YouSaid · the spoken record

John Collison

lines on the record: 84
first: 2020-06-16
most recent: 2020-06-16
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“You're spending time with Daniel. Daniel's fabulous. And again, it's Pioneer, I feel like, is going after the same opportunity, which is how do we help people go further down the rabbit holes rather than trying to bring them back on track?”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“So much to say. Patrick actually wrote up a guide to this. It's actually pretty good that he put on his website of advice for youngsters. But I think for me, it is being willing to go down the rabbit hole, whatever your particular rabbit hole is in that I think all the institutions you're probably part of want to help you bring you back on the normal track as it were and again kind of Martin Wallace, the principle I mentioned. One of the things that was remarkable about him is despite the fact that he was a principal, that's almost the perfect societal clip art of someone who brings you back on track and makes you do the done thing. Instead, he was incredibly supportive in us wandering in all our weird and wacky ways. And so we're really interested in how you, I'm really interested in how you help people wander and go down those rabbit holes. Similarly, actually Stripe invested in a company called Pioneer.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“When we were running on a kind of a previous technology company prior to Stripe, and he just kind of made it work, despite the fact they had all their attendance requirements and things like that, he was willing to enable that because he felt like it was a good thing. Or in the case of Patrick, Patrick just decided to skip the Irish end of school exams and do the British ones as well because he could shortcut and go to college earlier this kind of extremely benevolent oversight of us and flexibility and understanding in a very unassuming and quiet way where it never really came up as a big thing. It was just you almost assumes that of course I want to enable you on the path that you want to be on even if it makes my life hard and it's extremely different to what I might be used to. And so as I think a lot of the acts of kindness that people have done for me and especially the Irish themed ones is some of the most interesting ones are ones that”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“At his place for a week, and so we get there, and it wasn't one of his many guest rooms. We get there at the studio apartment. And so he's like, okay, you can take the bedroom. And he sleeps on the couch. But that was for me kind of a very Irish act of kindness when first moving here. Or similarly, when I was in secondary school, we just had this incredibly understanding principle where we always had various pursuits and weird things going on. And we were serious about academia, but we were taking maybe an unconventional path. And so this principle, a guy called Martin Wallace, who's since passed away, sadly, but he was always incredibly understanding that we had a path in mind that we wanted to take. And it might not be fully aligned with all the rules that were written down that they had for running a secondary school. And so I just dropped out of half a year of high school that I more or less.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“I was reflecting on this. And so I grew up in Ireland. I spent all my years there until I moved out to the United States for college. And I feel very culturally Irish. And there's something about acts of kindness I've experienced with Irish people that's maybe different to that I've experienced with Americans. And just there's something about kind of the culture there. Just to give you maybe two examples. One is first moving out to San Francisco, the person we stayed with was an Irish guy. And the way we got to know him is how to kind of going away party at MIT. There was an Irish guy who came to the going away party, didn't know me and Patrick didn't know each other that well, but oh, sure, you're in San Francisco. You can stay with my brother. So barely met the guy, never met his brother, but this guy, Lorkin, very Irish name, was willing to let us.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Venture capital, this notion that you're getting a bundle of experience the partner can bring. So Mike Moritz is Sequoia Capital and he invested in Stripe in 2010 and joined our board in 2011. And so again, it's been really fabulous from a company strategy and from a hiring perspective to have that experience, which is a totally different set of experience to Jonathan's experience that I just mentioned. It's been really helpful to have that as we've built out the company. And so again, I think what you're looking for is in building a board is a set of experiences that will be really valuable to the company, both in building the company, but in occupying that governance seat, who are the people that you want ultimately accountable to shareholders.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“To help the shareholders is to help the management, but there can be no confusion about that. There's some specific roles that exist within the board, the audit committee, the compensation committee, things like that, where the board member will actually be put to work inside the company to be a relatively high workload task. So that's one set of responsibilities. Then, depending on the experience that the board member has, I mean, generally you have people who are much more experienced at a certain set of things and they're able to contribute that experience to the company and to people who maybe are much less experienced in that. To give you a few examples, we're hiring a CFO right now, Jonathan Shadwick, who's on our board and previously was the CFO of VMware and Skype in various places like this, has been extraordinarily helpful to us. And as we run that search, because he's actually done the role of a public company. And so he's much more experienced in the domain than we are. Similarly, you see in lots of kind of”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, we've been lucky to have incredible board members. And I think part of they're all different Pokemon with different strengths and weaknesses and attacks and such like that. And so I think it's important to kind of for the board member to know what they are providing and for the company to know what they should be getting from the board member. First and foremost, obviously, it is a governance role. You are managing the management team. And I think there's a buffet called this out in his letter this year complaining about the cozy relationship between board members and management at company. But I think that is an important aspect of it, which is board members need to realize that they work for the shareholders and they are the boss of management and not the other way around. I think ones that internalize that relationship tend to be the most effective. And look, that's generally pretty friendly because oftentimes the best way.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Felt like just raking it in. I mean, just absurd amounts of money for kids at the time. And just the notion, and we would look at the App Store would give you these reports of where people are buying the app and you have sales happening in Saudi Arabia and Mexico and all these places buying your app. But again, these two Irish hooligans running a multinational business, I mean, I think that was one of the first times for me where it was really striking to feel that.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Patrick and I, it was actually a little contemporaneous with Stripe, we had a set of iPhone apps for the first from the very start. You probably remember those that one year between 07 and 08 when there was no App Store. And so there were jailbroken apps. And Patrick and I ran a business that was offline Wikipedia for your iPhone. And so compressed English Wikipedia was the largest by far, but if you stripped out tables and images and everything like that, you could compress it to have it fit on four gigabytes was the first release iPhone. You could have it fit on a four gigabyte iPhone. And it was especially popular overseas because unlike in the US, the iPhone didn't launch often with good data plans. And so you had people without internet access. And it was really useful to have this Hitchhiker's guide to the galaxy. But we were at the time when we started doing this, we were teenagers. We were selling it in the app store and we were making to, I mean, pop to teenagers.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it kind of has to be right now the increasing globalization that's been driven. I mean, COVID has certainly given it a fillip, but it was a trend that was happening anyway. But from a product point of view, we're deeply investing in it. We didn't really cover this. But Stripe, the company is very global where we have engineers in Dublin and Singapore and Mexico City and all these places around the world building for all the startups that are springing up in all these countries around the world. And again, COVID drives it even further. But the fact that if you are a kid in one of these countries who grows up interested in technology and previously you could look over the fence as the game that everyone else was playing but not participate and now you get to really meaningfully participate in the internet economy, that's exciting.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“That's actually true for a lot of other businesses. I mean, banking is another classic one where there is not a giant number of new banks in the United States. And so instead what we've seen is a lot of consolidation of share in the industry. I mean, airlines, another classic example. And so, I mean, you can look at lots of these other industries and their structure and how they work, but part of what I found so exciting about technology by contrast is it is not a fixed pie that everyone's looking to find creative ways to redo the capital stack or do a roll-up or something like that. But instead, we can just create all sorts of new technology wealth and all sorts of new technology value. Someone will come along and do something super interesting in payments. I'm like, whoa, that's awesome because that's just kind of taking share away from Stripe.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I still find technology one of the most interesting places to look because what I find so exciting about technology is from a business point of view, it's positive sum. So many other businesses are essentially, I mean, they learn not to talk about them this way, but there's all these business euphemisms for the fact that there's a fixed amount of supply in this industry, and we're getting really good price discipline. That's one of these investory euphemisms for not competing too much on price or revenue optimization and things like that. As you look at something like, I mean, real estate in many kind of parts of the world, barriers to building mean that part of what makes it a good business is the fact that there's a fixed number of assets that can be monetized. And so you are getting the, in the case of San Francisco, a huge amount of the wealth creation has flowed directly to landlords in San Francisco because it's so hard for new construction to take place there.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Lots of features of Excel that make it a really nice programmer environment and really nice to. Many more people able to participate in software creation and kind of smooth the on-ramp, which is right now there's like a really sharp vertical part of that on ramp.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Difference in the Irish technology industry and technology scene versus when I left back in 2009. That's not the case. On no codes, I don't think no code is fully a panacea because I think there's a set of even when you're doing no code, you're still reasoning about the relations between different objects and data flows and things like that. And so I think when you're building an app with Zapier or something like that, you're still doing a form of engineering. You're just not necessarily writing codes. And so hopefully that's something that can give leverage to people without necessarily needing to have to spend quite as much time in it. And this is not new, by the way. If you look at Excel, no one calls it a no-code tool. But Excel, I think, is one of the most underappreciated programming environments in the world. The number of Excel programmers versus people using what we think of as more traditional languages is really something to behold.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, the answer to how short stuffed we are in engineers is still clearly loads in that Stripe is an investor in a company called Lambda School, and you've probably seen what they do. It's really nifty. But I mean, they're essentially, they often explain themselves in financial terms of being an arbitrage play where they help people who are in software engineering is such a highly compensated field that people who might be working some other job that want to make the jump into software engineering, they help them via remote night courses over the course of, I think it's nine months get trained up in a software, effectively a software engineering degree, and then move into the field. And so the fact that they have had such success, I think, speaks to the fact that we're still really short of software engineers. And again, that's our experience with Stripe doing lots of hiring in that field. Again, I think one of the really exciting trends for me that we touched on earlier is more and more software engineering moving outside the Bay Area. Like when I go back to Ireland, it's crazy. It's night and day.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're making overall a macro developer productivity improvements where we spend our efforts and stuff like this. So we are, I would say it's something we probably spend a lot of time on compared to other companies is developer productivity and getting scientific about developer productivity. And yet I still think we're really early in our journey compared to where we could be.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Any kind of overarching metrics to compare and contrast the productivity of different segments, that's something that we are really interested in, that we have not made that much progress on. We have found, I would say we do probably at Stripe, a lot more surveying of engineers than other companies. And it's not the best system of metrics, but I think it's better than nothing. It's kind of analogous to look at how all the media companies work, and it's lots and lots of or any kind of advertising company, lots and lots of consumer surveying, get brand awareness, TV ratings and things like that. So that's how all those industries run. Similarly with Stripe, if you're an engineer at Stripe, you spend a lot of time being surveyed because that way we can get a sense for, okay, how productive are you in this domain versus where you were six months ago? How productive are you in this domain versus this other domain where you used to work? And that can give a sense for”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so within sales, there is measurability down to the level of the individual person and even down to the level of month by month on an individual person. You've probably seen these curves, but companies talk about time to productivity curves with salespeople where it's actually a measure of a product's complexity that maybe in B2B, SaaS, a standard time-to-productivity curve would be people are at more or less their terminal productivity within six to nine months. That would be relatively standard. But that is the level of granularity you have on a domain-like sales. Then meanwhile, you look at the domain of software engineering. Look, I come from, Patrick and I wrote that first version of Stripe, my first love and domain where I spend a huge amount of my time, but it's incredible to me how hard it is to measure the output of software engineering. And you can measure us in, you can look at the goals that we set out to accomplish and how good a job we did at accomplishing them. But if you're trying to put any...”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Payments, no, I mean. As still learning. I mean, we're touching on it here, but I talked about this phenomenon of the shared playbooks that Silicon Valley is developing. And I really think this is what's going on. It's one of the things that is probably under discussed, the notion that there is a common playbook that goes from company to company in people's heads. Maybe one of the most mature ones is the B2B sales playbook. I mean, there is really a set of best practices there. And Silicon Valley is on version 27 of the playbook, and it's always being updated. People took the playbook from Oracle and applied to Salesforce with improvements, and now all the up-and-coming B2B startups today are kind of modifying that and making improvements. But it really is a shared playbook. As we look at engineering, it is interesting to me. One kind of related to the measurement question we were just talking about, it is frightfully hard to measure engineering.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Volume versus CapEx required to expand. We haven't fully chased this through, but I think that's a really interesting distinction because oftentimes you can have technology companies that really spend a lot of, I mean, Buffett obviously always talked about the example of the textile mills that Berkshire Hathaway got to start with and just being such an incredibly terrible business because you're always spending this CapEx just to tread water, just to stay in place. I think similarly, it's important for companies to be honest with, I mean, not only external investors, but companies to be honest with themselves on is this spend just the cost of doing business, the cost of operating our business, and we are maintaining our competitive position, or are we expanding in some way? Are we growing our share of market? Are we expanding to a new country? Are we developing a new product that will monetize separately? But it's probably worth you being honest with yourself on the answer to that question.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“And sadly, we don't even have kind of the metrics that we're fully happy with internally yet. But I think it's interesting that I have not seen a company publicly in how they kind of talk about things where I'm like, oh, that's clearly the answer and that's how we should do that. And I think what you see is a number of proxies that are maybe, I mean, unsurprisingly, the proxies are perhaps overly generous to the companies where they say, okay, we're going to count all of this spend as R&D, something with a long-lived payoff. But I thought it was interesting people talk about concept buffet introduced in his 86 letter of owner earnings. And the more interesting thing about that definition for me was splitting out the two forms of CapEx. CapEx spend that has a multi-year horizon or a multi-year payoff, but splitting out Capex into what is just needed to tread water, investment required for the company to keep its same competitive position, keep its unit.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Real intelligent view on what is the capital that we're developing, what is the multi year value that we're getting from this system that we're building versus what is the actual ongoing cost of operating the system. And so that's something that, I mean, we spent a lot of time at Stripe getting good internal management views into at a system-by-system, line by line level. How much are we investing in kind of the future potential of this system versus what is the existing profitability of the system? But I'm always surprised, I mean, you must be too as you read kind of the statements of various public companies out there, how unhelpful they are at answering what is really the core question for a technology business, which is how much are you paying to operate this business versus how much are you investing in a long-lived technology advantage?”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Categorize them as cash flowing or growth. So if you're looking at Amazon, you might say, okay, well, the retail business produces money, and then we plow this back into AWS as an investment area. And so we'll just kind of separate out AWS and the retail business, and we'll look at the profitability of each, and we'll treat AWS as an investment area. But of course, that's not quite right because the retail business, it's fractal. The retail business itself, as you look at it, they are expanding new lines. They are expanding to new geographies and things like that. And so the retail business itself is composed of a cash flowing core business and then new expansion areas that they're planning that money into. And so as we look at how kind of accounting works for this, it's really basic. All you have is companies that are spending lots of money on operations, engineering, salaries, operations salaries, lawyers' salaries, kind of those general OPEX.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the reason this gets interesting is because you and I might very reasonably want to think about what is the profitability of a business after you strip out all the investment in future growth. Because as you look at the technology sector, the entirety of the technology sector, one of the things that kind of unifies technology companies is that they don't tend to produce kind of huge amounts of cash flows, certainly until later in their maturity. companies that are in their growth phase, either pre-public companies or recently public companies tend to be mostly reinvesting that in growth. And so, okay, one question you might have is how much of this is a profitable underlying business versus how much of it is investment in a future systems? The best answer that people tend to have is that they split out different lines of business and kind of”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Engineers have laboriously worked on to make good. In the case of Stripe, it is the payments engine along with Stripe Radar, the fraud detection engine, along with lots of process knowledge on how we all work together and again, how we kind of make sure that the maximal number of payments go through online and we have all the hookups to various other places. But again, the capital has gone from something really tangible, an espresso machine doesn't change in value that much. You can reason about the value really easily. Why can you reason about the value really easily? It doesn't change that much over time. There's a clear market for it. You could go out and sell this espresso machine. You paid something for it. You just bought this espresso machine. And so when the accounting principles is you just carry things at cost for depreciation. But again, it's really easy to reason about the value of tangible capital like that espresso machine. It's really hard to reason about the value of intangible capital like stripe radar, what is the value of that system that we've”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“The standard way we look at businesses is just completely wrong is in reasoning about essentially research and development and intangible capital. And so capital obviously has really moved over the past hundred years away from heavy machines that you'll really hurt your foot if you drop one on them to intellectual capital and intangible capital. And so traditionally, if you read a balance sheet and a company has a bunch of stuff, has a bunch of assets on its balance sheets, what would that company have? Well, if you're a cafe, maybe your assets are the coffee machine because you bought a really expensive coffee machine. These days with technology businesses, what is the capital within the business? What are the assets that the business have? It's probably software that has been developed in-house by the business. Google, it is the search engine that now for 20 years”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“We're also separately, importantly, trying to solve the needs of equity holders where they're trying to understand what are the long-term cash flows for this business going to be. And the reason I bring that up is people think of accounting and gap as these fundamentals that are etched into stone tablets. I mean, accounting standards are invented by us humans to give us a view of a business. And they're up to us to choose. I mean, they're generally in kind of long boring committees, but we humans choose how we look at businesses. And I think we should be able to reason about what's a better way, what's a worse way to look at businesses. And that's why I have absolutely no patience for the crowd that's all this whinging about non-gap metrics. Because, I mean, you just, there are relatively arbitrarily chosen and constantly tweaked set of standards for looking at a business. And so if they're constantly tweaked, presumably you would expect that they can be improved upon. And one of the areas in which I think”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, if you start with, it'll sound like a funny question. If we imagine we're the product manager for accounting, we're just hired at, I can't remember the name of the agency that manages GAP, the accounting principles, let's imagine that we're hired as a product manager there. And so like any good product manager, we start with, okay, well, what are the jobs to be done? Who's our target customer, a target persona? It's interesting to think about we're actually trying to do a number of different jobs with accounting. We're trying to figure out how much profit we earn so we know how much tax we have to pay. That's one job we have. We're also trying to help the business run itself. We're trying to provide a view of the business to managers so that we can determine whether we need to invest in new machinery to be more efficient or something like that. We're also trying to solve for the needs of creditors where people want to be able to evaluate the business and understand, will it have enough money to pay off its debt?”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“It kind of reminds us of payments before we started Stripe. And so we've started playing in that space again to make it easy for if you're doing anything that involves verifying someone's identity, it should be easy to provide that.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“The bar for that is a little bit higher than it was. And I think you've seen this reflected in it's a little bit harder to like a really lean consumer startup than it was before. Maybe if you're doing anything involving video, again, I think that infrastructure is not where it's going to be 10 years from now. We have a lot of challenges there. And the other thing maybe is that obviously there's much more of the internet becomes regulated. I think we haven't fully caught up with that in terms of making it easy for the companies that are regulated. And so again, there's not all the infrastructure we need there. One area of business that we've just started dabbling in is identity verification because there are so many different parts of the internet where you need to verify someone's identity. If you're going to pay out money to someone, that's one that's fairly close to Stripe's business. Then you need to verify people's ID, why with all the AML rules. But even you think about it, if you're selling any kind of an age-restricted product, you just check their ID so the confident of their age. That's something that historically has been really, really hard.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Build and deploy software now is not what it's going to be 10 years from now. That's going to change. And in particular, we've actually regressed a little bit where it has gotten harder to build a consumer startup than it was 10 years ago, I think, because 10 years ago, you were just on the web and you had, I mean, there was WordPress 10 years ago. You could use some pretty simple frameworks to get a product out there broadly to people on the web. Now, if you are starting a consumer company, you probably need a iPhone app, you need an Android app, maybe there's some other platforms or mobile platform you need to take into account state of the art for web has evolved and maybe kind of the expectations for real-time or kind of the capabilities of your application, those standards are higher. And so as a result, I think just launching a consumer service.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you really have to contrast where we are with where we were 10 or 15 years ago in that it's really amazing that so much of that, I mean, Stripe is obviously part of this, but Stripe is absolutely not all of it. The infrastructure that you have available on tap at a very affordable price so that you can reach a global audience, whether it's, I mean, you mentioned Toby from Shopify. Shopify, obviously a very big part of that. The tools for software development in GitHub and all the deployment hosting platforms, the cloud platforms, things like this, is a radically different environment than we were in 10 or 15 years ago. And I'm young. I'm 29, but I'm already at the stage where I'm talking about, well, when I started in the technology, and I feel like I'm that guy, you young cripper snappers don't realize what I was like in my day, but it was much tougher. There's much less on-demand. I'm not that old. It still feels to me like the way we...”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. But as I was reading this, they describe how one of the cable companies, I can't remember who getting in a spash with a local Colorado town and changing the programming to just be call your mayor and tell him you want cable in your town exactly like the tactics Uber might have used during that period when they were getting into fights with local cities. And so again, there's a lot of history repeating itself. Those are maybe two of the histories that spring to mind.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“American phenomenon. I don't think there was really quite as much of a scramble in other companies, but cable this new technology laying, it was a new technology platform, a new technology paradigm laying Coax Cable to all these towns across America. And you had way more, I mean, television bandwidth, number of channels possible than previously was the case. When you read it, it actually rhymes a lot with some of the technology shifts that we see. And so firstly, you had actually, in our discussion of serial acquirers, we left out John Malone, who's presumably one of the most successful serial acquirers of all time with Liberty Media, where they basically continue to roll up small cable companies and built a very large company out of acquiring kind of small little local cable companies. But the second thing that was, of course, interesting is it was one of the original kind of new technology company from out of town versus local municipalities. And it was funny as I was reading it, when I say it, I think it was the book.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“And not an internet bubble in that the run up of the Worldcom stocks and people like that was much larger in terms of total size than all the internet companies and things like that. And so there's some good reading to be done on what happened with that and I really drove a lot of then the, you basically had all this investment and optimism around the growth of the internet. And I think it was either WorldCom that kept going around with this talking point of the internet is doubling every four months. I felt like it was going to the moon and bandwidth and things like this. That ended up with this incredible oversupply of internet capacity, fiber especially, that then made things really cheap when everything washed out in 2001-2002. And as a result, it was a platform on which everything else could build during that period following. That's one that's probably interesting to study. The second is actually I was pretty interested in the cable companies that emerged in the late 80s, early 90s. This is like a particular”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've never seen that format. It's super interesting. But anyway, I probably index a little bit more on that. I would say there's obviously tons of content on Google, Facebook, the super prominent mainstream companies. I think the interesting things to think about are one, there's a lot of content out there that's essentially propaganda by these companies, the blessed accounts. And so it's not like there aren't interesting facts there, but they're probably not as interesting as the things the company really wish you didn't read because they go a little bit off script, the official accounts, and those can be a little bit harder to find. The other one is there's a number of technology transitions that are maybe a bit understudied compared to all of the prominent major internet businesses these days. And perhaps two to highlight the telco bubble of the late 90s, early 2000s, people don't really remember this, but by market cap, the 2000 bubble was really a telco.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“A little bit on what aspect of technology you're interested in because Stripe sells to businesses. So I probably indexed more on boring B2B behind the scenes content than maybe someone who's starting a consumer company. History of Salesforce is quite interesting to look at. Somebody, the history of Oracle is interesting to look at. There's a good book on Oracle called Soft War by, I can't remember the author, but the name of the book is Soft War Software.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Expansion versus software to make the businesses life easier and kind of take some of the administratia off their place, but then what actually gets worked on within those constraints will often be determined by the teams.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of technology founders is their eyes are bigger than their bellies. And there's a huge number of enticing investment areas and more than they have resources to actually be able to go after. And so there we have to be fairly disciplined on, again, if you think about these two layers of how this right business works, one is this really powerful global payments and treasury network that makes it easy to move money anywhere around the world. We'll be fairly opinionated in a top-down way on part of the most important initiatives for OK, we have to make it easy for businesses in around Europe and Southeast Asia, those are two of our priority markets, we're going to make it easy for those businesses to accept money. We'll do that in a fairly top stand way and then similarly for the software business. And so you end up marrying together those top-down and bottoms-up initiatives where you provide high level guidance on this is how much effort, roughly speaking, we'll be spending on”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Interrupted. And what we realized was that it was a failover of hardware or switchover of hardware that was happening on their end that as a result a few transactions would get dropped. No one would notice this, no customers really even noticed this because it was such a temporary blip, but it was bothering them. And so they went and they found a way to be able to predict when one of those failovers was going to happen and anticipated and switch over to the new hardware before it happened such that customers wouldn't see any interruption. You get a tiny increase in the number of payments that will go through successfully for the business using Stripe. No business could ever kind of afford to do this optimization themselves. But in aggregate when you add up all these optimizations, they're really meaningful. That's an example of the kind of thing that really neat and happens in a bottom-up way. I think the top down side of it comes from what is the strategy of the company. And I think what's probably painful for”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's two ways that product development happens at Stripe, tops down and bottoms up. And when you say, how do we decide what to let people at Stripe explore, there's a ton of exploration that's going on that no mandate has come, there isn't any kind of sign-off process that's been established for it. And so just recently, the team that works on credit cards with Stripe, I mean, remember when I said that this really is a scale business. You can just go arbitrarily deep in improving the product in all sorts of incredibly detailed ways that would never be worthwhile for any individual business. And so an example of this that was very bottom-up was the team that manages our integrations with Visa, or directly integrated with all the card networks. So we have our hardware sitting in their data centers. And we notice these occasional blips in service coverage where just really for a moment it would be...”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Who are not from the United States working in the United States, and now we have lots of global offices around the world. And so there really is a very global, diverse perspective within the building. And as you think about engineering products, Stripe as a global economic infrastructure provider, it's really important to have those perspectives because the product that succeeds in the United States is actually going to be very different from the product that succeeds. I mean, even in the UK, never mind Japan, never mind India. Commerce is very culturally nuanced, and a business in Indonesia is not going to buy from an American company who thinks that they can swan in without taking into account the local considerations. And so that's been really important in our international expansion actually working.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Some people call this the lean methodology. Lean is a little bit different in a bunch of ways. I do agree with the basic spirit of it, which is when launching new things, you really need to start them small and make them earn their way. Make them respond to customer feedback and see if they actually work. And again, this ties into the resource allocation capital allocation framework that we were talking about a little bit earlier. So that's definitely anything you see that has been launched from Stripe. and probably a pretty core team. The mother gotten help from lots of different parts of Stripe, but it probably had a pretty core team that was working on it. That's one thing. The second thing, this is probably fairly obvious, but is worth calling out, is that most markets are not like the United States. And honestly, I think one thing that's been pretty helpful for us is, I'm obviously, as you can hear, not American, Patrick is not. Stripe has lots of people.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Funny thing that happens is new things at Stripe are almost always started by really tiny teams in that any announcement that you've seen from Stripe probably was a team of less than 10 people when it launched and certainly was a team of less than 10 people enough and less than five people in the kind of core part of its gestation and its development. And I think that is really important. I think it's often easier to get fast work done with a small team versus a large team. And also, I think the classic big company mistake is to throw 300 people out of a problem and have them executing for three years before getting any market feedback. The case of the original version of Stripe, Patrick and I built the first version of Stripe and we had the first customer using it within three months of writing the first line of code. That was really helpful because then we had actual validation customer feedback, know what's useful, know what's not. You're not working on the wrong.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Being built on how we work. Companies wouldn't like to hear it described that way. So they're like, wait a second, that's our IP. But that's basically what's happening. There's a collaborative playbook that's being built in Silicon Valley, which is kind of the set of best practices for how we do things. Google imported lots of Google is famous for OKRs. Google didn't invent OKRs. They took them from Intel. Facebook really built a lot of its advertising.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Another way in which Stripe tends to operate is we think a lot of this stuff can be studied. And that's not to say that the experience isn't useful, it absolutely is. But as we develop our frameworks for thinking about these things, we try to at least come at them from an informed perspective. And so as we've looked at something, say like how you do company planning, how you plan what the company will do in 20 or something like that. This is the bane of our existence. I think it's the bane of every larger company's existence where it's just a bear of a process and we continue to tweak it and try to make it less of a bear. But one of the things we did is we were putting this process in place is we went out and we studied how do Apple do it? How do Google do it? How do Amazon do it? How do lots of other companies that have been this before do it? And what can we learn from those? Because I think an interesting thing that's happening in the technology industry is since there's so many employees who've been at different companies or things like that, there's almost a shares playbook that's”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Benefit of hindsight what the best return is going to be because you're dealing with so much uncertainty. But I find that a useful framework for thinking about that with Stripe because we are really fortunate to have a huge number of potential areas in which we can expand. One area in which we're expanding is internationally. And so we just launched, I mean, just last week we launched Stripe in Romania and Bulgaria and a handful of other new countries and we continue to invest resources in making Stripe available to businesses in more countries. But then we have all these interesting software products that we're developing that solve additional problems for businesses. We have our Stripe Radar for fraud prevention or we recently started lending to businesses on strike. And so that's another potential use of resources. And so again, you are making these essentially capital allocation decisions, which is should the marginal team work on fraud prevention or lending or international expansion? And it starts to give you a framework for thinking about that.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Get shut down or something like that. And so I think as a company grows, the outcome for the company really depends on how good a job they do at putting resources towards the most productive use of them. And by the way, I've often found that investors, when giving advice to operating companies, have a really good knack for saying intelligent-ish sounding things that are completely non-actionable. An example of this is an investor at a board meeting who's like, well, you really want a deep moat around your business. And you're like, we're just trying to run the business here. How do I do that? And so similarly, I think placing resources towards the area of highest future return, I mean, that is the framework for what all businesses are trying to do. It's actually not that actionable when you think about it, both for two reasons. One, you tend to have competing time horizons, should I be looking for a return over one year or over 10 years from now, and there's no great answer to that. And it's hard to know without”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source
“Resources in the public markets, that's capital. Internally, a company tend to be a little different. Maybe it's scarce engineering resources or scarce management bandwidth, something like this, towards the most productive use. And I think when companies that are really successful are the ones that internalize this lesson and operationalize it. And so Amazon, if you, I mean, they're well cited here for a reason, but I think they are probably the tech company that are closest to being pure capital allocators in how they work where they have a very strict and intellectually rigorous framework for funding new bets and allowing people to try out new things and then the initiatives that are working, they really pour gas on. Alexa has thousands or maybe tens of thousands of people working on it these days because it's one of the things that works, the initiatives that don't work just get resources withdrawn from them or eventually.”
2020-06-16 · Invest Like the Best · John Collison – Growing the Internet Economy - [Invest Like the Best, EP.178] · IDENTIFIED FROM THE TRANSCRIPT · source