Patrick Collison: Philosophies for Running Stripe, Hiring, Decision Making, and Reading
What this covers
This episode first aired in May 2018. This is a Knowledge Project Podcast episode from the archive.
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Patrick Collison, CEO, and co-founder of Stripe shares wise insights on success, failure, management, decision making, learning and so much more.
In this conversation, we cover the biggest (and most valuable) mistakes Patrick made in the early days of Stripe and how they helped him get better, the characteristics that Patrick looks for in a new hire to fit and contribute to the Stripe company culture, what compelled he and his brother to move forward with the early concept of Stripe, even though on paper it was doomed to fail from the start, the gaps Patrick saw in the market that dozens of other processing companies were missing — and how he capitalized on them, the lessons Patrick learned from scaling Stripe from two employees (he and his brother) to nearly 1,000 today, and so much more. --
Timecodes:
00:00 - Collison’s journey from dropping out to founding Stripe 09:58 - On Stripe’s culture 15:30 - Lessons learned from the early days of Stripe 21:51 - What Collison has learned from scaling Stripe 30:04 - On specialization vs generalization 37:48 - How Collison manages risk and large downsides 41:09 - On “thoughtful disagree-ness” 45:07 - How Collison has modified his decision making process 55:22 - The company culture's Collison admires 59:13 - What Collison learned from studying Koch Industries 1:00:57 - On Collison's reading habits 1:19:15 - Collison's smallest habits that make the biggest difference 01:21:55 - Mistakes Collison sees people make 01:24:39 - The future of online payments 01:37:00 - Success and Silicon Valley
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Source description (no synthesized summary yet).
Patrick Collison argues that reducing friction in commerce and payments systems—particularly enabling seamless global transactions—can unlock enormous economic value by expanding the number of viable businesses, improving management practices, and removing artificial geographic constraints on trade.
- Microtransactions, high-value transactions, and cross-border commerce remain impeded by payment friction that prevents entire business models from existing
- Survey data shows 40-60% of Atlas-founded companies wouldn't exist without reducing incorporation friction; management practice improvements alone drive 13% revenue gains
- Housing and regulatory barriers in Silicon Valley are suppressing future innovation by making it harder for new talent to congregate in high-productivity zones
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When you get big, loss aversion increases and goals shift from customer improvement to preventing competition and preventing new entrants, which may be a more effective business strategy than innovation
“bets when you get big you have more loss aversion and so your goal is not necessarily to get better from your customers perspective it could be to prevent competition and prevent new entrants that might be a more um without a moral judgment on it it might actually be a more effective business strategy”
Deng Xiaoping visited Shannon's special economic zone in western Ireland, which was one of the world's first, found it inspiring, and subsequently decided to set up special economic zones in China, including Shenzhen and the pearl river delta area, which were in some ways directly inspired by what he saw in western Ireland.
“one of the world's first special economic zones was created in shannon uh which was very close to 10-15 miles from where i was born deng xiaoping visited it uh and found this quite inspiring and so decided to set up uh special economic zones in china and so shenzhen and this sort of um the pearl river delta that sort of special economic zone was in in some ways directly inspired by you know what he saw in western ireland”
Berkshire Hathaway's Warren Buffett and Charlie Munger, and Koch Industries' leadership, are notably focused on epistemology, structuring doubt, and accounting for biases and mechanisms for clarity of thinking to a striking degree.
“warren and charlie at berkshire and how the folks at koch industries are so into a kind of epistemology and structuring of doubt and accounting for biases and mechanisms for for clarity of thinking um like due to a very striking degree i mean obviously if you read um uh the the public writings or you go to omaha and you listen to what you know warren and especially charlie talk about um you know it's sort of half investing in half applied epistemology half philosophy right”
When scaling an organization from 2 employees to 1000, a startup operates like a tower defense game where problem creation rate is outside your control but problem-solving rate is what you control; when problem creation exceeds solution capacity, the company fails even though individual problems are manageable.
“there's a category of uh sort of flash games um desktop tower defense games uh where you're sort of building little towers that shoot missiles and all these little critters uh sort of scampering uh across the board uh trying to sort of break into your fortress or whatever the case might be and a startup feels a little bit like that where you fundamentally don't control the sort of the rate of you know problem appearance um you just control the sort of the other variable of the rate at which you're you know building defensive or mitigatory or mechanisms to to deal with those problems and sometimes the rate of the problem creation can outstrip the rate at which you can solve them even though in principle any one of them uh is uh is is relatively manageable right”
Koch Industries has compounded from $20 million to $100 billion in annual revenue over approximately five decades without relying on a single driver of success, resource monopoly, or breakthrough innovation, suggesting deep institutional characteristics enable sustained growth.
“coke industries uh in that you know charles of course or charles and david are most famous for their political activities but if you just look at the company uh that has kind of compounded from 20 million in annual revenue to now according to public estimates 100 billion um over call it five decades and there aren't that many organizations that have compounded like that for that long without there being kind of one driver of success there's no one thing that enabled their rise they didn't like stumble upon some resource that they kind of cornered there was no kind of iphone for them et cetera it's clearly something kind of deeper and more sort of institutional”
Regulatory barriers prevent the creation of new solutions in consumer banking: the Office of the Comptroller of the Currency had essentially stopped issuing new federal banking charters after the financial crisis, and the distinction between checking and savings accounts is legally mandated rather than a bank's choice, making it difficult for new entrants to disrupt the market.
“the office of the controller of the currency which is the entity that uh sort of issues federal banking charters uh had had basically stopped issuing new banking charters both financial crisis and so if you came along and you're like well i'm going to go solve all these problems and consider banking you're essentially blocked from doing so by the kind of regulatory apparatus”
Sequoia Capital has been a top-three venture firm for essentially its entire existence, which is unprecedented—no other VC firm has maintained top-three status for approximately four decades—suggesting deep institutional differences from other firms.
“one of our major investors is sequoia capital and sequoia has been you know the top firm or in the top three firms obviously it's a subjective ranking but call it you know unquestionably a top three firm for uh for essentially its entire existence and there was no other vc firm that has been a top three firm for you know call it four decades”
Friction-reducing in systems is not always good; what looks like a bug may be a feature for some constituency, and reducing friction necessarily harms those whose interests rely on friction.
“across society i think so many of the things that look like bugs are actually features from the perspective of um uh of of somebody of some constituency right and of course so much of politics is reconciliation of the countervailing interests of different constituencies and of course the problem is that in so many cases uh the incremental gain of the constituency is substantially outweighed by the social utility loss of the rest of society right and so bad teachers um do great in the us but almost certainly that's kind of a net bad trade for society but the bad teachers care more about sort of their ongoing employment than the rest of society cares evidently um uh about correcting that”
Making twice as many decisions at half the precision is often better than making fewer decisions with higher precision, and most people (including himself five years ago) should operate earlier on the decision-making curve where additional time provides diminishing improvements.
“the first is i i now just place more value on decision speed in that uh if you can make like if you can make twice as many decisions at half the kind of um half the precision that's actually often better um and then given the fact that sort of the uh rate of improvement of decision making with additional time almost necessarily tends to kind of flatten out i think that most people certainly that patrick of five years ago and potentially the patrick of today included should be sort of earlier should be operating earlier in that curve make more decisions with less confidence but in significantly less time right”
Geographic balkanization of commerce exists not because of deep economic necessity but because of arbitrary payment infrastructure challenges; economists note the gravity equation (trade falls with square of distance) but some of this effect is due to payment complexity, not fundamental barriers.
“there's a kind of unnatural sort of sub-clusters existing not because of sort of you know deep necessary limitations but because of something much more arbitrary and contingent and you know economists talk about sort of the gravity equation and the fact that the sort of proclivity of any two countries to trade falls off with the square of their distance and you know there's all these like big questions about like well is that about something kind of fundamental in culture or about um i don't know just surprising returns to proximity or you know what have you um assuredly there's you know some of that stuff um but i think talking about the challenges and kind of complexities and hidden costs of payment methods that doesn't feel like a very deep thing”
Rising housing costs in Silicon Valley have negative-sum consequences: not only do existing landowners benefit while others lose, but fewer future innovations will be created because talent cannot congregate as cheaply as before.
“it's a it's a negative sum in the sense that it's not just that these games go to uh go to these sort of existing landowners but actually there'll be fewer future gains like i think you should be mad about this you know if you don't live in silicon valley and you don't have the slightest interest in doing so because it's much less likely the next cool technology that you'd like to take advantage of will exist um it's sort of it's a it's a suffocation um of a future potential and a future gains”
Some people enjoy discovering the limitations and exceptions to arguments and beliefs (topological exploration), while others find this stressful; this personality difference determines whether someone thrives in environments requiring rigorous disagreement
“there's kind of a question of affect and again personality as to do you enjoy finding those limits and the exceptions and thinking about well maybe this is less true than i think or where is this less true than i think uh or or is that just like a stressful process”
You cannot simply start a hospital in the US without getting a certificate of need; regulatory barriers prevent market entry into healthcare.
“you can't even start a hospital unless you get a a certificate of need but but if you observe that well hey you know medical care in san francisco doesn't seem so great and it seems extraordinarily expensive you know even though it seems like a very thankless undertaking i'm going to try to do better well first you'd better get approval for that um you can't you can't just enter the market”
Payment infrastructure friction remains extraordinarily high despite decades of e-commerce: for example, over 90% of Brazilian credit cards do not work online outside of Brazil, preventing Brazilian consumers from purchasing from global merchants.
“it's still like 90 plus percent of brazilian credit cards do not work online outside of brazil brazil is not some backwater it's not some inconsequential country right obviously one of the uh top economies in the whole world and brazilian consumers basically cannot purchase outside of brazil”
Joel Mokir's "A Culture of Growth" argues that the Industrial Revolution occurred when and where it did primarily because of intellectual factors rather than economic ones, specifically a synthesis of belief in scientific progress and appreciation for practical engineering knowledge.
“a culture of growth by john mohir uh sorry joel mokir apologies um and it's basically a book about why why did the enlightenment and the industrial revolution uh really the industrial revolution start when it did and and where it did and he basically makes the case i mean there's obviously tons of different arguments that have been made for this and because it only happened once it's sort of we can never know definitively and you know was it the abundance of uh or what was it the abundance of coal in the uk was it the something that the intellectual property system and patents was it the high cost of labor in the uk that sort of created more sort of that made productivity enhancing improvements more valuable was it something about trade you know and so on and so forth and and mohir basically makes the argument that it was um that it was primarily intellectual and more than sort of quote-unquote economic”
Society is inconsistent in wanting innovation while simultaneously creating structural barriers to it through regulation; healthcare costs and drug discovery rates decline while people complain about lack of innovation, yet regulations make entry and drug development harder.
“i think we're very sort of dissonant on this point as a society where on the one hand we decry lack of innovation on the other hand in our collective action we do so much to ensure that it doesn't occur right and so you know on the one hand we decry the state of the sort of um medical industrial complex and the eighteen and a half percent of our gdp that i spent on healthcare costs and uh the plateau or even decline in life expectancy and the declining rate of drug discovery and so on and yet on the other hand we sort of uh through regulatory structures make it harder and harder to engage in drug discovery”
Enrico Moretti estimated that 50% of US GDP growth between 1964 and 2010 was lost to inefficient land use and allocation, suggesting enormous economic stakes in housing policy.
“over at berkeley this guy enrico moretti has estimated that 50 percent of uh us gdp growth between 1964 and i think 2010 um uh was left on the table as it were by sort of inefficient land use and uh and land allocation um and obviously fifty percent of the high number and quite speculative and it's very difficult to measure the counter factual but even just the idea that one can with a straight face hypothesized it could be anything remotely in that vicinity i think gives you a sense for uh how high the stakes here are”
Good speculative bets at organizations are made infrequently not because downside is fundamentally too costly, but because the mindset of improving existing systems differs fundamentally from the mindset of discarding old systems and building something new from scratch
“it feels to me that actually the reasons that organizations don't tend to make more of these um or make more good ones is it's more of sociological more institutional and less that it's fundamentally too costly”
San Francisco's density is approximately one-third that of Greenwich Village in New York, suggesting significant room for increased density without becoming an extreme case like Hong Kong.
“we place such an enormous premium on the aesthetic appearance of the san francisco of today recognizing that it is of approximately a third of the density of even just greenwich village in new york right we're we're not um you know the the sort of the other extreme is not hong kong you you can triple san francisco and get to greenwich”
The smallest habit that makes the biggest difference is reaching out to people whose work he admires and telling them so; half the time they don't respond, but when they do it can be incredibly rewarding and lead to meaningful relationships.
“i reach out to people whose work i admire and tell them that and often it leads to a dialogue and and in some cases i've gotten to know them pretty well and so i'm fortunate that tyler cohen who i mentioned is a friend but i was never introduced to him i just randomly emailed him years ago actually invited him to a bitcoin meetup that i held in 2011. uh and i did not however buy any bitcoin but um uh i invited him to that meetup and he replied and you know apologized that he couldn't make it but we sort of ended up in kind of a dialogue after that um and when you reach out to these people yeah half the time they don't respond um but you know half the time they do and it's you know it's asymmetric it doesn't really cost you much when they don't and and it can be incredibly rewarding when they do”
Dealing with constant, multi-level problems appearing simultaneously across an organization creates psychological and emotional difficulty even when each individual problem is rationally manageable, because the constellation of problems seems unreasonably implausible
“the character of having problems materialize sort of at every level of of the organization or at every kind of level of abstraction or you know at every kind of magnitude and so on that's just a kind of unnatural thing that i think is just on a psychological emotional level difficult to deal with”
San Francisco experienced a 40% rise in housing costs since 2010 because of housing supply constraints, not because of some secular unavoidable economic force, making it a function of collective decisions rather than necessity.
“a 40 rise since we got san francisco in 2010 that's not necessary it's not natural and and it's it's a it's a function of our sort of collective decisions rather than kind of some um some secular and unavoidable uh economic force”
Tokyo has maintained stable housing costs over decades despite economic success by imposing vastly fewer limitations on housing supply, contrasting with San Francisco's rising costs.
“you can look at places like um you know obviously tokyo has um over the last couple decades been an improbable well not especially improv but has been such an enormous economic success story and you know you had the boom and the bust uh uh of the supposed stagnation of japan uh in the kind of early 90s on but sort of broadly speaking has done really well but because of vastly fewer limitations on on housing supply have had just very stable housing costs have not had the same displacement right”
Nick Bloom at Stanford conducted an RCT in India where teaching better management practices to businesses led to 13% revenue increases over three years, demonstrating that management quality is causal and represents low-hanging fruit.
“nick bloom at stanford did this really interesting work has done a whole bunch of interesting work about management practices do management practices matter you know is it is good imagined merely correlated or in fact causal in terms of um uh leading to or the the advent of better outcomes um and they did an rct a proper trial in india where they taught better management practices to a cohort of firms and did not to a sort of control group and saw double-digit percentages in revenue over a multi-year period i don't recall exactly i think it was 13 over three years or something like that right um like that that's an incredible low-hanging fruit like all they did is teach better management practices 13 more revenue like 13 more value provided by the company as assessed by their customers”
Collison's brother John advocates that at every moment one should be reading the best book available to them, and as soon as a better book is discovered, one should discard the current book in favor of it.
“john has this insight that and it's kind of related to the previous point that um at every moment you should be reading the best book you know of in the world um i i mean i don't i don't mean kind of the absolute best for everyone but sort of the best book for you but like as soon as you discover something that that seems more interesting or more important or whatever you should absolutely discard your current book sort of in favor of that because any other algorithm necessarily results in you reading kind of quote unquote worst stuff of our time sub-optimal”
Stripe's approach allows heterogeneous exploration-exploitation ratios across the organization, with different teams allocated different ratios based on their function, enabling organizational pace layering where different parts operate at different speeds.
“as we've grown we've we've tried to shift into a model where it is somewhat less uniform and in certain teams less optimization of what already exists is going to be required it's going to require more exploration and in other parts of the company it could be tilted in the reverse direction”
Leaders should make fewer decisions by pushing decisions back to domain experts and questioning whether the need for a decision indicates an underlying organizational or institutional failure, rather than treating decision-making as the primary lever of leadership.
“the third thing is uh i now try to fairly deliberately just make fewer decisions in that why am i making the decision uh and for some kind of decisions you know there are some um good reasons for that and there's some decisions the ceo ought to make and is kind of fundamentally on the hook for but there are some decisions where if i'm making it or if i have to make it that probably suggests that something else organizationally or institutionally has broken and i think the need for a decision uh from anyone not just for me is often like only a sort of um an epi phenomenon and there's really some other underlying issue that's causing you to have to make in the first place”
Strong organizational cultures are ones where members can describe them in detail, expound on their merits for extended time, and specifically articulate what they disagree with about the culture, indicating genuinely distinctive values.
“i admire cultures that are strong first off cultures that when you ask somebody who's in the culture can you describe it and that they will that they can expound on its merits for more than half an hour and in almost every case describe at some length all the things they don't like about it right um because if it's strong they're i mean it's improbable that every aspect of it is something the person you know really agrees with or feels an affinity for”
Decision-making in organizations is overrated relative to feedback mechanisms and incentive structures; organizations are better understood as biological systems with circulating fluids (incentives, goals, feedback) rather than as binary decision moments.
“i'm inclined to say i don't know if i actually believe this but i'm trying to say in response to that question that decision making in organizations is slightly overrated in that organizations are not like investment entities um or funds or managers uh in that organizations well with investing it's fundamentally very binary there is a moment at which you either buy or or don't or sell or don't or whatever um and maybe it's somewhat more continuous in the case of say public market investing and so on but given sort of um constraints on just decision-making time i think you've treated a bit more binary you assess the stock and you make a buy or or or not decision uh whereas in organizations everything is much more fluid and continuous it's much more about i think designing the feedback mechanisms”
Most decision-making challenges in organizations stem from operating in a zone where you must make decisions with significant long-term impact while facing uncertainty that could be reduced but time and cost constraints prevent further investigation, creating a frustrating and dissatisfying situation where you could know more but cannot afford to find out.
“you're operating in sort of the weird zone where you're often making decisions that have sort of significant long-term impact um or that are at least difficult to reverse or to course correct um in the face of great uncertainty right and the uncertainty is often unnecessary in the sense that you could in principle go and significantly reduce the uncertainty you could go and study the question more you could go and obtain more information you could go and run an experiment you know it's not like cosmic uncertainty where there's just it's true sort of nicey and unknowability and i think when it is like true deep unmitigatable uncertainty then i think it's not too hard to say well we're just going to choose something and you know make the best decision we can i think it's a more frustrating kind of uncertainty where it's actually not necessary but the thing that's sort of limited is your is essentially the cost of obtaining further information”
Stripe studies organizations like Sequoia Capital, the Economist, the New Yorker, and Koch Industries to understand what enables sustained multi-decade excellence and institutional strength, since these few organizations have compounded successfully where most others have failed
“sequoia has been you know the top firm or in the top three firms obviously it's a subjective ranking but call it you know unquestionably a top three firm for uh for essentially its entire existence uh and there was no other vc firm that has been a top three firm for you know call it four decades”
Patrick Collison's love of reading originated from growing up in a remote part of rural Ireland with poor internet for 14-15 years, forcing reliance on books and reading as primary intellectual stimulation
“we crappy internet when i was growing up because our house was so remote there's so much noise on the phone line and that we didn't have internet for years”
Solving the ostensibly simple problem of allowing any two parties in arbitrarily chosen countries to transact online will have enormous consequences for the world, despite sounding cliché.
“making it easy for any two parties uh a business and a consumer in arbitrarily chosen countries making it easy for those two entities to transact will have enormous consequence for the world and like that that sounds like such a sort of a straightforward idea that it almost sounds cliched and the fact that it sounds cliched should not blind us to the fact that it is still extraordinarily far from being the case today right”
Payment infrastructure and APIs for developers were so obviously needed by any business operating on the internet—where there are tens of millions of developers and this is one of the top needs—that Stripe's founders were initially discouraged when searching for such a service and finding it didn't exist, suspecting some latent force must be preventing its creation.
“it just seemed so strange that something with stripes character didn't exist in that we really looked for a stripe before we uh before we started it as an it just it felt that it must be the case that there is some service some company somewhere offering infrastructure and apis and payments and economic tools that are straightforward to use for a developer right i mean this is one of the sort of top needs that any business operating on the internet has arguably by definition a sort of a business on the internet uh must have access to these tools uh there are tens of millions of developers operating on the internet and so just given the magnitude of that market and the sort of obviousness of the business model it really felt like this had to exist”
Collison learned the strategy of following what people he admires admired rather than following the people themselves from a line by Basho, the Japanese poet, and applies this to find influential ideas by tracing them upstream through admired figures.
“there's the the line from basho about the the japanese poet um that you shouldn't follow the people you most admire but you should follow what they admired and i try to do that i try to figure out for the people who seem to be doing really great work or have really interesting ideas or just who i admire and whatever regard um to figure out how do they get to who and what they are uh what influenced them or what's upstream”
Reading should be treated as an active process where readers should skim, skip, backtrack, and discard books; the reader is not a passive consumer but the owner of the book and can use it as they see fit.
“i've not discarded i think reading is like a you know should be treated as a um as a kind of more active process uh sort of you should you should skim you should skip you should backtrack uh you should discard and then potentially return like the you know you're not subject to the book you're not a passive consumer like the book is um the book is there for you you bought it it's yours um and like jump back and forwards tear it in half if you want annotate it wildly like you know use it”
Physical books create productive collisions and idea connections because they exist in physical space, making it more likely that other books or ideas trigger their relevance, in a way digital books cannot.
“part of the reason that i still really value physical books is because uh you i mean for now at least uh we still exist in physical space and uh and it creates a kind of idea space for you uh that makes kind of productive collisions more likely to happen”
Most people understand on a contemplative level that things are complicated but experience decisions emotionally as if they should be simple; the gap between intellectual and emotional processing creates stress in leadership
“while you might recognize sort of on some contemplative stoic level that this is how it goes um you know that's not necessarily how it feels in the moment right and it kind of feels like that way every day”
There is a subset of books worth reading and enjoyable to read that is smaller than the subset of books merely worth reading, and Collison decided to read all books in the intersection first, then move to books worth reading but not enjoyable.
“there's a set of um the set of great books that are really worth reading right and there's a subset of those books that that are really enjoyable to read maybe it's like 10 or 20 of them say um and the subset the intersection of really worth reading and really enjoyable to read is actually still more books that you can read than you can read in a lifetime uh and so uh i sort of decided well i will read all of the um the books that are really worth reading and really enjoyable to read and when i run out of those then i'll go back to the books that are merely worth reading right”
Atlas, Stripe's service for helping founders incorporate companies without geographic restrictions, would not exist for 40-60% of companies that use it if Atlas didn't exist, representing a significant causal impact on the number of new businesses created globally.
“when we survey companies started with atlas 60 of them tell us they would not exist uh if not for atlas you know they could be rock like maybe maybe some of them actually secretly would but maybe but maybe some of them are actually overstating their own resourcefulness or overstating maybe they're underestimating the challenges they would have faced and so i think that number could either be too high or it could be too low right but but let's be conservative and say that it's actually only 40”
Collison owns a house in San Francisco with his brother John and hopes its value declines because he believes the social returns of cheaper land in the most productive region of the country vastly outweigh the reduction in his wealth as a landowner.
“you know i'm a landowner in san francisco john and i own a house together and i hope its value declines um in that i think it's impossible to answer uh what the price of land should be um but i think it is very clear that on a marginal basis the social returns of cheaper land in the most productive productive region of the country uh would vastly outweigh the reduction in wealth you know to existing landowners”
Reducing payment friction is necessary but what matters is integration with payments as foundational layer for understanding business dynamics and enabling company operations at scale
“mediated by payments as this kind of foundational layer because it's something every business necessarily has and because it gives us good sort of understanding of the dynamics within the business and so on but it's on some kind of fundamental level and not about the payment even though we think that kind of per the first point the impact of just solving the payments will itself be enormous”
When Collison finishes a particularly good book, he sometimes writes a summary or shares snippets with friends via email or Google Doc; this summarization aids synthesis and recall while triggering recommendations and idea clustering from friends.
“if it's really good i might write a review for friends and just you know share an email or a google doc or something or just share snippets with friends um and that's valuable both because again sort of the act of of summary or summarization uh sort of aids the kind of synthesis uh and and better recollection um but also of course uh it triggers outpointers uh and further suggestions uh from from those friends”
Stripe actively seeks to hire people with rigor and clarity of thought who seek correctness over consensus, are willing to be wrong, and can contemplate surprising or divergent ideas, rather than people who prefer smoothness and harmony.
“the things that we really prize and uh try to you know seek in the people we hire are um a kind of rigor and clarity of thought uh in that i think so many organizations prize uh sort of smoothness and smoothness of sort of interactions and uh trying to reduce minimize the number of sort of ruffled feathers and they kind of at least sort of inadvertently if not deliberately prefer cohesion over correctness and we really try to identify people who who are seeking correctness and who don't mind being wrong and who are willing to at least contemplate things that seem improbable or surprising if true or really divergent to what is sort of the generally accepted status quo”
Stripe's broader hypothesis is that macro measures like the number of businesses started, success rate of companies, expansion rate into new markets, and magnitude of value provided to customers are movable through infrastructure changes like better payments and incorporation tools.
“stripe hypothesis is that things like that that seem very uh sort of one would think are very difficult to move um are actually movable um and that and really macro measures like the number of people who start a company or who start a technology company or again the the success rate of those companies and you know just to give some kind of um illustrative maybe um intuition pumps here uh when we survey companies started with atlas 60 of them tell us they would not exist uh if not for atlas”
Collison finds it difficult to answer the question of which books have most influenced him because it's hard to know if books caused influence or merely resonated with pre-existing leanings he already had.
“i i didn't actually embarrassingly i feel guilty about this i didn't post a response myself uh and i thought about it and it's actually just a very hard question to answer like i actually worry that may not it may not have been a good question because like it's hard to know did the book influence you or did you have an inkling or a leaning and then you read something that really resonated but sort of it's actually not like the book is just the artifact upon which you project the sort of the characteristic that had already arisen or the belief that had already arisen and the book is not actually causal in and of itself right”
Collison's process for evaluating a new book is to jump to the middle, read a few pages to see if the content and ideas are compelling, and if so, backtrack to the start; this approach works despite initial unfamiliarity with terms and context.
“normally i'll jump sort of midway through it and just start reading and see like would i like to have ended up here and almost certainly like a bunch of the terms i won't recognize or the you know antecedent ideas i won't be familiar with or whatever but like do i yeah do i want to be here or had to have gotten here and if after a couple pages it seems like the answer is yes then i might sort of backtrack to the start and start kind of pursuing it a bit more seriously”
The most common mistake people make is not having the right peer group or mentors, or not being deliberate about choosing who to be around; the people around you are massively formative in determining where you end up.
“and you have 140 characters maybe not having the right peer group or not having the right mentors isn't quite the right term because mentor implies something kind of quite active but not striving to be more like the quote unquote right people or not just being kind of in either case deliberate enough about that uh of course who the right peer group is for you is i mean that's an entirely kind of personal and subjective question but whoever it is uh is going to be massively formative and influential in determining where it is that you end up”
Collison dropped out of MIT to start Stripe after realizing the problems they perceived for small startups were actually the same problems faced by large companies doing hundreds of millions or billions in revenue, and the market was vastly larger than initially thought.
“the particular thing we realized that caused us to you know really go take it a little bit more seriously and i mean concretely to drop out of college was the realization that the sort of problem that we perceived and kind of developers like us people building some little side project or with this kind of very nascent um you know startup or something like that that the problems we perceived for that segment of the market were actually the problems that larger companies had as well that kind of what we thought initially might be a little lake of opportunity was sort of more akin to an ocean”
When Stripe surveyed users of all sizes (from side projects to billion-dollar companies) about payment needs and desired features, all company segments requested essentially the same roster of features, suggesting the problem set was pervasive, not niche
“we talked to companies doing hundreds of millions or billions in revenue or companies in other countries and so on and we just asked them to kind of recount their problems and what they wished existed and everything else they basically give us the same roster of features”
Ireland's economic development over the latter half of the 20th century was enabled almost wholly by exports and by importing American multinational companies to set up factories, bases, and hubs in Ireland, which created a visceral link between progress and outward-looking economic development that is pervasive in Irish culture.
“ireland's sort of improbable rise from poverty over the latter half of the 20th century was very significantly enabled maybe almost wholly enabled by by exports by sort of importing american multinational companies having them set up factories and bases and and you know hubs of different sorts in ireland”
Stripe allocates roughly 70-80% of effort to optimizing existing, known-good systems with clear ROI, and roughly 20% to more speculative bets; this allocation ratio is necessary because without optimizing existing systems the company's default non-existence would be guaranteed.
“roughly speaking we invest most of our effort we have a precise number out but let's just say 70 or 80 percent in optimizing that which we already have that which we already know is producing returns that which there's a sort of relatively clear line of sight from sort of the input the work the optimization whatever to sort of the uh output improvement and then you know some fraction of the work and the sort of a distribution of um of bet skew but uh some factor of the work let's call it 20 um into things that are more speculative right”
The Drew Houston quote that 'you are the average of your five closest friends' is deeply true and implies that choosing those five people (and investing in those relationships) is enormously important to your outcomes.
“drew houston is the quote about how um you end up the average of your five closest friends i think it's a very deep truth to that right but if you accept that then of course who your five closest friends are i mean choosing that and we do though we may not think of it this way we do choose those people um like you are choosing who you are”
E-commerce has existed for decades but only ~2% of commerce was online at Stripe's founding, suggesting the infrastructure is still primitive and enormous growth potential remains.
“we have had commerce on the internet for decades at this point but it's still like 90 plus percent of brazilian credit cards do not work online outside of brazil”
Ireland experienced high rates of immigration post-EU expansion in 2004 when eastern European countries joined the EU, which was not accompanied by material social strife, conflict, or challenges seen in other parts of the world, creating a cultural appreciation for open borders and facilitating opportunity.
“ireland has had very high rates of immigration um particularly post the expansion of the eu in 2004 a very large number of eastern european immigrants moved to ireland when those countries accessed to the eu and that was really not accompanied by any any material social strife or conflict or a lot of the sort of um challenges that we've seen in other parts of the world”
The Economist and Apple are examples of cultures with extraordinarily high standards where work has primacy and workers are anonymous because the work speaks for itself.
“the second is cultures of of perfection um and so both the economist and apple have extraordinarily high standards for themselves and and really kind of in both cases the work has a kind of primacy and so who designed the latest iphone or who wrote that article in both cases that's anonymous because there's such a belief that the work speaks for itself right”
Americans have grown up in an environment where college attendance is heavily prioritized from an early age, leading to optimization of extracurriculars from age 14 and selection of kindergartens based on downstream college acceptance rates, whereas this cultural emphasis does not exist in Ireland.
“people in the u.s have grown up in environment in which college attendance is sort of really prioritized from an early age and sort of you know you're optimizing your extracurricular activities from the time you're 14 and you're choosing your kindergarten on the basis of what the sort of downstream college acceptance rates look like and all that kind of stuff um of course growing up in ireland that sort of wasn't part of the you know culture or discourse or environment at all”
Stripe is still early in understanding organizational feedback mechanisms after only about a year at 500+ employees, having been under 100 just three years prior, so claims of having figured out organizational design would be hubris
“stripe has been a thousand person organization for uh or has been a more than 500 person organization uh for just over a year right um we're we're beginners at this”
Collison reads because he feels stressed by how much important stuff he doesn't know, not because reading itself is blissful, and he doesn't feel weird about this—he feels everyone else is weird for not being similarly motivated to learn.
“with reading basically i don't feel like i'm weird i feel like everyone else is weird uh in that there's just like so much stuff to know and i guess i just feel stressed out by like it feels important or it's obviously important and i don't know it and so [ __ ] like i better you know get to work”
Irish culture places importance on warmth, interpersonal dynamics, and trying to make others enjoy themselves and be at ease, and this cultural trait has influenced Stripe's approach to creating a warm workplace environment.
“there's the reverse version where so many irish people themselves have sort of benefited enormously from being able to go and sort of pursue lives in the uk and australia and the us and canada and so on and that's again just really kind of part of the national ethos and then maybe more softly i guess irish culture places um places a lot of importance on just a kind of warmth and there's kind of a particular particular tenor to the sort of interpersonal dynamics and trying to have other people enjoy themselves and be at ease and have a good conversation with them and whatever else”
Collison runs regularly not because he finds it immediately enjoyable or euphoric, but because he feels he should do it and strongly prefers having run to not having run, despite the immediate discomfort.
“i run quite a bit and i don't even run because i enjoy it that much i mean i enjoy it um but it's nothing kind of in the in the immediate moment it's it's not like it's euphoric or anything close to it i mean it's pretty painful um uh and you know the the greg leman quote about how i mean it's very dispiriting when you think about it it is very deeply true that how you how it never gets easier you just go faster that's true of running like if i stay running for the rest of my life um it will it will never get easier i will just go faster but just it feels like something i ought to do um it's i i vastly rather having run than not having run”
Collison's parents allowed him unfettered access to books and supported his interests without choosing them, pushing from behind rather than pulling in front, which enabled his love of reading and learning.
“our parents had lots of books and so you know we could just kind of burrow our way sort of sequentially through the shelves um but you know it was pretty um it was pretty unfettered and i think our parents had a kind of they followed our interests uh and supported them but they didn't choose them um it felt like they they pushed from behind rather than pulling uh in front”
Collison visited Stanford in 2005 for the International Lisp Conference, which was very eye-opening and made him want to attend college in the US, leading him to pursue British A-level exams rather than the standard Irish education path to gain admission.
“as part of the programming i had visited the us for the first time um i'd gone to stanford for the 2005 international lisp conference and there was a fairly small conference uh and uh but it was very eye-opening for me uh and i remember you know walking around stanford and thinking man american colleges seem great uh and so i uh you know back in high school in ireland i decided to see if there was some way that i could just go to college in the us the subsequent year and it was sort of a long story but i eventually figured out that i could not do it if i did the standard irish kind of follow the standard irish education path but that i could do it if i did the british sort of terminal examination and so i kind of resumed my sort of self-education except instead of programming i was now studying for these you know british exams”
Collison tried to become a physics professor at MIT but decided against it after a year because he felt physics progress had slowed substantially compared to the early 20th century, and he realized he enjoyed programming and software more than mathematics and physics.
“went back um because i felt that i hadn't sort of really you know properly rejected the hypothesis that maybe i should try to become a professor right maybe kind of physics is what i should be again at least attempting to spend my career on um and after a year back at mit i decided that that was not the case um progress in physics really felt like it had sort of slowed down pretty substantially compared to the you know 1910s 20s 30s the sort of the period in which so much of what we were learning about um you know that that's at a broader period of discovery um i felt like the period in which sort of you know we existed in say 2010 was there really was just not the same rate of progress”
Collison rarely rereads books after finishing them; the act of annotation helps imprint the key ideas in memory, reducing the need to return to the book.
“um if i want to make a particular point or be reminded a particular aspect or you know whatever um maybe i will but but generally speaking i don't and i think you know part of the value of making the annotations is of course to um imprint them more firmly in your mind so you sort of don't need to come back as much”
Stripe had no experience in the payments domain, was not founded by US citizens, and faced regulatory barriers specific to non-citizens, all of which further complicated an already crowded, competitive market.
“we had no experience in the domain we were very young we we weren't even us citizens and you know an ecosystem that again just because the regulatory dynamics you know that's a bad further complication”
Patrick Collison did not technically drop out of high school in Ireland, formally graduated, but practically spent minimal time in formal coursework during transition year (an optional gap year before final exams) when he was pursuing programming.
“i didn't technically speaking drop out although i sort of practically speaking did um but you know given my lack of education credentials elsewhere i i i do um i should for the sake of my parents um insist that i do in fact or did in fact formally speak and graduated from high school”
Collison reads throughout the day: in the morning, evening, while walking, and while eating, making reading a habitual part of daily life.
“when do you typically read always i mean in the morning and evening while walking while walking is a good one actually uh like your peripheral vision is such that you can actually quite function read a book while walking um and and there's other people that stripe you to this and do it much more and faster than i do um but but you spent a lot of time walking and so uh being able to do that i found to be uh quite um quite valuable um often while eating”
Collison did not intentionally buy bitcoin at a meetup he held in 2011, despite inviting Tyler Cowen, though he did reach out to Cowen and eventually became friends with him.
“i reached out to people whose work i admire and tell them that and often it leads to a dialogue and and in some cases i've gotten to know them pretty well and so i'm fortunate that tyler cohen who i mentioned is a friend but i was never introduced to him i just randomly emailed him years ago actually invited him to a bitcoin meetup that i held in 2011. uh and i did not however buy any bitcoin”