The Collison Brothers Built Stripe into a $95B Unicorn
forbes.com
forbes.com
It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees.
Why is he getting 100,000 from each employee ? Not because those employees send him a cheque. But because of particular outcomes of share capital, and corporate law. Decisions made in UK / US legal circles since before the USA was a USA.
These decisions have been part of 200 years of the most phenomenal growth in global human wealth ever, so there is a lot of baby in the bathwater. But look at say the German mittelstand - a different approach to local business banking. And compare european social-democracy to US welfare states.
There is a lot of room and flexibility between "totally dampen growth and human innovation" and "more equal sharing of life's burdens".
Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. So the last 200 years of growth can be seen as a story of government funded and directed scientific achievement, given reign to rollout in a benign business climate, and the workforce provided via mass education and health programs, all of which funded by taxing the successful companies.
Is that an over simplification - hell yes. But so is "young founder has great idea and works hard".
I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.”
The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion.
If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then….
- Senior engineers would make NFL wages
- And quants would be making NBA/NFL wages
That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc.
The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team.
And at the top end, the best players are a massive draw that makes teams tons of money.
Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.)
Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players. Relative rank is what matters and it's why NCAA March Madness is so popular despite being made up of relatively low ranked players.
This is a popular enough theory that it's been tested multiple times. In the successful cases, the rival league still ended up trying to poach the top players and ended up merging with the other top league. In the less successful cases, the league went out of business.
In software, that's not the way it works. Or at least, the competitive business aspect of it is largely out of engineer's hands. Few businesses ultimately succeed because they wrote better code, IMO. Though interestingly, a bunch of startups only get big in the first place by having great code that allows them great speed/flexibility/etc. Stripe itself got big originally because its API was really great, which I'd attribute more to product than to engineers, except in this case it's kind of a merger of the two.
"March Madness" is an anomaly, a single-elimination tournament with 48 games in one weekend with a history of upsets and buzzer-beaters. Additionally, college basketball and football in the US benefit greatly from the local and alumni network affinity for the programs, that doesn't exist with, say, minor league baseball or the NBA D-League.
The AFL was actually relatively successful since it forced a merger with the NFL. Meanwhile, at least according to a 30 for 30 documentary, the original USFL had a potentially viable niche as a second-tier spring league for awhile until they made the bizarre decision to switch to the fall football season and try to force an NFL merger.
What is so special about them?
...because they formed unions.
I don't understand what makes people think that software engineers are so valuable that they'd get wages that are multiples of doctors.
The Logic of Collective Action explains the mechanics. https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action
It's basically game theory, by another name.
"Preventing defectors from collective bargaining" is also, more or less, the definition of what an economic cartel does.
If you could hire 2 or 5 of the next best engineers for the price of a top pick 'NFL' engineer, you'd be ahead in output in most situations.
The same does not go for the NFL.
This is the main reason it’s completely illogical to expect that an employee receive most of the revenue their labor helped generate.
If your work earns $100k/y in revenue for a company, that doesn't mean your work created it entirely. The continued dividends of organization of the company, customer acquisition, legal apparatus, support of your entire organization made that revenue possible and are entitled to a share of it too. It took a village to make that revenue, unless it didn't, in which case: quit and do it yourself to keep all that money.
This is a self-correcting system that ensures everyone gets paid approximately what they contributed.
It's of course hard to precisely quantify these things, but the worsening gap between worker and owner incomes is quite obviously not proportional to any change in how much value owners add to a corporation compared to workers (if anything, workers' contribution has been increasing, not decreasing, as productivity tools and techniques have been advancing).
It's because there ARE contributions from the owner, even a passive owner has what I called "dividends from stored labor": they took on the risk, created a functioning company solving a problem, did the work of organizing the systems/structure that run the thing, and so they are entitled to a piece of the revenue as well (as that revenue couldn't have been earned without their contributions either).
My point was that owners currently get a disproportionately large piece, and that the gap between what owners get vs what workers get has been widening with time. And not only is it widening, but it is doing so while the relative contributions to the business' success are often narrowing (give the huge increases in worker productivity in most domains).
What's happening here is gains from trade. I have a lot of free time and a set of skills, while my employer has a lot of money and the willingness to shoulder the risk that the work they're asking me to do won't be profitable for them in the long run. Both sides get something out of the deal.
Amazon is structured so that there is net 100,000 dollars of wealth in the deal betweeen you and him that goes to him (whatever goes to you, he also gets 100k.
I am sure you have no complaints, but why the 100k? why can't that be 50k to him and 50k to you.? Or 33, 33 and 33 extra in tax? or ...
And is the particular arrangement something that is fundamental and inviolable to creating the wealth Amazon did? Or is it just that because it was that way Amazon could beat the alternative universe Amazon ?
what is the phase space of "still generate wealth" and "society looks different"?
If Amazon had had a competitor back in the day that had done just that - everything Amazon did, only shared more, then probably we would all be buying from ... err ... Mississippi.com. But this competitor would have had to pull all the right moves - as well as sharing differently.
And one day, yes there will be some innovative new company that will do to Amazon what they have done to Walmart. And maybe that company will have a competitor that will be a co-op and maybe they will have the edge. It has worked ok in the UK for John Lewis. But the lesson from John Lewis is they have to be good at all the basic stuff - and only then do they get to pick staff based on the nicer governance / culture / slight pay gap.
Building a company is hard. Building something like Amazon is freakishly hard. Which is why this "treat employees well" is basically never left up to the market and just tacked on afterwards in regulations.
And finally - yeah would Bezos exactly be hurting if he was half as wealthy. Neither of us think so - which kind of is my point. If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
The phase space available to us is larger than we think.
I'm not angry. I'm just making a point.
> Building a company is hard. Building something like Amazon is freakishly hard.
And that's the point.
> If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
I don't want to fixate on Bezos in particular, but there are probably a lot of founders who would be hesitant to start a company if, once that company became valuable enough, they would be forcibly divested from it by law and therefore be at risk of losing control. Even if you're a vision-focused founder who is intrinsically motivated by wanting the company you are founding to exist in the way that you want it to exist, with no regard to your own personal wealth, you're going to be hesitant with that sort of confiscatory regime. And that's setting aside the fact that building a large company is not only "freakishly hard" but also tremendously risky. If you have a wealth cap of 10 billion dollars thinking "10 billion dollars is enough motivation for anyone", sure, but there's a risk premium involved and the expected value is nowhere close to that number.
Amazon's secret sauce was cheap capital. Both tax holiday/avoidance and persuading Wall St to forego profits. A combo that's unlikely to be repeated any time soon.
If Amazon employed me tomorrow, would their revenue immediately and automatically increase by $100k?
It is always useful for fish to ask what is water.
Otherwise people accept knee-jerk political phases like "free market" or "business friendly policies", without considering if it is optimal
There is a continuum of ways to arrange government, labour and private ownership. The particular point labelled "USA early 2000s" is not the only one.
That is what I genuinely believe - and I want to look around to see what the rest of the continuum looks like - the good and the bad parts
If you were a fairly senior SWE then customers gave Amazon a few million dollars for the work you did. Jeff got $2.8m, you $200k. On paper it's unfair, unreasonable, and unbalanced, but you agreed to it, and without Jeff you would have earned less. Maybe it's fine.
This was early in my career, and I didn't work on anything customer facing, but there's still no guarantee of that. What if I'd worked on the Fire Phone?
The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.
The distinguishing factors here aren’t simply European regulations and taxes.
I know of American VCs who have been just as ambitious investing with U.K. startups as with American ones.
If we are to take the content of your post at face value, that thesis is wrong. It was due to sand hill road being where sand hill road is. That may have something to do with taxes and regulations to a degree, but that isn’t a sufficient explanation.
and within the US, "why SV?" might simply have another orthogonal explanation.
If that were the case, you would have to see unicorns in Delaware and Texas and many other places in the US, especially since many of these have a much more lax tax regime than California or New York.
The fact that unicorns are almost exclusively bred in two cities in the US actually suggests that the influence of the tax and employment regimes is overwhelmingly dwarfed by other factors.
No offense to Europeans, but I've only heard of Spotify.
[1] https://www.statista.com/statistics/813906/spotify-number-em...
Not a bad bump, but also historically low by Amazon pay bumps. But it’s also not going to solve income inequality… And very likely there are few people qualified to be CEO of Amazon who’d do the job for $18.45/hour.
CEOs often have hardly any salary. But his shares nearly doubled in value over the pandemic - increasing by $84 billion.
Divide those billions per employee instead and they get $84,000 each. And Bezos is still as rich as he was before the pandemic.
That language is based on the assumption that they're not already being compensated.
Their compensation is what they agreed to accept as payment for their labor. So they're already being compensated. If they want to "own" part of the company outside of this agreement, they need to buy a piece of it. If you want that as part of your employment agreement, negotiate it beforehand, either individually, or as part of a union effort. If you can't negotiate it through those efforts, then accept the fact that the employer believes they can get a better deal on the labor.
Democracy doesn't have to be leaderless: we have a good few hundred years of experience in running entities many times more complex than a company using democratic processes, appointing leaders by vote etc.
This doesn't ring true to me... the industrial revolution came from the steam engine. And so many later advancements like the light bulb, generators, cars, planes, mass manufacture of fertilizer didn't have much governmemt involvement.
Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.
In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc).
It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies
(hmm - there is likely to be a speed / stability / waste trade off here?)
societal democracy works because everybody is born into a society equally.
A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote.
So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.
but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.
If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer. It is this property of equity which makes capital more powerful.
you could artificially raise the power of labour by fiat law. But this law would distort the capital being spent - you might even find capital flight, if the law is very skewed towards labour.
That's only capital being spent if the company is not profitable. Otherwise, it's just reinvesting revenue back into the business. And a company that is going bankrupt may well become unable to pay employees' promised wages, which does happen occasionally.
> If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer.
While there are definitely people who are not happy with this kind of arrangement, it's not entirely unheard of either. Early stage start-ups often hire people on equity instead of wages; and co-ops where all (or most) workers are owners and only get paid if the business is successful also exist.
And studies have shown that people become unhappy when confronted with people who have significantly more than them - simply put, envy.
Therefore, one can easily argue that if economic growth is coupled to ever-increasing inequality, it actually begins to reduce overall human happiness after a point -- and if you "read the room" around the world, I'm pretty sure humanity has passed that point.
Just take a look at how society is structured today, where a 1% difference in achievement at some arbitrarily determined age can lead to a difference in expected lifetime income that is orders of magnitude larger. And that's not to mention the kind of personal wealth that, due to the properties of exponential growth, cannot help but grow, regardless of the competence of its owner.
Die-hard capitalists argue that this is the best economic system that we've ever had, but our sample size is very limited. We've only been trying this out for a minute fraction of humanity's existence, and the effects of this system have not reached a steady state. If the past few decades are any indication, capitalism has made the world worse off in many ways. It enabled our ancestors to leave us with many major unsolved problems, with blissful ignorance - issues that are given token acknowledgement in economics classes as "externalities," a term that doesn't even begin capture how important they really are for humanity's future.
I posit that overall human happiness plotted against economic inequality is maximized somewhere in between strictly enforced equality and the extreme levels of inequality that we see today. It doesn't take a genius to see it, but no one really talks about the middle. Perhaps sanity is too boring for this generation.
Assuming those numbers are correct, I believe he got that 100 billion over time and over time he has had much more than 1 million employees, although probably the most amount of employees he has had at any one time was 1 million.
1 million employees right now, or all time? Amazon is ~28 years old. $100B/28 years = $3.6B/year.
- Abolish step-up basis, which allows dynasties to build tax-free wealth via "invest, borrow, die"-type strategies. Also other tax avoidance strategies used by the rich e.g. 503cs.
- Stop giving corporations special treatment under anti-trust law compared to other ways of organising. Give unions, workers' co-operatives, and other such organisations, the same rights to act in an organised way that corporations have. (And, conversely, start paying attention to corporate monopolies rather than using the narrow "consumer harm" standard that's been followed in recent years)
Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business. I’m the one taking the risk yet the government benefits if that risk pays off but doesn’t compensate me if it doesn’t.
So? A worker has already paid all kinds of taxes in their life, but they still get taxed on their income.
> Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business.
Your original capital is yours, but if you get income from it, you should be taxed the same as any other income. My time is and should be my own to do with as I see fit, but I still get taxed if I get income from it.
capital is what makes future productivity improvements possible. If you took a risk investing your capital, but that return is taxed the same as wage income (which has zero risk associated with it), you would be discouraged from investing that capital, and instead consume more of it (ala, why invest in your business buying plant and equipment, when you could just go on a lavish vacation!).
The low capital tax is to encourage more capital investment, because those with capital has the choice to not invest (and thus society as a whole loses the potential benefits of such investment). People with wage income don't tend to have the option of _not _ working, so lowering their tax won't encourage _more_ wage income.
The fairy tale that no one would invest if, instead of 100%, they were only allowed to keep, say, 50% of the profits is far-fetched. The game would go on, only with more (in the optimal case) redistribution and less accumulation among the already well-off. The issue here is the relative inequality caused by capital gains, which in the long run tears societies apart, because the middle class can no longer afford apartments/houses and vacations, and the lower class can no longer afford basic needs (food, health care, mobility).
Your second sentence applies to labor as well: "I'm the one doing the work, yet the government benefits..."
Either "all taxation is theft", or "taxation is the government charging for providing the services necessary for work and business to operate".
1. Work a job and pay income tax 2. Invest remaining income, capital gains are taxes when liquidated. 3. Buy a car with the remaining gains, pay sales and property tax 4. Sell car, pay sales tax again 5. Reinvest money, earn gains, pay taxes on them 6. Repeat
The same money just keeps getting taxes. His point is that the money should be taxed once and only once.
Why? This argument is often given as an axiom without any reasoning behind it.
There is often handwaving about "risk", but a worker has risks due to not being able to supply the labor that they are selling. They invested in their labor through paying for education and training.
Why is their "risk" not considered the same as capital "risk"?
a worker gets paid when they worked - there's no capital risk. They took a risk when they invest in skills for the job, but that risk isn't capital risk. If you are saying that their job should compensate for the initial risk they took getting educated, then i would say this risk pay-off is embedded in the salary of the job they took.
Modern worker agreements (a.k.a most normal jobs) do not have downside risk if you can’t deliver. You just lose your job and stop gaining money. With capital investments you can easily undo 5 years of gains in 1 bad year.
If I had no context of the situation, I would see the lower % as a way to incentivize people to invest their money in things that would fall under capital gains.
From my experience working at several saas unicorns, in each companies there was 2-3 max people who where responsible for the success of the company. It is not that all others were useless but they all could have been replaced easily without having any impact in the success of the company.
I know this is difficult to hear as an employee but this is the truth. 99% of us are replaceable.
In my opinion and experience, working with skilled and nice people VS working with stupid and coward people for example has only an impact on the happiness of the employees but has no link with company performance. (company culture has no impact on company performance)
If that were true, it would be weird that companies work so hard to acquire, retain, and develop talent.
At the end whether you have a design system, if you have infinite scalability, if you use node or Ruby, having that feature or that other feature it doesn't matter. The only thing that matter is the revenue the company make.
If what matters was the people then ngo would be unicorns
+ interviews with people working in hr and culture at other ones.
And to give you more concrete data, the significant employees where :
1. The ceo founder (work hard play hard culture) b2b enterprise martech
2. The ceo founder + cto founder (chill + excellence culture) b2b enterprise productivity software
3. The ceo founder + vp of sales (micro management culture) b2b enterprise martech
4. The ceo founder ( chill + low expectation culture) b2b smb martech
"You think the Collisons are... creating and maintaining a high performing engineering culture"
Yes.
I have been at unicorn companies with C-suite executives that are clearly useless, or worse, net detractors playing political games that the people under them have to work around to get shit done. I have been at companies where one engineer is single-handedly keeping parts of the lights on, or conceptualizing and architecting critical systems, having an outsized impact well beyond their title and compensation. There seems to be a false idea here that the way companies run is "top down" - ie. the Collison brothers set out all the goals and strategies and products, and then the employees just execute their vision like pawns. Maybe there are companies like that, but I've never seen one, particularly a fast growing one.
I guess I just disagree that the number of people who would be deemed "responsible" for Stripe's success is 2-3. That seems, frankly, unbelievable to me having worked in companies with hundreds or thousands of employees and seeing how many different people it takes to build something massive, innovative, with multiple product or business lines. Not just taking marching orders but exercising their creativity, judgement, expertise, leadership skills etc.
It's far easier to tell the story of a handful of people than of thousands. The only successful approach to the latter is selecting some at random and telling their stories - but that still leaves most people out. I think it's an interesting and hard problem to tell a comprehensive story about a large group, but I'm not really sure if it can be done. Even Howard Zinn focused on (usually unsuccessful) opposition leaders more than the everyman in his narrative! In any event, I'd love to see someone succeed at making such a narrative, not necessarily about Stripe, but about anything really.
Admittedly the absurdity of the headline is what triggered the initial thought for me, but the article lived up to the headline in this case.
For the last five years, I’ve requested an Elixir client.
I wish they would either build one or greatly improve the docs for people who aren’t using one of their first party API client libraries. It’s not like Stripe lacks the resources.
In fact an argument could be made that ignoring all but the most popular handful of languages runs counter to their goal of increasing the GDP of the internet. Increased friction for adopting new and productive languages means fewer do and devs remain in a slightly more ossified ecosystem.
[0] https://insights.stackoverflow.com/trends?tags=java%2Cjavasc...
Based on what I've been seeing, Elixir has been growing faster the past year or two than it was previously. Elixir Forum's posts and active users are going up and that's where people tend to ask their questions, rather than Stack Overflow. In fact, the lack of support from companies like Stripe is the single top complaint I hear. Most users are very happy with the language, tooling and community.
FWIW, I'd like to see a Stripe Rust lib, also. But it's far more important to just be make the guides better for people who aren't using a Stripe API client and maybe even make a guide for making a compliant API client. That way, you can be programming in something truly niche like Janet and still have a great experience with Stripe.
The information is all there, but it takes way more digging than it should to get at it.
Okay so after a quick google it appears Microsoft are the "Simpsons already done it" of the programming world: https://github.com/Azure/autorest/
It'd probably be a good idea to add an Elixir backend for that and point it at the Stripe's API here: https://github.com/stripe/openapi
Purely in terms of seeing what structs are used in what what on what endpoints, the docs are fine. It's really when it comes to guides that it falls over since they invariably lean on language-specific API clients. This makes it easy to miss how headers are constructed, the required security-related details for webhooks, etc.
Yes it is, And none more pronounced than those involving celebrity founders like Elon Musk; The achievements of SpaceX and Tesla are often showcased like 'his' alone in media like Iron Man waving his hand and Jarvis building the products.
One thing these founders are proven to be good at is getting very talented people to work for them and perhaps lately taking credit for all their efforts.
P.S. Not implying that Collison Bros are like that, I don't know enough about them and I like Stripe as a product.
What? Are you telling me Patrick Collison lost to his future wife at 17 in a science competition? That's so cool.
"I wanted her, so I decided to make the next big thing"
If you can't beat 'em join 'em! (or in this case, propose to 'em)
The first real contender to Stripe in a long time.
Gumroad is another merchant of records, but developer documentation is worse, fees are higher and it seems to support only USD pricing.
Other alternatives requires a somewhat hefty monthly fee, which is a non starter for my use case.
Something about Paddle that I can't define is putting me off, whether it is website, wording, attitude, "contact me for the quote" and such things makes it feel old school and bureaucratic. I learned over time to listen to my gut feeling, so I'm not gonna use it.
Gumroad looks much more relaxed, although more expensive and lacks many features.
Here in this thread, someone mentioned https://www.getrevin.com, which lets you use Stripe and provides a tax shield merchant of record for 1% on top of Stripe fees, which makes it interesting.
I also found out https://www.lemonsqueezy.com which is priced similarly to Gumroad, but it lacks documentation to be able to compare it.
Disclaimer: I'm joining Stripe in a month :)
As a dev I thought maybe easier integration. But it doesn't seem all that different from Stripe Invoice.
I also believe that an awful lot of small online SASS and digital good sales by companies are committing (unintentional) tax fraud in the countries of their customers.
I hate trying to understand vat/sales tax on digital goods, to the point that it has until now discouraged me from starting that sort of business on my own. With Paddle I wouldn't have to even think about it.
The funniest thing is that the EU ostensibly did it to make "Amazon pay their fair share" while most small merchants that used to run e-commerce have moved to sell on Amazon or eBay just not to have to keep up with all the regulations and bs.
Cookie law is "simple", but what does it achieve? How are our lives better after knowing that every website uses cookies? Is there any website you thought "oh wow, they are telling me they are using cookies, this totally changes my perception of how they operate!"?
GDPR is the same: did it make any difference in the amount of surveillance capitalism we are subject to? No! Did it make any of the sites you use to reduce the amount of data collected? No! Did it make money for a fuckton of lawyers who went after Small/Medium Businesses who had a website and had no idea if they were complying or not, leading the majority of them to just close down and move to Facebook Pages? Of course it did!
It's akin to saying that assault is now okay because the people are being forced to sign consent forms before getting punched in the face.
You still have to know and understand your legal/tax responsibilities when selling to businesses in Singapore, South Korea, Australia etc.
(B2B Saas founder here)
People often ask me why PartsBox doesn't offer inexpensive B2C plans to hobbyists and I have to explain that it would not make business sense: the costs of dealing with the idiotic EU VAT MOSS rules would exceed the revenue from subscriptions. Plus it would take a significant amount of time, effort and maintenance to support, thus presenting opportunity costs.
If you run a B2B business, things are reasonably straightforward (although still far from obvious), but B2C is a nightmare in the EU (as a side note, I have no idea how people expect to run sustainable small B2C businesses, this is really difficult).
Also, Paddle might be the only reasonable solution, because they do the invoicing themselves. If you can accept that your customers will be getting invoices from someone else, this simplifies things a lot. There is no company that does invoicing for your SaaS correctly if you are based in some EU countries, even though many claim to do so.
“Simply change your entire business model or build a different product”
> Another thing I used to do was to just sell to everyone except European customers
“Just ignore the entire EU market for whatever you’re selling”
This isn’t a serious post right? Or I guess, it’s actually a classic HN counter-post.
That said their API is very basic and their UX is not on par with what you can. A lot of operations are not possible (eg. Letting users change their billing details, such as company or personal, vat number, etc)
They also won't migrate your credit card data if you're too small.
www.getrevin.com looks like a much better alternative: they basically create a stripe account and add you to it. You integrate with your their stripe account and they pay you, same as paddle.
Nothing against Stripe, Stripe is great.
What normally happens is that you become too big and that's when VCs step out of the way, you IPO and everyone takes their gains. But in the case of stripe you have $100Bn company that the VCs will still happily plough money into. So there's no reason to IPO. You can get all the liquidity you need privately. On top of that, Stripe doesn't really need capital, they aren't some uber buying market share with loss making. They are real SAAS, they can scale and see a drop in their earnings:cost ratio.
As for why stay private, what John C has said publicly is that they still see a lot of growth to go, and that not having to provide detailed financian statements to the general public, which would include competitors, is a competitive advantage. It seems believable to me.
The only downside for the company seems to be that employees would be able to sell, and that seems rather greedy for the company to not work in its employee's best interest.
You wouldn’t think that “it’s easy to use and not scammy” Would have been an innovation, but at that stage, I think it was.
Stripe is great, so I assume these guys are good leaders. But Stripe was founded in 2011. Are there not plenty of young founders of that era "hanging on" to their leadership? I don't see anything particularly out of the ordinary here.
Google - better search. Search was "solved", just not well. Zoom - better video chat. It was "solved", not well. Amazon - they've never done anything original, always just better. Online books was done, colo servers were a thing. Apple - same. Telsa - better electric cars. Airbnb - better short term rental market. Salesforce - better CRM. Snowflake - better data warehouse.
And on and on and on. It seems nobody actually wants new things. They seem to want better on some dimension.
There are exceptions, but they are few.
As Henry Ford said, if you ask people what they want they’ll tell you a faster horse. It’s not as if the automobile wasn’t new and revolutionary, but nobody cares about cars. They care about getting around. And a way to get around that was faster, more powerful and more reliable…that was new. It’s the details that matter.
If you take your view, the moon landing was hardly anything noteworthy because animals have been migrating to new lands for millions of year.
The moon landing wasn't a product.
"New" v "better" isn't saying something is or isn't noteworthy. Tesla is a hell of a story. So is SpaceX. So is Apple. So is Google. Amazing technical leaps. All noteworthy, all creating immense value.
Stripe nailed everything else about the business. They made everything that sucked about old credit card processors good. It wasn't just the transaction. It was everything that led up to it (simple integration, debugging, good dev documentation, sane APIs, etc) and everything after. Eventually, they even made the transactions better with alternative methods, fraud, and recurring payment pass-through.
Wow, HN's ability to dismiss and diminish major accomplishments continues to astound me.
The word 'just' is used in many cases to show someone did one thing and not other things. Doing lots of things is often just stupid.
Sometimes "just" does have an implication.
If you assume the writer isn't being a dick, it's easy to see what they meant.
I also found this to be a somewhat shallow analysis, considering their sustained success over a decade.
Wonder why. Competitors’ device? Privacy concerns?
It could also be some petty competitive instinct to stiff his competitors even a few cents or dollars in revenue.
It's from like 2002, when they first came out.
You know what I just did? I put a band-aid a guy sold me on the street, 2 cents, it's perfect, the cotton part over the camera and it doesn't leave residue. Restickable. Hardware kill switch right there...but for this problem, it's just a band-aid.
If the rates continue to rise and market gets bearish on paying multiples on revenues, its going to run into serious liquidity crunch.
> In March, Fidelity, required to publicly update the value of its holdings, marked down Stripe by 20%. Most unicorns—startups valued at $1 billion or more—are trading on the secondary markets at 20% to 40% discounts to their last official venture capital rounds. But Stripe’s shares remain hard for new investors to obtain and in high demand, with recent transactions implying a valuation of as much as $165 billion, per New York–based EquityZen, a marketplace for pre-IPO shares.
The topic reminded me of a good episode of Invest Like the Best with Carta CEO Henry Ward[1], which included a discussion of their CartaX platform for offering insiders a chance to sell private stock to institutions.
[1]: https://podcasts.apple.com/ma/podcast/henry-ward-transformin...
I know Stripe is a darling YC company but if you look for it, you can find some usually anonymous detractors.
"+1. Also a founder of an $XB fintech. Exact same story. Patrick + John dangled an acquisition to get a look inside, and ended up re-trading on the terms. Then proceeded to target 2 of our team members to recruit. Fast forward a few years, and now they have deployed a team to directly copy one of our products. Amongst their L2 team, Patrick and Will are described as the "killers". I guess maybe a bit of duplicity is required to build a company of that size..."
I've found a lot of the "secrets" really aren't that. The ideas are usually pretty public, and the questions come down to ability to execute and integrate etc. Stripe has a good position from which to expand linked lines.
I can understand when it comes to interviewing for a leadership position, some of the interview may be based on 'fit' rather than just the display of problem solving skills w.r.t the interview question, but to me it didn't seem like they were particularly interested in testing either. I have 10+ years of experience operating in a large $XB FinTech and my expertise was an almost exact match for the work the position they were looking to hire.
I'd like to think that it was that specific group within Stripe that had that issue, but the posts on Hacker news have me thinking otherwise.
Seems like a vacuous statement. Isn’t that true of anything/anyone in life?
You're welcome to write your own critique of Stripe or anything else but recycling other people's HN drama is not really in the spirit of the site. Repasting an old provocative comment while withholding context (i.e. not linking it and its rebuttals) is extra lame.
HN/VCs also said Uber was a $150B company...Lyft was a $50B company...Peloton was a $40B company...
if Stripe went public today, I would say they would be lucky to crest at a $30B valuation, even that may be lofty...PayPal has 3x market share as Stripe and has a $92B valuation
Exactly.
The hype squad have been screaming about the valuations of these companies and now look at them as soon as they IPOed. Neither of them are profitable companies.
It just means the VCs, insiders and everyone else who got was in before the IPO made a windfall in their stock and by now cashed out. The news hyping up the IPO to retail investors and left them holding the bags again as the market drops.
I would expect Stripe to delay their (eventual) IPO.
There are starups right now that were founded before 2010, went public, and say they will be profitable in 5-7 years time
That’s 18-20 years without a profit!?!
While there are definitely advantages to the discipline of having to make a profit, I don't see anything fundamentally wrong with building a company over long timescales.
But! That was something I myself did not know. Not really important that eg wikipedia already knows about negative modulos getting the last elements of a list.
That was the point of AI. From that day I had much more confidence in the basic premise of the basic research, that this could be done and it slowly would develop.
And why did I come up with a result so fast with my own basic research? Desperation. Solitude, isolation. Silence. Single-mindedness, determination, that AI was all I actually cared about, no secondary reason to live. It got all my resources.
Its not a cathedral or a forest.
> That's 18-20 years without a profit!?!
Same same, but different.
But I wouldn’t compare an infrastructure / platform like Stripe to B2C nice-to-haves for rich-ish people like Uber or Lyft or cute expensive jokes like Peloton.
They were absolutely overvalued at those market caps, but it's wrong to say that "HN/VCs said those companies were worth X but they didn't reach X in public markets"
Why is it wrong? You think private markets are better indicators of value than public?
The $90 billion is without the IPO pop. It would be worth $90 billion after the IPO pop maybe today. In late 2021, maybe $120 billion.