitcoin, and rather prefer it as an asset that grows over time.
Fortunately, Stripe has got a solution for this.
Things got interesting when Stripe recently acquired Bridge, a StableCoin platform for $1.1 billion—a platform that operates in Blockchain to make transactions in StableCoin like USDT, Tether, TUSD, etc. Basically, Bridge allows you to accept payments in Stablecoins and you can convert them in any local currency you want, for example, USD, Euro, INR, etc—using Stripe.
See what Patrick Collison, the CEO of Stripe says about StableCoin:
What is StableCoin? StableCoin is a type of Bitcoin, but they are not volatile like Bitcoin is, which makes it appropriate for businesses and people to make transactions in StableCoin—as its name says “Stable Coin” They are “Stable!”
Let’s see some use cases of StableCoin:
First, Imagine receiving or sending money in just a few seconds and minutes instead of days and weeks which is usually what happens with the traditional banking system like SWIFT and ACH. StableCoins don’t take days and weeks to credit the amount in the account, they take seconds and minutes!
Second, Imagine not needing to pay 1-2% of the credit card fee and still delivering the same amount of money but the fee would be 10 to 100 times lower. That’s what StableCoin is about. Unlike your traditional banking system, StableCoin doesn't have to be expensive, and of course, they are not. And let’s be real, no one wants to pay that 2% card fee because it’s not only expensive, but it’s also painfully disturbing in many ways to use a credit card.
Want to read more about StableCoin? read this, this, and this.
I’m so optimistic about future payments as Stripe took this bold move, and I really hope that we’ll have a better payment system in place for sending and accepting payments online— not really having to juggle through the traditional banking system or comply with useless regulations made by useless people.
Is this a new money movement era we’re entering in?
Financials of Stripe
Stripe's mission is audacious: To increase the GDP of the internet.
And with that reason, I want you to read an excerpt from Stripe’s 2022 Annual Letter:
“Growing up, we only gradually came to realize that things around us weren’t just always there. Actual people, with concrete visions, working for a long time, made them happen. That hotel, that park, that railway. The world is a museum of passion projects.
This basic wonder is what animates us at Stripe. Things around us could be so much richer—in every sense of that word—than they are. The dedication of doers is what makes the world a continually improving place, and we’re keen to play a small role in helping make that happen.
We enormously appreciate the trust of the millions of businesses that rely on Stripe. As Stripe grows, we want to make sure that anyone interested has a chance to hear what we’re up to.”
Collison brothers really understand the importance of transparency and authenticity. They are not only some of the most ambitious people you’d know in Silicon Valley, but they are also on their way to making the world a better place—in some way or another–Stripe is just a part of it.
And if you read the Stripe’s Annual Letter 2023, it’s get even more interesting:
“Stripe’s mission is to grow the GDP of the internet. The core idea behind the company – one we endeavour to take very seriously – is that we’re still early in the journey of software-driven innovation, and Stripe is an applied exercise in thinking through some of the corollaries of that. In particular, thanks to the new possibilities afforded by the internet, we believe that putting better – more global, easier to use, more flexible, faster, cheaper – economic infrastructure in the hands of companies and entrepreneurs will lead to a more vibrant and prosperous world. Remarkably, this journey was still in its infancy when Stripe launched in 2011. Thirteen years, and more than twice the number of internet users later, it’s still early. The world of 2034 is going to look very different.”
Above everything, “It’s still early!” It’s so fascinating how Stripe thinks about the future—Thirteen years of running Stripe, and still thinking “We’re too early, wow!
Now I think this is the perfect time to disclose how and what they are doing on the number side! Let’s take a deep breath and go through the financials of Stripe, one at a time.
To set the stage, let’s start with this: Last year in 2023, the total payment volume processed on Stripe was more than $1 trillion, 25% up from the year 2022. Though the numbers for 2024 haven't been disclosed. But I bet it’d definitely be way more than $1 trillion.
Total Fundings
Stripe has raised a total of $9.81 billion in 24 funding rounds.
Jan 01, 2010: Undisclosed amount in Seed round; investors included Y Combinator, Sam Altman.
Mar 28, 2011: Raised $2M in Seed round; investors included Sequoia Capital, a16z, SV Angel.
May 01, 2011: Raised $18M in Series A; investor: Sequoia Capital.
Jul 09, 2012: Raised $20M in Series B; investors included General Catalyst, Sequoia Capital, Redpoint Ventures.
Jan 22, 2014: Raised $80M in Series C; post-money valuation of $1.75B; investors included Khosla Ventures, Founders Fund, Sequoia Capital, Allen & Company.
Sep 30, 2014: Raised $10M in Series C; investor: General Catalyst.
Dec 02, 2014: Raised $70M in Series C; post-money valuation of $3.6B; investors included Thrive Capital, Sequoia Capital, General Catalyst, Founders Fund, Khosla Ventures.
Jul 28, 2015: Undisclosed amount in Series C; post-money valuation of $5B; investors included Sequoia Capital, Visa, Kleiner Perkins, American Express Ventures, Square Peg Ventures.
Nov 12, 2015: Undisclosed amount in Series C; investor: Alven.
Oct 03, 2016: Undisclosed amount in Series C; investor: Sumitomo Mitsui Financial Group.
Nov 22, 2016: Raised $150M in Series D; post-money valuation of $9.2B; investors included CapitalG, Sequoia Capital, General Catalyst.
Dec 08, 2016: Raised $16M in Series D.
Mar 15, 2017: Raised $5.05M in Series D.
Jul 19, 2017: Raised $6.22M in Series D.
Mar 02, 2018: Raised $38.7M in Series D.
Sep 21, 2018: Raised $245M in Series E; post-money valuation of $20.2B; investors included Sequoia Capital, a16z, DST Global, Kleiner Perkins, Khosla Ventures, Thrive Capital, General Catalyst.
Jan 25, 2019: Raised $100M in Series E; post-money valuation of $22.5B; investors included General Catalyst, IGNIA.
Aug 27, 2019: Raised $2M in Series E.
Sep 19, 2019: Raised $250M in Series G; post-money valuation of $35B; investors included Sequoia Capital, a16z, General Catalyst.
Mar 25, 2020: Raised $631M in Series G; post-money valuation of $36B; investors included a16z, General Catalyst, Google Ventures, Sequoia Capital.
Mar 14, 2021: Raised $600M in Series H; post-money valuation of $95B; investors included NTMA, Fidelity Investments, Baillie Gifford, AXA, Sequoia Capital, Ireland Strategic Investment Fund, Allianz X.
Mar 15, 2023: Raised $6.87B in Series I; post-money valuation of $50B; investors included Thrive Capital, a16z, Baillie Gifford, Founders Fund, General Catalyst, BDT & MSD Partners, Goldman Sachs Asset Management, Temasek, GIC.
Apr 08, 2024: Raised $694M in Series I; details on valuation and investors not disclosed.
Growth and Valuation
There are a few key points I want to highlight in this section.
Stripe is valued at ~$70 billion as of 2024
Stripe’s EBITDA profit was $100M in 2023
Stripe has a total of more than 8,000 employees
More than 135 currencies are supported on Stripe
1,221,049 live websites use Stripe to accept payments
Stripe generated a total of $16 billion in total revenue in 2023
More than 100+ companies process over $1 billion in payments on Stripe
Stripe is supported in 46 countries, expecting to double it by the end of 2025
Top 5 companies that process more than $1 billion of payments through Stripe:
Stripe Annual Recurring Revenue over the last five years:
$2B ARR in 2019
$7.4B ARR in 2020
$12B ARR in 2021
$14B ARR in 2022
$16B ARR in 2023
All the numbers seem pretty astonishing, but I doubt whether it’s now a $70 billion company, or a $100+ billion company, especially since it has acquired a StableCoin platform Bridge to start accepting payments in StableCoin through Blockchain.
So my bet is, if we add this matter to Stripe, the number should go up, not down!
Stripe Leadership and Culture
Stripe is special because its co-founders and leaders are incredible people.
There is a great essay by Paul Graham called, Cities and Ambition, in which he argues that different cities give you different vibes and tells what’s unique about the city and its people. For example, he says:
“New York tells you, above all: you should make more money. There are other messages too, of course. You should be hipper. You should be better looking. But the clearest message is that you should be richer.
What I like about Boston (or rather Cambridge) is that the message there is: you should be smarter. You really should get around to reading all those books you've been meaning to.
When you ask what message a city sends, you sometimes get surprising answers. As much as they respect brains in Silicon Valley, the message the Valley sends is: you should be more powerful.
That's not quite the same message New York sends. Power matters in New York too of course, but New York is pretty impressed by a billion dollars even if you merely inherited it. In Silicon Valley no one would care except a few real estate agents. What matters in Silicon Valley is how much effect you have on the world. The reason people there care about Larry and Sergey is not their wealth but the fact that they control Google, which affects practically everyone.”
It’s the same thing for any company you go to. Google will give you different vibes (Working culture and mission), Facebook will give you a different vibe, and so will NVIDIA, Stripe, or any company you work at. And with that reason, every company has different goals, ambitions, and values.
Stripe being a fintech company, is more about money and finance. The Stripe engineer doesn’t work on improving the home feed algorithm so you’re doom scrolling the Stripe page, lol. But before we understand Stripe’s culture, it’s really important to understand the leaders of Stripe, especially the people who are the head of the company. Because they are the people who shape the company’s goal, mission, visions, and values, right?
As the company grew, so did its mission and vision. The co-founders of Stripe, the Collison brothers are some of the most fascinating people you’d ever know in Silicon Valley. Let’s see what they do differently and how’s the company's culture:
Patrick Collison
Patrick is the co-founder and CEO of Stripe.
Reading this essay I found that Patrick is an avid reader, who often likes to read the history of generational companies that created wealth in the market. He would go back and find the early days of Amazon or Microsoft or any influential company, and what he does is, he just looks at the particular situation and asks simple questions like: What did the company do in those days? How long did it take them to get there? How can we replicate this in our company? And so many first principle questions he would ask.
Patrick is very obsessed with the details—thinking from the first principle and really trying to understand the nuances. He is not only an ambitious person, but he also thinks in the long-term—a multi-decade vision.
When it comes to Stripe, Patrick refuses to compare Stripe to small companies. He believes and compares it to big companies like Amazon, Google, Microsoft, etc. Although each company is operating in different domains, Patrick does this because he didn't want to build a company that’d get acquired by a big company and IPO it.
He has always dreamed of making Stripe as big as he could.
One more thing that stood out about Patrick is he really tries to get ground-level experience. What I mean by this is, for example, if he wants to learn or see a project or problem, he would not just ask about it to the managers or team executive. Instead, he would directly work in that department (Sales, finance, marketing, etc) and get his hands dirty to learn and know the problem from the ground level.
If you have ever watched any of Patrick's videos online, you’d know that he is a critical thinker and prioritizes clear communication. If he finds something hard to explain, he’d just take a few seconds, really pause, and then come up with just a few words or sentences that’d sum up everything—The answer you’d never expected.
He also encourages his team members and employees to think critically and not get constrained by rules and laws. He would often recommend books and interesting stuff he would find online and suggest to the team to read or consume the information.
Patrick is ambitious, and he inspires his team to be ambitious.
John Collison
John is Patrick’s younger brother, co-founder, and the President of Stripe.
If you ask a question to Patrick, you’d expect a pause and a concrete answer. But John just does the opposite—he is straightforward. This doesn’t mean his communication skills are terrible, actually, he is absolutely beast at this.
And that’s why there is more content online from John than Patrick. John goes to most of the podcasts, interviews, seminars, and conferences than Patrick does. John is some kind of a funny guy which makes him an interesting guest in public conferences, and the reason why he better fits.
What about his work at Stripe? At Stripe, John focuses on the technical side of the company—engineering, logistics, team management, etc. And to my point, the combination of John and Patrick perfectly fits together. I’d also argue that you can, to a degree, compare the Collison brothers to Wright Brothers.
Just like Patrick, goes and gets the ground-level experience about the subject, the same thing John does, and since his most work revolves around management and engineering, he would directly dive into the nuts and bolts of those areas to really understand the problem.
As a result, if you’re an employee at Stripe, you don’t take this for granted, you’d go “Wow, the president of the company is sitting next to me to really trying to understand how to remove the seven lines of code to increase the page speed by 3 seconds. Wild!”
Steffan Tomlinson (CFO)
Steffan joined from Confluent to Stripe in late 2023.
Steffan has more than 25 years of experience in the finance industry, most notably with Confluent, Google Cloud, and Palo Alto Networks. His career spans seed-stage startups to Fortune 25 companies across the technology landscape, from cloud computing to security and networking. Steffan has a track record of scaling financial operations for high-growth companies like Confluent and Palo Alto Networks, which saw significant increases in customers, revenue, and margin during his tenure.
“Developer- and product-led businesses have been at the heart of my career since the beginning, and I’ve long been struck by Stripe’s relentless focus on its users, and the enduring business this has created,” said Steffan. “I’m thrilled about the opportunity to scale Stripe’s financial operations as the company continues to meet the evolving needs of its users.”
“We’ve been fortunate to grow tremendously with our users over the years, and yet when you look at how many inefficiencies still exist in online commerce, it’s clear we’re just getting started. Steffan has a strong track record of optimizing the financial engines of high-growth and high-discipline organizations, and I’m looking forward to partnering with him as we help fuel the growth of our users in the years ahead,” said John Collison, co-founder and president of Stripe.
Culture
The head members of a company play an important role in shaping the company’s culture, and the team gets inspired by seeing their work and talks. So if the head of the company has strong, influential people, there is no doubt the company culture would be weak—creating medicare products and bringing mediocre results.
Not a chance!
Fortunately, Stripe's head of members are some of the most influential people at Stripe, whether you talk about Stripe's CEO Patrick, president of Stripe John Collison, CFO of Stripe Steffan, or CTO of Stripe Rahul Patil.
So now let’s look at what Stripe’s culture looks like:
Fully Transparent: Stripe has always been transparent about its work among its people. And they first called it Email Transparency, which they introduced in 2014. And that’s what makes Stripe special. In the company, any employee can see, respond to, or edit an email sent by a Stripe customer. This way, the team set high standards for the company, and not to mess around. Patrick, the CEO of Stripe also shares the numbers publicly from his Twitter profile, this allows investors and customers to see what’s really happening at the company and how much progress the company is making. For example this tweet:
Writing clearly: Stripe follows what Amazon did two decades ago—banning PowerPoint presentations in meetings and conferences. Instead of making beautiful designs and graphics to communicate ideas, Patrick and the head of the members encourage the employees and team members to communicate the ideas in the written word. Patrick also recommends books and content that would help the team to improve and become better at doing things at Stripe.
Customer-centric approach: The best thing a founder or CEO can do is to solve customer problems publicly. Elon Musk and Patrick are very good at this. There are many cases when Stripe’s CEO Patrick directly replies to the customer's queries and helps solve the problem. This is powerful because it not only helps build trust with customers but also people love and share it because it’s a good thing. “The CEO of Stripe is directly trying to help me solve my problem, Wow!”
Look at this tweet:
Multi-decade vision: More than anything else, the company, the CEO, and the team members have the mindset and vision of thinking in decades, not in years. And when you really think it through, it’s a massive competitive advantage for Stripe. Because this allows Stripe to focus and build products that will matter not tomorrow but 10 years from now, whereas its competitors freak out about random hot trending news. Don’t believe me? Read this Stripe’s 2023 Annual Letter excerpt:
How can Stripe not grow when it has leaders and teams like this? Long on Stripe!
Stripe Superpower
This all begs the big question: What makes Stripe unique and special?
Well, there are many things Stripe does differently than its competitors. And that’s why you see PayPal which was founded in 1998 couldn’t compete with Stripe even though Stripe was born a decade after Paypal—same with Stripe’s other competitors like Adyen and Square.
Many early-stage founders and startups may not know about Square and Adyen, but there is a high probability that they must have heard about Stripe somewhere along the way in their entrepreneurial journey. Stripe’s organic word-of-mouth marketing is so compelling and strong that people literally can’t escape from it.
Here are the few key points that really help Stripe stand out in the market.
Ease of the Product
Stripe, from the beginning, has focused on building simple, easy-to-use products that any no-code experienced individual can use and manage their finances online using Stripe. Stripe really understands the logistics of running a fintech company, they know how complicated the rules and system tend to be, which Stripe never aimed for.
The primary reason anyone would use Stripe is because of its simplicity.
You can notice it from the Stripe logo itself. Go see the logo, it’s not some fancy design or something, it’s just a written word STRIPE. To my point, we can say that Stripe has also been influenced by Apple's simplicity, and implemented so many things that Apple does perfectly.
Two of them are simplicity and ease of product development.
Strong Branding
What most founders and leaders make the mistake while building a company is that they build a great product, but they often lack the marketing and online presence, which causes people to doubt their product and worry about trying the product.
But Stripe does the opposite. Both Stripe and its co-founders have a strong online social presence—a social presence that benefits the product, instantly solves the customer’s problem, gets feedback publicly, and improves the product that way—while building trust and relationships with the customers along the way.
There are a few more ways Stripe builds strong branding:
Building an excellent product experience
Publish great content online, Stripe Press is for this.
Attract high-quality, passionate, and ambitious individuals
This is what strong branding looks like, and Stripe and its team are so good at this.
Most founders and companies, especially those who are newbies, take it for granted, but Stripe doesn’t. Just having a great online presence and social media profiles not only allows customers to believe in your product, but they also get a chance to directly contact for the help they need, which often makes the experience 10 times better.
Network Effect
The more people use Stripe, the more people will use Stripe.
Trust is one of the biggest factors in business, or let’s just say in general in life. And who do we trust? A brand that we really understand, the friend we hang out with, the colleague we spend the most time with, and of course our mom and dog.
If I’m using Stripe to accept payments and my friend asks me to recommend a platform for accepting payments online, I’d advise him to go with Stripe, and he would do it, then he would do the same thing with his peer group. The cycle continues and the magic happens for Stripe because the product is great.
And this is where the Stripe wins.
Though that’s one type of network effect, the other type of network effect Stripe gets is from the “Data it collects.” Stripe has massive amounts of data coming from all across the sources—Stripe Payments, Stripe Capital, Stripe Treasury, Stripe Billing, Stripe Radar, etc. And as it collects those data, it allows Stripe to improve the product, fix broken systems, and enhance the product quality.
The more data Stripe collects, the better it becomes.
Businesses of All Size
Stripe wants to reach as many customers as possible.
PayPal focuses on the end customer, Square mostly focuses on the big businesses and enterprises. But Stripe didn’t want to do that, so initially they focused on the developer. But it turned out to be a good thing because a developer can be a big company or just a newborn startup. And as a result, today, Stripe serves both spectrums of customers. Stripe provides the service to companies like Google, X, Amazon, Salesforce, etc, and it also provides the service to small businesses and startups with a valuation of literally $0.
Very few fintech companies are doing it, and Stripe is one of them.
I, and maybe you too personally have experienced this, it’s so easy to create and start a Stripe account than to create Stripe’s competitor account. For example, when I created a Stripe account it took me less than 30 minutes to enter all the details and documents, and Stripe verified it within 24 hours. But it took me 12 days to get rejected by one of Stripe's competitors for the account I wanted to create on their platform, a horrible experience.
All in One
People go to Barbecue because they can eat anything and everything.
The same thing is true with Stripe, people use Stripe because they don’t just want to accept payments online, they also want to make sure that their customers' data is safe—Stripe Radar helps. They also want to get funds from Stripe—Stripe Capital helps. They also want to make payments to their employers or workers—Stripe Connect helps. They also want to manage billing and subscriptions—Stripe Billing helps.
Most businesses juggle through these, so when you get all these features in one platform, there is no reason to not use it. And that’s why so many businesses and startups go for Stripe to operate their finances online. What’s more…the barrier to entry is so low, but the upsides are really high for Stripe’s customers.
Stripe’s Future
As internet adoption increases, Stripe growth will just grow and grow. There is no going back from here, especially since Stripe is a company that thinks in “Long Term Horizon.” However, it still has to break some barriers that are holding Stripe back from its scale and abroad expansion.
StableCoin is one way they’re thinking about it. That’s why Stripe has acquired Bridge (a stablecoin platform that works in blockchain) to fully cut the traditional banking system from the platform. Though the dollar value would still be there. But you wouldn’t have to worry about the broken financial system compliance and regulations.
And Stripe is definitely working on that!
One question you might have in your mind is: Stripe is a $70 billion company but why it’s not going public? Your question is valid. The reason Stripe has no plan for going public is because if it did, then it may lose control and power over the organization since more investors, shareholders, and people would get involved.
In an interview with The Information, Patrick Collison said:
“As for any sort of IPO, there are core pillars of the product and the functionality we want to build for customers that we just haven’t finished. At some point, it’s likely we’ll either seek to [go public] or have to, but it’s just not a focus right now.”
Since Patrick is the CEO of the company, he has to make the big decisions and one of them is “Going public.” And part of the reason he doesn’t want Stripe to go public is that he is some kind of influenced by Elon Musk.
When asked why SpaceX isn’t going public, Elon said, which I’m paraphrasing: “As long as SpaceX doesn’t do regular trips to Mars, it’ll remain a private company.”
And I guess that’s also what Patrick is thinking about Stripe. The goal for Patrick at Stripe is to expand the product to as many countries as possible, mostly in all the countries around the world, build the infrastructure out of traditional banking regulation, and make it so sustainable that it’s not affected by third-party regulations.
Once Stripe achieves these goals, it may consider going public.
Lessons From Stripe
We can learn a lot from Stripe.
Whether you’re a founder, builder, leader, or investor Stripe has so many things to teach you. If you have read this article carefully, you now already know what Stripe is doing differently that sets it apart from its competitors. But to summarize the lessons and to extract some main takeaways from this article, here are the five key learnings.
Keep it Simple
Whatever you’re building, keep it simple.
If you look carefully, you don’t find anything complicated in Stripe. The onboarding process is simple, the analytic dashboard is so clear, the integration method is something a 13-year-old coder can do, and the overall user interface is just too good to explain.
Stripe really understands this: if you confuse the customer, and if they can’t figure out what they want to achieve using your product, it’s not their fault, but it’s your fault. You didn’t make the product easy and simple to use, so how the heck would they figure out what is what?
You gotta have to keep your product simple and easy to use.
Go Niche, Then Go Niche-less
When Amazon first started, it was just a bookstore.
The same thing is true for Stripe. When Stripe started in 2010, it was just a payment gateway for developers, not for big businesses and enterprises. This helped Stripe position the product in the market and improve it as quickly as possible.
But once Stripe became big, say a unicorn, it no longer had to focus on just developers, it could serve small startups, it could serve big companies, it could also serve big enterprises, and it could also serve the end customers, which Stripe did.
This is what we call “The scaling.”
If Stripe had just focused on developers, it wouldn’t have become what it is today. Because, how big is the developer market, or how massive the payment transactions are in that niche? Not a lot.
But when you combine businesses of all sizes? You really scale.
But here’s the catch: if you spread your product too thin, too early, you may have a struggle building raving customers in the beginning, the customers that become your word-of-mouth marketers. Why? It's because when you try to serve everyone in the beginning, no one really understands what you’re trying to accomplish.
So better, go niche, then go niche-less.
Focus on the Customer's Problem
Customer is everything.
No customers, no business. But it’s your job to make the customer's work easier and make them satisfied with your product. And that’s why you have to deeply focus on the customers.
Solve the problems they have ASAP.
Ask them what features they’d love to have
Make it easier for them to contact you via call or email
Patrick does this so well, he is on Twitter and whenever he sees someone tag him saying a bad thing about Stripe, he directly solves the problem or takes action almost immediately. And that’s what a founder or leader of the company should be doing.
Patrick did it here, here, and here.
Listen to the customers. Because they have everything you need to improve and scale your product. I’d encourage you to watch this video on how a shirtless dancing guy, a lone nut, built a massive cult by making the experience good for his first follower.
You might already have seen this video. Watch it again.
Set the Standard Bar Really High
If you’re the founder or CEO of your company, you’re the hero of the company.
You gotta keep the standard bar really high at your company—to motivate and inspire your employees and team members—to make really great products and do things that the world has never seen before.
Just like Stripe does. Stripe doesn’t aim for mediocre products, instead, they’ve set the quality bar and the standards really high in the company. Just look at Patrick, he encourages his employees and team members to think critically, think out of the box, and try not to be constrained by rules. Never aim for mediocre results or build mediocre products—let your competitors do this.
That’s how you set the standard bar really high in your company.
Think in Decades, Not in Years
Let the “Time” be your biggest competitive advantage.
This is the most important one. If you’re building something, there is no point thinking in a one or two-year timeframe. As the saying goes “We overestimate what we can do in a year and underestimate what we can do in 10 years.” So true, isn’t it?
Most founders and leaders think in one or three-year plans, which doesn't really move the needle. Because the good things take time, a really long time. That’s why when your competitors are introducing mediocre products, following hot trends, and often freaking out, you just have to sit back and create great products and think about what impact the product would have not in two years, but a decade later.
One great framework you can use is, to ask: why build a product that no one is going to use after 5 years? And why not build a product that will last for 30 or 50 years? And just go build that product.
You can learn this from Amazon and Stripe’s 2023 Annual Letter. These are two companies that really care about long-term thinking. You can’t compete with them in terms of time horizon, especially if you are an impatient company.
Because they can just wait and build great products that would matter not tomorrow but 10 years from now. However, this doesn’t mean you should act like dumb and do nothing about what’s happening in technology. Nope! That's not what I'm saying. You should definitely adopt the new technology as it arrives.
But you don’t need to implement every new technology. The reason? most of the time, most of them are distractions. You should think from the first principle and understand the basics of human needs. Because in the end, great technology is nothing but a machine that humans use.
Thanks for reading, catch you on the next one.
Crazy research + writing! I'm making a docu-series with this stack post. 📺
Excellent