Full transcript: Stripe CEO Patrick Collison on Recode Decode

On this episode of Recode Decode, hosted by Kara Swisher, Stripe CEO Patrick Collison dropped in to talk about startups (they’re hard to start, hard to make profitable), why he chose to do a back-end payments infrastructure company and how Silicon Valley, for all its faults, is still a place where good ideas are valued and risk of failure is accepted as the price of admission.

You can read some of the highlights from the interview at that link, or listen to it in the audio player below. We’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Google Play Music, TuneIn or Stitcher.

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Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media Podcast Network.

Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the person who always tries to use Apple Pay at the Microsoft store, but in my spare time, I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode anywhere you listen to podcasts; we’re on Apple Podcast, Google Play Music, TuneIn, Stitcher, SoundCloud and more, or just visit recode.net/podcasts for more.

Today in the red chair is Patrick Collison, the CEO and co-founder of Stripe, and e-commerce company that allows people and businesses to accept payments over the web. He started the company with his brother John in 2010. He also has the best LinkedIn page, which is full of horrible business-y jargon. Patrick, welcome to Recode Decode.

Patrick Collison: Thank you very much for having me.

Yeah, we’re watching all of you carefully and what you’re doing, and stuff like that, but I’m very excited to have you here because you’re one of the more interesting. We’ve had you onstage at the Code Conference talking about what it’s like to run a startup. You obviously have one of the more understated of big companies in Silicon Valley startups, at least.

Well, we do back-end infrastructure, so it doesn’t get quite as much attention.

Yes, that’s true, but it’s actually a really important and interesting part of the changing business environment.

Mm-hmm.

Let’s talk a little bit about Stripe, besides the fantastic name it has, give us a little background ...

We started out with a much worse name.

What was it?

/dev/ Payments, and so the only way was up.

Really?

Yes, so for folks who write software, or use Unix or Linux or any of these operating systems, you know, they’ll be familiar with ... I apologize, this is ...

No, go for it. Go for it.

There’s the /dev device hierarchy and so that’s where your hard drives and your mouse and your audio system, whatever, they’re all represented. Part of what Unix’s breakthrough was, back in the ’70s, is that there was this kind of structured, coherent, standardized way to represent all these different heterogenous devices, right?

Mm-hmm.

A really straightforward interface for dealing with them. When we were sort of thinking about Stripe, although it wasn’t called Stripe back then, when we were thinking about this problem space back in the beginning, we were so struck by how needlessly complicated it was and how every different payment system worked a different way and it was weeks or months of set-up complexity because of all the random needless differences that existed. We thought there really should be some standardized way of handling all of this, sort of like there is for devices on Linux and Unix.

So you gave it a needlessly complex name?

Well, a needlessly complicated name that got at this notion of simplicity that Linux had pioneered, and so /dev/ Payments, if you’d ever written low-level software in Unix, it made total sense; you’re like “Aha, I get it.” And then, if you had not, which of course the vast majority of the world hasn’t, then it was impenetrable.

You took this in to a VC?

We took it to a VC and we got the response from them that one would expect, and we had a nice meeting where they, at least politely, sort of listened to our entreaties, and claims, and aspirations, and at the end they asked us, “So what’s it called?” We would tell them and it really felt like the meeting started to go south at that moment.

The particular moment that caused us to definitively decide to go and change this was, we’d actually checked, being the nerds that we were, that Delaware permitted slash characters in names. This had to pass muster with their rules. Then we discovered that they didn’t actually allow a slash character at the beginning until the company was actually incorporated as /dev/ Payments.

Right, so no slashes.

Then we started to get mail where people were like a slash character and then spelling out the word, and then it was all ...

Right, we had a slash, we got rid of it. Recode had a slash.

That’s a good point. I hadn’t thought of that.

We had to remove it. People did not like it. I loved it, but nobody else did.

We’re kindred spirits.

Yes, exactly.

You get the evocative attraction of slashes. Then we decided we had to change something else and we decided we’d go to the other end of the spectrum, the other extreme, and just find a word that everyone knew, was easy to spell, ideally one syllable, nothing complicated. Whatever the polar opposite of /dev/ Payments was, and we checked where there were just a whole bunch of single-syllable one-word domains were available and Stripe was one that actually turned out to be.

Why did you like it?

There’s nothing special about it. It was just available.

There’s a credit card stripe.

People think that. I remember the first time I ever met Mike Ovitz, he was really impressed by it, by this name and how thoughtful it was and the analog to the card stripe. And stripe kind of implies philosophy or something, right?

Mm-hmm.

I wish ...

Yeah, it just was there.

It was an available dot-com domain name.

What was the other one?

We were also, we considered ... Stripe is really a builder, as in building things, and creation and so forth, and so we kind of found the mental image of a forge, like some kind of blacksmith, sort of like that, was attractive to us. But then we realized that “forge” had some other connotations, especially when applied to payments, and so we sort of dropped that one.

I think Forge was one of our names, too. We went with the same naming company, I guess, or something like that.

Oh, really?

Yeah.

We could not afford a naming company. Our naming company was we’d get back to the office late in the evening and we’d page through random books, just pick out words that sounded like nice words. I remember John, at the time, had a motorcycle repair book and indeed he had a used motorcycle in the office, but so his go-to book for good words would be this repair book. He’d be like, “Carburetor.”

That’s actually a good name.

Explain what you were trying to do, the concept of what you do. How did you come up with it? You both obviously have an accent, you’re from Ireland, and what was the concept of what you wanted to do? Everyone else was doing very consumer-facing.

Right. My background, both John and I, I guess, had been sort of ... We didn’t think about it this way at the time, but looking back, we’d always been interested in infrastructure. One of the first major programming projects that I worked on when I was growing up in Ireland, back just coding by myself, was a programming language. Then I spent a bunch of time working on a new web framer. Just back-end things to make it easier to go in and build things on top of, do other development.

We started a small, a really small startup, that never really went anywhere especially significant, back when we were quite young; I was 18 or 19, John was 16 or 17. That company was bought in this small little acquire, but through that process we sort of got familiar, somewhat, with some of the challenges of building a startup. In particular, we also got to meet a whole bunch of people who, themselves, were building startups, and got familiar with the challenges that they encountered. What was really striking to us back then, in 2009, was that ...

This is in Dublin, you’re still in Dublin?

No, we’re in the U.S. at this point. We’re actually, at that moment, we were both in college in Boston. A whole bunch of our friends by then were founders or entrepreneurs, or people just working on startups of various sorts. What was really striking to us was, if looked at the app store, the iOS app store had come about at that point, it was incredibly easy to charge for things, and there were all sorts of people, people like us, people who had built indie apps or created something on the side, or whatever it was, that were generating some modest revenue. That, in many cases for them, was quite meaningful. We actually had created some apps in the app store, and they were generating some revenue for us, and it really was not huge, but it was present. You know, when you’re 18, 19, 20 ...

It was easy?

It was easy. Then we were really struck by how, when you turned your sights to the broader internet outside of that particular ecosystem, it was so incredibly difficult. There were so many things we realized that people we knew, our friends were building, that they weren’t charging for; not because they weren’t intrinsically monetizable, but because it was so difficult to do so.

Right. To set up a storefront or whatever.

Yeah, exactly. Right.

What were the options at the time?

The options, basically, were we really knew nothing whatsoever at this space kind of starting out, but we came to realize that the options that existed were off-shoots in different ways of traditional banks. Banks, which are not technology companies, not software companies, not ADI companies, because the nature of the problem ... we’re sort of forced to provide this service to developers, right, and it’s very difficult for a technology company to do all the ...

Right, they’re so used to retailers or whoever else, their customers, it’s not their natural customer.

Exactly. They had done an admirable job of doing their best to provide a developer-oriented service, but it’s kind of like your local bank trying to build AWS. It’s just really not their core and natural competency.

Right.

Of course, in PayPal, there was one technology company that had tried to go in the reverse direction, to bring technology to finance, but this was 2009 and PayPal had been acquired and I think they had set off on the right mission, but from our vantage point they’d kind of lost their way.

Sure. They were focused on eBay.

They were focused on eBay, they were focused on peer-to-peer, consumer stuff, whatever, so there was no technology infrastructure provider for payments, right? In practice, what you do as an entrepreneur is, you go to the bank, often in person, whether it was in person or not, you have to fill out actual paperwork, you have to mail it away, you have to wait for a response, you have to plead your case, try to get approval, you have to knit together a couple of different companies. There wasn’t a single payments company you could go to. This is getting really arcane because you’d have to get a gateway and find an ISO and then figure out how to connect them together, and the whole thing took several weeks. It was sort of as if — and again, you had to go through all these steps in order to just launch a website. The thought from our standpoint was ...

Which, of course, the least of your worries is the payment part, it’s mostly the product.

Yeah, and so the thought from our standpoint was, “Why is there not some service you can go to, put in your basic details, your bank account information, your personal information, whatever, and click, register, activate, what have you, and now you’ve access to some service that will enable to you to just charge credit cards.” That was all we were thinking of in the beginning, and the scope of what we’re working on, and sort of what we have realized is the actual full problem space has expanded, but the initial motivation was, “Why is it so difficult? Why can I not in a single evening go from conceiving some idea to actually having an extant website where I can just go and charge my customers?”

Right. What’s astonishing is that people hadn’t done that. They did it in the big scale on Amazon, that you could buy commercial things.

No, I think you’re totally right. I think it’s, in hindsight, really surprising, like almost remarkable, that Stripe had not happened before Stripe.

Well, some had tried. Microsoft was in there for a little bit, Google was in there for a little bit, they all sort of sputtered. PayPal sputtered.

Yeah, I think it’s a really interesting question why it didn’t happen sooner, why this did not exist in 2009. You’re dead right that all these different companies had tried in different ways. I think, basically, now looking back, it’s sort of a combination of things. For the large companies, they were usually entering for some ulterior strategic motive, they wanted more consumer accounts, they wanted to build their wallets, whatever. What they weren’t trying to build is the best service for technology businesses. Then, for the smaller companies that could have done it, the startups, I think many of them, I mean, almost all of them in some sense, were kind of dissuaded by this either real or perceived barriers where you had to have these partnerships in place with banks, you had to figure out how to work with the card networks, there was regulatory complexities, and so on. I think it was a space that startups were, for understandable reasons, quite slow to go tackle.

That’s when everybody was going into the hot spaces.

That’s true.

Right, the exciting social media apps and photo apps, I’m trying to think of everything, dating, everything.

Social, local ...

Why didn’t you? Were you interested in that or just, “I think I’ll do the back end?”

I think, in the world, not even just in the technology industry, I think infrastructure gets far less attention than it should.

They do. Like Cisco. You’re like Cisco, essentially.

Yeah, I think infrastructure, I think institutions, I think the basic building blocks and tools, I think they’re so pivotally important for civilization overall, they have outsize impact. Seeing the full scheme of all institution of infrastructure, the tools and APIs for moving money on the internet, that seemed like a sufficiently large one that was meaningful, but also a sufficiently small one that you could actually make some progress on.

Right. Absolutely. You started this company, you got funded, how much funding have you raised so far? For those who don’t know.

We raised on the order of $450 million to date.

Wow. That’s a lot of money.

It is.

What do you need all that money for?

Well, we’re doing a lot.

What was your first raise? A couple million?

We did a seed round of about two million, and then we did a series A of about 18 or 19 million ...

Relatively normal amounts. Right.

It’s funny, I remember having dinner with John in October of 2009, and we’re walking back from it, and we’d been kind of discussing this sort of Striper, as it was at the time, dev payments idea, and whether we should go tackle it in some way, and I remember John turning to me, I very vividly remember this, him turning to me as we were walking through Potrero and saying, “Yeah, we should go, but let’s prototype it, it really won’t be that hard.” I still have those “It won’t be that hard” words ringing in my mind, now, sitting here eight years later.

Yeah.

There’s a huge amount ... Well, I should step back a little bit. As we just discussed, we set out with this vision of making it really easy for developers, for early-stage companies to go and just accept the first payment. The thing, when we started working on Stripe, we were working on it as a side project. We were still in school, we were working on other things at the same time; it seemed like a promising idea to us, but it didn’t seem like some monumental, world-changing phenomenon.

We came to realize, as we talked to more companies in the spaces, as we talked to just companies who were trying to deal with money online — which, you know, is a large fraction of them — what we realized is that it wasn’t just the small companies, the independent developers, the solo founders who were encountering these problems. When we talked to the mid-tier companies we realized they, too ... they had a different set of problems, but they had a very large list of them.

When we talked to the large companies we realized that they, too, were immensely frustrated by the infrastructure that they were being forced to deal with, and so forth. Then we realized there were all these companies that existed at the margins and at the edges and at the boundaries, that sort of were finding it almost impossible to even get up and running because of other impediments that were being placed in front of them.

What we initially thought of as being this sort of nice developer service, really, over time, has, again, over the intervening five-plus years, has instead become this much broader infrastructure, this global platform, for moving money online.

Right.

That turns out to require an enormous amount of investment and build-out, not just on the technical front, but in multiple countries, working with multiple regulators ...

How many countries are you in now?

We are directly present in 25 countries today; North America, Western Europe, parts of East Asia, Australia ...

That’s important because this is where the buyers were, buyers and sellers are everywhere.

Absolutely, and of course, despite the amount of investment and build-out thus far, there are many countries we, even with the fund that we’ve raised, we’ve yet to expand to, which I think gives some sense for the full magnitude of the problem, and perhaps why it hasn’t been solved so far. Then to your question of how many countries we’re in, once you then add on Atlas, which we launched back in February of last year, we now serve entrepreneurs in about 130 countries, with some meaningful direct relationship. From our vantage point we’ve made some decent progress, but there’s still a fairly lengthy way to go.

You’re morphing into a different kind of company, not just pay, but it’s more services, even. How do you look at the company now since it started? It’s got a bigger platform than just payments.

Yeah, that’s a good question. I think the categorical definition, the box that people would like to place us in, or even that we ourselves can see the company as being in, continues to morph because Stripe doesn’t have a direct historical analog or antecedent.

Right.

There isn’t a thing like Stripe that’s previously existed. What we do is we provide sort of ...

Well, you could look at you and say “Cisco,” I get that. You know what I mean? They make things and servers ...

They make things but they’re much less pivotal for the business. Don’t get me wrong, Cisco is an immensely important company, they’re one we look up to.

I think at the time it didn’t exist, if I recall ...

I guess Stripe is sort of the platform, or the toolkit, that sort of a business handles its revenue. It is so core. That revenue thing, that ancillary consideration of how a business handles its customers and how they handle, and think about, their marketing funnel, and how they think about all the regulatory or compliance requirements around them, especially for things like marketplaces; how they think about their revenue recognition, their billing logic, if you think of a SaaS company or something like that.

Right. That’s where you do run into a lot of companies.

For sure. For sure. In these different ancillary spaces, of course, many of them are well populated, but we think about Stripe as a platform for first launching, but then subsequently building and scaling, an internet business. The emphasis ...

How one builds and scales an internet business at the core, at what they’re doing. You have to provide a lot of services.

Yes.

All around revenue.

Correct.

Right. Exactly. All right, when we get back, we’re going to talk more about where you’re going and what you’re doing now. We’re here with Patrick Collison of Stripe, which used to be called, what is it? /Dev/ ...

You shouldn’t even tell them ...

That’s okay, I like it. I think you should go back to it.

Sleeping dogs should lie.

That doesn’t look so good on a t-shirt, either. We’re going to talk more about payments and where businesses are going on the internet and how they manage themselves.

Today’s show is brought to you by Audible, which has an unmatched selection of audiobooks, original audio shows, news, comedy and more. You can listen to all of that wherever you are thanks to Audible’s free apps for iOS, Android and Amazon devices. It’s not a streaming or rental service, with Audible you own your books. Patrick, what book should I listen to next?

I was on vacation last week and I think the two best books that I read were “A Culture of Growth” by John Mokyr ...

Okay, that’s super serious for a vacation, but explain that.

Well, it’s basically about ...

I listened to Megyn Kelly’s book, but go ahead.

Well, it’s basically the question of why did the industrial revolution happen when it did, and so David Hume, writing in, I don’t know, 1750 or something, said that, “If there is a rate of progress in the world, if there is some progress, it’s at a rate so slow that it’s not even measurable.” This is David Hume looking back at the full scope and sweep of human history and deciding that well, maybe there’s some progress but so little you can’t even discern it.

Then, of course, he said that basically right at the moment where we’ve seen the most astonishing take-off ever since then. There’s, of course, the question of what changed? What happened in 1750? People had been around for a long time back then and Mokyr sort of takes this view of it that, really, the critical ingredient for the industrial revolution was culture and ideas and it’s a culture of growth.

Wow, that is one serious, heavy book for a vacation. I’m not going on vacation with you, clearly, because I would be reading ...

That is probably a good call.

All right. Okay. All right. It sounds like an economics class that I slept through in college.

[ad]

We’re here with Patrick Collison talking about Stripe, his payments company he started with his brother John, only a few years ago, really, and it’s become sort of the de facto way different companies manage their revenue and payments. We’re talking about the bigger issues, what you morph into. You were providing a service that people didn’t have. It never existed because no one had this problem before. Payments were done in all kinds of ways for regular businesses. Typically banks. They would bring their revenues in and carry a sack of money, deposit in the bank, and then they would have loans and things like that. Do you think of yourself as a bank, or how do you look at yourselves? Where are you going?

Yeah, no, we definitely don’t think of ourselves as a bank. I mean, the things we care about, it’s really sort of twofold; it’s how do we have more technology businesses get started? That entails questions around what’s the barrier to entry and the activation energy required and what barriers does one have to vault over and all of that. That’s how we get led to things like Atlas where we realized that it’s not only the access to payments, but also the access to the legal system and access to investors, especially as determined by where the company itself resides. It’s when we encounter problems like that that we’re led to things like Atlas, and because we care so much about helping more technology companies get started, we’re willing to go tackle them.

The other thing that we care about it how do we help these ensuing businesses? How do we help them be more successful? How do we help them grow their revenue, find new customers, serve better those customers they already have and really help them optimize, better understand, and ultimately have a more successful ...

There’s lots of those companies, you know, customer relationship management and things like that.

Yeah, no, the certainty isn’t there, although of course because of the nature of the Stripe product and the fact that we are handling the revenue for them, there are some things that we can do that are very difficult for others.

Having insights.

Yeah, there are some things that we can do, where we think we can really bring value that those customers can’t get elsewhere, and of course there are some cases where someone else can do it as well as we can, and those ones will be, we’re more than happy to have others go serve. To answer your question as to whether we consider ourselves a bank, I think a bank has a very different conception of itself. I think they’re kind of very ... our idea of ourselves and the goals we have and the banks, they’re very divergent, and in that sense I think we’re quite complimentary.

Banks moved into helping businesses build businesses. You know what I mean?

Yeah, but we really care about technology businesses, right?

Right. Mm-hmm.

People always ask us when we’re going to build a point-of-sales system, and we’re like, “We’re not going to build a point-of-sales system because we are about technology business.” A bank has to think about, to your point, all businesses, and of course there are some things ...

Why not do that at Stripe?

Two reasons, in that, partially because you need to focus, and you cannot be all things to all people, and if our goal was to help all businesses in the world succeed, I think that’s under-determined and under-constrained. And partially because — and this kind of gets more maybe to our personalities and our world view — we think that things that the internet is making possible, that technology makes possible, the new creative undertakings and kinds of coordination and new products and services, we think those things are cool. We’re really interested in the question of, if you look at all the innovation and all the different phenomena that have arisen over the last 20-30 years, thanks to the internet, and if you ask yourself the question of how can you have more of that, how can you enable that progress to happen more quickly? How can you have the gains spread more universally? That’s just personally a cause that has a great deal of resonance with me.

Sure.

I think that Stripe generally is comprised of the kind of people who believe in technology, or are kind of optimistic about its effect, and want to have whatever future it’s leading to happen ...

There’s also plenty of market. Plenty of market in that area.

Fortunately the technology industry is a sufficiently large market to keep it going for quite a while.

Talk about, you have some news to talk about here. Your company’s growing. How many people do you have now?

We’re about 750.

Wow. That’s an astonishing amount. Where are most of them deployed? In different parts?

Most of them, well, engineering is the largest function. In terms of plurality of people most are Stripe engineers, but again, there’s just such a broad scope of work to do, right? We have people on the ground in so many countries, we have people who help solve the unique business problems that individual customers face, and we have people who solve and answer the legal challenges. We have a very large finance team because we’re now moving such enormous amounts of money ...

Right, exactly.

It’s a long list. I think that Stripe is kind of more, is both more interdisciplinary and more integrated and tightly coupled than any other technology companies. At many companies here in Silicon Valley you have the product organization sort of builds the thing that consumers have spent a lot of time engaging with. Then you have the side of the house that deals with all the administration associated with that; the revenue comes in from the advertisers and you go and you shuffle the money around. Whereas for Stripe, the legal team, the finance team, the risk team, they’re all part of the product itself. I think it actually, the culture that then arises is, to my mind, I actually prefer it because ...

Well, your product is what you’re making. You know what I mean?

Yeah, it feels like there’s a closer integration between the culture itself and the product we ship to the world, which I think actually makes for a better culture.

Right. Which is all dedicated to that because you need each part of it.

Right. Exactly.

Talk a little bit about the security, you just hired a security head?

Yeah, well, we just hired a new head of security ...

You’ve had a head of security before, correct?

That’s right. Peter Zatco comes most immediately from a nonprofit organization that he started, partially at the request of the Obama administration, the CITL. Basically it’s devoted to helping software creators and makers build more secure software, but really he spent a lot of his career working in various government roles, and generally trying to improve the level of security across the net overall. He’s also joining along with someone that he’s kind of known and worked closely with for a long time, John Kaltwasser, who spent even longer in government than he has and served roles in the U.S. Navy, U.S. Cyber Command, and so on.

Why is this important to you? This area? Obviously, I’m asking the dumb question, I understand why it is, but ... Because this is a concern of everybody, that these ...

Totally. I think that it’s hard to answer that question without resorting to platitudes, but security is such an immensely key part of what we do, and what customers are buying from us, that we’ve always thought that we need to be the best in the world at it. Right?

Mm-hmm.

We’ve invested a lot in it for a long time. When Stripe first launched, even we were just ten people, we launched with this technology called Stripe.js, which was a new kind of tokenization technology such that businesses could send card numbers directly to Stripe rather than having the card numbers first go to their servers, and it massively circumscribed the points of contact and therefore ...

Where it could get stolen.

Exactly. It meant the merchants themselves were far less vulnerable to some of the kind of breaches we’ve seen elsewhere over the past couple of years. It’s a rapidly changing, enormously complicated landscape, and in having both Peter and John join, part of what makes us so glad that they’re here is that they have such extensive experience seeing the most advanced adversaries in the world. And that when the department of defense wanted to send somebody to go help Ukraine, back when they were being attacked from various parties, they sent John Kaltwasser. Or when Sony sought help from the government back when they were hacked, it was John Kaltwasser. Nation states have been some of the most active attackers over the past couple of years, and some of the most sophisticated and well-funded attackers, having people who have been on the defense side of that for quite some time, I think, is valuable.

Obviously your business is built around finance, and the movement of revenues and finances. What are the things you worry about, then, in making these kind of hires? It’s sort of at the core of your business, if you’re not ironclad safe.

For sure.

What’s your use?

I agree.

Yeah. What are you worried about when you think about those inclusions, and what should the broader public be worried about? It seems like there’s vulnerabilities everywhere.

For sure. I think what the broader public should be worried about is legacy systems. That’s being, of course, I work at Stripe, but I too am also a consumer, and my personal data that resides in all sorts of systems; not just financial systems, I mean health care systems and communications systems, the phone system, what have you. I think that, again just kind of speaking personally as a consumer, I feel pretty good about the information I have that resides with Facebook, that resides with Google, that resides with these technologies ...

Many people don’t, that’s interesting.

Well, my view of it is that they, I mean, firstly they’re technology companies and I think as much as anyone does, they understand the threats, they understand the best practice and so on, but I think the real thing they benefit enormously from is they’re pretty new, and so they don’t have these enormous impossible to comprehend legacy systems from 1970 that have points of connection that someone forgot about or ...

Some door somewhere.

Yeah, exactly. Or a server using encryption technologies that were broken 20 years ago but no one has had the chance to go upgrade them and so on. I sort of assume that when my information, if my information, is breached as part of some hacking, that it will be from some 20- 30-year-old corporation that hasn’t kept pace with the broader industry, and again, for the broader public, I think that’s the thing to really be concerned about.

I think the issue’s with Facebook is we’re scared of them, not breaches, but what are they going to do with our information?

Exactly, there’s a whole set of broader policy questions around data storage and access and the government access to it and so on, but from the security vantage point, I think the thing to really care about is how big is the organization, just because the fixed costs of this investment are large, and so many small companies just can’t afford to make the investment. I mean, if you do not have a big security team, there’s just too many things to do, and so I think that’s the first thing to care about.

The second thing to care about is, are they a modern technology company? If they aren’t, if they have systems from 40 years ago, it is — and no one will say this on the record, of course, but I’m sure you’ve done this. You talk to anyone off the record who’s dealing with technology systems that have been around for 40 years, it is almost impossible for them to make it truly secure.

No, you cannot at all, in fact, that’s why they breach almost constantly.

Where do you imagine your business going? You have $450 million you’ve raised, which is more than most, you’re one of these unicorns, or deca-corns, or what’s your valuation?

Our last round that we had spec’d just around Thanksgiving last year, was at 9.2 billion post.

Expensive.

I thought it was a super cheap deal.

Oh, okay, good. Well, that’s nice. I hope your investors feel the same. Where do you imagine you’re going? A lot of people feel that some of these companies, Squared, a bunch of others, they’re not in your space exactly, but a lot of these finance companies, SoFi, they all do different things; what do you guys do? Are you the next, I’m trying to, there’s not really a comparable, but banks, SoFi ...

No, there isn’t a neat bucket to put us in.

Well, there is, it’s like a SoFi. Yeah. A mortgage broker. That’s ...

Oh, for SoFi, sure.

Yeah. You can sort of make comparables for a bunch of them.

Yes.

Where do you imagine going with this?

I think we’ll be working on it for a very long time. I think that’s part of the nature of infrastructure, right? I think different kinds of products just have different natural time horizons and cycles. If you’re building a consumer app, you’re necessarily coupled to the intrinsic time cycle of human fashion in that it’s a fashion-driven space and we see that in the cycle of these various apps. I think for infrastructure that that just naturally tends to play out over a longer time horizon. We’ve always viewed Stripe as a multi-decade undertaking. We measure our progress, we talk about this idea of increasing the GDP of the internet, and we measure our progress on that basis.

How well others do?

No, just what fraction of the GDP of the internet do we represent?

That you’re representing.

Are we helping power? How much of that do we think we’re somehow causedly responsible for? What are we unlocking that wasn’t ...

Helping them make their businesses possible.

Yeah.

You bought a bunch of things. Explain the hacker ...

Yeah, yeah. We launched a magazine called Increment back about three weeks ago at this point.

Yep, this is run by Susan Fowler, the famous Susan Fowler.

We just signed the acquisition of a very small company called Indie Hackers, which is a website that surfaces the stories and interviews with people who started revenue-generating business. As you well know, there’s no shortage of attention paid to the well-funded, the sort of extravagantly venture-backed companies, but I think there’s often too little attention paid to the quietly profitable, from the individual founder vantage point, highly successful private-side project or small business, and so Indie Hackers is sort of a showcase for them. The broader thinking behind ...

Yeah, what are you doing?

Yeah, with Indie Hackers, it comes back to this idea of how do we help more technology companies, and especially technology businesses, get started?

Mm-hmm.

What I love about Indie Hackers is it’s so focused on the mechanics and the details, and it’s not about, you know, everyone can get excited about the idea of starting a company, but how do you actually do that? What service do you use? What challenges do you encounter? How do you deal with loneliness? What do you use for analytics? The nuts and bolts like this. I might have mentioned this to you before, but something we think a lot about, and something that I often reference is, that there’s an apocryphal quote attributed to Picasso, I don’t think he actually said it, but it’s so good that why not, right? That when you get art critics together they talk about things like themes and motifs and macro trends and all the rest, and when you get painters together they discuss where to get cheap turpentine. Indie Hackers is sort of a site about cheap turpentine.

Again, in service of that goal of helping more of these business get started, we think it can be really high impact. When you look at the total number of such businesses in the world today, there’s no reason as to why it could not be very substantially larger. And when we look at Atlas and our surveys, when we ask the founders, “How likely do you think it is that you wouldn’t have gotten started if Atlas didn’t exist?” That really gives it the sense that it’s actually surprisingly possible to have a significant impact here.

It’s sort of spurring people.

Correct. It’s spurring and helping them get through the early months.

Then they become customers.

For Increment, it’s sort of a little bit later in the company’s life cycle. Once you get to 10-20 engineers, you’re beyond the point where it’s about just building the initial product and it’s more how does a group of people build software together? We were really struck by how there’s an enormous amount written about how an individual engineer should do something, and best practices, and the languages you should use, and the technologies, and all the rest; there’s surprisingly little written about how groups of people should build software together and the practices they should adopt and how they should do things like testing, how they should do things like deployment, how they should do things like handle pagers and the inevitable incidents that arise and things like that.

That was your first fascinating story, incidents.

Yeah. When you talk to engineers and managers and people implicated in the software engineering process at these companies, these practices, these processes, this kind of nature of the operation, informs so much of ...

You’re getting best practices tips. I think I called it New Yorker for geeks, but actually, now I’m thinking it’s Glamor magazine for geeks. You know what I mean? “How-tos, here’s the makeup we use. Here’s the lipstick that works for us.”

I never thought I’d be accused of being involved in anything glamorous, but ...

Yeah. No, you aren’t being. Don’t worry.

Yes, it’s the best practices. Again, the particular observation we came to was that there are best practices, there are some companies that do these things really well, and we see it again and again among, especially companies built on Stripe, is that generally they do converge on these best practices when you look at them with their 200 people, they’ve eventually discovered them, but it’s often a needlessly painful process to get there. They first do it the wrong way. A clearinghouse for best practices is a great term for it. That is exactly what this is.

You’re doing it just to be helpful? You just want more of these made so you can then have customers, too.

Well, again, Stripe does better if the internet economy is larger, and so if Increment successes, if it actually makes a sizable fraction of companies grow faster or operate more effectively and so on, that’s actually really fabulous news for us.

Right. Do you want to then expand into other services? Just sort of begs the question, more services from Stripe? What do you see your other services being?

Well, it will be very customer driven. I think people don’t quite ...

That they want from you, say, “We need ______.”

Not even necessarily what they state they need from us, per se, but we’ll go and ask them, what’s holding you back? Why aren’t you bigger than you are? What are the challenges you’re dealing with?

What’s the No. 1 thing they say?

Well, it depends on the size and the stage of the business.

Talent, I bet.

Well, the talent is certainly there, and that in and of itself is a thought-provoking statement, but take a top of the line example. If you look at Connect, what we heard back a couple of years ago was that all these businesses wanted to transfer money to bank accounts.

Right. Something simple like that.

Yeah, well, it felt like an odd request in the beginning, but then you sort of dig into it and you realize thanks to smartphones in large part, these new marketplaces are arising and the internet is enabling this new economic coordination, then you realize that actually, I don’t just want to transfer money to bank accounts, they want to verify the identities of these counter parties, and they want to handle the taxes around them, and so on and so forth, along those lines. And we first built that bank account transfer API and then we found we were led to some of these broader solutions around handling identity verification and compliance and tax reporting and so on. Now that we’ve built that, we continue to get feedback from this marketplace ...

That they want something else.

Yeah, exactly. We continue to chase this down. I guess the particular thing that I think is different about Stripe, as compared to most companies, is for most companies it doesn’t work that well to ask your users, “What do you want?” In that, if you ask the average consumer, “What do you want from Snapchat or Facebook or Twitter or whatever?” they can’t tell you. Broadly speaking, I guess, they want to be entertained or something; or maybe they want to learn more about the world or what have you, but it’s very difficult to know.

You don’t have a teenager, they know. They know what they want.

I’m guessing that most teenagers were not asking for colored filters before Snapchat actually invented them, right?

I get a lot of suggestions from my kids to tell ...

Okay, well, maybe you get a lot of suggestions, but difficult to stack rank ...

Absolutely, you’re right.

Whereas for us, because we serve technology businesses, they’re necessarily pretty good at knowing what they need. When we say that we’re very customer driven in this regard, it’s not that we think we’re somehow better at being customer driven, or more virtuous than other companies. I think it just structurally makes more sense.

Makes more sense to do that. All right. When I get back I’m going to ask you whether you’re going to sell or go public, so just get ready for that. We’re here with Patrick Collison, the CEO of Stripe, who founded it with his brother many years ago. It’s a payments company, or it helps technology companies make payments and manage their revenues.

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We’re here with Patrick Collison, he is CEO of Stripe, one of the hot internet companies of this era, along with Airbnb, Uber and some others, but you’re behind the scenes, you’re not loud and splashy, like Uber, but there’s other ways to describe that company right now. Noisy would be a good one, probably, as a polite way to say it. You’re sort of growing in a much more humble way. I don’t know how else to put it. It really is, even though you’ve raised an enormous amount of money over this enormous evaluation, you’ve been a lot quieter. Where do you imagine taking the company? Do you want to go public?

We want to be an independent company for a very long time.

Yeah, I can’t even think who’d buy you. I’m trying to think ...

In some sense it’s an irrelevant question because we’re just not that interested in it.

Microsoft. Sorry.

Well, we’ve been here for years at this point, acquisitions are just not a path that we’re interested in. From our vantage point there are different merits to being public and being private and being totally transparent, what the long-term stay for us is an open question. What we’re really clear on is that we are not going public any time soon. If we were to, though, it would be years in the future.

Are you profitable? Is your company profitable?

We’ve never commented on that.

I bet you are more profitable.

You have asked us before.

Yes, I know, we have. I’m guessing you’re probably more profitable than other people, you’re closer, if you wanted to go public. Silence from Patrick. Well done. You’re turning red. Patrick has very red hair and now his face is turning just as red as his hair. Let’s talk a little bit about where this whole sector is going, and in Silicon Valley, too, because you have other interests, too. You’re very active politically, recently, is that correct? You’ve been very interested in politics.

Yeah, I think a lot of folks ...

Yeah, about immigration and all kinds of issues. How do you, the thing you were on the stage at Code for was about what it’s like to be a startup. What is it like, now, to be a startup? Do a little check-in here.

Well, it’s kind of hard for me to say, because my vantage point has also changed a lot.

Right.

Obviously the ecosystem has changed a bit, but because Stripe has grown, my particular vantage point has also changed. It’s kind of hard to know whether to attribute it to the ecosystem change or to Stripe itself. I guess what jumps out at me is maybe two or three things. First, in some sense we’re waiting for the next wave.

Mm-hmm. Absolutely.

In that social happened, mobile happened, a lot of speculation around AI and VR and ...

Automation.

Yeah. I think that both of those, I think, in the fullness of time will be significant, but they’re ...

It feels like something.

They’re certainly not happening in a major economic way now. Right?

Right.

I think what is happening in a really significant way, but it makes for a less sexy and compelling story, is the much less glamorous deployment of technology to spaces where it has not previously been applied. I love the example of farm logs here, which is helping farmers and agricultural businesses better manage their crops, better understand their yields, down to things like when they should water them, very kind of granular level. When they should water them and different parts of the land. I think there’s an enormous amount of that happening, but the spreading of that technology into the rest of the economy ...

Have you heard about Swine Tech?

I haven’t, but I love it already.

Yeah, of course, exactly. I was like, “Sign me up.” Apparently pigs sleep on their piglets and kill them and it’s to monitor the sleeping patterns of pigs.

Okay, that’s a really good example. We see there are thousands, and thousands and thousands of those, right? And I think in aggregate they are fabulous, but they don’t represent a new technological trend, they represent bringing the fruits and the benefits of technology to sectors that haven’t previously benefited from it.

Right, but Swine Tech would be a customer of yours, not the piglets, correct?

Well, based on the product we have today, at least, but who knows about the future?

Well, they could, they have a technology.

Payments for piglets.

Right.

You have to start somewhere. The other trend that sort of jumps out at me, that I think is kind of interesting, is for a long time people laughed at Silicon Valley, just full of these ridiculous ideas and boondoggles that will go nowhere and companies that are purportedly wildly overvalued and all the rest. This is particularly striking when you go back and you pull out, from essentially every year from when Facebook was founded, the articles about the magnitude of Facebook’s overvalue.

I wrote one. I don’t feel bad at all. Yeah, but there were 20 other companies that hit the wall, Max Levchin had one or two of them.

For sure. Absolutely.

That’s what I’m saying.

There’s been tons of failure, but what’s inspiring to me in sort of how it’s all changed is that I feel like there’s now somewhat more antipathy, and I think some of that is understandable since Silicon Valley companies have become so powerful in that at a moment in time last year, I don’t think it’s the case as of literally today, but four of the top five companies in the U.S. by market cap were technology companies.

They weren’t 10 years ago.

Right. Bringing the lens down to startups, I think that when a startup hits the rocks or turns out to be a stupid idea or to fail or whatever, there’s actually, to me, a distasteful glee that people take in that. From my standpoint, what I love about the ideal of Silicon Valley, it’s not the place where failure is celebrated, but it’s a place where doing things that have a pretty high chance of resulting in failure, in service of also accomplishing some things that turn out to have enormous upside, that we’re a place that’s okay with that trade, I think, is so special and so unique and so unlike the vast majority of the world.

I just got back from Japan and I was spending time with a good friend there who runs a very promising startup, and she was describing how that thought is so unlike that of Japan.

Sure. Absolutely. It doesn’t happen everywhere.

I guess the thing that worries me a little bit, or at least I don’t like, is that I think we’re kind of becoming, perhaps because of the growing power of the giants, we’re sort of becoming more negative at the low end, and it’s not that I’m defending the particular companies themselves, but I would really defend us being a kind of place that produces lots of failures.

Right.

I think that’s great. I think 10-20 percent of companies should totally fail and 30-40 percent of companies should kind of mostly fail, because if you’re not trying things that ...

No, I get that idea. I think you’re absolutely right. You have to look at the power of the larger companies now, because they’ve misbehaved so badly and pretend that they don’t. Or they’ve done things that ... I think the difference between Silicon Valley and other places is that they love to tell you how great they are. You know what I mean? After a while you’re like, “You’re just making money. Stop.” I don’t think people who make Coca-Cola go on and on about the great benefits. Of course, they have issues. Any products. Paper towel people. You don’t have to listen to that direct from them, they just make a lot of money making paper towels, they shut up, they go home. I think Silicon Valley likes to celebrate itself almost continually, even when, I think in this recent political era, they just ... look, they’re about to go to meetings with Trump, and guess what he’s signing tomorrow? An executive order of religious freedom thing, which they’re supposed to be against. Silence.

I think Silicon Valley is somewhat predisposed to kind of sententious moralizing and ...

Then when the rubber hits the road they don’t do anything about it.

That maybe looks cute when they’re plucky upstarts, but it starts to ring a little bit more hollow when ...

When they can do something about it.

Right, and when the slightest tweak of a ranking algorithm change actually does have an enormous societal impact.

Effect businesses, yeah.

I think Silicon Valley broadly is still sort of figuring out its particular strain of, I don’t want to say libertarianism because that’s kind of too specific a political term, but sort of the idea that when good happens, that we claim credit for it, but when bad things occur, “Oh, we’re just building tools.”

Right. Exactly. You know what I mean? It’s funny because ...

I think that combination is bad luck.

Stephen Colbert recently was talking to Ivanka Trump like this and she said, “That’s the Old Testament God. When good things happen, take credit, when bad things ...” I don’t know. It’s just the way it is, you know?

That’s a funny analogy.

Yeah, it was. It was interesting, you would get that. I’m guessing you’re Catholic? Ireland, maybe not. Perhaps you’re not.

I myself am not religious, but yes, I certainly grew up in a very Catholic environment.

Right, exactly. As I did. What’s interesting is that I just don’t think they take responsibility for the platforms they’ve created and, for example, Mark Zuckerberg starting to, grudgingly, but doing it, trying to get the idea that fake news might have had an issue, whatever the platform happens to be, and I think that’s one of the issues. I think, politically, you think these are important issues. You think Silicon Valley should get involved politically, you yourself have been thinking about this.

I’ve been pretty outspoken. I mean, not to give myself too much credit here, I think it’s easier for me to be outspoken than it is for ...

Because?

Well, because we’re not as consequential as the top four tech companies. For them, I think it really is ... well, again, on the one had I sort of agree with you, where I think that Silicon Valley has not figured out how to discharge its broader societal responsibility in the way that I think eventually it will, but on the other hand, you think that the global aspect of all of this, to what degree should they be involved in the U.S., to what degree should they be involved in any of the countries in which they have a local presence? When they start exercising their political power and so on, I’m sure, I’m absolutely certain, there will be a loud constituency raising objections at that, in the sense that, “You’re telling me that you already have all this power in the form of your products, and now you’re exercising it politically?”

You said you were like that before.

Well ...

What did Apple start with? Throwing a hammer at power, and we’re going to break, come on, they’ve said they’re going ...

Are you saying Apple is ...

Are they just selling watches?

Are you really saying that Apple is less scary if they start exercising their power politically?

No, that’s what they said they were going to be, better than other companies. They said it at the very start.

I don’t want to put words in his mouth, but I imagine what Tim Cook would say is that they want to be scrupulously fair and law abiding, and that it’s not Apple’s business to be advocating for particular political causes.

You’re wrong. Think different. We’re the iconic class, we’re the dreamers. Come on. Everything coming out of Silicon Valley is either total bullshit, which I think it may be, or they should stick to it. I don’t know. They certainly market themselves that way. You don’t, but a lot of them do.

Okay. Again, speaking personally, I’m outspoken, and that’s ...

Mm-hmm. I appreciate that.

That’s the trade-off we’ve made, and what I personally believe, but I guess I do want to, again, I want to be somewhat ...

You’re a kind man.

It’s not just, I would love to ascribe it all to kindness, but I’m not claiming I’m that good of a person. It’s amount of recognition, I guess, that ... I think these people and these companies are in legitimately, extraordinarily difficult positions, and were I forced to take sides on some of these issues, with such enormous ramifications and trickle-down consequences and the knowledge that I have to, for decades to come, work with these groups, it’s not easy.

No, but that’s how we get to bad places. Anyway, we’ll disagree. Let’s get back to entrepreneurialism. Let’s go back to the idea of entrepreneurialism.

The last thing I would say is I think that press raising these questions is a good thing.

Thank you. I’ll continue to do so. Let’s get back to entrepreneurialism, we’re going to finish up on that. You are helping entrepreneurs. How do we keep the innovative spirit alive, because that is one thing, I’ve interviewed Eric [Weiner], I can’t remember, the guy from the, the happiness guy; he did how innovation dies, where it rises and where it dies, and went through cultures throughout history looking at this. They’re all very similar patterns, arrogance breaks in, insularity comes in, at the beginning tolerance and open-mindedness create it, like you said, the industrial revolution, we talked about that book, and then another set of things comes in. How do you keep the U.S. innovative, because we are, this industry still remains innovative, and how do we keep that entrepreneurialism because it obviously is good for you, for your business. What do you think the key steps are?

Then, I’d like you to finish up talking about something you’ve done that you think you made a mistake. I don’t want to do the learning lesson thing, but what do you think some tips for entrepreneurs are? That’s the last part. In the beginning, how do we keep innovation alive? This administration is not that friendly to tech, although now they have these innovation councils, which, at this point, I think, are all bullshit, but okay. Are you on that innovation council?

We’re not.

Okay.

On the innovation side, I think there, sort of to the point of the book that we were just discussing, I think there are some cultural aspects to that, and how do we create stuff in a culture and environment that’s hospitable to it, and that encourages people to take these risks, and doesn’t point ... Who’s the character in “The Simpsons”? Nelson?

Mm-hmm.

Who points with a “Ha ha” when a company fails. I think we actually kind of underweight the cultural stuff because it’s so squishy. You can talk about a particular policy because that’s serious and substance, but when you talk about culture it feels so amorphous and affable.

On the positive front, one could not ask this question without bringing up the topic of immigration. The insane crazy benefit and tail wind that the U.S. has for decades and decades gained from is the fact that we are the preeminent destination for high-potential people all around the world at multiple stages in their careers, and that universities are the best universities in the world, people want to study here and come here for that, and then the companies are among the most innovative companies in the world and so they want to hire the best people from around the world and people want to come as part of that.

I think, broadly speaking, the U.S. has not quite done its best to undermine that, but all but through its immigration policy, and to the extent that universities can help students come here or that companies can help enable the best and brightest to move here as they would like to, it has been very much despite, rather than because, of U.S. immigration policy. I think, I suspect that that’s an even bigger deal than we think.

Oh, it’s a huge deal.

Ultimately the number of successful technology companies and the degree of success that they achieve is, to your point earlier in this conversation, it’s limited by talent. Right? There are so many people around the world who would love nothing more than to be able to go and exercise their talents and their potential here, and needless barriers stand in the way.

Well, they act like it’s a limited resource, and it’s not.

Lant Pritchett at Harvard and others have talked with the notion of trillion dollar bills lying on the sidewalk, with the idea that needless immigration restrictions represent trillions of dollars of lost opportunity. When you talk about various prescriptions and policies for the economy, normally you’re talking billions, tens of billions, maybe hundreds of billions, in terms of gains, and this is sort of a free trillion dollars lying right there. Right?

Yep.

Okay. Then the other one, of course, that you couldn’t answer this question and not bring up, is our line policy, in that, again, I think here in Silicon Valley there was a devious spy who got here back 30-40 years ago and was charged with the mission of figuring out there’s too much innovation happening in Silicon Valley and in San Francisco, how do you undermine it and help slow it down. I think the policy of making it ever more difficult and expensive to build, and therefore ever more difficult and expensive for people to come here, would be a really successful way of achieving that. Right?

Absolutely.

People forget how recent this is, and that for the vast majority of American history housing has cost essentially, approximately the construction cost of a house. Zoning laws and things like this, they’re a second half of the 20th century phenomenon. This is not how American cities have worked for the vast majority of their history, and when you look back at American cities in the periods of their growth, the New Yorks and the Chicagos, in the early part of the 20th century and so on, they did not see the kind of housing price increases that we’re seeing here in the area today.

We are doing something historically unprecedented, we are very deliberately — and with this, again, the kind of pompous moralizing that you so correctly caught in so many other instances — doing our best to asphyxiate this growth. I think it kind of has a symmetry to the immigration stuff, where immigration policy prevents foreigners from coming here, and housing policy prevents Americans from coming here.

Right.

We’re doing everything we can to make sure the spoils and the gains recruit the existing land owners ...

What about you moving Stripe to Kansas? Wouldn’t Donald Trump like that? Why don’t you? why aren’t you hiring good Americans? Why don’t you train a coal miner to do what you do?

You know, I would definitely not venture to state anything about how Donald Trump would think of any given action, I know that would depend on the particular hour and day, but to some degree we’ve already started doing this. Stripe has offices around the world today, we just opened an engineering office in Seattle. Would we ...

Seattle? Why didn’t you ... I think this is a false argument, this idea that Apple should open a plant in Kansas and that will solve that. I don’t think it solves anything. I think this is where we were founded and this is where they are. You know what I mean? This just happens to be ...

Ultimately it comes down to, I think, the companies have less agency here than is ascribed to them, it comes down to where people want to live, and that we will go where the people who we want to hire want to live.

Right.

Unfortunately, there are hundreds of thousands, millions of people who would like to live here but just can’t afford it. If a whole bunch of them start conglomerating in Kansas or in Wisconsin or Alabama, sure, we will enthusiastically, merrily, happily, honestly, gleefully open an office there, but it’s led by where people want to live, first, and ...

Right, one or two there, but not enough.

Companies, maybe it sounds like an abdication, but I really mean it, we have to be followers there. We can’t tell people where to live.

Right. Although, some people want you to do that.

The world would be much simpler if companies could, although I don’t think it’d be better.

All right. Last question. Entrepreneur. What would be your tip for an entrepreneur? What’s a big honking mistake you made, or something you did that was really great? Like that was fantastic, what I just did there.

Generally speaking, and I mean this seriously, all of the really good things that I’m most proud of that Stripe has done, they’ve been done by others, and that’s, if ever I might get a swollen head from Stripe’s success, you don’t have to go back very far through the list of really cool things that I think we’ve done, it’s abundantly clear that they were done, they were led, they were conceived of, the whole nine yards, by others. Generally speaking, and I think I may have said this to you before, I think it’s a little bit too much attention given to the founders, in that we’re here as delegates on behalf of this much larger group.

The celebrities.

Exactly. On the advice point, two perhaps, first, and this has been given umpteen ways by others, but it’s a cliché for a reason, almost everything is fixable except legal issues, breeches of the law and the culture that is ever complicit and condones that, and a bad product. So many other things that people get wrapped up in, or spend too much time on, just do something reasonable and move on. It’s fixable later. I think that the two things that are almost impossibly difficult to fix in a company are a culture that is not scrupulous about obeying the law, and even speaking of the law in a broad sense, just basic ethics, and then secondly, just a bad product. You can delude yourself to an immense degree, and there are some people who are fabulously talented at the sales and the showmanship that go with the company so they can sort of paper over a bad product for longer than they should, but ultimately you cannot fool nature there.

The other piece of advice would be, and I think this one might be useless because I don’t think anyone believes it until they’re actually in it themselves, but startups are harder than you’d think. They’re harder than you’d think even knowing that they’re harder than you’d think. Stripe has been sort of improbably fortunate in that we started the company, we launched six and a half years ago and we’re an incredibly young company in some sense, and we’re so lucky to have been able to reach the scale that we have so quickly, and so in that sense we’re in some small percentage of all companies, all technology companies ever started in Silicon Valley, but even for Stripe it’s been extraordinarily difficult and that’s despite the huge tailwind of luck that we’ve benefited from. Again, I think it’s, like other things in life, where you hear the advice but you can’t internalize it until you actually experience it first hand, I’m not sure how useful the exhortation is, but they really are hard.

Hard startups. That’s a very good ...

You know this.

Yes, I do. Yes, I do, but everything is fixable, you’re absolutely right about that. Anyway, Patrick, this has been super fantastic interview, I’ve really enjoyed it. I think it’s going to be really interesting to a lot of entrepreneurs to hear your thoughts on a lot of these things. Thank you for being so honest. I know that sounds weird, but I don’t get a lot of that, I’ll tell you. Anyway. It was great talking to you. Thank you for coming by.

Thank you so much for having me.

No problem.

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This article originally appeared on Recode.net.