1 00:00:03,160 --> 00:00:10,959 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. So my idea for 2 00:00:11,000 --> 00:00:13,600 Speaker 1: you guys is you guys just have like regular normal, 3 00:00:13,720 --> 00:00:16,079 Speaker 1: boring ads on the podcast. I think you need to 4 00:00:16,120 --> 00:00:19,480 Speaker 1: do the post red ads for yeah, say a lot 5 00:00:19,520 --> 00:00:21,880 Speaker 1: that everything in securities, frauds is having a bad night 6 00:00:21,960 --> 00:00:25,279 Speaker 1: sleep securities for us. 7 00:00:25,400 --> 00:00:27,640 Speaker 2: Well, like I could do like the men's shaving club 8 00:00:27,840 --> 00:00:29,800 Speaker 2: ads or something that could be fun too. 9 00:00:29,840 --> 00:00:33,840 Speaker 1: When buying short data out of the money called out right, Yeah, 10 00:00:33,920 --> 00:00:34,640 Speaker 1: I think we good. 11 00:00:35,600 --> 00:00:38,479 Speaker 3: Hello and welcome to The Money Stuff Podcast. I'm Matt Levine, 12 00:00:38,680 --> 00:00:40,720 Speaker 3: I read The Money Stuff Colm at Bloomberg. 13 00:00:40,400 --> 00:00:43,720 Speaker 2: Opinion, and I'm Katie Greifeld, a reporter for Bloomberg News 14 00:00:43,720 --> 00:00:45,360 Speaker 2: and an anchor for Bloomberg Television. 15 00:00:45,800 --> 00:00:46,080 Speaker 1: Katy. 16 00:00:46,120 --> 00:00:48,839 Speaker 3: Today we're doing something new. We're doing our first interview 17 00:00:48,840 --> 00:00:49,920 Speaker 3: on The Money Stuff Podcast. 18 00:00:50,000 --> 00:00:52,479 Speaker 2: Are you nervous, I'm pretty nervous. I'm a little bit 19 00:00:52,520 --> 00:00:53,080 Speaker 2: nervous too. 20 00:00:53,240 --> 00:00:55,760 Speaker 3: We're recording this after it happens, and we're not really nervous. 21 00:00:56,960 --> 00:00:57,880 Speaker 2: I'm still stressed out. 22 00:00:57,920 --> 00:00:59,440 Speaker 1: To speak for yourself, I'm pretty nervous. 23 00:00:59,440 --> 00:01:02,040 Speaker 3: I haven't listened to it yet. Today our guest is 24 00:01:02,120 --> 00:01:06,080 Speaker 3: John Collinson. Stripe is a payments and financial technology company, 25 00:01:06,520 --> 00:01:09,240 Speaker 3: and John and his brother and co founder Patrick are 26 00:01:09,360 --> 00:01:11,280 Speaker 3: kind of tech industry celebrities. 27 00:01:11,800 --> 00:01:16,199 Speaker 2: Yeah, he's an Irish billionaire. He's from Limerick. That's cool. 28 00:01:16,600 --> 00:01:18,959 Speaker 3: Katy's wearing her Limerick jacket, but we'll probably get into 29 00:01:18,959 --> 00:01:19,840 Speaker 3: that during the podcast. 30 00:01:19,880 --> 00:01:22,200 Speaker 2: That's true. It's a little embarrassing. 31 00:01:21,720 --> 00:01:24,280 Speaker 3: That I wore this medium amount of embarrassing. 32 00:01:24,480 --> 00:01:27,160 Speaker 2: I truly didn't mean to, but as I said to 33 00:01:27,160 --> 00:01:29,680 Speaker 2: you in our office, it was forty seven degrees when 34 00:01:29,720 --> 00:01:32,520 Speaker 2: I left my apartment this morning, pre dawn, and I 35 00:01:32,560 --> 00:01:36,759 Speaker 2: needed a top. And this is my favorite medium weight jacket. 36 00:01:37,360 --> 00:01:39,800 Speaker 3: This is the behind the scenes content that my stuff 37 00:01:39,800 --> 00:01:43,800 Speaker 3: podcast listener is really grave. Yeah, let's jump right back 38 00:01:43,800 --> 00:01:46,800 Speaker 3: into that Internet failed it should I do like a 39 00:01:46,840 --> 00:01:49,640 Speaker 3: crashing transition to talking about striper? 40 00:01:50,840 --> 00:01:52,440 Speaker 1: Yeah, so how do you guys usually start these? How 41 00:01:52,440 --> 00:01:53,520 Speaker 1: do you one? I guess you haven't done that, You 42 00:01:53,560 --> 00:01:56,120 Speaker 1: haven't done that, you could invent the forduct. Yes, start 43 00:01:56,160 --> 00:01:59,000 Speaker 1: by review of the advertisements I've heard the podcast. 44 00:01:59,160 --> 00:02:02,600 Speaker 3: We start the podcas us with much like this. We 45 00:02:02,640 --> 00:02:06,160 Speaker 3: walk into the room and bullshit a bit and then 46 00:02:06,320 --> 00:02:09,680 Speaker 3: record that. Yeah, and then we eventually say hello and 47 00:02:09,720 --> 00:02:11,800 Speaker 3: welcome to the Money Stuff Podcast. Then we talk about 48 00:02:11,800 --> 00:02:13,760 Speaker 3: whatever the thing we're talking about today. So now we're 49 00:02:13,760 --> 00:02:18,160 Speaker 3: talking about stribe, capital markets, Yeah, destiny tech. Okay, So 50 00:02:18,320 --> 00:02:20,760 Speaker 3: listens in podcasts with you, you talk a lot about 51 00:02:21,040 --> 00:02:23,760 Speaker 3: your interest in business history and like you've learned from 52 00:02:24,040 --> 00:02:26,079 Speaker 3: the tech companies of the past and the conglomerates of 53 00:02:26,120 --> 00:02:29,600 Speaker 3: the conglomerate wave. I have not heard you talk about 54 00:02:29,720 --> 00:02:32,800 Speaker 3: the lessons you've learned from financial services companies. And I 55 00:02:32,840 --> 00:02:36,000 Speaker 3: write about finance and think of Stripe in many ways 56 00:02:36,120 --> 00:02:39,440 Speaker 3: as like a financial services esque company here, like some 57 00:02:39,480 --> 00:02:42,400 Speaker 3: evolution to a financial services company. So I'm curious, like, 58 00:02:42,800 --> 00:02:44,840 Speaker 3: I don't know we you think about financial services. 59 00:02:45,639 --> 00:02:48,799 Speaker 1: Yeah, in general, we try to learn a lot from 60 00:02:48,919 --> 00:02:52,120 Speaker 1: other businesses. And Okay, one things I really like is 61 00:02:52,120 --> 00:02:54,760 Speaker 1: we live in a golden age of learning about other 62 00:02:54,800 --> 00:02:57,280 Speaker 1: businesses right now. And one of the reasons I like 63 00:02:57,360 --> 00:03:00,520 Speaker 1: this is because I think learning about other businesses at 64 00:03:00,560 --> 00:03:04,320 Speaker 1: some level learning about the world or certainly the economy, 65 00:03:04,520 --> 00:03:07,000 Speaker 1: because you know, you're getting sense for how all the 66 00:03:07,080 --> 00:03:11,720 Speaker 1: various entities work together. With financial services in particular, you 67 00:03:11,760 --> 00:03:14,280 Speaker 1: came up with the framing that you know, Stripe is 68 00:03:14,280 --> 00:03:16,359 Speaker 1: in a way kind of a new kind of scaled 69 00:03:16,400 --> 00:03:18,680 Speaker 1: investment bank. Was it you're framing I think? 70 00:03:18,720 --> 00:03:21,280 Speaker 3: I said, yeah, yeah, but I would love for you 71 00:03:21,360 --> 00:03:23,120 Speaker 3: to tell me that's right, but I'm assuming you'll tell 72 00:03:23,120 --> 00:03:23,600 Speaker 3: me it's wrong. 73 00:03:23,800 --> 00:03:25,960 Speaker 1: No. I actually kind of like it because if you 74 00:03:25,960 --> 00:03:28,200 Speaker 1: think about what are the potential source of funding for 75 00:03:28,200 --> 00:03:29,720 Speaker 1: a business, Like, if you want to scale off a business, 76 00:03:29,720 --> 00:03:31,120 Speaker 1: how can you fund it? There's three ways you can 77 00:03:31,160 --> 00:03:33,480 Speaker 1: fund a business. You can do it through debt, equity, 78 00:03:33,840 --> 00:03:36,800 Speaker 1: or retain earnings. And so if you just tick through 79 00:03:36,840 --> 00:03:39,840 Speaker 1: each one of those on the earning side, maybe that's 80 00:03:39,840 --> 00:03:42,000 Speaker 1: the place where a Stripe is kind of the most 81 00:03:42,000 --> 00:03:45,440 Speaker 1: directly doing this, where we're making it easier for businesses 82 00:03:45,480 --> 00:03:48,600 Speaker 1: to self fund their growth. And we see tons of 83 00:03:48,640 --> 00:03:52,200 Speaker 1: bootstrapped or kind of certainly airly monetizing businesses on the Stripe, 84 00:03:52,320 --> 00:03:54,600 Speaker 1: like with this customer and Stripe Photo Room, and they 85 00:03:54,600 --> 00:03:57,760 Speaker 1: do online kind of GENI powered photo editing. They're based 86 00:03:57,800 --> 00:04:00,280 Speaker 1: in France, and you know, maybe ten years ago they 87 00:04:00,320 --> 00:04:02,080 Speaker 1: would have you know, raised a whole bunch of VC 88 00:04:02,200 --> 00:04:04,280 Speaker 1: and scaled up that way. They're actually profitable within a 89 00:04:04,360 --> 00:04:07,200 Speaker 1: year and they've just kind of scaled up profitably since then. 90 00:04:07,480 --> 00:04:09,760 Speaker 1: Ninety eight percent of their business comes from outside France 91 00:04:09,760 --> 00:04:11,200 Speaker 1: and so they're kind of selling this product to a 92 00:04:11,240 --> 00:04:13,400 Speaker 1: global audience and stripes making it easy to do that. 93 00:04:13,640 --> 00:04:15,400 Speaker 1: And we've seen that in general, I guess the AI 94 00:04:15,520 --> 00:04:19,159 Speaker 1: companies in particular, where you know, during the social media boom, 95 00:04:19,520 --> 00:04:23,000 Speaker 1: maybe companies scaled up first with raising lots of VC 96 00:04:23,120 --> 00:04:25,719 Speaker 1: dollars and then later on figured out monetization. With a 97 00:04:25,720 --> 00:04:27,599 Speaker 1: lot of the AI companies, you know, open the eye 98 00:04:27,600 --> 00:04:30,200 Speaker 1: perplexity clause, you know, the photo room who I was mentioning, 99 00:04:30,360 --> 00:04:33,280 Speaker 1: they actually monetized from pretty early on using stripe, and 100 00:04:33,320 --> 00:04:34,440 Speaker 1: so that's one source of funding. 101 00:04:35,160 --> 00:04:39,840 Speaker 3: Stripe allows early stage companies to monetize so efficiently that 102 00:04:39,880 --> 00:04:41,800 Speaker 3: like there is less need for data and equity in 103 00:04:41,839 --> 00:04:44,960 Speaker 3: the world because companies can sell fund like you're putting 104 00:04:45,040 --> 00:04:46,000 Speaker 3: vcs out of business. 105 00:04:46,200 --> 00:04:49,160 Speaker 1: Yeah, and obviously we think it's a more slightly more 106 00:04:50,360 --> 00:04:53,800 Speaker 1: healthy dynamic for the businesses. A classic trap that early 107 00:04:53,839 --> 00:04:57,640 Speaker 1: stage companies fall into is you know, and why combinators 108 00:04:57,680 --> 00:05:00,440 Speaker 1: say tries to get their companies to avoid falling into 109 00:05:00,440 --> 00:05:02,680 Speaker 1: this failure mode is kind of they raise money and 110 00:05:02,720 --> 00:05:05,720 Speaker 1: then they think kind of valuation milestones or any kind 111 00:05:05,720 --> 00:05:08,719 Speaker 1: of financial or investor milestones are the milestones that matter 112 00:05:08,760 --> 00:05:10,320 Speaker 1: for the business, whereas obviously that's not the case. It's 113 00:05:10,320 --> 00:05:11,960 Speaker 1: are you building something of value in the world which 114 00:05:12,000 --> 00:05:14,560 Speaker 1: will generally be measured by does anyone want to buy it? 115 00:05:14,600 --> 00:05:16,280 Speaker 1: And so I think maybe it gets people on the 116 00:05:16,320 --> 00:05:19,240 Speaker 1: right leaderboard earlier on, where a revenue leader board is 117 00:05:19,279 --> 00:05:21,440 Speaker 1: just a much healthier leaderboard to be thinking about than 118 00:05:21,480 --> 00:05:24,200 Speaker 1: a fundraising valuation leaderboard. But we also play in the 119 00:05:24,240 --> 00:05:27,080 Speaker 1: other parts of the capital stack, where on the debt side. 120 00:05:27,160 --> 00:05:29,839 Speaker 1: I mean, you guys have probably watched this, but banks 121 00:05:30,160 --> 00:05:32,120 Speaker 1: have kind of gotten out of the SMB lending space 122 00:05:32,279 --> 00:05:35,000 Speaker 1: since the financial crisis, as just the compliance costs have 123 00:05:35,040 --> 00:05:36,720 Speaker 1: gone up, Like people do not go to a bank 124 00:05:36,800 --> 00:05:39,320 Speaker 1: for a five thousand dollars loan anymore, and so we 125 00:05:39,400 --> 00:05:44,599 Speaker 1: now lend through our lending partners billions of dollars to startups. 126 00:05:44,640 --> 00:05:48,080 Speaker 1: We do that entirely programmatically through amount models, you know, 127 00:05:48,160 --> 00:05:49,840 Speaker 1: cash flow based lending. So we're not looking at the 128 00:05:49,839 --> 00:05:52,200 Speaker 1: balance sheet, We're not trying to do credit checks on 129 00:05:52,240 --> 00:05:54,359 Speaker 1: the individual or something like that. We're looking at the 130 00:05:54,360 --> 00:05:57,160 Speaker 1: stream of cash flows. Is it a healthy, reliable stream 131 00:05:57,200 --> 00:05:59,039 Speaker 1: of cash flows that can support some debt? 132 00:05:59,640 --> 00:06:02,440 Speaker 3: You're doing the cash flows you can see exactly. 133 00:06:02,440 --> 00:06:04,400 Speaker 1: We see the cash flows and people repay out of 134 00:06:04,400 --> 00:06:06,599 Speaker 1: the stripe cash flows, and so that is a new 135 00:06:06,800 --> 00:06:09,479 Speaker 1: kind of lending product that exists in the market. That 136 00:06:09,720 --> 00:06:11,360 Speaker 1: now again is you know, in the billions of dollars 137 00:06:11,400 --> 00:06:13,200 Speaker 1: in terms of the debt we're providing. It's kind of 138 00:06:13,240 --> 00:06:14,719 Speaker 1: ironic in a way. If you want to raise one 139 00:06:14,760 --> 00:06:17,119 Speaker 1: hundred million dollars of debt, that is a very competitive market. 140 00:06:17,160 --> 00:06:18,880 Speaker 1: Lots of people are playing in that. If you want 141 00:06:18,960 --> 00:06:22,640 Speaker 1: to raise five thousand dollars of debt for your company, 142 00:06:22,800 --> 00:06:24,960 Speaker 1: it's actually much harder to get that than it was, 143 00:06:25,240 --> 00:06:27,839 Speaker 1: say twenty or thirty years ago. We've gone backwards there. 144 00:06:28,040 --> 00:06:32,240 Speaker 1: And then on the equity side, I think stripeatless has 145 00:06:32,279 --> 00:06:37,240 Speaker 1: actually helped make more companies investable because what a lot 146 00:06:37,240 --> 00:06:40,080 Speaker 1: of people don't realize is stripeatlists are in corporation product. 147 00:06:40,279 --> 00:06:44,440 Speaker 1: But it lets companies where the founders might be in 148 00:06:44,480 --> 00:06:47,039 Speaker 1: Israel or might be you know, in Singapore or something 149 00:06:47,080 --> 00:06:50,720 Speaker 1: like that, create a US Delaware company and that makes 150 00:06:50,760 --> 00:06:52,560 Speaker 1: it much more investable. And so we've seen a lot 151 00:06:52,600 --> 00:06:56,359 Speaker 1: of foreign founders kind of virtually creating a US company, 152 00:06:56,480 --> 00:07:00,119 Speaker 1: which it just turns out foreign companies investors fanan too scary. 153 00:07:00,160 --> 00:07:02,000 Speaker 3: So I guess I'm responsible for the framing that you're 154 00:07:02,040 --> 00:07:04,160 Speaker 3: sort of in somebody's a substitute for an investment back. 155 00:07:04,200 --> 00:07:06,080 Speaker 3: So like your framing is like increase the GDP of 156 00:07:06,080 --> 00:07:08,240 Speaker 3: the Internet. But like you know, you have these businesses 157 00:07:08,279 --> 00:07:12,880 Speaker 3: like incorporating companies, like what is the principle? And like 158 00:07:13,360 --> 00:07:15,040 Speaker 3: that was like a real investment banker I was doing, 159 00:07:15,080 --> 00:07:18,720 Speaker 3: like corporate derivatives. I'm like, I assume you would never 160 00:07:18,880 --> 00:07:20,560 Speaker 3: get into that business, But am I wrong? 161 00:07:21,160 --> 00:07:23,600 Speaker 1: We're certainly not planning on us. We build products that 162 00:07:23,680 --> 00:07:26,600 Speaker 1: are scalable in some way through tech and so you know, 163 00:07:26,800 --> 00:07:30,080 Speaker 1: Stripe itself. This past year we did trillion dollars in 164 00:07:30,120 --> 00:07:32,160 Speaker 1: payment through the strip platform. That's still growing in a 165 00:07:32,160 --> 00:07:34,559 Speaker 1: pretty healthy clip. The number of businesses served is millions 166 00:07:34,600 --> 00:07:37,160 Speaker 1: of dollars. And so if there's something that is solved 167 00:07:37,160 --> 00:07:39,280 Speaker 1: by just throwing an army of people at it, I mean, 168 00:07:39,520 --> 00:07:41,560 Speaker 1: you know, all the investment banking firms are exceptional ash 169 00:07:41,560 --> 00:07:44,760 Speaker 1: recruiting armies of people, and that is a very competitive space, 170 00:07:44,800 --> 00:07:46,480 Speaker 1: whereas the space of you know, like I was saying, 171 00:07:46,480 --> 00:07:48,160 Speaker 1: with the lending side of things, that was just an 172 00:07:48,240 --> 00:07:50,600 Speaker 1: underserved marketers where we came at it by talking to 173 00:07:50,640 --> 00:07:52,680 Speaker 1: our customers and they said, we really need growth capital 174 00:07:52,760 --> 00:07:55,200 Speaker 1: as actually very annoying for us to get us and 175 00:07:55,280 --> 00:07:58,880 Speaker 1: so I guess we try to find the underserved spaces, 176 00:07:58,960 --> 00:08:02,880 Speaker 1: and investment banking, for you know, certainly on the larger side, 177 00:08:02,880 --> 00:08:04,400 Speaker 1: does not seem underserved right now. 178 00:08:04,600 --> 00:08:06,880 Speaker 2: I've listened to a lot of podcasts you've been on 179 00:08:06,920 --> 00:08:09,840 Speaker 2: in the past several weeks, so sorry, no, no, it's 180 00:08:09,840 --> 00:08:13,160 Speaker 2: been really interesting. You interviewed Charlie Munger, which was I. 181 00:08:13,200 --> 00:08:16,240 Speaker 1: Much prefer interviewing to being interviewed. So we'll come back 182 00:08:16,240 --> 00:08:17,640 Speaker 1: for the second round of this where you guys are 183 00:08:17,640 --> 00:08:18,160 Speaker 1: put on the spot. 184 00:08:18,240 --> 00:08:19,560 Speaker 2: That'll be a lot of fun. We'll put that on 185 00:08:19,560 --> 00:08:22,920 Speaker 2: the calendar. But at one point Charlie Munger started talking 186 00:08:22,960 --> 00:08:26,280 Speaker 2: about like banks and they're selling these sleazy products, and 187 00:08:26,320 --> 00:08:28,119 Speaker 2: of course I couldn't see if you were nodding along 188 00:08:28,240 --> 00:08:30,120 Speaker 2: and I were talking about, you know, whether you would chafe. 189 00:08:30,160 --> 00:08:33,320 Speaker 2: It's sort of the comparison to you know, an investment bank, 190 00:08:33,400 --> 00:08:35,680 Speaker 2: for example, but it sounds like you don't, No, I don't. 191 00:08:35,880 --> 00:08:38,280 Speaker 1: Investment banking provides a useful set of services in the 192 00:08:38,280 --> 00:08:40,679 Speaker 1: world and Okay, one things I really like about the 193 00:08:40,720 --> 00:08:46,400 Speaker 1: Money Stuff newsletter is a studied detachment from what's going 194 00:08:46,440 --> 00:08:48,920 Speaker 1: on where there are people and people respond to incentives 195 00:08:48,960 --> 00:08:51,000 Speaker 1: and that creates behaviors in the world. I like Matt 196 00:08:51,040 --> 00:08:53,640 Speaker 1: does have views and you know, just like crypto and 197 00:08:53,840 --> 00:08:55,840 Speaker 1: you know, all sorts of things, and you can kind 198 00:08:55,880 --> 00:08:58,040 Speaker 1: of the views that occasionally come out, but it's mostly 199 00:08:58,080 --> 00:09:00,600 Speaker 1: this very detached view of what's going on in the world. 200 00:09:00,920 --> 00:09:03,520 Speaker 1: But the way we think about it, like, for example, 201 00:09:03,559 --> 00:09:06,320 Speaker 1: we think, you know, stripes, scale and revenue are actually 202 00:09:06,360 --> 00:09:09,600 Speaker 1: pretty decent proxies for the value stripe is providing in 203 00:09:09,600 --> 00:09:11,400 Speaker 1: the world. That's not always the case with the business. 204 00:09:11,440 --> 00:09:13,720 Speaker 1: You could have an extract of business somewhere, or monopolies 205 00:09:13,800 --> 00:09:16,439 Speaker 1: or rent extraction or something like that. But in our 206 00:09:16,480 --> 00:09:21,200 Speaker 1: case we have very INFORGMNED buyers and a very competitive market. 207 00:09:21,240 --> 00:09:23,040 Speaker 1: There are lots of other places people could go for 208 00:09:23,120 --> 00:09:26,160 Speaker 1: payment acceptance or billing software or something like that, and 209 00:09:26,240 --> 00:09:28,559 Speaker 1: so generally, if customers are choosing you and paying you 210 00:09:28,600 --> 00:09:30,839 Speaker 1: money for a service, it's because you're providing something of 211 00:09:30,920 --> 00:09:33,560 Speaker 1: value that you can't get elsewhere. And similar with investment banks, 212 00:09:33,600 --> 00:09:35,400 Speaker 1: I think if people are going to investment banks for 213 00:09:35,440 --> 00:09:37,960 Speaker 1: a thing, that's probably because they're providing some value to them. 214 00:09:38,000 --> 00:09:39,319 Speaker 1: And so that's the frame of guy I tend to take. 215 00:09:39,520 --> 00:09:43,360 Speaker 1: I think Charlie rest in Peace generally took a lot 216 00:09:43,360 --> 00:09:48,319 Speaker 1: of offense as where he saw people hyping things, principal 217 00:09:48,360 --> 00:09:51,160 Speaker 1: agent problems. You know, there's a set of things that 218 00:09:51,200 --> 00:09:55,440 Speaker 1: bothered him, Crypto Robinhood, mutual fund advisors, and you know, 219 00:09:55,600 --> 00:09:58,160 Speaker 1: you could understand I could construct the Steelman for those cases. 220 00:09:58,320 --> 00:10:02,040 Speaker 3: I think there's a lot of opacity and pricing and 221 00:10:02,160 --> 00:10:06,000 Speaker 3: value in financial services that there's probably a lot less 222 00:10:06,000 --> 00:10:08,080 Speaker 3: of in your business, right, Like you're kind of charging 223 00:10:08,080 --> 00:10:09,240 Speaker 3: a transparent feed to people. 224 00:10:09,320 --> 00:10:11,120 Speaker 1: Yeah, and certain the more scaled something is, the more 225 00:10:11,160 --> 00:10:14,040 Speaker 1: price comparison they'll be, the more efficient the pricing will be. Whereas, yeah, 226 00:10:14,080 --> 00:10:17,320 Speaker 1: there's more room for extracting price in the when you 227 00:10:17,360 --> 00:10:18,520 Speaker 1: get into bespoke deals. 228 00:10:19,160 --> 00:10:21,720 Speaker 3: So one thing I think of when I give investment 229 00:10:21,760 --> 00:10:24,480 Speaker 3: banking is just serving as an advisor to CEOs and 230 00:10:24,520 --> 00:10:26,679 Speaker 3: sort of giving them general advice on their business. And 231 00:10:26,720 --> 00:10:28,880 Speaker 3: we were talking before about you know, you are now 232 00:10:28,960 --> 00:10:32,120 Speaker 3: interacting with a lot of big companies, and you had 233 00:10:32,120 --> 00:10:35,760 Speaker 3: some views on like the ability of a big company 234 00:10:35,840 --> 00:10:38,800 Speaker 3: to CEO to sort of understand her company, and I'm 235 00:10:39,400 --> 00:10:41,120 Speaker 3: I'd love for you to talk about them. 236 00:10:41,320 --> 00:10:46,720 Speaker 1: Yeah, I think people think that CEOs are able to 237 00:10:47,280 --> 00:10:50,199 Speaker 1: drive change in their organizations. I'm talking about organizations in general. 238 00:10:50,200 --> 00:10:52,240 Speaker 1: I'm not talking about the Stripe. People think that a CEO 239 00:10:52,360 --> 00:10:54,360 Speaker 1: lands in a new job, they take over a company, 240 00:10:54,720 --> 00:10:57,480 Speaker 1: and they're able to just whip everything into shape and 241 00:10:57,640 --> 00:11:02,000 Speaker 1: change everything. And I think the general experience of CEOs 242 00:11:02,040 --> 00:11:04,120 Speaker 1: and in new jobs is that is not the case. 243 00:11:04,160 --> 00:11:06,839 Speaker 1: And organizations are pretty hard to change. And in fact, 244 00:11:06,960 --> 00:11:10,000 Speaker 1: one of the things that we believe strongly at STRIPE 245 00:11:10,360 --> 00:11:14,120 Speaker 1: is it's very important for people to get close to 246 00:11:14,160 --> 00:11:17,640 Speaker 1: the work or you will not be able to drive 247 00:11:18,480 --> 00:11:21,200 Speaker 1: any meaningful, useful change. And so like a bunch of 248 00:11:21,200 --> 00:11:23,480 Speaker 1: different ways in which we do that. It actually reminds 249 00:11:23,520 --> 00:11:26,440 Speaker 1: me of the lean manufacturing principle, you know. And they 250 00:11:26,600 --> 00:11:29,000 Speaker 1: have all these very nice esthetic Japanese terms for things, 251 00:11:29,040 --> 00:11:30,640 Speaker 1: and so you know, there's the English equivalent per much 252 00:11:30,640 --> 00:11:32,920 Speaker 1: for the Japanese terms, but in them is gemba, which 253 00:11:32,960 --> 00:11:35,160 Speaker 1: is this idea that managers should you know, walk the 254 00:11:35,160 --> 00:11:37,520 Speaker 1: factory floor and solicit ideas from the people who are 255 00:11:37,559 --> 00:11:40,600 Speaker 1: on the production line and things like that, and all companies, 256 00:11:40,640 --> 00:11:43,280 Speaker 1: like a tech company like Stripe has its equivalents. And 257 00:11:43,360 --> 00:11:50,000 Speaker 1: so we very much encourage engineering managers to actually write 258 00:11:50,040 --> 00:11:51,920 Speaker 1: code at Stripe to get the experience of what is 259 00:11:51,920 --> 00:11:53,960 Speaker 1: it like working in their corner of the code baselat 260 00:11:54,080 --> 00:11:57,040 Speaker 1: problems our engineers running into. I really enjoyed being a 261 00:11:57,120 --> 00:12:00,040 Speaker 1: CFO last year when we were between CFOs, and the 262 00:12:00,080 --> 00:12:02,400 Speaker 1: reasons I really enjoyed that again was getting closer to 263 00:12:03,400 --> 00:12:06,840 Speaker 1: the actual numbers, the processes by which we drive the business, 264 00:12:06,880 --> 00:12:09,640 Speaker 1: Like we're going to hold Stripe to a budget regardless, 265 00:12:09,640 --> 00:12:11,720 Speaker 1: and aren't you interested in how that process is actually 266 00:12:11,720 --> 00:12:13,480 Speaker 1: set and how those numbers are set and everything like that. 267 00:12:13,520 --> 00:12:15,840 Speaker 1: So you know, I say that I think every founder 268 00:12:15,840 --> 00:12:18,560 Speaker 1: should be CFO of their business for at some point 269 00:12:18,720 --> 00:12:21,439 Speaker 1: during its lifespan. It's it's a very educational experience. 270 00:12:21,880 --> 00:12:24,400 Speaker 3: Did like product ideas? Did you do that and come 271 00:12:24,440 --> 00:12:28,319 Speaker 3: away with like we need to do accounting software? No? No? 272 00:12:28,840 --> 00:12:29,160 Speaker 4: Or or? 273 00:12:29,200 --> 00:12:31,600 Speaker 1: I mean I mean maybe in an abstract way, but again, 274 00:12:31,800 --> 00:12:34,199 Speaker 1: Stripes finance needs are are maybe a little different from 275 00:12:34,200 --> 00:12:37,160 Speaker 1: the broader ones. But again, I just think for getting 276 00:12:37,200 --> 00:12:40,840 Speaker 1: close to how the business actually runs that's maybe the 277 00:12:40,840 --> 00:12:44,960 Speaker 1: thing that's hard for CEOs to do, and you know, 278 00:12:45,120 --> 00:12:47,040 Speaker 1: we tried to do it from a customer perspective a 279 00:12:47,120 --> 00:12:49,120 Speaker 1: huge amount of Even some of the products we're talking about, 280 00:12:49,160 --> 00:12:52,200 Speaker 1: like Stripe Capital, they basically come from us trying to 281 00:12:52,240 --> 00:12:55,600 Speaker 1: spend more time with our customers than our competitors do. 282 00:12:55,840 --> 00:12:58,240 Speaker 1: And so you know, we'll start every leadership team meeting 283 00:12:58,720 --> 00:13:01,679 Speaker 1: at am Monday morning with hearing from a customer. We 284 00:13:01,679 --> 00:13:02,839 Speaker 1: just asked them to come and give us kind of 285 00:13:02,880 --> 00:13:05,120 Speaker 1: feedback on the product. If you were to sit in 286 00:13:05,160 --> 00:13:08,160 Speaker 1: on those meetings, it's not an A plus report card 287 00:13:08,200 --> 00:13:10,199 Speaker 1: that we're getting. You know, there are things they want 288 00:13:10,240 --> 00:13:13,360 Speaker 1: us to fix. But I find that it's easy for 289 00:13:13,480 --> 00:13:15,760 Speaker 1: like product managers to overcomplicate things, and you know, you 290 00:13:15,760 --> 00:13:18,079 Speaker 1: can get in your own heads and construct some really 291 00:13:18,160 --> 00:13:20,760 Speaker 1: convolutioned castle in the sky, and there's nothing quite as 292 00:13:20,760 --> 00:13:23,719 Speaker 1: grounding as hearing directly from a customer talk about what 293 00:13:24,000 --> 00:13:25,440 Speaker 1: is not working for them in the product. And you know, 294 00:13:25,440 --> 00:13:27,199 Speaker 1: we do the same on Fridays with like an all 295 00:13:27,240 --> 00:13:30,040 Speaker 1: company thing, bring customers to talk to that. But anyway, 296 00:13:30,320 --> 00:13:32,400 Speaker 1: I think the essence of this for CEOs is getting 297 00:13:32,400 --> 00:13:35,480 Speaker 1: close to the actual production function. And that is sometimes 298 00:13:35,480 --> 00:13:35,920 Speaker 1: hard for them. 299 00:13:36,160 --> 00:13:38,840 Speaker 2: So I have two points. It's interesting to hear you 300 00:13:38,880 --> 00:13:40,800 Speaker 2: say that. First of all, my brain immediately goes to 301 00:13:40,840 --> 00:13:44,560 Speaker 2: Elon Musk, like on the factory floor at SpaceX and Tesla. 302 00:13:44,640 --> 00:13:46,840 Speaker 2: But it was interesting. We had Home Depot this week 303 00:13:46,960 --> 00:13:50,160 Speaker 2: announced that they were going to require corporate employees to 304 00:13:50,200 --> 00:13:54,199 Speaker 2: work eight hour factory shifts, which is interesting, like retail shifts. 305 00:13:54,360 --> 00:13:55,920 Speaker 1: So Starbucks did something similar. 306 00:13:55,679 --> 00:13:57,680 Speaker 2: Right, Yeah, which makes a lot of sense, I mean, 307 00:13:58,120 --> 00:14:01,360 Speaker 2: especially in brutal jobs. Is that one and then the 308 00:14:01,440 --> 00:14:04,000 Speaker 2: other thing? I mean, given that you do know so 309 00:14:04,120 --> 00:14:06,800 Speaker 2: much about his business history and you know, just love 310 00:14:06,920 --> 00:14:09,280 Speaker 2: looking at companies, but those eight am meetings where you're 311 00:14:09,320 --> 00:14:12,040 Speaker 2: just talking to your different companies, like, you see so 312 00:14:12,200 --> 00:14:15,240 Speaker 2: many different types of companies, which is interesting. 313 00:14:15,760 --> 00:14:17,840 Speaker 1: Yeah, And it's definitely a pretty interesting time. I think 314 00:14:17,880 --> 00:14:21,280 Speaker 1: the behavior we observe is that tech has been very 315 00:14:21,280 --> 00:14:23,720 Speaker 1: well covered, and so I think everyone knows broadly kind 316 00:14:23,720 --> 00:14:25,640 Speaker 1: of what's going on in the tech world. What we 317 00:14:25,680 --> 00:14:29,760 Speaker 1: find interesting is the businesses that are the Sherwin Williams 318 00:14:29,760 --> 00:14:31,480 Speaker 1: of the world, you know, the businesses that are ten, 319 00:14:31,520 --> 00:14:33,880 Speaker 1: twenty fifty, one hundred and two hundred years old, and 320 00:14:33,920 --> 00:14:36,080 Speaker 1: how they are adapting to the modern world. And generally, 321 00:14:36,160 --> 00:14:41,840 Speaker 1: what we find is that COVID provided a useful long 322 00:14:41,920 --> 00:14:44,760 Speaker 1: term change to those businesses because those kinds of businesses 323 00:14:44,840 --> 00:14:49,400 Speaker 1: all employed a chief Digital Innovation officer prior to Covid, 324 00:14:49,440 --> 00:14:51,080 Speaker 1: and that person had a team to ten people, and 325 00:14:51,120 --> 00:14:52,800 Speaker 1: they produced all these slides and ideas, and the ideas 326 00:14:52,800 --> 00:14:54,720 Speaker 1: were pretty good, and the company just ignored all them 327 00:14:54,760 --> 00:14:56,520 Speaker 1: and just didn't do any of them. And so they 328 00:14:56,520 --> 00:14:58,520 Speaker 1: had the kind of idea generation part and nothing happened. 329 00:14:58,880 --> 00:15:02,880 Speaker 1: And then it happened, and it was this oh moment 330 00:15:03,360 --> 00:15:06,520 Speaker 1: where people they were forced to adapt because you know, 331 00:15:06,520 --> 00:15:08,560 Speaker 1: obviously the stories were locked down or we're not open, 332 00:15:08,760 --> 00:15:11,640 Speaker 1: and so you maybe had gym companies moving to virtual 333 00:15:11,640 --> 00:15:15,040 Speaker 1: training or something like that. But that created a mandate 334 00:15:15,040 --> 00:15:17,600 Speaker 1: for actually getting serious about the digital stuff. And we 335 00:15:17,680 --> 00:15:22,000 Speaker 1: see much higher quality digital execution coming out of that. 336 00:15:22,280 --> 00:15:24,680 Speaker 1: And there's kind of a few common patterns in what 337 00:15:24,720 --> 00:15:30,160 Speaker 1: everyone's trying to do. I think everyone is questioning their middlemen. 338 00:15:30,200 --> 00:15:32,320 Speaker 1: I don't think middlemen are going away, but they're questioning 339 00:15:32,320 --> 00:15:35,600 Speaker 1: the middlemen and do middlemen add value? And they are 340 00:15:35,640 --> 00:15:39,640 Speaker 1: starting to do much more direct customer relationship stuff. Part 341 00:15:39,680 --> 00:15:42,400 Speaker 1: of that is the product experience where you know, Hershey's 342 00:15:42,440 --> 00:15:46,320 Speaker 1: using Stripe to sell candy directly online, and the customization 343 00:15:46,400 --> 00:15:50,040 Speaker 1: and things like that, and then everyone's just trying to 344 00:15:50,240 --> 00:15:52,680 Speaker 1: build some kind of recurring revenue. And so, you know, 345 00:15:52,720 --> 00:15:54,320 Speaker 1: we think there's two kinds of business in the world. 346 00:15:54,400 --> 00:15:56,240 Speaker 1: There's those who have recurring revenue and those who want 347 00:15:56,280 --> 00:15:59,160 Speaker 1: recurring revenue. And people talk about the engine, you know, 348 00:15:59,200 --> 00:16:01,320 Speaker 1: the airplane engineers with power by the hour. You know, 349 00:16:01,320 --> 00:16:03,680 Speaker 1: you actually don't buy an engine, you buy you know, 350 00:16:04,080 --> 00:16:07,720 Speaker 1: specially exactly. You might trust, you know, the by the minute. 351 00:16:07,840 --> 00:16:10,320 Speaker 1: But that is actually was all companies are moving towards 352 00:16:10,360 --> 00:16:12,160 Speaker 1: because it's kind of better on both sides of the equation. 353 00:16:12,400 --> 00:16:14,760 Speaker 1: And obviously that's pretty complex from an implementation point of view. 354 00:16:14,760 --> 00:16:27,640 Speaker 4: And so the intercomanent Stripe. 355 00:16:30,320 --> 00:16:32,840 Speaker 3: I did like the Stripe fire side a while back, 356 00:16:32,880 --> 00:16:35,120 Speaker 3: and You're like, what should we do? And I was like, 357 00:16:35,240 --> 00:16:36,880 Speaker 3: you should fix paywalls. Have you done it? 358 00:16:37,880 --> 00:16:41,320 Speaker 1: We're getting there because one of us hard. Why is 359 00:16:41,360 --> 00:16:43,880 Speaker 1: it hard? Okay, it's hard for a few reasons. One, 360 00:16:44,880 --> 00:16:49,000 Speaker 1: I think people confuse paywalls with micropayments, and I think 361 00:16:49,120 --> 00:16:54,560 Speaker 1: more consumers want micropayments than publishers. For the publishers want macropayments. 362 00:16:54,640 --> 00:16:56,640 Speaker 3: I think nobody wants micropayments and ever wants to talk 363 00:16:56,680 --> 00:16:57,760 Speaker 3: about it wrong. 364 00:16:57,800 --> 00:16:59,520 Speaker 1: Okay, yeah, yeah. So anyway, once we move past the 365 00:16:59,520 --> 00:17:06,440 Speaker 1: micropayments thing, then it's hard because you ultimately need to 366 00:17:06,480 --> 00:17:10,160 Speaker 1: smooth the onboarding friction and you probably need some cross 367 00:17:10,240 --> 00:17:13,240 Speaker 1: publisher network and you know, publishers are not competing, they're 368 00:17:13,240 --> 00:17:16,480 Speaker 1: maybe not inclined to work together, and then it's just 369 00:17:16,640 --> 00:17:18,359 Speaker 1: a bunch of tech upgrades which are actually kind of 370 00:17:19,040 --> 00:17:21,479 Speaker 1: somewhat prosaic long running projects, but you know, you need 371 00:17:21,480 --> 00:17:22,720 Speaker 1: to be able to have the patients to work with 372 00:17:22,760 --> 00:17:24,760 Speaker 1: the media company to spend a year or year and 373 00:17:24,800 --> 00:17:26,920 Speaker 1: a half upgrade in their stack. The way we've ended 374 00:17:27,000 --> 00:17:29,159 Speaker 1: up doing this is with our product link, which is 375 00:17:29,240 --> 00:17:31,119 Speaker 1: very simple but is really starting to work. It just 376 00:17:31,160 --> 00:17:33,240 Speaker 1: remember you guys, maybe run into it on the internet. 377 00:17:33,320 --> 00:17:36,360 Speaker 1: It just remembers your credentials across websites, and so if 378 00:17:36,359 --> 00:17:38,879 Speaker 1: you've bought on websites A with stripe and you have 379 00:17:38,960 --> 00:17:41,600 Speaker 1: the box checked to remember your payment details, then you'll 380 00:17:41,640 --> 00:17:44,160 Speaker 1: be able to buy on site B without entering your 381 00:17:44,200 --> 00:17:47,240 Speaker 1: payment details again and you might think it will lead 382 00:17:47,240 --> 00:17:49,280 Speaker 1: to a big increase in conversion if a lot of 383 00:17:49,520 --> 00:17:51,800 Speaker 1: consumers have their payment credentials remembered so they don't have 384 00:17:51,840 --> 00:17:53,800 Speaker 1: to type any extra data in they can just click buy. 385 00:17:54,000 --> 00:17:56,440 Speaker 1: And turns out it does. And there's obviously a virtuous 386 00:17:56,440 --> 00:17:59,080 Speaker 1: cycle here where you know, the more people sign up 387 00:17:59,080 --> 00:18:01,160 Speaker 1: for it, but denser the network gets. So that's where 388 00:18:01,160 --> 00:18:02,720 Speaker 1: it's starting to work. And so we have some media 389 00:18:02,720 --> 00:18:04,760 Speaker 1: properties starting to use that. And so what it means 390 00:18:04,840 --> 00:18:07,159 Speaker 1: is they get lots of people coming with credentials all 391 00:18:07,200 --> 00:18:09,040 Speaker 1: pre filled and they just need to hit by and 392 00:18:09,160 --> 00:18:10,880 Speaker 1: then the commercial proposition just needs to work. 393 00:18:11,000 --> 00:18:13,080 Speaker 3: I just feel like the media payoll problem for me 394 00:18:13,200 --> 00:18:15,640 Speaker 3: is not even the payment credentials. It's once you've paid 395 00:18:15,720 --> 00:18:19,119 Speaker 3: for a payoll, keeping you logged in, you're on your 396 00:18:19,119 --> 00:18:24,280 Speaker 3: phone to computers, you're like, you get something emailed to you. 397 00:18:24,320 --> 00:18:26,399 Speaker 2: And just remember me. It's really frustrating. 398 00:18:26,600 --> 00:18:28,639 Speaker 1: We should and may get to that as well. I agree, 399 00:18:28,680 --> 00:18:30,000 Speaker 1: that's that's part two of it. To me. 400 00:18:30,040 --> 00:18:31,960 Speaker 3: That's related to like online identity and the stuff that 401 00:18:31,960 --> 00:18:35,320 Speaker 3: people are crypto people away talking about. So I also 402 00:18:35,320 --> 00:18:37,520 Speaker 3: have listened to you on podcasts. One thing that you've said, 403 00:18:37,640 --> 00:18:41,600 Speaker 3: is that when you started raising money for a shripe, 404 00:18:41,760 --> 00:18:44,679 Speaker 3: people are like, why isn't this assault problem pay exists? 405 00:18:44,960 --> 00:18:47,720 Speaker 3: Can you tell us why it's not right it wasn't 406 00:18:47,800 --> 00:18:49,840 Speaker 3: or why is it isn't? Like why is payments hard? 407 00:18:50,080 --> 00:18:53,120 Speaker 3: And like there were payments companies before you, like, what's 408 00:18:53,280 --> 00:18:54,159 Speaker 3: the thing that you're solving? 409 00:18:54,200 --> 00:18:54,600 Speaker 4: They didn't. 410 00:18:55,320 --> 00:18:59,159 Speaker 1: It wasn't solved for a few reasons. Payments requires you 411 00:18:59,200 --> 00:19:02,199 Speaker 1: to be good at two very different things that are 412 00:19:02,280 --> 00:19:07,480 Speaker 1: quite distinct skill sets. There's technology and there's financial services. 413 00:19:07,760 --> 00:19:11,640 Speaker 1: And so prior to Stripe, you had some payment companies 414 00:19:11,680 --> 00:19:13,600 Speaker 1: that just did the technology layer. You know, they said, 415 00:19:13,600 --> 00:19:15,399 Speaker 1: we're a nice API and we plug into you know, 416 00:19:15,440 --> 00:19:17,400 Speaker 1: whatever bank you use. But that wasn't a good payment 417 00:19:17,400 --> 00:19:19,359 Speaker 1: experience because you then try to sign up with the 418 00:19:19,400 --> 00:19:22,440 Speaker 1: bank and you know, it's spent week shuffling paperwork around 419 00:19:22,480 --> 00:19:25,720 Speaker 1: or something like that. And so a huge amount of 420 00:19:25,720 --> 00:19:28,919 Speaker 1: what we do is at the intersection of those things, 421 00:19:28,960 --> 00:19:33,080 Speaker 1: where you have AMLKYC considerations, where you know, a stripe 422 00:19:33,119 --> 00:19:37,400 Speaker 1: is essentially aiming to look at the activity going on 423 00:19:37,400 --> 00:19:39,880 Speaker 1: on its platform and ensure that it is lisit and 424 00:19:40,080 --> 00:19:42,840 Speaker 1: you know, acceptable activity that's happening on the platform, and 425 00:19:42,880 --> 00:19:45,280 Speaker 1: so we do lots of cool mL work. You know, 426 00:19:45,320 --> 00:19:48,520 Speaker 1: we don't talk about it really that much publicly because 427 00:19:48,640 --> 00:19:51,080 Speaker 1: it is just what goes into operating a skilled platform 428 00:19:51,200 --> 00:19:53,600 Speaker 1: like this, but it's a huge amount of the special 429 00:19:53,640 --> 00:19:57,080 Speaker 1: sauce that makes Stripe tick. At the same time, the 430 00:19:57,119 --> 00:19:58,959 Speaker 1: tech has to be really good and nice and usable, 431 00:19:59,040 --> 00:20:01,920 Speaker 1: and customers really care about latency, they really care about 432 00:20:01,960 --> 00:20:04,880 Speaker 1: how easy the API integration experiences, and so I would 433 00:20:04,880 --> 00:20:08,880 Speaker 1: say companies prior to Stripe tended to pick a lane 434 00:20:08,880 --> 00:20:11,080 Speaker 1: a bit where you had a few purely tech companies 435 00:20:11,119 --> 00:20:13,199 Speaker 1: where you know, they'd say, we're a payment s gateway 436 00:20:13,200 --> 00:20:14,920 Speaker 1: and we just don't think about anything. We just handle 437 00:20:14,920 --> 00:20:18,120 Speaker 1: off the transaction of something someone else or those banks, 438 00:20:18,560 --> 00:20:21,280 Speaker 1: and they actually just generally outsourced the tech. They didn't 439 00:20:21,280 --> 00:20:23,639 Speaker 1: even really do it themselves, or if they did themselves, 440 00:20:23,680 --> 00:20:26,080 Speaker 1: they did not do it particularly well, and so it 441 00:20:26,200 --> 00:20:29,720 Speaker 1: was a very crummy experience for the developers actually using it. 442 00:20:29,760 --> 00:20:32,240 Speaker 1: And of course, the tech changes Mobile was just coming 443 00:20:32,240 --> 00:20:34,439 Speaker 1: along as we were getting started. You know, the iPhone 444 00:20:34,440 --> 00:20:35,919 Speaker 1: App Store came out in two thousand and eight. We 445 00:20:35,920 --> 00:20:37,760 Speaker 1: started Stripe in two thousand and nine, so like we 446 00:20:37,760 --> 00:20:39,760 Speaker 1: were just in time for that, and so mobile was 447 00:20:39,760 --> 00:20:42,840 Speaker 1: a very relevant consideration. You know, even just the web 448 00:20:42,880 --> 00:20:45,879 Speaker 1: apps and SaaS and everything grew a huge amount, and 449 00:20:45,920 --> 00:20:48,320 Speaker 1: so I think the banks had not built for that 450 00:20:48,520 --> 00:20:50,679 Speaker 1: and did not build for that, and so there was 451 00:20:50,680 --> 00:20:53,399 Speaker 1: maybe a gap between the existing providers and there was 452 00:20:53,440 --> 00:20:54,800 Speaker 1: that sort of things that you had to be really 453 00:20:54,800 --> 00:20:56,800 Speaker 1: good at. There were huge number of things with Stripe 454 00:20:56,840 --> 00:20:59,320 Speaker 1: that we did buy intuitive feel they were not part 455 00:20:59,359 --> 00:21:02,760 Speaker 1: of a particularly deliberate tops down strategy that was written 456 00:21:02,760 --> 00:21:05,160 Speaker 1: down in the business plan, but ended up working out well. 457 00:21:05,480 --> 00:21:08,400 Speaker 1: And so one was our really early focus on developers, 458 00:21:08,440 --> 00:21:10,840 Speaker 1: where our go to market was through developers. We started 459 00:21:10,840 --> 00:21:12,960 Speaker 1: by selling to startups and there was this really i 460 00:21:13,000 --> 00:21:15,680 Speaker 1: would say, kind of bottoms up sort of adoption motion. 461 00:21:16,119 --> 00:21:19,160 Speaker 1: But again, ultimately the product we're selling is a technical 462 00:21:19,240 --> 00:21:21,360 Speaker 1: API product, and so of course you should be thinking 463 00:21:21,359 --> 00:21:23,840 Speaker 1: about what the developers want. We just had the developer 464 00:21:23,880 --> 00:21:26,320 Speaker 1: focus because we were software engineers ourselves. We just wanted 465 00:21:26,320 --> 00:21:28,840 Speaker 1: to build a product that we thought was a good product. 466 00:21:29,080 --> 00:21:30,760 Speaker 1: But I think it ended up being more strategic than 467 00:21:30,800 --> 00:21:32,040 Speaker 1: we maybe realized in the beginning. 468 00:21:32,560 --> 00:21:36,600 Speaker 3: There's a lot of like mess in the legal and 469 00:21:36,720 --> 00:21:40,440 Speaker 3: like infrastructure of the payment system, and like your job 470 00:21:40,520 --> 00:21:43,160 Speaker 3: is to provide people a very clean abstraction to that mess, 471 00:21:43,160 --> 00:21:45,280 Speaker 3: and like that means handling all of the mess and 472 00:21:45,320 --> 00:21:47,200 Speaker 3: you know, actually going on figuring stuff out and then 473 00:21:47,240 --> 00:21:48,840 Speaker 3: being able to put that in the back end of 474 00:21:48,880 --> 00:21:51,960 Speaker 3: your API. So the API is like a very clean abstraction. 475 00:21:52,160 --> 00:21:55,679 Speaker 1: Like is that burn Hobart had a line that I 476 00:21:55,840 --> 00:21:58,359 Speaker 1: liked in one of his newsletters that stripe makes the 477 00:21:58,400 --> 00:22:00,840 Speaker 1: financial system work the way people think it already does. 478 00:22:01,119 --> 00:22:03,520 Speaker 1: And that's I think is actually a pretty nice design 479 00:22:03,600 --> 00:22:05,919 Speaker 1: principle for us. And you know, maybe a good example 480 00:22:05,960 --> 00:22:06,640 Speaker 1: of this is. 481 00:22:06,720 --> 00:22:08,840 Speaker 3: See when I hear that I want you to do 482 00:22:08,920 --> 00:22:11,800 Speaker 3: like equity derivatives, I want you to do more of 483 00:22:11,840 --> 00:22:12,600 Speaker 3: this stuff in my world. 484 00:22:12,760 --> 00:22:15,560 Speaker 1: But I don't think we have a view on how improved. 485 00:22:15,560 --> 00:22:17,160 Speaker 1: No one has, sad maybe we just think about it more. 486 00:22:17,320 --> 00:22:19,920 Speaker 2: I do want to talk about crypto. Yeah, we debated 487 00:22:19,960 --> 00:22:23,080 Speaker 2: this internally, but when it comes to the payments world, 488 00:22:23,520 --> 00:22:27,280 Speaker 2: I mean, the conversation tends to devolve into a crypto 489 00:22:27,359 --> 00:22:30,919 Speaker 2: conversation because I feel like crypto is trying to solve 490 00:22:31,520 --> 00:22:33,879 Speaker 2: a lot of payments problems, especially when it comes to 491 00:22:34,000 --> 00:22:37,440 Speaker 2: cross border payments and I'm not asking you about like 492 00:22:37,480 --> 00:22:39,720 Speaker 2: the price of bitcoin or whether you're bullish on you know, 493 00:22:39,800 --> 00:22:42,679 Speaker 2: number go up. But when it comes to crypto and 494 00:22:42,720 --> 00:22:44,760 Speaker 2: the problems that it's trying to solve, I mean, how 495 00:22:44,800 --> 00:22:45,560 Speaker 2: do you think about it? 496 00:22:45,920 --> 00:22:48,639 Speaker 1: We're quite excited about crypto at the moment. I interpret 497 00:22:48,680 --> 00:22:53,280 Speaker 1: money stuff as the house position as moderately cryptoskeptical, and 498 00:22:54,160 --> 00:22:56,320 Speaker 1: so I guess what I would say to a moderately 499 00:22:56,359 --> 00:23:00,600 Speaker 1: cryptoskeptical audience, They'd be two things. One, there are just 500 00:23:00,600 --> 00:23:03,960 Speaker 1: a bunch of scams and dodgy characters and everything like that. 501 00:23:04,119 --> 00:23:05,720 Speaker 1: But it kind of reminds me of I at the 502 00:23:05,720 --> 00:23:07,119 Speaker 1: first I grew up in Ireland. The first time I 503 00:23:07,160 --> 00:23:10,119 Speaker 1: went to Vegas was for work conference there. It was 504 00:23:10,359 --> 00:23:12,600 Speaker 1: for a work conference, and you know, at the Venetian 505 00:23:12,680 --> 00:23:16,120 Speaker 1: or something like that, probably Money twenty twenty, and you're 506 00:23:16,160 --> 00:23:19,560 Speaker 1: going into the hotel past like all the people smoking 507 00:23:19,560 --> 00:23:22,240 Speaker 1: indoors and like the people just addicted to the slot machines, 508 00:23:22,280 --> 00:23:23,760 Speaker 1: just pressing them again and again again, and it's all 509 00:23:23,800 --> 00:23:25,520 Speaker 1: the blinking lights and you know the I guess, the 510 00:23:25,520 --> 00:23:27,320 Speaker 1: clatter of the coins paying out, and you have to 511 00:23:27,359 --> 00:23:31,840 Speaker 1: walk past this degenerate gambling area crazy scene. Yeah, it's 512 00:23:31,840 --> 00:23:35,240 Speaker 1: a grim scene to get to your serious industry conference, 513 00:23:35,280 --> 00:23:37,920 Speaker 1: and those very surprising to me. And I don't know, 514 00:23:37,960 --> 00:23:40,640 Speaker 1: there's something similar in crypto where you have the casino 515 00:23:41,000 --> 00:23:44,000 Speaker 1: dogecoin value speculating part of it, and then there's people 516 00:23:44,040 --> 00:23:46,160 Speaker 1: doing all the serious work over in say stable coins 517 00:23:46,280 --> 00:23:48,520 Speaker 1: or something like that, and those two things just exist. 518 00:23:48,760 --> 00:23:51,720 Speaker 1: But I think one cannot use the existence of the 519 00:23:51,720 --> 00:23:54,240 Speaker 1: slots in the Vegas casino to write off the work 520 00:23:54,520 --> 00:23:55,840 Speaker 1: atnomment stretching the analogy. 521 00:23:56,480 --> 00:24:01,480 Speaker 3: No, this is good, so because like, yeah, yeah, you're 522 00:24:01,480 --> 00:24:03,720 Speaker 3: excited with there's like, well, your friend Patio eleven would 523 00:24:03,760 --> 00:24:08,880 Speaker 3: say it's a kyic avoidance mechanism. Basically, it's like a yeah. 524 00:24:08,880 --> 00:24:11,720 Speaker 1: Well. The thing about crypto is there's been a lot 525 00:24:11,720 --> 00:24:14,800 Speaker 1: of hype on what crypto is useful for. And so 526 00:24:14,880 --> 00:24:16,200 Speaker 1: for example, if you go back and read the original 527 00:24:16,240 --> 00:24:18,560 Speaker 1: Bitcoin paper, which is a great read. It's a very readable 528 00:24:18,560 --> 00:24:21,120 Speaker 1: original paper, it actually used the word interchange in there 529 00:24:21,119 --> 00:24:23,040 Speaker 1: and talks about kind of the use of bitcoin as 530 00:24:23,119 --> 00:24:26,840 Speaker 1: a payment method. But bitcoin turned out to be certainly 531 00:24:26,920 --> 00:24:29,080 Speaker 1: stock bitcoin, you know, before lightning and everything like that 532 00:24:29,240 --> 00:24:31,520 Speaker 1: should have to be a horrible payment method, like slow expensive, 533 00:24:31,840 --> 00:24:34,560 Speaker 1: let's not do that. And now the technology has matured 534 00:24:34,960 --> 00:24:37,520 Speaker 1: through what has been kind of fourteen years of development. 535 00:24:37,560 --> 00:24:39,920 Speaker 1: I think the crypto haters used this argument that like, well, 536 00:24:39,960 --> 00:24:41,240 Speaker 1: you know, it is the Web in ninety three for 537 00:24:41,280 --> 00:24:43,560 Speaker 1: you know, many many years, whereas the actual web coming along. 538 00:24:43,640 --> 00:24:46,240 Speaker 1: But there's been fourteen years of lots of technical development 539 00:24:46,320 --> 00:24:50,040 Speaker 1: happening such that we've ended up with much more advanced technologies. 540 00:24:50,040 --> 00:24:52,280 Speaker 1: And so what you specifically have now with stable coins 541 00:24:52,480 --> 00:24:56,240 Speaker 1: is you have, firstly, something that's value doesn't change and 542 00:24:56,280 --> 00:24:58,439 Speaker 1: so there's none of the kind of speculation stuff that 543 00:24:58,480 --> 00:25:01,080 Speaker 1: we're talking about. You have something that's actually very technically scalable, 544 00:25:01,119 --> 00:25:04,680 Speaker 1: so with the current L two's there's no real scalability 545 00:25:04,680 --> 00:25:08,000 Speaker 1: issues with them, and you have a pretty sensible construct 546 00:25:08,080 --> 00:25:10,240 Speaker 1: where in a way, it's narrow banking. Right. We've been 547 00:25:10,240 --> 00:25:12,800 Speaker 1: talking about narrow banking in this country for decades, and 548 00:25:12,840 --> 00:25:15,520 Speaker 1: we have ended up with narrow banking through stable coins, 549 00:25:15,920 --> 00:25:18,119 Speaker 1: where let's say a good stable coin, you know that 550 00:25:18,480 --> 00:25:22,000 Speaker 1: like a PAXOS or a USDC. In the case of USDC, 551 00:25:22,280 --> 00:25:25,120 Speaker 1: it is fully backed by short term treasuries. And that 552 00:25:25,160 --> 00:25:27,720 Speaker 1: actually just seems like a pretty good construct to me. 553 00:25:27,800 --> 00:25:30,120 Speaker 1: And so you know, we now make it where you can, 554 00:25:30,200 --> 00:25:32,320 Speaker 1: you know, accept money and strive via crypto. You can 555 00:25:32,320 --> 00:25:35,080 Speaker 1: do some payouts things like that. And the obvious thing 556 00:25:35,119 --> 00:25:38,840 Speaker 1: that people say is true where in the US you 557 00:25:38,880 --> 00:25:41,719 Speaker 1: will be slightly too biased against crypto because the US 558 00:25:41,800 --> 00:25:43,840 Speaker 1: is the world's best currency. You know, the US has 559 00:25:43,920 --> 00:25:46,600 Speaker 1: the world's reserve currency where you get to spend and 560 00:25:46,920 --> 00:25:50,320 Speaker 1: might back exactly. And so of course people in the 561 00:25:50,440 --> 00:25:52,000 Speaker 1: US think the USD is awesome because it is an 562 00:25:52,040 --> 00:25:54,800 Speaker 1: awesome currency, whereas many people in many other countries have 563 00:25:54,920 --> 00:25:58,000 Speaker 1: a much more adversarial relationship with their own currency. And 564 00:25:58,040 --> 00:25:59,840 Speaker 1: I'm not even talking about Zimbabwe, though it is true. 565 00:26:00,119 --> 00:26:03,400 Speaker 1: I'm talking about Turkey, which is a very large country 566 00:26:03,400 --> 00:26:07,800 Speaker 1: and economy and population, but people there do not have 567 00:26:08,280 --> 00:26:10,720 Speaker 1: full faith in the lira, and they think about what's 568 00:26:10,720 --> 00:26:12,560 Speaker 1: a better place to keep money than lira. 569 00:26:13,000 --> 00:26:15,680 Speaker 3: I thin guess the other like US bias is that 570 00:26:16,400 --> 00:26:19,880 Speaker 3: the US government really wants dollar payments to flow through 571 00:26:19,920 --> 00:26:24,360 Speaker 3: the KYCED banking system. And like there's some suspicion that. 572 00:26:24,359 --> 00:26:27,240 Speaker 1: I think all the serious grown up crypto players today, 573 00:26:27,600 --> 00:26:30,080 Speaker 1: I mean they're subject to the fincent travel rule. They 574 00:26:30,119 --> 00:26:33,159 Speaker 1: are ky seeing the actors, and so if you go 575 00:26:33,240 --> 00:26:36,320 Speaker 1: through a crypto flow today, you will see the normal 576 00:26:36,400 --> 00:26:39,520 Speaker 1: frictions of dealing with a regulator financial product where you 577 00:26:39,560 --> 00:26:41,480 Speaker 1: are asked to provide your you know, last for your 578 00:26:41,520 --> 00:26:43,720 Speaker 1: social or upload a driver's license or things like that. 579 00:26:43,920 --> 00:26:46,480 Speaker 1: And so I think just in most of the crypto 580 00:26:46,560 --> 00:26:48,679 Speaker 1: use cases that are being tough. Obviously there's the sketchy 581 00:26:48,760 --> 00:26:50,680 Speaker 1: dark web stuff exists as well, but in most of 582 00:26:50,680 --> 00:26:53,480 Speaker 1: the use cases we are talking about where serious businesses 583 00:26:53,520 --> 00:26:56,119 Speaker 1: like stripe or serious merchants are using crypto, it is 584 00:26:56,160 --> 00:26:59,600 Speaker 1: the custodial lissis part of the crystals. 585 00:27:00,280 --> 00:27:02,960 Speaker 3: On chain, like non costardical transfer. 586 00:27:02,680 --> 00:27:05,280 Speaker 2: Like correct, I'm true. I mean, if you look into 587 00:27:05,320 --> 00:27:08,240 Speaker 2: your crystal ball and you know, it's been fourteen years 588 00:27:08,240 --> 00:27:11,000 Speaker 2: since bitcoin was created, as you said, we've seen a 589 00:27:11,040 --> 00:27:14,640 Speaker 2: ton of technology advancement since then. I mean, you said 590 00:27:14,640 --> 00:27:17,800 Speaker 2: you're quite excited about crypto, but I mean, how far 591 00:27:17,880 --> 00:27:20,280 Speaker 2: can we run that out? Do you think it's the future? 592 00:27:20,359 --> 00:27:22,560 Speaker 2: For example, would you go that far if you look 593 00:27:22,760 --> 00:27:25,200 Speaker 2: fifty one hundred years into the future. 594 00:27:25,320 --> 00:27:27,800 Speaker 1: I don't think it's a singular future. And again there's 595 00:27:27,800 --> 00:27:30,080 Speaker 1: a bit of overpromising that's happened in the crypto world. Again, 596 00:27:30,119 --> 00:27:32,359 Speaker 1: I think that's what gets people's backed up. Actually, speaking 597 00:27:32,359 --> 00:27:35,480 Speaker 1: of bern Hobart, we just Stripe Press published this new book. 598 00:27:35,600 --> 00:27:37,880 Speaker 1: The title is Boom, and the pieces of the book 599 00:27:38,040 --> 00:27:42,760 Speaker 1: is that we generally view financial bubbles as societally net 600 00:27:42,760 --> 00:27:46,040 Speaker 1: negative because you know, they cause misallocation of resources and 601 00:27:46,080 --> 00:27:48,320 Speaker 1: they cause you know, ultimately people lose out. And he 602 00:27:48,400 --> 00:27:53,760 Speaker 1: makes the argument that bubbles provide a societally useful function 603 00:27:54,119 --> 00:27:58,080 Speaker 1: by essentially coordinating efforts. And you know, maybe the dot 604 00:27:58,119 --> 00:28:01,439 Speaker 1: com boom is incorrectly understood as a pets dot common webvan. 605 00:28:01,520 --> 00:28:03,480 Speaker 1: It was really like bit dollars put into it, as 606 00:28:03,640 --> 00:28:05,679 Speaker 1: you guys probably know, it was a telecoms boom, and 607 00:28:05,720 --> 00:28:07,800 Speaker 1: it was a fiber rollout boom. But it led to 608 00:28:07,840 --> 00:28:11,280 Speaker 1: the US having just amazing fiber overcapacity that then led 609 00:28:11,280 --> 00:28:12,959 Speaker 1: to the steady growth of the Internet for the decades 610 00:28:13,000 --> 00:28:15,560 Speaker 1: that followed. And so that's maybe an example of it 611 00:28:15,600 --> 00:28:18,000 Speaker 1: was a bubble, but it was a societally useful bubble 612 00:28:18,000 --> 00:28:20,280 Speaker 1: because then it led to this overcapacity that had lots 613 00:28:20,320 --> 00:28:22,600 Speaker 1: of positive externalities. And I think you make that argument 614 00:28:22,600 --> 00:28:23,600 Speaker 1: about crypto, that. 615 00:28:24,720 --> 00:28:27,080 Speaker 3: Argument made as crypto led to a build out of 616 00:28:27,640 --> 00:28:29,800 Speaker 3: GPUs that led to the AI boomah. 617 00:28:29,840 --> 00:28:31,760 Speaker 1: Oh interesting. I wasn't even making that case. You could 618 00:28:31,760 --> 00:28:34,159 Speaker 1: make that argument too, though obviously there was a lot 619 00:28:34,200 --> 00:28:37,480 Speaker 1: of GPU spent happening even even before crypto. No. I 620 00:28:37,560 --> 00:28:39,640 Speaker 1: was just making the argument that I think the speculative 621 00:28:39,680 --> 00:28:42,560 Speaker 1: side of crypto, you could make the argument pulled in 622 00:28:42,960 --> 00:28:45,920 Speaker 1: attention and resources that was then used to build the 623 00:28:46,040 --> 00:28:49,400 Speaker 1: very boring useful parts of crypto, like you know, ethereum 624 00:28:49,400 --> 00:28:51,880 Speaker 1: to or against stable coins or things like that. 625 00:28:52,360 --> 00:28:54,000 Speaker 3: We could talk more about this. Do you want to 626 00:28:54,040 --> 00:28:56,240 Speaker 3: make sure are we talking about the things you don't 627 00:28:56,240 --> 00:28:56,840 Speaker 3: want to talk you about? 628 00:28:56,960 --> 00:28:59,880 Speaker 2: Yeah? Great, which we do want to talk about. 629 00:29:00,640 --> 00:29:04,720 Speaker 3: So another money stuff theme that we'll probably do on 630 00:29:04,760 --> 00:29:08,040 Speaker 3: our ad reads is that private markets are the new 631 00:29:08,040 --> 00:29:12,320 Speaker 3: public markets. You guys are among the poster children for that. 632 00:29:12,400 --> 00:29:15,240 Speaker 3: You're at the CFO. Tell me about what it's like 633 00:29:15,320 --> 00:29:17,960 Speaker 3: being private. I don't know, Like, I mean, how should 634 00:29:17,960 --> 00:29:20,040 Speaker 3: I think about like the idea that, like, you're an 635 00:29:20,120 --> 00:29:24,240 Speaker 3: enormous company and you've stayed private and have no enthusiasm 636 00:29:24,520 --> 00:29:26,560 Speaker 3: as far as we know, for going public or even 637 00:29:26,600 --> 00:29:28,760 Speaker 3: talking about this twenty years ago? Would you have been 638 00:29:28,800 --> 00:29:29,440 Speaker 3: able to do that? 639 00:29:31,200 --> 00:29:33,960 Speaker 1: Yeah? We spend a lot of time internally at Stripe 640 00:29:33,960 --> 00:29:37,840 Speaker 1: thinking about the value of the Stripe business. I think 641 00:29:37,840 --> 00:29:39,680 Speaker 1: the external world spends a lot of time thinking about 642 00:29:39,720 --> 00:29:42,640 Speaker 1: the value of the Stripe stock price, which are related 643 00:29:42,760 --> 00:29:47,280 Speaker 1: plus different things. We have definitely stayed private longer than 644 00:29:48,440 --> 00:29:50,840 Speaker 1: some people expected. I think we'll continue to stay private 645 00:29:50,880 --> 00:29:55,720 Speaker 1: longer than maybe some people expect. But there's no complex answer. 646 00:29:55,760 --> 00:29:58,240 Speaker 1: It's just a simple answer, which is we don't think 647 00:29:58,440 --> 00:30:01,520 Speaker 1: companies should sleep walk into going public. We think they 648 00:30:01,520 --> 00:30:06,200 Speaker 1: should be deliberate about it. And why would Stripe run 649 00:30:06,200 --> 00:30:09,400 Speaker 1: out and go public. It could be if we wanted 650 00:30:09,440 --> 00:30:12,920 Speaker 1: to sell stock broadly to a retail audience. That's not 651 00:30:13,000 --> 00:30:14,280 Speaker 1: something that we've had that, you know, we just the 652 00:30:14,360 --> 00:30:17,000 Speaker 1: business is profitable, you know, we haven't needed to raise 653 00:30:17,200 --> 00:30:20,120 Speaker 1: very large amounts of capital. A traditional reason might be 654 00:30:20,360 --> 00:30:22,320 Speaker 1: return of capital, not just kind of a capital raise 655 00:30:22,360 --> 00:30:25,000 Speaker 1: for running the business, but return of capital to existing shareholders. 656 00:30:25,080 --> 00:30:27,200 Speaker 1: But again that's where you're maybe referencing the private markets 657 00:30:27,240 --> 00:30:30,000 Speaker 1: have gotten deeper, and you know, in our case, we've 658 00:30:30,080 --> 00:30:33,520 Speaker 1: run two unlimited employee tenders, you know, last year and 659 00:30:33,680 --> 00:30:36,480 Speaker 1: this year. You know, Sequoia just did an LP tender 660 00:30:36,600 --> 00:30:39,000 Speaker 1: where they gave liquidity to some of their LPs, but 661 00:30:39,600 --> 00:30:42,560 Speaker 1: liquidity is available to people in the private markets, and 662 00:30:42,600 --> 00:30:47,040 Speaker 1: so it's more I think the default spring where companies, 663 00:30:47,080 --> 00:30:49,880 Speaker 1: you know, a SaaS company would be started and you know, 664 00:30:49,920 --> 00:30:51,720 Speaker 1: go from zero to one hundred million ar R and 665 00:30:51,720 --> 00:30:54,200 Speaker 1: then just run out and go public. Default is being 666 00:30:54,280 --> 00:30:56,480 Speaker 1: questioned a little bit in Silicon Valley. Obviously lots of 667 00:30:56,480 --> 00:30:59,400 Speaker 1: companies are still going public, but the default is being questioned, 668 00:30:59,400 --> 00:31:04,960 Speaker 1: and the default is more of a Silicon Valley tech 669 00:31:05,040 --> 00:31:08,800 Speaker 1: default than maybe a broader global default. So like in 670 00:31:08,840 --> 00:31:12,480 Speaker 1: financial suit, we know exactly so as Bloomberg employees, you 671 00:31:12,520 --> 00:31:14,360 Speaker 1: may be familiar with it, but Bloomberg is the example 672 00:31:14,400 --> 00:31:17,000 Speaker 1: that everyone cites. But if you just quickly run through 673 00:31:17,040 --> 00:31:19,840 Speaker 1: financial services, you know, take the world's leading market maker, 674 00:31:19,920 --> 00:31:23,520 Speaker 1: Citadel Securities private company, take the world's leading prop trade. 675 00:31:23,560 --> 00:31:25,840 Speaker 1: I'm probably offending one of the world's leading in all 676 00:31:25,840 --> 00:31:27,680 Speaker 1: these cases. So don't defend anyone. But if you look 677 00:31:27,720 --> 00:31:30,080 Speaker 1: at Jane Street, you know, which it's been reported on 678 00:31:30,120 --> 00:31:32,160 Speaker 1: a lot these days, just how good a business it is. 679 00:31:32,280 --> 00:31:34,400 Speaker 1: You know, whether they're at a ten billion profits run 680 00:31:34,440 --> 00:31:36,960 Speaker 1: rate or something like that. Private company Fidelity, when the 681 00:31:36,960 --> 00:31:40,680 Speaker 1: world's leading brokerages, private company Goldban Sachs, your former employer. 682 00:31:41,000 --> 00:31:43,240 Speaker 3: I assume that that a big difference is that a 683 00:31:43,240 --> 00:31:46,560 Speaker 3: lot like Chance Street writes very large checks. And the 684 00:31:46,680 --> 00:31:49,160 Speaker 3: Silicon Valley difference is not just that like you have vcs, 685 00:31:49,240 --> 00:31:50,640 Speaker 3: you might be hunger to get at whereas like said, 686 00:31:50,640 --> 00:31:52,560 Speaker 3: at all dozen, but like it's also you have employees 687 00:31:52,560 --> 00:31:54,880 Speaker 3: who are getting paid in equity and they're getting tender 688 00:31:54,880 --> 00:31:57,000 Speaker 3: as every Oh yeah, like is it tender every year 689 00:31:57,080 --> 00:31:58,760 Speaker 3: just as good as publicly traded stock? 690 00:31:59,680 --> 00:32:01,560 Speaker 1: We think the tender every year is in nice solution. 691 00:32:01,800 --> 00:32:03,640 Speaker 1: And there are some things that will be different if 692 00:32:03,640 --> 00:32:05,120 Speaker 1: we're a public company for the better. There's some things 693 00:32:05,160 --> 00:32:07,080 Speaker 1: that'd be different as a public company for the worse. 694 00:32:07,200 --> 00:32:09,160 Speaker 1: And you get it, you know, trading windows and who's 695 00:32:09,160 --> 00:32:11,760 Speaker 1: an insider and things like that. But it's thus far 696 00:32:11,800 --> 00:32:13,520 Speaker 1: work quite nicely for a solution. 697 00:32:13,720 --> 00:32:15,640 Speaker 2: So is that the model then? Like tender every year, 698 00:32:15,640 --> 00:32:16,400 Speaker 2: you've only done. 699 00:32:16,240 --> 00:32:20,520 Speaker 1: Two, but we don't have forward looking plans to announce, 700 00:32:20,560 --> 00:32:21,920 Speaker 1: and so I'd come back to it at some stage with 701 00:32:22,320 --> 00:32:24,520 Speaker 1: you know, we could go do something that you don't expect, 702 00:32:24,640 --> 00:32:27,280 Speaker 1: and we're not announcing the plans because genuinely it's not 703 00:32:27,320 --> 00:32:29,320 Speaker 1: like there's a written down plan at stride that we're 704 00:32:29,320 --> 00:32:32,080 Speaker 1: going to do this, this and then this. We are 705 00:32:32,200 --> 00:32:36,880 Speaker 1: always reevaluating it. But again, up to this point, it 706 00:32:36,920 --> 00:32:39,160 Speaker 1: has made more sense for us to grow as a 707 00:32:39,240 --> 00:32:42,640 Speaker 1: capital efficient private company, then it's made sense for us 708 00:32:42,640 --> 00:32:43,400 Speaker 1: to be a public company. 709 00:32:43,440 --> 00:32:46,239 Speaker 3: Sure, Like Chancer just makes money every year and they 710 00:32:46,240 --> 00:32:47,840 Speaker 3: don't need to raise capital, and so that. 711 00:32:47,920 --> 00:32:50,160 Speaker 1: Just seems like great business has money to people. Right. 712 00:32:50,280 --> 00:32:52,600 Speaker 3: I don't know what the economics that is, literally, but 713 00:32:52,640 --> 00:32:55,840 Speaker 3: they seem extremely good. But like, it does seem possible 714 00:32:55,880 --> 00:32:58,520 Speaker 3: that you could just make cash every year and fund 715 00:32:58,560 --> 00:33:00,760 Speaker 3: the business out of that, and out of that I. 716 00:33:00,640 --> 00:33:02,320 Speaker 1: Never need to for twenty four, we're trying to make 717 00:33:02,320 --> 00:33:03,920 Speaker 1: a decision for twenty four, and for twenty five, we'll 718 00:33:03,920 --> 00:33:05,480 Speaker 1: try to make a decision for twenty five. So luckily, 719 00:33:05,520 --> 00:33:07,600 Speaker 1: it's not the case that you're faced with a you know, 720 00:33:07,640 --> 00:33:09,040 Speaker 1: a fork in the roads and you have to make 721 00:33:09,080 --> 00:33:12,440 Speaker 1: some kind of permanent decision. We do constantly re evaluated when. 722 00:33:12,320 --> 00:33:14,840 Speaker 3: I write about this topic. One concern that people have 723 00:33:15,160 --> 00:33:18,240 Speaker 3: is that there are a lot of cool companies, like 724 00:33:18,280 --> 00:33:22,000 Speaker 3: an increasing number of them, like fast growing, profitable companies 725 00:33:22,400 --> 00:33:25,000 Speaker 3: that or sorry, I should say fast growing, not profitable 726 00:33:25,320 --> 00:33:28,520 Speaker 3: early stage companies, stage company companies, high growth companies that 727 00:33:29,000 --> 00:33:32,240 Speaker 3: don't go public, and that deprives like ordinary investors of 728 00:33:32,280 --> 00:33:35,720 Speaker 3: access to those companies, and therefore it should be like 729 00:33:35,720 --> 00:33:38,840 Speaker 3: made easier to go public or whatever. Right, So for you, 730 00:33:40,000 --> 00:33:41,520 Speaker 3: do you worry at all about that from like a 731 00:33:41,600 --> 00:33:44,800 Speaker 3: systemic perspective that you're depriving like American retirement savers of 732 00:33:44,880 --> 00:33:47,520 Speaker 3: access to the stripe And then two, you're not entirely 733 00:33:47,600 --> 00:33:50,920 Speaker 3: because there are people who are going around selling stripe 734 00:33:51,000 --> 00:33:53,200 Speaker 3: shares in a way that I believe you do not like. 735 00:33:53,800 --> 00:33:56,400 Speaker 3: And I don't know, like there's like a way around 736 00:33:56,480 --> 00:33:57,960 Speaker 3: of the barrier that you've set up. I guess. 737 00:33:58,840 --> 00:34:02,360 Speaker 1: Yeah, Look, do you think the debate over who should 738 00:34:02,360 --> 00:34:06,920 Speaker 1: be allowed by private assets is a good debate? And 739 00:34:08,680 --> 00:34:11,160 Speaker 1: the accredited investor rule is it's kind of an odd rule, 740 00:34:11,239 --> 00:34:13,120 Speaker 1: like we're able to take it for granted that it's 741 00:34:13,120 --> 00:34:15,920 Speaker 1: been around for a long time, but basically we define 742 00:34:16,280 --> 00:34:19,359 Speaker 1: sophisticated investors as rich people, which is, you know, maybe 743 00:34:19,440 --> 00:34:21,440 Speaker 1: some a historic and in. 744 00:34:21,520 --> 00:34:23,360 Speaker 3: Like a declining standard of rich where it's now like 745 00:34:23,440 --> 00:34:24,799 Speaker 3: sort of upper middle class people. 746 00:34:24,960 --> 00:34:27,320 Speaker 1: Correct. Yeah, So I think debate on that is a 747 00:34:27,360 --> 00:34:29,759 Speaker 1: good thing in Stripes case. You know, most of the 748 00:34:30,000 --> 00:34:34,320 Speaker 1: non employee ownership is through essentially kind of VC funds, 749 00:34:34,719 --> 00:34:39,120 Speaker 1: and the underlying VC fund ownership the LPs there tend 750 00:34:39,200 --> 00:34:42,719 Speaker 1: to be pension funds, college endowments, people. I think we 751 00:34:42,760 --> 00:34:44,880 Speaker 1: feel quite good about making money for it, and so 752 00:34:45,239 --> 00:34:47,520 Speaker 1: I don't think it's the case that's kind of broader society, 753 00:34:47,560 --> 00:34:50,120 Speaker 1: it doesn't get to benefit from the appreciation. I think 754 00:34:50,120 --> 00:34:52,520 Speaker 1: we feel quite good about the LP base of the 755 00:34:52,840 --> 00:34:55,080 Speaker 1: investors that are behind Striping. Again, I think that's another 756 00:34:55,120 --> 00:34:57,080 Speaker 1: thing that has allowed us to stay private for as 757 00:34:57,120 --> 00:34:59,160 Speaker 1: long as we have, which is actually the very long 758 00:34:59,239 --> 00:35:00,879 Speaker 1: term vcs. I think if we had a different set 759 00:35:00,880 --> 00:35:03,440 Speaker 1: of vcs, we would have been less fortunate in being 760 00:35:03,440 --> 00:35:05,680 Speaker 1: able to grow Stripe as a private company because maybe 761 00:35:05,680 --> 00:35:07,000 Speaker 1: they would have felt the need for a win or 762 00:35:07,000 --> 00:35:08,680 Speaker 1: something like that. But I think luckily, you know, Sequahic 763 00:35:08,760 --> 00:35:11,120 Speaker 1: Capital is one of the best VC firms that there 764 00:35:11,200 --> 00:35:12,680 Speaker 1: is that don't quite need to prove themselves. 765 00:35:12,880 --> 00:35:15,000 Speaker 3: They probably count you as a win anyway. Again, they 766 00:35:15,040 --> 00:35:17,000 Speaker 3: probably count you as a win exactly. 767 00:35:17,080 --> 00:35:17,279 Speaker 2: Yeah. 768 00:35:17,960 --> 00:35:19,640 Speaker 1: Yeah. And then on the I don't know what you 769 00:35:19,760 --> 00:35:22,560 Speaker 1: call them, but the firms out there at this market. 770 00:35:22,640 --> 00:35:25,360 Speaker 3: We've taught on the podcast about Destiny Tech one hundred, 771 00:35:25,360 --> 00:35:30,240 Speaker 3: which has a private market. I was the fund situation 772 00:35:30,480 --> 00:35:32,920 Speaker 3: with like some Stripe forward contracts, and like there's like 773 00:35:32,960 --> 00:35:35,520 Speaker 3: a general there's like a market for forward contracts, which 774 00:35:35,560 --> 00:35:38,080 Speaker 3: all seemed to be not really approveiate this. 775 00:35:38,160 --> 00:35:45,520 Speaker 1: It's not going to end well because generally hyping financial 776 00:35:45,640 --> 00:35:50,920 Speaker 1: assets has a bad history. It worked out badly with SPACs, 777 00:35:50,960 --> 00:35:55,120 Speaker 1: it worked out badly with icos, and it just tends 778 00:35:55,120 --> 00:35:57,160 Speaker 1: to work out badly, which is why it tends to 779 00:35:57,200 --> 00:36:00,160 Speaker 1: be regulated this. You know, financial regulators tried to in 780 00:36:00,400 --> 00:36:04,320 Speaker 1: the hyping of private assets. And so again Stripe is 781 00:36:04,360 --> 00:36:07,920 Speaker 1: not a public company. We do not enable broad retail 782 00:36:07,920 --> 00:36:11,759 Speaker 1: ownership of Stripe stock, and so if people try to 783 00:36:13,200 --> 00:36:18,759 Speaker 1: back into that by having private company stock in a 784 00:36:19,280 --> 00:36:21,680 Speaker 1: vehicle that that is then available to public mark investors, 785 00:36:22,280 --> 00:36:25,239 Speaker 1: we just think it's not a good construct. Like it's underdisclosed, 786 00:36:25,480 --> 00:36:28,360 Speaker 1: where people are buying an interest in things based on 787 00:36:28,719 --> 00:36:31,600 Speaker 1: name brand recognition but not based on going over the 788 00:36:31,640 --> 00:36:34,400 Speaker 1: financials or understanding what it actually is. They tend to 789 00:36:34,440 --> 00:36:36,120 Speaker 1: all be very high fees. I mean, it depends on 790 00:36:36,160 --> 00:36:38,160 Speaker 1: the vehicle, but they tend to be fairly distractive in 791 00:36:38,200 --> 00:36:40,600 Speaker 1: that way, and so we don't like it. We don't 792 00:36:41,239 --> 00:36:44,399 Speaker 1: we don't permit it, and I'm personally not a fan. 793 00:36:44,920 --> 00:36:47,160 Speaker 2: Is there much that you can do about it? Like 794 00:36:47,239 --> 00:36:49,600 Speaker 2: in the case of a Destiny Tech, for example, that 795 00:36:49,719 --> 00:36:53,799 Speaker 2: says that you know they have stripe forwards zuchorrect. Yeah, 796 00:36:53,960 --> 00:36:55,440 Speaker 2: I mean, what can you do? 797 00:36:55,600 --> 00:36:57,360 Speaker 1: We prohibit forward, So we had a bit of a 798 00:36:58,239 --> 00:36:59,920 Speaker 1: about that people do them anyway? 799 00:37:01,080 --> 00:37:02,160 Speaker 3: Can you then avoid them? 800 00:37:02,239 --> 00:37:06,920 Speaker 1: And I don't know where this goes, Yeah, because right, I. 801 00:37:06,920 --> 00:37:09,560 Speaker 3: Mean, it seems like they're prohibited and people do them. 802 00:37:09,480 --> 00:37:11,560 Speaker 1: And yeah, we put it up on the website just 803 00:37:11,600 --> 00:37:13,880 Speaker 1: to make it abundantly clear, so everyone has the same information. 804 00:37:14,000 --> 00:37:16,640 Speaker 1: It's allowed, they're not allowed. So I don't know. There's 805 00:37:16,640 --> 00:37:19,000 Speaker 1: some areas where people have to read the tea leaves 806 00:37:19,080 --> 00:37:21,600 Speaker 1: or the body language. We tried to make it abundantly clear, 807 00:37:21,680 --> 00:37:24,160 Speaker 1: get out there with the semaphore flags. So this people 808 00:37:24,440 --> 00:37:25,440 Speaker 1: are not in any doubt. 809 00:37:25,560 --> 00:37:28,000 Speaker 2: On the topic of going public. It doesn't sound like 810 00:37:28,040 --> 00:37:30,440 Speaker 2: you're in any rush, obviously, you said in June, and 811 00:37:30,480 --> 00:37:32,960 Speaker 2: I thought this was interesting that many companies make the 812 00:37:33,000 --> 00:37:36,759 Speaker 2: decision to go public too early. That you personally see 813 00:37:36,840 --> 00:37:39,879 Speaker 2: tons of opportunities to change and grow the business quite 814 00:37:39,920 --> 00:37:42,919 Speaker 2: a lot, and I think it's interesting that you want 815 00:37:42,960 --> 00:37:45,560 Speaker 2: to stay private to do that, and I think a 816 00:37:45,600 --> 00:37:48,279 Speaker 2: lot of founders would agree with you. But just the 817 00:37:48,400 --> 00:37:51,200 Speaker 2: fact that, you know, sort of like going public. You 818 00:37:51,280 --> 00:37:54,680 Speaker 2: see this as this sign of maturity and maybe that 819 00:37:54,800 --> 00:37:57,000 Speaker 2: you're not innovating as much as you would in the privates. 820 00:37:57,360 --> 00:37:57,680 Speaker 1: I don't know. 821 00:37:57,719 --> 00:38:00,200 Speaker 2: It kind of made me think of tech company is 822 00:38:00,239 --> 00:38:03,640 Speaker 2: like offering dividends. Like I remember when Metas started giving 823 00:38:03,680 --> 00:38:05,960 Speaker 2: out dividends earlier this year. Everyone was like, oh, well, 824 00:38:06,680 --> 00:38:08,480 Speaker 2: they're old news now and they're too mature. 825 00:38:09,000 --> 00:38:11,080 Speaker 1: Well, I think Meta is the wrong example to use 826 00:38:11,200 --> 00:38:14,160 Speaker 1: for that argument, because they currently seem to be doing 827 00:38:14,239 --> 00:38:17,319 Speaker 1: extraordinarily well in the AI race. And I'm not making 828 00:38:17,360 --> 00:38:19,640 Speaker 1: the claim that you know, one cannot innovate as a 829 00:38:19,680 --> 00:38:22,120 Speaker 1: public company, because that is clearly an absurd claim and 830 00:38:22,239 --> 00:38:24,160 Speaker 1: you would just be kind of constantly slapped in the 831 00:38:24,160 --> 00:38:26,719 Speaker 1: face by counterexamples. And Meta would be the perfect one 832 00:38:26,840 --> 00:38:28,560 Speaker 1: where they just dem at the ring glasses and those 833 00:38:28,600 --> 00:38:30,719 Speaker 1: look amazing, and again they're just nailing it in the 834 00:38:30,760 --> 00:38:33,520 Speaker 1: AI race, and so they'll basically argument I do think 835 00:38:33,560 --> 00:38:39,759 Speaker 1: that on the margin, if you are developing large number 836 00:38:39,760 --> 00:38:41,840 Speaker 1: of new products, if you have a fast growing business, 837 00:38:42,040 --> 00:38:44,399 Speaker 1: if you're constantly reinventing how the business works. And again 838 00:38:44,440 --> 00:38:47,239 Speaker 1: in our case, we are transforming Stripe from not just 839 00:38:47,280 --> 00:38:49,000 Speaker 1: being a payments business to there are all these new 840 00:38:49,040 --> 00:38:51,120 Speaker 1: software lines of business that are much earlier, that are 841 00:38:51,160 --> 00:38:53,400 Speaker 1: harder to predict how they grow. Everything like this. You know, 842 00:38:53,480 --> 00:38:55,320 Speaker 1: we're changing out the underlying payment methods. You know, we 843 00:38:55,360 --> 00:38:58,720 Speaker 1: talked about crypto, we didn't talk about around the world, 844 00:38:59,040 --> 00:39:01,239 Speaker 1: there are all these interesting trends happening in new payment 845 00:39:01,280 --> 00:39:04,000 Speaker 1: methods where are basically bank transfers, and things like UPI 846 00:39:04,200 --> 00:39:06,040 Speaker 1: and picks in Brazil and things like that are becoming 847 00:39:06,120 --> 00:39:08,200 Speaker 1: much more relevant to anyway, the huge amount of change, 848 00:39:08,560 --> 00:39:13,320 Speaker 1: I think on the margin, the public company valuation apparatus 849 00:39:13,920 --> 00:39:16,640 Speaker 1: is set. You see it how people you know, the 850 00:39:16,719 --> 00:39:17,960 Speaker 1: quarter of the earnings and the miss and the beat 851 00:39:18,000 --> 00:39:23,440 Speaker 1: and everything like that. It is optimized for mature, predictable businesses. 852 00:39:23,480 --> 00:39:27,000 Speaker 1: And indeed people talk about kind of business predictability, whereas 853 00:39:27,400 --> 00:39:29,160 Speaker 1: you know, for a business that is still in the 854 00:39:29,520 --> 00:39:31,160 Speaker 1: you know, in the early stages like Stripe, and we 855 00:39:31,200 --> 00:39:32,920 Speaker 1: think about a lot of new products on a five 856 00:39:33,040 --> 00:39:35,640 Speaker 1: or ten year time horizon. Again, I think on the margin, 857 00:39:35,680 --> 00:39:38,040 Speaker 1: there are some benefits to doing that as a private 858 00:39:38,080 --> 00:39:40,440 Speaker 1: company because you get to kind of completely retool the 859 00:39:40,480 --> 00:39:43,400 Speaker 1: business as you go without necessarily wondering about, you know, 860 00:39:43,640 --> 00:39:45,520 Speaker 1: what will the reception be for this in you know, 861 00:39:45,840 --> 00:39:47,160 Speaker 1: the next quarter's earnings release. 862 00:39:47,520 --> 00:39:51,720 Speaker 3: I know you're not in any phase of learning an IPO, 863 00:39:51,840 --> 00:39:53,400 Speaker 3: but I was a capital markets banker, and I know 864 00:39:53,440 --> 00:39:57,040 Speaker 3: you've had thoughts about like the IPO process, and like, 865 00:39:57,239 --> 00:40:00,279 Speaker 3: I don't know if you're doing an IPO, like would 866 00:40:00,280 --> 00:40:01,520 Speaker 3: you change about the process. 867 00:40:02,000 --> 00:40:05,319 Speaker 1: I find all the debates about IPO mechanics really uninteresting 868 00:40:05,480 --> 00:40:07,520 Speaker 1: because it just doesn't matter. Like, if you have a 869 00:40:07,600 --> 00:40:10,200 Speaker 1: great business that's valuable for customers that millions of people 870 00:40:10,320 --> 00:40:12,640 Speaker 1: use and makes money as a result, you can do 871 00:40:12,800 --> 00:40:14,600 Speaker 1: whatever you want. Like, you know, I think Facebook would 872 00:40:14,600 --> 00:40:16,400 Speaker 1: say they botch the IPO, but they have like an 873 00:40:16,400 --> 00:40:19,200 Speaker 1: incredible business, so it doesn't matter and no one remembers it. 874 00:40:19,440 --> 00:40:21,760 Speaker 1: And then you can have like the world's best IPO 875 00:40:21,840 --> 00:40:23,319 Speaker 1: plan and if the business isn't good, it doesn't matter. 876 00:40:23,360 --> 00:40:25,200 Speaker 1: And so people get into all these debates about direct 877 00:40:25,200 --> 00:40:28,520 Speaker 1: listing versus regular IPO and then Bill Gurly complains that 878 00:40:28,560 --> 00:40:31,080 Speaker 1: the bankers are taking too many fees, and then it 879 00:40:31,239 --> 00:40:34,000 Speaker 1: just doesn't matter. Like, build a great business and you 880 00:40:34,160 --> 00:40:37,319 Speaker 1: could write your prospectus on a cocktail mapp and it'll 881 00:40:37,360 --> 00:40:37,640 Speaker 1: be fine. 882 00:40:37,960 --> 00:40:40,960 Speaker 3: Really, this is like why Charliemker doesn't like financial services 883 00:40:41,000 --> 00:40:44,640 Speaker 3: business because you're like like, oh, this is around business. 884 00:40:45,000 --> 00:40:45,839 Speaker 3: It's true, but it's. 885 00:40:45,760 --> 00:40:48,720 Speaker 1: True, right, Yeah. And the thing is investors are smart. 886 00:40:48,800 --> 00:40:52,279 Speaker 1: I think people try to do too much of a 887 00:40:52,360 --> 00:40:55,120 Speaker 1: song and a dance with investor relations and try to 888 00:40:55,480 --> 00:40:57,799 Speaker 1: you know, gin things up. And ultimately, when you meet 889 00:40:57,800 --> 00:41:00,239 Speaker 1: professional investors, you know they're really smart and they look 890 00:41:00,239 --> 00:41:02,719 Speaker 1: through and understand the fundamental dynamics of a business. And 891 00:41:02,960 --> 00:41:06,320 Speaker 1: so the secret to good investor relations is have a 892 00:41:06,360 --> 00:41:08,000 Speaker 1: good business that's growing and it is profitable. 893 00:41:08,200 --> 00:41:28,440 Speaker 2: Where people should do that exactly. Ye, Well, oh you 894 00:41:28,560 --> 00:41:30,320 Speaker 2: have an airport. Do you want to talk about that? 895 00:41:30,480 --> 00:41:31,000 Speaker 2: Is that something? 896 00:41:31,760 --> 00:41:32,000 Speaker 1: Okay? 897 00:41:32,440 --> 00:41:35,319 Speaker 2: Why where did that come from? 898 00:41:35,880 --> 00:41:39,720 Speaker 1: Well? I should not be listened to for any rational 899 00:41:39,920 --> 00:41:41,120 Speaker 1: financial investment advisor. 900 00:41:41,680 --> 00:41:43,280 Speaker 2: I don't know. I don't have the pockets. 901 00:41:44,480 --> 00:41:48,080 Speaker 1: Well, I'm a pilot and an aviation and I grew 902 00:41:48,160 --> 00:41:50,000 Speaker 1: up interested in US and I've been flying since I 903 00:41:50,120 --> 00:41:52,160 Speaker 1: was a teenager and you know, still really love to 904 00:41:52,160 --> 00:41:54,040 Speaker 1: do it, and I'm flying my spare time, and so 905 00:41:54,360 --> 00:41:57,480 Speaker 1: I would say it's not necessarily the most rational business 906 00:41:57,520 --> 00:42:00,440 Speaker 1: interest of mine. But the case the airport, so Dublin 907 00:42:00,560 --> 00:42:03,600 Speaker 1: basically is three airports. Doublin International, which you've been to Dublin, 908 00:42:03,640 --> 00:42:05,480 Speaker 1: that's the one you've been to. I guess three if 909 00:42:05,480 --> 00:42:07,480 Speaker 1: you count the military airport, Belt Donal, and then Western, 910 00:42:07,480 --> 00:42:09,960 Speaker 1: which is the general aviation airport. And so general aviation 911 00:42:10,120 --> 00:42:11,520 Speaker 1: is all the stuff that is not airlines. So it 912 00:42:11,560 --> 00:42:14,360 Speaker 1: could be public service flights like search and rescuer, air ambulance. 913 00:42:14,520 --> 00:42:16,560 Speaker 1: It could be flight training, you know, people getting their 914 00:42:16,600 --> 00:42:18,560 Speaker 1: pilot's licenses. It could be corporate jets, it could be 915 00:42:18,560 --> 00:42:22,200 Speaker 1: all this kind of stuff. And generally speaking, the appropriate 916 00:42:22,320 --> 00:42:25,239 Speaker 1: home for the general aviation stuff is not where all 917 00:42:25,280 --> 00:42:28,359 Speaker 1: the airlines are because they just don't mix that well. 918 00:42:28,600 --> 00:42:31,680 Speaker 1: And so most places will have you know, if someone's 919 00:42:31,719 --> 00:42:33,880 Speaker 1: doing flight training in New York, they'll not do it 920 00:42:33,960 --> 00:42:36,200 Speaker 1: at GfK. They'll do it you know, Westchester or something 921 00:42:36,239 --> 00:42:38,840 Speaker 1: like that. Yeah, Yeah, they really don't mix well. And 922 00:42:39,560 --> 00:42:42,160 Speaker 1: in the case of Dublin's Western Airport, I end up 923 00:42:42,160 --> 00:42:43,960 Speaker 1: buying it back in twenty twenty one, and it needed 924 00:42:43,960 --> 00:42:46,040 Speaker 1: a bunch of investment, and so A bought it and 925 00:42:46,360 --> 00:42:49,279 Speaker 1: we've been investing in giving it the facility that needs around, 926 00:42:49,600 --> 00:42:52,719 Speaker 1: you know, instrument landing capabilities and you know, redoing the 927 00:42:53,120 --> 00:42:55,279 Speaker 1: terminal and the capital stock and things like that, and 928 00:42:55,400 --> 00:42:57,200 Speaker 1: so it's partly I think it's a good I mean, 929 00:42:57,239 --> 00:42:59,920 Speaker 1: they are in the US, they're not for profit businesses. 930 00:43:00,040 --> 00:43:02,759 Speaker 1: They tend to be government owned and federally funded. Internationally 931 00:43:03,120 --> 00:43:04,840 Speaker 1: they are like he throws, a for profit business and 932 00:43:04,840 --> 00:43:07,000 Speaker 1: they just make money off landing fees. And so I 933 00:43:07,040 --> 00:43:09,640 Speaker 1: actually think it will, in the fullness of time, be 934 00:43:09,760 --> 00:43:12,040 Speaker 1: a good business once it's kind of come out on 935 00:43:12,080 --> 00:43:14,040 Speaker 1: the right side of the growth curve. But it's also 936 00:43:14,200 --> 00:43:14,960 Speaker 1: a passion. 937 00:43:14,680 --> 00:43:17,880 Speaker 2: Product in that's awesome. I mean this not as an insult, 938 00:43:17,960 --> 00:43:21,360 Speaker 2: but I feel like to enjoy being a pilot, like 939 00:43:21,480 --> 00:43:23,320 Speaker 2: casually you have to be like a little bit crazy, 940 00:43:23,840 --> 00:43:26,520 Speaker 2: like that seems like an insane proposition, but maybe I'm 941 00:43:26,600 --> 00:43:27,400 Speaker 2: just really risking. 942 00:43:27,600 --> 00:43:30,960 Speaker 1: So no, it just it requires a lot of discipline, 943 00:43:31,120 --> 00:43:34,640 Speaker 1: you know, checklist discipline, and you know, recurrent training. I 944 00:43:34,719 --> 00:43:38,239 Speaker 1: just went through some recurrent training and it just I 945 00:43:38,280 --> 00:43:41,520 Speaker 1: actually find it more interesting because obviously aviation safety is 946 00:43:41,680 --> 00:43:45,759 Speaker 1: generally talked about correctly as one of the best examples 947 00:43:45,920 --> 00:43:51,200 Speaker 1: of process optimization over the last you know, five decades, 948 00:43:51,440 --> 00:43:53,759 Speaker 1: where we have taken a system and just improved the 949 00:43:53,880 --> 00:43:56,799 Speaker 1: crap out of it until it's like so good. If 950 00:43:56,840 --> 00:43:58,600 Speaker 1: they talk guys, how can go buy on Twitter recently 951 00:43:58,680 --> 00:44:01,840 Speaker 1: where the FA doesn't and date car seats on airplanes 952 00:44:02,080 --> 00:44:05,200 Speaker 1: because flying is so safe compared to driving that they're 953 00:44:05,239 --> 00:44:07,600 Speaker 1: worries that if they mandated car seats on airplanes, even 954 00:44:07,640 --> 00:44:10,520 Speaker 1: though like you have a tiny benefit, it would lead 955 00:44:10,560 --> 00:44:12,799 Speaker 1: to people choosing not to fly and choose to drive 956 00:44:12,840 --> 00:44:15,719 Speaker 1: instead and get into car accidents and therefore be net 957 00:44:15,840 --> 00:44:17,799 Speaker 1: less safe. But I find it funny that, you know, again, 958 00:44:18,160 --> 00:44:21,040 Speaker 1: flying an airplane feels like in principle it should be 959 00:44:21,120 --> 00:44:22,759 Speaker 1: like kind of hard to do, and driving car on 960 00:44:22,800 --> 00:44:25,480 Speaker 1: the ground should be easy to but permile. Obviously flying 961 00:44:25,560 --> 00:44:28,279 Speaker 1: wins out, And so again you have this decades and 962 00:44:28,360 --> 00:44:31,040 Speaker 1: decades and decades of history where we've taken the lessons 963 00:44:31,160 --> 00:44:33,040 Speaker 1: of you know, they say the rules and regulations they 964 00:44:33,040 --> 00:44:34,760 Speaker 1: are written in blood. You know, we take the lessons 965 00:44:34,840 --> 00:44:36,960 Speaker 1: of the previous accidents that have happened and then we 966 00:44:37,040 --> 00:44:39,640 Speaker 1: wrap them into future training. And you know, generally, when 967 00:44:39,640 --> 00:44:42,000 Speaker 1: you do pilot training, you're studying a lot of specific 968 00:44:42,120 --> 00:44:45,040 Speaker 1: accidents that happened and you know what the learnings were 969 00:44:45,120 --> 00:44:47,000 Speaker 1: for them. And so I think if you're interested in 970 00:44:47,560 --> 00:44:51,920 Speaker 1: systems design, engineering, process optimization, things like that, lessons. 971 00:44:51,680 --> 00:44:53,800 Speaker 3: From piloting like inform your software engineering. 972 00:44:54,719 --> 00:44:57,600 Speaker 1: I mean they're pretty separate, but I think the software 973 00:44:57,640 --> 00:45:00,759 Speaker 1: engineering brain tends to be a t to flying. And 974 00:45:00,800 --> 00:45:02,439 Speaker 1: you know, you got Palo Alto Airport was a little 975 00:45:02,440 --> 00:45:05,080 Speaker 1: general Afacian airport in the Barians when the busy general 976 00:45:05,120 --> 00:45:09,800 Speaker 1: aviation airports in the entire country. Because I think engineering minds, 977 00:45:09,880 --> 00:45:12,000 Speaker 1: of which there are lots in Palo Alta, tend to 978 00:45:12,120 --> 00:45:14,480 Speaker 1: enjoy it. And again you're mixing you know, a kinesthetic 979 00:45:14,520 --> 00:45:18,840 Speaker 1: skill and meteorology and you know, mechanical understanding of you know, 980 00:45:18,920 --> 00:45:22,239 Speaker 1: a combustion engine and all the attendance systems and you 981 00:45:22,320 --> 00:45:23,800 Speaker 1: know airspace and everything like that. 982 00:45:23,960 --> 00:45:26,400 Speaker 2: So it wasn't like fueled by you being in an 983 00:45:26,719 --> 00:45:28,960 Speaker 2: adrenaline junkie like I want to go fast and I 984 00:45:29,040 --> 00:45:30,200 Speaker 2: want to fly in the sky. 985 00:45:30,760 --> 00:45:33,200 Speaker 1: Adrenaline Like if you're feeling adrenaline while flying you're doing 986 00:45:33,239 --> 00:45:33,640 Speaker 1: something wrong. 987 00:45:33,800 --> 00:45:35,879 Speaker 2: I feel it all the time when flying, like God, 988 00:45:35,960 --> 00:45:36,920 Speaker 2: I hope we stay in the air. 989 00:45:37,160 --> 00:45:39,600 Speaker 1: There was that, you know, you read entron descentic Zuperie 990 00:45:39,680 --> 00:45:42,360 Speaker 1: and you know, flying in Africa during the b nineteen 991 00:45:42,400 --> 00:45:45,000 Speaker 1: twenties in his case, and you know, getting shot down 992 00:45:45,120 --> 00:45:47,360 Speaker 1: and all these kind of things. There clearly was a 993 00:45:47,680 --> 00:45:49,920 Speaker 1: that would make you feel something. Yeah, that exactly. I 994 00:45:49,960 --> 00:45:51,680 Speaker 1: think that kind of stuff would make you feel something. 995 00:45:51,800 --> 00:45:54,279 Speaker 1: But again in these days it has become much more 996 00:45:54,440 --> 00:45:57,600 Speaker 1: safety oriented and the cowboys stuff has been pulled out. 997 00:45:57,600 --> 00:46:01,520 Speaker 1: And again they actually describe one of the cultural challenges 998 00:46:01,680 --> 00:46:04,400 Speaker 1: that happened in the aviation industry underwent was that we 999 00:46:04,560 --> 00:46:07,279 Speaker 1: produced all these military pilots in you know, the World 1000 00:46:07,280 --> 00:46:09,680 Speaker 1: War Two, in the Vietnam War, and those people then 1001 00:46:09,719 --> 00:46:13,359 Speaker 1: went into you know, PanAm cockpits and they actually kind 1002 00:46:13,360 --> 00:46:15,400 Speaker 1: of made bad captains in a certain way because it 1003 00:46:15,560 --> 00:46:17,240 Speaker 1: was like very much shut up, this is my cockpit. 1004 00:46:17,520 --> 00:46:21,879 Speaker 1: And so the CRM Crew Resource Management, I guess thing 1005 00:46:22,360 --> 00:46:25,680 Speaker 1: basically was a multi decade efforts to get rid of 1006 00:46:25,800 --> 00:46:30,239 Speaker 1: the the captain mindset and get towards a collaborative problem solving. 1007 00:46:30,160 --> 00:46:33,319 Speaker 3: A lot of like I'm going on a like seven 1008 00:46:33,800 --> 00:46:38,279 Speaker 3: seven the pilot landed fourteen line carriers, Like that's got 1009 00:46:38,400 --> 00:46:39,920 Speaker 3: to be the safest possible way to fly. 1010 00:46:40,000 --> 00:46:42,000 Speaker 2: But apparently not, No, he's gone rogue. 1011 00:46:42,320 --> 00:46:44,160 Speaker 3: Not listening to his second officer or whatever. 1012 00:46:44,640 --> 00:46:47,680 Speaker 1: Do European airlines have a different model than the US 1013 00:46:47,760 --> 00:46:51,279 Speaker 1: airlines where they take pilots who have two hundred and 1014 00:46:51,320 --> 00:46:53,560 Speaker 1: fifty hours only, which the US would consider very low, 1015 00:46:53,760 --> 00:46:55,520 Speaker 1: and they put them in the right seat of airliners 1016 00:46:55,680 --> 00:46:58,000 Speaker 1: and they have like a really strong safety record, and 1017 00:46:58,160 --> 00:47:00,080 Speaker 1: so as you fly around an airliner in Europe, you 1018 00:47:00,120 --> 00:47:02,359 Speaker 1: could have someone who only learned to fly a few 1019 00:47:02,440 --> 00:47:04,320 Speaker 1: years ago. And the way they do that is a 1020 00:47:04,400 --> 00:47:07,799 Speaker 1: huge amount of standardization, a huge amount of process orientation. 1021 00:47:08,200 --> 00:47:10,840 Speaker 1: You know, people make fun of Ryanair for the hard landings, 1022 00:47:10,880 --> 00:47:13,359 Speaker 1: you know, the Ryanair landing in europehere they really plunk 1023 00:47:13,400 --> 00:47:15,440 Speaker 1: it on the runway. That is one of their safety 1024 00:47:15,600 --> 00:47:18,399 Speaker 1: SOPs where they say a positive landing, as it's known 1025 00:47:18,480 --> 00:47:20,799 Speaker 1: in the industry, is safer because it reduces the risk 1026 00:47:20,840 --> 00:47:23,360 Speaker 1: of hydroplaning if it's wet, and so it reduces the 1027 00:47:23,560 --> 00:47:25,000 Speaker 1: like very small risk that you run off the end 1028 00:47:25,000 --> 00:47:26,480 Speaker 1: of the runway if the runway is wet, but we're 1029 00:47:26,520 --> 00:47:28,040 Speaker 1: just going to every landing. We're going to plunk it 1030 00:47:28,080 --> 00:47:32,120 Speaker 1: on and that's safer. But again, it's generally process orientation, 1031 00:47:32,840 --> 00:47:35,200 Speaker 1: standards and a lot of that kind of stuff that's 1032 00:47:35,280 --> 00:47:38,399 Speaker 1: driven to safety and not excessive piloting skill. And again, 1033 00:47:38,400 --> 00:47:41,439 Speaker 1: if you're relying on incredible piloting skill, something has gone 1034 00:47:41,480 --> 00:47:43,160 Speaker 1: wrong in your system. Because we should be able to 1035 00:47:43,440 --> 00:47:46,880 Speaker 1: have a seven seven seven full of passengers be safe 1036 00:47:47,040 --> 00:47:49,400 Speaker 1: even if the pilots are fatigued or something like that. 1037 00:47:49,960 --> 00:47:52,520 Speaker 2: That's wild. I did not know that about Ryanair. I 1038 00:47:52,560 --> 00:47:54,360 Speaker 2: feel like they should put that fact out there. You 1039 00:47:54,440 --> 00:47:57,200 Speaker 2: know that it's intentional that we're plunking down. 1040 00:47:57,239 --> 00:47:59,120 Speaker 1: That's true. Yeah, yeah, because you know it's quite Yeah, 1041 00:47:59,120 --> 00:48:00,759 Speaker 1: that's question exactly. Yeah. 1042 00:48:01,840 --> 00:48:02,520 Speaker 3: Draw attention to. 1043 00:48:02,600 --> 00:48:05,160 Speaker 2: It being uncomfortable, Well, everyone knows. 1044 00:48:06,480 --> 00:48:07,399 Speaker 4: That's sure. That's true. 1045 00:48:07,520 --> 00:48:07,959 Speaker 1: That's true. 1046 00:48:08,280 --> 00:48:10,440 Speaker 3: John Colls and thanks for coming on the Money Stuff Podcast. 1047 00:48:10,600 --> 00:48:13,000 Speaker 1: Thank you guys, it's fun our first guests. 1048 00:48:13,200 --> 00:48:22,600 Speaker 3: Yeah, I'm honored, and that was the Money Stuff Podcast. 1049 00:48:22,800 --> 00:48:24,760 Speaker 2: I'm Matt Levian and I'm Katie Greifeld. 1050 00:48:25,160 --> 00:48:27,239 Speaker 3: You can find my work by subscribing to the Money 1051 00:48:27,239 --> 00:48:29,120 Speaker 3: Stuff newsletter at Bloomberg. 1052 00:48:28,680 --> 00:48:31,160 Speaker 2: Dot com and you can find me on Bloomberg TV 1053 00:48:31,360 --> 00:48:35,000 Speaker 2: every day on Open Interest between nine to eleven am Eastern. 1054 00:48:35,280 --> 00:48:36,960 Speaker 3: We'd love to hear from you. You can send an 1055 00:48:37,000 --> 00:48:40,200 Speaker 3: email to Moneypod at Bloomberg dot net, ask us a 1056 00:48:40,280 --> 00:48:41,640 Speaker 3: question and we might answer it on air. 1057 00:48:42,120 --> 00:48:44,280 Speaker 2: You can also subscribe to our show wherever you're listening 1058 00:48:44,400 --> 00:48:46,399 Speaker 2: right now and leave us a review. It helps more 1059 00:48:46,400 --> 00:48:47,279 Speaker 2: people find the show. 1060 00:48:48,040 --> 00:48:51,240 Speaker 3: The Money Stuff Podcast is produced by Annamsarakus and Moses 1061 00:48:51,280 --> 00:48:53,920 Speaker 3: I'm Special thanks this week to Stacey wom. 1062 00:48:54,280 --> 00:48:56,320 Speaker 2: Our theme music was composed by Blake Maples. 1063 00:48:56,680 --> 00:48:59,200 Speaker 3: Brandon Francis Newnhim is our executive producer, and. 1064 00:48:59,239 --> 00:49:01,200 Speaker 2: Stage Ballman is Flimberg's head of podcasts. 1065 00:49:01,560 --> 00:49:03,880 Speaker 3: Thanks for listening to The Money Stuff Podcast. We'll be 1066 00:49:04,000 --> 00:49:05,400 Speaker 3: back next week with more stuff