WEBVTT - Money Stuff Podcast: Stripe's John Collison 0:00:03.080 --> 0:00:18.480 Bloomberg Audio Studios, Podcasts, radio news. 0:00:19.760 --> 0:00:22.599 Hey Marin talks to money listeners. Hope you're preparing for 0:00:22.640 --> 0:00:24.960 a lovely holiday break. We are going to be off 0:00:24.960 --> 0:00:26.920 for a few weeks, resting up for another great year 0:00:26.920 --> 0:00:29.400 of interviews. But do not worry. We're bringing you some 0:00:29.440 --> 0:00:31.920 great stuff It doesn't do in the meantime. Starting with 0:00:32.000 --> 0:00:34.280 another episode from our colleagues on the Money Stuff team, 0:00:34.560 --> 0:00:37.519 hosts Matt Levine and Katie Greifeld spoke with John Collison, 0:00:37.520 --> 0:00:39.879 the co founder and president of Stripe. It was a 0:00:39.920 --> 0:00:42.639 really interesting conversation about the financial services business, the case 0:00:42.640 --> 0:00:46.120 he's making for crypto, and why he doesn't think IBOs matter. 0:00:46.240 --> 0:00:48.400 I disagree, by the way, enjoy and be sure to 0:00:48.400 --> 0:00:50.840 catch more episodes by subscribing to The Money Stuff Feed. 0:00:53.640 --> 0:00:55.840 So my idea for you guys is you guys just 0:00:55.920 --> 0:00:58.720 have like regular normal boring ads on the podcast. I 0:00:58.760 --> 0:01:02.200 think you need to do the post read ads for yeah, 0:01:02.360 --> 0:01:04.800 say a lot that everything in securities, frauds is having 0:01:04.800 --> 0:01:06.280 a bad night's sleep securities for us. 0:01:08.680 --> 0:01:10.960 Well, like I could do like the men's shaving club 0:01:11.120 --> 0:01:13.000 ads or something that could be fun too. 0:01:13.160 --> 0:01:15.039 When buying short data out of the money called out. 0:01:16.520 --> 0:01:16.720 Right. 0:01:16.920 --> 0:01:17.959 Yeah, be good. 0:01:18.920 --> 0:01:21.840 Hello, and welcome to The Money Stuff Podcast. I'm Matt Levine, 0:01:22.000 --> 0:01:24.160 I write The Money Stuff Colm at Bloomberg. 0:01:23.720 --> 0:01:27.039 Opinion, and I'm Katie Greifeld, a reporter for Bloomberg News 0:01:27.040 --> 0:01:28.679 and an anchor for Bloomberg Television. 0:01:29.120 --> 0:01:29.400 Katy. 0:01:29.440 --> 0:01:31.720 Today we're doing something new. We are doing our first 0:01:31.760 --> 0:01:33.200 interview on The Money Stuff Podcast. 0:01:33.319 --> 0:01:35.800 Are you nervous, I'm pretty nervous. I'm a little bit 0:01:35.840 --> 0:01:36.400 nervous too. 0:01:36.560 --> 0:01:39.080 We're recording this after it happens, and we're not really nervous. 0:01:40.280 --> 0:01:41.720 I'm still stressed out. To speak for. 0:01:41.680 --> 0:01:43.680 Yourself, I'm pretty nervous. I haven't listened to it yet. 0:01:43.880 --> 0:01:47.440 Today our guest is John Collinson Stripe. Stripe is a 0:01:47.480 --> 0:01:51.200 payments and financial technology company, and John and his brother 0:01:51.280 --> 0:01:54.600 and co founder Patrick are kind of tech industry celebrities. 0:01:55.080 --> 0:01:59.480 Yeah, he's an Irish billionaire. He's from Limerick. That's cool. 0:02:00.120 --> 0:02:02.280 He's wearing her Limerick jacket, but we'll probably get into 0:02:02.280 --> 0:02:03.160 that during the podcast. 0:02:03.200 --> 0:02:05.480 That's true. It's a little embarrassing that I. 0:02:05.400 --> 0:02:07.560 Wore this medium amount of embarrassing. 0:02:07.800 --> 0:02:10.480 I truly didn't mean to, but as I said to 0:02:10.480 --> 0:02:13.000 you in our office, it was forty seven degrees. When 0:02:13.040 --> 0:02:15.840 I left my apartment this morning pre dawn, and I 0:02:15.880 --> 0:02:20.079 needed a top and this is my favorite medium weight jacket. 0:02:20.680 --> 0:02:23.120 This is the behind the scenes content that Money Stuff 0:02:23.120 --> 0:02:27.239 podcast listeners really crave. Yeah, let's jump right back. 0:02:27.120 --> 0:02:28.079 Into that internetailed. 0:02:28.160 --> 0:02:29.920 It should do. 0:02:29.960 --> 0:02:32.960 Like a crashing transition to talking about striper. 0:02:34.160 --> 0:02:35.760 Yeah, So how do you guys usually start these how 0:02:35.760 --> 0:02:36.720 do you want? I guess you haven't done that. 0:02:36.760 --> 0:02:38.359 You haven't done that, you could invent the product? 0:02:38.560 --> 0:02:41.160 Yeah, start by review of the advertisements I've heard. 0:02:41.360 --> 0:02:45.440 Yea, the podcast we start the podcast with much like this. 0:02:45.760 --> 0:02:48.760 We walk into the room and bullshit for a bit 0:02:49.120 --> 0:02:52.360 and then record that. Yeah, and then we eventually say 0:02:52.400 --> 0:02:54.680 hello and welcome to the Money Stuff podcast, and we 0:02:54.680 --> 0:02:56.720 talk about whatever the thing we're talking about today. So 0:02:56.760 --> 0:03:02.000 now we're talking about Stripe capital markets. Yeah, okay, So listeners, 0:03:02.000 --> 0:03:04.560 in podcasts with you, you talk a lot about your 0:03:04.560 --> 0:03:07.440 interest in business history and like you've learned from the 0:03:07.480 --> 0:03:09.600 tech companies of the past and the conglomerates of the 0:03:09.680 --> 0:03:13.080 conglomerate wave. I have not heard you talk about the 0:03:13.160 --> 0:03:16.360 lessons you've learned from financial services companies. And I write 0:03:16.360 --> 0:03:19.600 about finance and think of Stripe in many ways as 0:03:19.639 --> 0:03:23.240 like a financial services esque company here, like some evolution 0:03:23.280 --> 0:03:26.160 of a financial services company. So I'm curious, like, I 0:03:26.200 --> 0:03:28.280 don't know what you think about financial services. 0:03:28.960 --> 0:03:32.119 Yeah, in general, we try to learn a lot from 0:03:32.240 --> 0:03:35.200 other businesses, and Okay, one of the things I really 0:03:35.200 --> 0:03:37.520 like is we live in a golden age of learning 0:03:37.560 --> 0:03:39.840 about other businesses right now. And one of the reasons 0:03:39.880 --> 0:03:42.920 I like this is because I think learning about other 0:03:42.960 --> 0:03:47.080 businesses at some level learning about the world or certainly 0:03:47.080 --> 0:03:50.120 the economy, because you know, you're getting sense for how 0:03:50.160 --> 0:03:53.960 all the various entities work together. With financial services in particular, 0:03:54.880 --> 0:03:57.480 you came up with the framing that you know, Stripe 0:03:57.520 --> 0:03:59.320 is in a way kind of a new kind of 0:03:59.320 --> 0:04:00.560 scaled investment bank. 0:04:00.760 --> 0:04:03.600 Was it you're framing I think I said that. Yeah, yeah, 0:04:03.600 --> 0:04:05.320 but I would love for you to tell me that's right. 0:04:05.400 --> 0:04:06.920 That I'm assuming you'll tell me it's wrong. 0:04:07.120 --> 0:04:09.280 No. I actually kind of like it because if you 0:04:09.280 --> 0:04:11.520 think about what are the potential source of funding for 0:04:11.520 --> 0:04:13.040 a business, Like if you want to scale up a business, 0:04:13.040 --> 0:04:14.440 how can you fund it? There's three ways you can 0:04:14.480 --> 0:04:16.800 fund a business. You can do it through debt, equity, 0:04:17.160 --> 0:04:20.120 or retain earnings, and so if you just tick through 0:04:20.160 --> 0:04:23.159 each one of those on the earning side, maybe that's 0:04:23.160 --> 0:04:25.280 the place where a Stripe is kind of the most 0:04:25.320 --> 0:04:28.760 directly doing this, where we're making it easier for businesses 0:04:28.800 --> 0:04:31.920 to self fund their growth. And we see tons of 0:04:31.960 --> 0:04:35.520 bootstrapped or kind of certainly airly monetizing businesses on the Stripe, 0:04:35.640 --> 0:04:37.880 like with this customer and Stripe Photo Room, and they 0:04:37.920 --> 0:04:41.080 do online kind of GENI powered photo editing. They're based 0:04:41.080 --> 0:04:43.560 in France, and you know, maybe ten years ago they 0:04:43.600 --> 0:04:45.400 would have you know, raised a whole bunch of VC 0:04:45.520 --> 0:04:47.600 and scaled up that way. They're actually profitable within a 0:04:47.680 --> 0:04:50.520 year and they've just kind of scaled up profitably since then. 0:04:50.800 --> 0:04:53.040 Ninety eight percent of their business comes from outside France, 0:04:53.080 --> 0:04:54.520 and so they're kind of selling this product to a 0:04:54.560 --> 0:04:56.720 global audience and Stripes making it easy to do that. 0:04:56.920 --> 0:04:58.719 And we've seen that in general, I guess the AI 0:04:58.800 --> 0:05:02.680 companies in particular, where you know, during the social media boom, 0:05:02.800 --> 0:05:06.280 maybe companies scaled up first with raising lots of VC 0:05:06.440 --> 0:05:09.000 dollars and then later on figured out monetization. With a 0:05:09.040 --> 0:05:11.960 lot of the AI companies, you know, open eye perplexity clause, 0:05:12.000 --> 0:05:13.800 you know the photo room who I was mentioning, they 0:05:13.839 --> 0:05:16.719 actually monetize from pretty early on using stripe, and so 0:05:16.760 --> 0:05:17.760 that's one source of funding. 0:05:18.480 --> 0:05:23.160 Stripe allows early stage companies to monetize so efficiently that 0:05:23.200 --> 0:05:25.160 like there's less need for data and equity in the 0:05:25.200 --> 0:05:28.680 world because companies can sell fund like you're putting vcs 0:05:28.720 --> 0:05:29.280 out of business. 0:05:29.520 --> 0:05:32.480 Yeah, and obviously we think it's a more slightly more 0:05:33.680 --> 0:05:37.119 healthy dynamic for the businesses. A classic trap that early 0:05:37.160 --> 0:05:40.960 stage companies fall into is you know, and why combinators 0:05:41.000 --> 0:05:43.720 say tries to get their companies to avoid falling into 0:05:43.720 --> 0:05:46.000 this failure mode is kind of they raise money and 0:05:46.000 --> 0:05:49.040 then they think kind of valuation milestones or any kind 0:05:49.040 --> 0:05:52.039 of financial or investor milestones are the milestones that matter 0:05:52.080 --> 0:05:53.640 for the business wheas obviously that's not the case. It's 0:05:53.640 --> 0:05:55.279 are you building something of value in the world which 0:05:55.320 --> 0:05:57.880 will generally be measured by does anyone want to buy it? 0:05:57.920 --> 0:05:59.560 And so I think maybe it gets people on the 0:05:59.640 --> 0:06:02.400 right lead board earlier on, where a revenue leader board 0:06:02.480 --> 0:06:04.480 is just a much healthier leaderboard to be thinking about 0:06:04.600 --> 0:06:07.440 than a fundraising valuation leaderboard. But we also play in 0:06:07.480 --> 0:06:09.599 the other parts of the capital stack, where on the 0:06:09.680 --> 0:06:11.640 debt side. I mean, you guys have probably watched this, 0:06:11.760 --> 0:06:14.680 but banks have kind of gotten out of the SMB 0:06:14.839 --> 0:06:17.920 lending space since the financial crisis, as just the compliance 0:06:17.920 --> 0:06:19.640 costs have gone up, Like people do not go to 0:06:19.680 --> 0:06:21.840 a bank for a five thousand dollars loan anymore. And 0:06:21.920 --> 0:06:26.200 so we now lend through our lending partners billions of 0:06:26.240 --> 0:06:31.160 dollars to startups. We do that entirely programmatically through amount models, 0:06:31.240 --> 0:06:33.000 you know, cash flow based lending. So we're not looking 0:06:33.000 --> 0:06:34.880 at the balance schee. We're not trying to do kind 0:06:34.880 --> 0:06:36.839 of credit checks on the individual or something like that. 0:06:37.000 --> 0:06:38.960 We're looking at the stream of cash flows. Is it 0:06:39.000 --> 0:06:41.960 a healthy, reliable stream of cash flows that can support 0:06:42.000 --> 0:06:42.360 some debt. 0:06:42.760 --> 0:06:45.960 So you're doing the cash flows, you can see exactly. 0:06:45.760 --> 0:06:47.719 We see the cash flows and people repay out of 0:06:47.720 --> 0:06:49.920 the stripe cash flows. And so that is a new 0:06:50.120 --> 0:06:52.800 kind of lending product that exists in the market. That 0:06:53.040 --> 0:06:54.719 now again is you know, in the billions of dollars 0:06:54.720 --> 0:06:56.480 in terms of the debt we're providing. It's kind of 0:06:56.520 --> 0:06:58.040 ironic in a way. If you want to raise one 0:06:58.080 --> 0:07:00.440 hundred million dollars of debt, that is a very competiti marks. 0:07:00.440 --> 0:07:02.240 Lots of people are playing in that. If you want 0:07:02.279 --> 0:07:05.960 to raise five thousand dollars of debt for your company, 0:07:06.120 --> 0:07:08.279 it's actually much harder to get that than it was, 0:07:08.560 --> 0:07:11.160 say twenty or thirty years ago. We've gone backwards there. 0:07:11.360 --> 0:07:14.760 And then on the equity side, I think stripe atless 0:07:15.360 --> 0:07:20.440 has actually helped make more companies investable because what a 0:07:20.440 --> 0:07:23.360 lot of people don't realize is stripe aatleists are incorporation product. 0:07:23.600 --> 0:07:27.760 But it lets companies where the founders might be in 0:07:27.800 --> 0:07:30.360 Israel or might be you know, in Singapore or something 0:07:30.400 --> 0:07:34.040 like that, create a US Delaware company and that makes 0:07:34.080 --> 0:07:35.880 it much more investable. And so we've seen a lot 0:07:35.920 --> 0:07:39.679 of foreign founders kind of virtually creating a US company, 0:07:39.800 --> 0:07:42.920 which it just turns out foreign companies investors fim too scary. 0:07:43.440 --> 0:07:45.320 So I guess I'm responsible for the framing that you're 0:07:45.360 --> 0:07:47.480 sort of in somebody's a substitute for an investment back. 0:07:47.520 --> 0:07:49.360 So like your framing is like increase the GDP of 0:07:49.400 --> 0:07:51.560 the Internet, but like you know, you have these businesses 0:07:51.600 --> 0:07:56.200 like incorporating companies, like what is the principle? And like 0:07:56.680 --> 0:07:58.360 that was like a real investment backer. I was doing 0:07:58.400 --> 0:08:02.040 like corporate derivatives, and like I assume you would never 0:08:02.200 --> 0:08:03.600 get into that business. 0:08:03.240 --> 0:08:05.600 But I am I wrong. We're certainly not planning on us. 0:08:05.960 --> 0:08:08.680 We build products that are scalable in some way through 0:08:08.760 --> 0:08:12.080 tech and so you know, Stripe itself. This past year 0:08:12.080 --> 0:08:14.720 we did trillion dollars in payment through the strip platform. 0:08:14.800 --> 0:08:16.560 That's still growing in a pretty healthy clip. The number 0:08:16.560 --> 0:08:19.480 of businesses served is millions of dollars. And so if 0:08:19.520 --> 0:08:21.680 there's something that is solved by just throwing an army 0:08:21.680 --> 0:08:23.240 of people at it, I mean, you know, all the 0:08:23.280 --> 0:08:26.000 investment banking firms are exceptional as recruiting armies of people, 0:08:26.080 --> 0:08:28.920 and that is a very competitive space, whereas the space 0:08:28.960 --> 0:08:30.320 of you know, like I was saying, with the lending 0:08:30.440 --> 0:08:32.679 side of things, that was just an underserved marketers where 0:08:32.880 --> 0:08:34.560 we came out it by talking to our customers and 0:08:34.559 --> 0:08:36.920 they said, we really need growth capital. It's actually very 0:08:36.960 --> 0:08:39.400 annoying for us to get us. And so I guess 0:08:39.400 --> 0:08:44.360 we try to find the underserved spaces, and investment banking 0:08:44.440 --> 0:08:46.400 for you know, certainly on the larger side does not 0:08:46.440 --> 0:08:47.240 seem underserved. 0:08:47.320 --> 0:08:49.880 Right now, I've listened to a lot of podcasts you've 0:08:49.920 --> 0:08:52.840 been on in the past several weeks. So sorry, no, no, 0:08:52.920 --> 0:08:56.480 it's been really interesting. You interviewed Charlie Munger, which was I. 0:08:56.480 --> 0:08:59.520 Much prefer interviewing to being interviewed. So we'll come back 0:08:59.559 --> 0:09:00.960 for the second round to this, right, you guys are 0:09:00.960 --> 0:09:01.440 put on the spot. 0:09:01.559 --> 0:09:02.880 That'll be a lot of fun. We'll put that on 0:09:02.880 --> 0:09:06.240 the calendar. But at one point Charlie Munger started talking 0:09:06.280 --> 0:09:09.560 about like banks and they're selling these sleazy products, and 0:09:09.640 --> 0:09:11.439 of course I couldn't see if you were nodding along 0:09:11.559 --> 0:09:13.480 and I were talking about, you know, whether you would chafe. 0:09:13.480 --> 0:09:16.640 It's sort of the comparison to you know, an investment bank, 0:09:16.720 --> 0:09:18.199 for example, but it sounds like you don't. 0:09:18.400 --> 0:09:20.959 No, I don't. Investment banking provides a useful set of 0:09:20.960 --> 0:09:23.320 services in the world. And okay, one things I really 0:09:23.360 --> 0:09:28.920 like about the Money Stuff newsletter is a studied detachment 0:09:29.040 --> 0:09:31.199 from what's going on where there are people and people 0:09:31.280 --> 0:09:33.680 respond to incentives and that creates behaviors in the world. 0:09:33.880 --> 0:09:35.640 I like, Matt does have views and you know, just 0:09:35.840 --> 0:09:38.720 like crypto and you know, all sorts of things, and 0:09:38.760 --> 0:09:40.640 you can kind of the views that occasionally come out, 0:09:40.760 --> 0:09:43.400 but it's mostly this very detached view of what's going 0:09:43.400 --> 0:09:45.959 on in the world. But the way we think about it, 0:09:46.040 --> 0:09:48.640 like for for example, we think, you know, stripes scale 0:09:48.679 --> 0:09:51.839 and revenue are actually pretty decent proxies for the value 0:09:51.840 --> 0:09:54.080 stripe is providing in the world. That's not always the 0:09:54.080 --> 0:09:55.599 case with the business. You could have an extract of 0:09:55.640 --> 0:09:58.560 business somewhere, or monopolies or rent extraction or something like that. 0:09:59.000 --> 0:10:03.000 But in our case we have very inforgmned buyers and 0:10:03.240 --> 0:10:05.520 a very competitive market. There are lots of other places 0:10:05.520 --> 0:10:08.360 people could go for payment acceptance or billing software or 0:10:08.360 --> 0:10:11.280 something like that. And so generally, if customers are choosing 0:10:11.320 --> 0:10:13.360 you and paying you money for a service, it's because 0:10:13.400 --> 0:10:15.520 you're providing something of value that you can't get elsewhere. 0:10:15.679 --> 0:10:17.679 And similar with investment banks. I think if people are 0:10:17.679 --> 0:10:20.120 going to investment banks for a thing, that's probably because 0:10:20.160 --> 0:10:21.720 they're providing some value to them. And so that's the 0:10:21.720 --> 0:10:24.400 frameworkuy I tend to take. I think Charlie rest in 0:10:24.440 --> 0:10:28.360 Peace generally took a lot of offense at where he 0:10:28.520 --> 0:10:33.720 saw people hyping things, principal agent problems. You know, there's 0:10:33.760 --> 0:10:37.080 a set of things that bothered him, Crypto Robinhood, mutual 0:10:37.080 --> 0:10:39.959 fund advisors, and you know you could understand, I could 0:10:39.960 --> 0:10:41.439 construct the Steelman for those cases. 0:10:41.480 --> 0:10:45.360 I think there's a lot of opacity and pricing and 0:10:45.480 --> 0:10:49.400 value in financial services that there's probably a less of 0:10:49.520 --> 0:10:51.439 in your business, right, Like you're kind of charging a 0:10:51.480 --> 0:10:52.559 transparent feed to people. 0:10:52.640 --> 0:10:54.439 Yeah, and certainly the more scaled something is, the more 0:10:54.440 --> 0:10:56.720 price comparison they'll be, the more efficient the pricing will be. 0:10:56.840 --> 0:10:59.600 Whereas yeah, there's more room for extracting price in the 0:11:00.360 --> 0:11:01.800 when you get into bespoke deals. 0:11:02.440 --> 0:11:04.600 So one thing I think of when I think give 0:11:04.679 --> 0:11:07.680 investment banking is just serving as an advisor to CEOs 0:11:07.720 --> 0:11:09.920 and sort of giving them general advice on their business. 0:11:09.960 --> 0:11:12.080 And we were talking before about you know, you are 0:11:12.080 --> 0:11:15.160 now interacting with a lot of big companies, and you 0:11:15.240 --> 0:11:18.679 had some views on like the ability of a big 0:11:18.720 --> 0:11:21.720 company to CEO to sort of understand her company, and 0:11:21.800 --> 0:11:24.320 I'm I'd love for you to talk about them. 0:11:24.640 --> 0:11:30.040 Yeah. I think people think that CEOs are able to 0:11:30.559 --> 0:11:33.520 drive change in their organizations. I'm talking about organizations general, 0:11:33.520 --> 0:11:35.560 I'm not talking about stripe. People think that a CEO 0:11:35.679 --> 0:11:37.680 lands in a new job, they take over a company, 0:11:38.040 --> 0:11:40.840 and they're able to just whip everything into shape and 0:11:40.960 --> 0:11:45.319 change everything and I think the general experience of CEOs 0:11:45.360 --> 0:11:47.560 and new jobs is that is not the case, and 0:11:47.800 --> 0:11:50.400 organizations are pretty hard to change. And in fact, one 0:11:50.400 --> 0:11:53.760 of the things that we believe strongly at Stripe is 0:11:54.600 --> 0:11:57.560 it's very important for people to guess close to the 0:11:57.640 --> 0:12:02.600 work or you will not be able to drive any meaningful, 0:12:02.720 --> 0:12:05.240 useful change. And so like a bunch of different ways 0:12:05.240 --> 0:12:06.959 in which we do that. It actually reminds me of 0:12:07.040 --> 0:12:10.200 the lean manufacturing principle, you know. And they have all 0:12:10.200 --> 0:12:12.560 these very nice aesthetic Japanese terms for things, and so 0:12:12.600 --> 0:12:14.760 you know, there's the English equivalent permius for the Japanese terms, 0:12:14.840 --> 0:12:17.120 but in them is gemba, which is this idea that 0:12:17.160 --> 0:12:19.880 managers should, you know, walk the factory floor and solicit 0:12:19.920 --> 0:12:21.640 ideas from the people who are on the production line 0:12:21.640 --> 0:12:24.280 and things like that. And all companies, like a tech 0:12:24.280 --> 0:12:27.480 company like Stripe, has its equivalents, and so we very 0:12:27.559 --> 0:12:34.160 much encourage engineering managers to actually write code Stripe to 0:12:34.160 --> 0:12:35.839 get the experience of what is it like working in 0:12:35.880 --> 0:12:39.319 their corner of the code base problems our engineers running into. 0:12:39.520 --> 0:12:41.719 I really enjoyed being CFO last year when we were 0:12:41.760 --> 0:12:44.480 between CFOs, and one of the reasons I really enjoyed that. Again, 0:12:44.600 --> 0:12:48.880 was getting closer to the actual numbers, the processes by 0:12:48.880 --> 0:12:51.200 which we drive the business, Like we're going to hold 0:12:51.200 --> 0:12:54.040 Stripe to a budget regardless, and aren't you interested in 0:12:54.080 --> 0:12:55.840 how that process is actually set and how those numbers 0:12:55.840 --> 0:12:57.880 are set and everything like that. So you know, I 0:12:57.920 --> 0:13:00.280 say that I think every founder should be CFO their 0:13:00.360 --> 0:13:03.440 business for at some point during its lifespan. It's it's 0:13:03.520 --> 0:13:06.400 a very educational experienced. 0:13:05.760 --> 0:13:08.000 Like product ideas. Did you do that and come away 0:13:08.000 --> 0:13:11.480 with like we need to do accounting software? No? 0:13:11.480 --> 0:13:13.600 No, or or? I mean, I mean maybe in an 0:13:13.600 --> 0:13:16.760 abstract way, but again, stripes finance needs are are maybe 0:13:16.760 --> 0:13:19.040 a little different from the broader ones. But again, I 0:13:19.080 --> 0:13:23.320 just think for getting close to how the business actually runs, 0:13:23.600 --> 0:13:27.240 that's maybe the thing that's hard for CEOs to do. 0:13:27.559 --> 0:13:29.160 And you know, we try to do it from a 0:13:29.160 --> 0:13:31.599 customer perspective a huge amount of Even some of the 0:13:31.600 --> 0:13:34.200 products we're talking about, like Stripe Capital, they basically come 0:13:34.240 --> 0:13:37.760 from us trying to spend more time with our customers 0:13:37.960 --> 0:13:40.360 than our competitors do. And so you know, we'll start 0:13:40.360 --> 0:13:44.199 every leadership team meeting at am Monday morning with hearing 0:13:44.240 --> 0:13:45.640 from a customer We just asked them to come and 0:13:45.640 --> 0:13:47.520 give us cand of feedback on the product. If you 0:13:47.559 --> 0:13:49.880 were to sit in on those meetings, it's not an 0:13:49.960 --> 0:13:52.480 A plus report card that we're getting. You know, there 0:13:52.520 --> 0:13:55.000 are things they want us to fix. But I find 0:13:55.040 --> 0:13:58.680 that it's easy for like product managers to overcomplicate things, 0:13:58.720 --> 0:13:59.960 and you know, you can get in your own head 0:14:00.080 --> 0:14:03.080 and construct some really convolutioned castle in the sky. And 0:14:03.080 --> 0:14:05.880 there's nothing quite as grounding as hearing directly from a 0:14:05.920 --> 0:14:08.080 customer talk about what is not working for them in 0:14:08.120 --> 0:14:09.360 the product. And you know, we did the same on 0:14:09.559 --> 0:14:12.000 Fridays with like an all company thing, bring customers to 0:14:12.000 --> 0:14:14.360 talk to that. But any I think the essence of 0:14:14.360 --> 0:14:17.559 this for CEOs is getting close to the actual production function, 0:14:17.840 --> 0:14:19.240 and that is sometimes hard of them. 0:14:19.440 --> 0:14:22.160 So I have two points. It's interesting to hear you 0:14:22.200 --> 0:14:24.120 say that. First of all, my brain immediately goes to 0:14:24.160 --> 0:14:27.880 Elon Musk, like on the factory floor at SpaceX and Tesla. 0:14:27.960 --> 0:14:30.160 But it was interesting. We had Home Depot this week 0:14:30.280 --> 0:14:33.440 announced that they were going to require corporate employees to 0:14:33.520 --> 0:14:37.520 work eight hour factory shifts, which is interesting, like retail shifts. 0:14:37.680 --> 0:14:39.240 So Starbucks did something similar. 0:14:38.960 --> 0:14:41.000 Right, yeah, which makes a lot of sense, I mean, 0:14:41.400 --> 0:14:44.560 especially in brutal jobs such as that one and then 0:14:44.600 --> 0:14:47.120 the other thing. I mean, given that you do know 0:14:47.240 --> 0:14:49.800 so much about his business history and you know, just 0:14:49.880 --> 0:14:52.240 love looking at companies. But those eight a m. Meetings 0:14:52.280 --> 0:14:54.800 where you're just talking to your different companies, like, you 0:14:54.880 --> 0:14:59.560 see so many different types of companies, which is interesting, Yeah. 0:14:59.360 --> 0:15:01.680 And it's definitely pretty interesting time. I think the behavior 0:15:01.760 --> 0:15:05.120 we observe is that tech has been very well covered, 0:15:05.200 --> 0:15:07.320 and so I think everyone knows broadly kind of what's 0:15:07.360 --> 0:15:09.880 going on in the tech world. What we find interesting 0:15:10.080 --> 0:15:13.360 is the businesses that are the Sherwan Williams of the world, 0:15:13.440 --> 0:15:15.800 you know, the businesses that are ten twenty fifty, one hundred, 0:15:15.800 --> 0:15:18.000 two hundred years old, and how they are adapting to 0:15:18.000 --> 0:15:20.720 the modern world. And generally, what we find is that 0:15:21.560 --> 0:15:26.600 COVID provided a useful long term change to those businesses 0:15:26.800 --> 0:15:30.840 because those kinds of businesses all employed a chief Digital 0:15:30.840 --> 0:15:33.600 Innovation Officer prior to COVID, and that person had a 0:15:33.600 --> 0:15:35.400 team of ten people, and they produced all these slides 0:15:35.400 --> 0:15:37.040 and ideas, and the ideas were pretty good, and the 0:15:37.040 --> 0:15:38.920 company just ignored all them and just didn't do any 0:15:38.960 --> 0:15:40.560 of them, and so they had the kind of idea 0:15:40.600 --> 0:15:44.280 generation part and nothing happened, and then COVID happened, and 0:15:44.320 --> 0:15:48.840 it was this oh moment where people they were forced 0:15:48.840 --> 0:15:51.000 to adapt because you know, obviously the stores were locked 0:15:51.000 --> 0:15:53.360 down or were not open, and so you maybe had 0:15:53.560 --> 0:15:56.320 gym companies moving to a virtual training or something like that. 0:15:56.680 --> 0:15:59.520 But that created a mandate for actually getting serious about 0:15:59.520 --> 0:16:04.080 the digital stuf and we see much higher quality digital 0:16:04.080 --> 0:16:06.200 execution coming out of that. And there's kind of a 0:16:06.200 --> 0:16:10.120 few common patterns in what everyone's trying to do. I 0:16:10.120 --> 0:16:14.200 think everyone is questioning their middlemen. I don't think middlemen 0:16:14.280 --> 0:16:16.440 are going away, but they're questioning the middlemen and do 0:16:16.520 --> 0:16:19.880 middlemen add value? And they are starting to do much 0:16:19.880 --> 0:16:23.320 more direct customer relationship stuff. Part of that is the 0:16:23.360 --> 0:16:26.640 product experience where you know, Hershey's using Stripe to sell 0:16:26.880 --> 0:16:30.400 candy directly online and the customization and things like that. 0:16:30.880 --> 0:16:34.240 And then everyone's just trying to build some kind of 0:16:34.240 --> 0:16:36.600 recurring revenue. And so, you know, we think there's two 0:16:36.720 --> 0:16:38.280 kinds of business in the world. There's those who have 0:16:38.320 --> 0:16:40.960 recurring revenue and those who want recurring revenue. And people 0:16:40.960 --> 0:16:43.600 talk about the engine, you know, the airplane engine, makers, 0:16:43.600 --> 0:16:45.200 but power by the hour. You know, you actually don't 0:16:45.240 --> 0:16:48.240 buy an engine, you buy you know specially exactly. You 0:16:48.640 --> 0:16:51.360 might trust you know, the by the minute. But that 0:16:51.440 --> 0:16:54.040 is actually what all companies are moving towards because it's 0:16:54.080 --> 0:16:55.800 kind of better on both sides of the equation. And 0:16:55.840 --> 0:16:58.040 obviously that's pretty complex from an implementation point of view, 0:16:58.080 --> 0:17:23.200 and something intercomany stripe. 0:17:13.640 --> 0:17:16.160 I did like the Strive fire side a while back, 0:17:16.200 --> 0:17:18.440 and you're like, what should we do? And I was like, 0:17:18.560 --> 0:17:20.199 you should fix paywalls. Have you done it? 0:17:21.160 --> 0:17:24.639 We're getting there because one of us hard. Why is 0:17:24.680 --> 0:17:27.160 it hard? Okay, it's hard for a few reasons. One, 0:17:28.200 --> 0:17:32.280 I think people confuse paywalls with micropayments, and I think 0:17:32.440 --> 0:17:37.920 more consumers want micropayments than publishers, where the publishers want macropayments. 0:17:37.960 --> 0:17:39.959 I think nobody wants micropayments and everyone wants to talk 0:17:39.960 --> 0:17:40.280 about it. 0:17:40.320 --> 0:17:42.760 But okay, yeah, yeah, So anyway, once we move past 0:17:42.800 --> 0:17:49.120 the micropayments thing, then it's hard because you ultimately need 0:17:49.160 --> 0:17:52.520 to smooth the onboarding friction and you probably need some 0:17:53.080 --> 0:17:56.280 cross publisher network. And you know, publishers are not they're competing, 0:17:56.359 --> 0:17:59.640 They're maybe not inclined to work together, and then it's 0:17:59.720 --> 0:18:01.560 just a bunch of tech upgrades which are actually kind 0:18:01.600 --> 0:18:04.639 of somewhat prosaic long running projects, but you know, you 0:18:04.640 --> 0:18:05.960 need to be able to have the patients to work 0:18:05.960 --> 0:18:08.040 with the media company to spend a year or year 0:18:08.040 --> 0:18:09.920 and a half upgrade in their stack. The way we've 0:18:10.040 --> 0:18:12.360 ended up doing this is with our product link, which 0:18:12.400 --> 0:18:14.240 is very simple. What is really starting to work. It 0:18:14.359 --> 0:18:16.520 just remember you guys, maybe run into it on the internet. 0:18:16.640 --> 0:18:19.680 It just remembers your credentials across websites and so if 0:18:19.680 --> 0:18:22.199 you've bought on websites A with Stripe and you have 0:18:22.280 --> 0:18:24.920 the box checked to remember your payment details, then you'll 0:18:24.960 --> 0:18:27.480 be able to buy on site B without entering your 0:18:27.520 --> 0:18:30.520 payment details again. And you might think it will lead 0:18:30.560 --> 0:18:32.600 to a big increase in conversion if a lot of 0:18:32.840 --> 0:18:35.119 consumers have their payment credentials remembered so they don't have 0:18:35.160 --> 0:18:37.040 to type any extra data in they can just click buy, 0:18:37.320 --> 0:18:39.760 And turns out it does. And there's obviously a virtuous 0:18:39.760 --> 0:18:42.399 cycle here where you know, the more people sign up 0:18:42.400 --> 0:18:44.520 for it, but denser the network gets. So that's really 0:18:44.560 --> 0:18:46.399 starting to work. And so we have some media properties 0:18:46.400 --> 0:18:48.200 starting to use that, and so what it means is 0:18:48.200 --> 0:18:50.639 they get lots of people coming with credentials all pre 0:18:50.680 --> 0:18:52.440 filled and they just need to hit by and so 0:18:52.480 --> 0:18:54.200 then the commercial proposition just needs to work. 0:18:54.320 --> 0:18:56.359 I just feel like the media payoll problem for me 0:18:56.520 --> 0:18:59.000 is not even the payment credentials. It's once you've paid 0:18:59.000 --> 0:19:02.399 for a payoll, keeping you logged in, you're on your 0:19:02.440 --> 0:19:06.320 phone and computers. Yeah, you're like, you get something emailed 0:19:06.320 --> 0:19:07.600 to you. 0:19:07.600 --> 0:19:09.720 And just remember me. It's really frustrating. 0:19:09.920 --> 0:19:11.639 We should and may get to that as well. I 0:19:11.680 --> 0:19:13.280 agree that's that that's part two of it, to. 0:19:13.240 --> 0:19:15.200 Mean, that's related to like online identity and the stuff 0:19:15.200 --> 0:19:18.359 that people are crypti people are talking about. So I 0:19:18.359 --> 0:19:20.439 also have listened to you on podcasts. One thing that 0:19:20.480 --> 0:19:24.359 you've said is that when you started raising money for 0:19:24.400 --> 0:19:26.800 a stripe, people are like, why isn't this a solve 0:19:26.920 --> 0:19:30.679 problem exists? Can you tell us why it's not right 0:19:30.680 --> 0:19:32.480 it wasn't or why is it isn't? Like why is 0:19:32.560 --> 0:19:36.159 payments hard? And like there were payments companies before you, Like, 0:19:36.200 --> 0:19:37.919 what's the thing that you're solving? They didn't. 0:19:38.600 --> 0:19:42.479 It wasn't solved for a few reasons. Payments requires you 0:19:42.520 --> 0:19:45.480 to be good at two very different things that are 0:19:45.560 --> 0:19:50.880 quite distinct skill sets. There's technology and there's financial services. 0:19:51.080 --> 0:19:54.960 And so prior to Stripe, you had some payment companies 0:19:55.000 --> 0:19:56.880 that just did the technology layer. You know, they said, 0:19:56.880 --> 0:19:58.720 we're an ic API and we plug into you know, 0:19:58.760 --> 0:20:00.720 whatever bank you use. But that wasn't a good payment 0:20:00.720 --> 0:20:02.560 experience because you would then try to sign up with 0:20:02.600 --> 0:20:05.080 the bank and you know, it's spent a week shuffling 0:20:05.119 --> 0:20:08.560 paperwork around or something like that. And so a huge 0:20:08.560 --> 0:20:11.679 amount of what we do is at the intersection of 0:20:11.720 --> 0:20:15.760 those things where you have AMLKYC considerations, where you know, 0:20:15.960 --> 0:20:19.840 a Stripe is essentially aiming to look at the activity 0:20:20.200 --> 0:20:22.280 going on on its platform and ensure that it is 0:20:22.520 --> 0:20:25.960 lisit and you know, acceptable activity that's happening on the platform. 0:20:26.000 --> 0:20:28.600 And so we do lots of cool mL work. You know, 0:20:28.640 --> 0:20:31.840 we don't talk about it really that much publicly because 0:20:31.960 --> 0:20:34.400 it is just what goes into operating a skilled platform 0:20:34.480 --> 0:20:36.919 like this, but it's a huge amount of the special 0:20:36.960 --> 0:20:40.400 sauce that makes Stripe tick. At the same time, the 0:20:40.440 --> 0:20:42.280 tech has to be really good and nice and usable, 0:20:42.359 --> 0:20:45.240 and customers really care about latency, they really care about 0:20:45.240 --> 0:20:48.160 how easy the API integration experiences, and so I would 0:20:48.200 --> 0:20:52.160 say companies prior to Stripe tended to pick a lane 0:20:52.200 --> 0:20:54.400 a bit where you had a few purely tech companies 0:20:54.440 --> 0:20:56.520 where you know, they'd say, we're a payment s gateway 0:20:56.520 --> 0:20:58.240 and we just don't think about anything. We just handle 0:20:58.240 --> 0:21:00.960 off the transaction of something someone else. Or there was 0:21:01.040 --> 0:21:04.320 banks and they actually just generally outsourced the tech. They 0:21:04.320 --> 0:21:06.959 didn't even really do it themselves, or if they did themselves, 0:21:07.000 --> 0:21:09.440 they did not do it particularly well, and so it 0:21:09.480 --> 0:21:13.040 was a very crummy experience for the developers actually using it. 0:21:13.080 --> 0:21:15.520 And of course the tech changes Mobile was just coming 0:21:15.560 --> 0:21:17.760 along as we were getting started. You know, the iPhone 0:21:17.760 --> 0:21:19.200 app store came oute in two thousand and eight. We 0:21:19.240 --> 0:21:21.080 started Stripe in two thousand and nine, so like we 0:21:21.080 --> 0:21:23.080 were just in time for that, and so mobile was 0:21:23.080 --> 0:21:26.160 a very relevant consideration. You know, even just the web 0:21:26.200 --> 0:21:29.159 apps and SaaS and everything grew a huge amount, and 0:21:29.240 --> 0:21:31.639 so I think the banks had not built for that 0:21:31.840 --> 0:21:33.960 and did not build for that, and so there was 0:21:34.000 --> 0:21:36.720 maybe a gap between the existing providers and there was 0:21:36.760 --> 0:21:38.080 that sort of things that you have to be really 0:21:38.119 --> 0:21:40.119 good at. There were huge number of things with Stripe 0:21:40.160 --> 0:21:42.640 that we did buy intuitive feel they were not part 0:21:42.680 --> 0:21:46.080 of a particularly deliberate tops down strategy that was written 0:21:46.080 --> 0:21:48.480 down in the business plan, but ended up working out well. 0:21:48.800 --> 0:21:51.760 And so one was our really early focus on developers, 0:21:51.760 --> 0:21:54.159 where our go to market was through developers. We started 0:21:54.160 --> 0:21:56.280 by selling to startups, and there was this really I 0:21:56.320 --> 0:21:58.960 would say, kind of bottoms up sort of adoption motion. 0:21:59.400 --> 0:22:02.480 But again, ltimately the product we're selling is a technical 0:22:02.520 --> 0:22:04.680 API product, and so of course you should be thinking 0:22:04.680 --> 0:22:07.159 about what the developers want. We just had the developer 0:22:07.200 --> 0:22:09.600 focus because we were software engineers ourselves. We just wanted 0:22:09.600 --> 0:22:12.159 to build a product that we thought was a good product. 0:22:12.400 --> 0:22:14.080 But I think it ended up being more strategic than 0:22:14.119 --> 0:22:15.320 we maybe realized in the beginning. 0:22:15.880 --> 0:22:19.880 There's a lot of like mess in the legal and 0:22:20.040 --> 0:22:23.760 like infrastructure of the payment system, and like your job 0:22:23.840 --> 0:22:26.440 is to provide people a very clean abstraction to that mess. 0:22:26.480 --> 0:22:28.600 And like that means handling all of the mess and 0:22:28.640 --> 0:22:30.320 you know, actually going on and figuring stuff out and 0:22:30.359 --> 0:22:32.080 then being able to put that in the back end 0:22:32.119 --> 0:22:33.960 of your API. So the API is like a very 0:22:34.000 --> 0:22:35.960 clean abstraction. Like is that? 0:22:37.000 --> 0:22:39.760 Burne Hobart had a line that I liked in one 0:22:39.800 --> 0:22:42.520 of his newsletters that stripe makes the financial system work 0:22:42.560 --> 0:22:45.320 the way people think it already does, and that I 0:22:45.359 --> 0:22:47.760 think is actually a pretty nice design principle for us. 0:22:48.000 --> 0:22:49.600 And you know, maybe a good example of this. 0:22:49.680 --> 0:22:52.040 Is see when I hear that I want you to 0:22:52.080 --> 0:22:55.080 do like equity derivatives, I want you to do more 0:22:55.080 --> 0:22:55.880 of this stuff in my world. 0:22:56.080 --> 0:22:58.840 But I don't think we've a view on how it improved. 0:22:59.440 --> 0:23:01.320 Maybe I just think more I do want to talk 0:23:01.320 --> 0:23:04.639 about crypto. Yeah, we debated this internally, but when it 0:23:04.680 --> 0:23:08.679 comes to the payments world, I mean, the conversation tends 0:23:08.720 --> 0:23:11.840 to devolve into a crypto conversation because I feel like 0:23:11.840 --> 0:23:16.240 crypto is trying to solve a lot of payments problems, 0:23:16.320 --> 0:23:19.920 especially when it comes to cross border payments. And I'm 0:23:19.920 --> 0:23:21.760 not asking you about like the price of bitcoin or 0:23:21.760 --> 0:23:23.879 whether you're bullish on you know, number go up, But 0:23:24.280 --> 0:23:27.120 when it comes to crypto and the problems that it's 0:23:27.119 --> 0:23:28.880 trying to solve, I mean, how do you think about it? 0:23:29.240 --> 0:23:31.959 We're quite excited about crypto at the moment. I interpret 0:23:32.000 --> 0:23:36.560 money stuff as the house position as moderately cryptoskeptical, and 0:23:37.440 --> 0:23:39.640 so I guess what I would say to a moderately 0:23:39.680 --> 0:23:43.919 cryptoskeptical audience. They'd be two things. One, there are just 0:23:43.920 --> 0:23:47.199 a bunch of scams and dodgy characters and everything like that. 0:23:47.440 --> 0:23:49.040 But it kind of reminds me of I at the 0:23:49.040 --> 0:23:50.440 first I grew up in Ireland. The first time I 0:23:50.480 --> 0:23:53.119 went to Vegas was for a work conference there. It 0:23:53.359 --> 0:23:55.520 was for a work conference, and you know, at the 0:23:55.600 --> 0:23:57.600 Venetian or something like that, probably Money twenty to twenty 0:23:57.960 --> 0:24:02.200 and you're going into the hotel past like all the 0:24:02.200 --> 0:24:04.800 people smoking indoors and like the people just addicted to 0:24:04.840 --> 0:24:06.720 the slot machines just pressing them again and again again, 0:24:06.720 --> 0:24:08.359 and it's all the blinking lights and you know the 0:24:08.440 --> 0:24:10.320 I guess the clatter of the coins paying out and 0:24:10.359 --> 0:24:15.000 you have to walk past this degenerate gambling areas. Yeah, 0:24:15.000 --> 0:24:18.560 it's a grim scene to get to your serious industry conference. 0:24:18.600 --> 0:24:21.359 And those very surprising to me. And I don't know this. 0:24:21.440 --> 0:24:23.960 There's something similar in crypto, where you have the casino 0:24:24.320 --> 0:24:27.320 dogecoin value speculating part of us, and then there's people 0:24:27.320 --> 0:24:29.480 doing all the serious work over in say stable coins 0:24:29.560 --> 0:24:31.760 or something like that, and those two things just exist. 0:24:32.040 --> 0:24:35.040 But I think one cannot use the existence of the 0:24:35.040 --> 0:24:38.320 slots in the Vegas Casino to write off the work anomment, 0:24:38.359 --> 0:24:39.160 stretching the analogy. 0:24:39.760 --> 0:24:45.080 No, this is good, so because like, yeah, you're excited. 0:24:45.200 --> 0:24:48.960 There's like your friend Peto eleven would say, it's a 0:24:49.400 --> 0:24:52.200 kyic avoidance mechanism. Basically, it's like a yeah. 0:24:52.200 --> 0:24:55.000 Well, the thing about crypto is there's been a lot 0:24:55.040 --> 0:24:58.080 of hype on what crypto is useful for. And so 0:24:58.200 --> 0:24:59.520 for example, if you go back and read the original 0:24:59.520 --> 0:25:01.160 Bitcoin b or did a great read, it's a very 0:25:01.400 --> 0:25:04.280 readable original paper. It actually used the word interchange in 0:25:04.280 --> 0:25:06.040 there and talks about kind of the use of bitcoin 0:25:06.160 --> 0:25:09.639 as a payment method. But bitcoin turned out to be 0:25:09.760 --> 0:25:12.359 certainly stock bitcoin, you know, before lightning and everything like 0:25:12.400 --> 0:25:14.119 that should have to be a horrible payment method like 0:25:14.160 --> 0:25:16.560 slow expensive, let's all do you that. And now the 0:25:16.640 --> 0:25:20.080 technology has matured through what has been kind of fourteen 0:25:20.160 --> 0:25:22.000 years of development. I think the crypto haters used this 0:25:22.080 --> 0:25:23.879 argument that like, well, you know, is the web in 0:25:23.960 --> 0:25:25.800 ninety three for you know, many many years, whereas the 0:25:25.840 --> 0:25:28.240 actual web coming along. But there's been fourteen years of 0:25:28.320 --> 0:25:31.399 lots of technical development happening such that we've ended up 0:25:31.440 --> 0:25:34.320 with much more advanced technologies, and so what you specifically 0:25:34.320 --> 0:25:38.320 have now with stable coins is you have firstly, something 0:25:38.359 --> 0:25:40.240 that's value doesn't change and so there's none of the 0:25:40.400 --> 0:25:42.720 kind of speculation stuff that we're talking about. You have 0:25:42.720 --> 0:25:45.399 something that's actually very technically scalable. So with the current 0:25:45.680 --> 0:25:49.159 L two's there's no real scalability issues with them, and 0:25:49.320 --> 0:25:52.280 you have a pretty sensible construct where in a way, 0:25:52.320 --> 0:25:54.440 it's narrow banking. Right. We've been talking about narrow banking 0:25:54.480 --> 0:25:56.919 in this country for decades and we've ended up with 0:25:57.000 --> 0:26:00.960 narrow banking through stable coins, where say a good stable coin, 0:26:01.080 --> 0:26:04.440 you know that like a PAXOS or a USDC. In 0:26:04.480 --> 0:26:06.760 the case of USDC, it is fully backed by short 0:26:06.840 --> 0:26:10.159 term treasuries. And that actually just seems like a pretty 0:26:10.160 --> 0:26:12.280 good construct to me. And so you know, we now 0:26:12.320 --> 0:26:14.320 make it where you can, you know, accept money and 0:26:14.359 --> 0:26:16.880 strive via crypto. You can do some payouts things like that. 0:26:17.240 --> 0:26:20.120 And the obvious thing that people say is true where 0:26:21.240 --> 0:26:24.120 in the US you will be slightly too biased against 0:26:24.200 --> 0:26:26.439 crypto because the US is the world's best currency. You know, 0:26:26.520 --> 0:26:28.959 the US has the world's reserve currency where you get 0:26:29.000 --> 0:26:33.280 to spend and green back exactly. And so of course 0:26:33.280 --> 0:26:35.080 people in the US think the USD is awesome because 0:26:35.080 --> 0:26:37.440 it is an awesome currency, whereas many people in many 0:26:37.440 --> 0:26:40.480 other countries have a much more adversarial relationship with their 0:26:40.480 --> 0:26:42.840 own currency. And I'm not even talking about Zimbabwe, though 0:26:42.840 --> 0:26:44.840 it is true there. I'm talking about Turkey, which is 0:26:44.880 --> 0:26:49.399 a very large country and economy and population, but people 0:26:49.400 --> 0:26:52.840 there do not have, you know, full faith in the lira, 0:26:53.080 --> 0:26:54.920 and they think about what's a better place to keep 0:26:54.960 --> 0:26:55.879 money than lira. 0:26:56.320 --> 0:26:59.720 I guess the other like US bias is that the 0:27:00.160 --> 0:27:03.879 government really wants dollar payments to flow through the ky 0:27:03.960 --> 0:27:07.720 Seed banking system, and like there's some suspicion that. 0:27:07.680 --> 0:27:10.560 I think all the serious grown up crypto players today, 0:27:10.920 --> 0:27:13.400 I mean they're subject to the fincent travel real they 0:27:13.440 --> 0:27:16.480 are ky seeing the actors, and so if you go 0:27:16.560 --> 0:27:19.640 through a crypto flow today, you will see the normal 0:27:19.720 --> 0:27:22.840 frictions of dealing with a regulated financial product where you 0:27:22.880 --> 0:27:24.760 are asked to provide your you know, last for your 0:27:24.840 --> 0:27:26.960 social or upload a driver's license or things like that. 0:27:27.240 --> 0:27:29.760 And so I think just in most of the crypto 0:27:29.880 --> 0:27:32.000 use cases that are being top obviously that the sketchy 0:27:32.080 --> 0:27:34.000 dark web stuff exists as well, But in most of 0:27:34.000 --> 0:27:36.800 the use cases we are talking about where serious businesses 0:27:36.840 --> 0:27:39.439 like Stripe or serious merchants are using crypto. It is 0:27:39.480 --> 0:27:42.560 the custodial lyssis part of the crystals. 0:27:42.800 --> 0:27:44.840 It's just sort of like an un chain like non 0:27:44.880 --> 0:27:46.320 custodical transfer. 0:27:46.000 --> 0:27:48.360 Like correct, Yeah, I'm true. I mean, if you look 0:27:48.400 --> 0:27:51.280 into your crystal ball and you know, it's been fourteen 0:27:51.359 --> 0:27:54.160 years since bitcoin was created. As you said, we've seen 0:27:54.200 --> 0:27:57.720 a ton of technology advancements since then. I mean, you 0:27:57.720 --> 0:28:00.840 said you're quite excited about crypto, but I mean, how 0:28:00.920 --> 0:28:02.680 far can we run that out? Do you think it's 0:28:02.880 --> 0:28:05.520 the future? For example, would you go that far if 0:28:05.560 --> 0:28:08.479 you look fifty one hundred years into the future. 0:28:08.640 --> 0:28:11.120 I don't think it's a singular future. And again there's 0:28:11.119 --> 0:28:13.400 a bit of overpromising that's happened in the crypto world. Again, 0:28:13.440 --> 0:28:15.640 I think that's what gets people's backed up. Actually. Speak 0:28:15.640 --> 0:28:18.800 of Bern Hobart. We just Stripe Press published his new book. 0:28:18.920 --> 0:28:21.240 The title is Boom and the piesis of the book 0:28:21.359 --> 0:28:26.040 is that we generally view financial bubbles as societally net 0:28:26.080 --> 0:28:29.280 negative because you know, they cause the misallocation of resources 0:28:29.280 --> 0:28:31.439 and they cause you know, ultimately people lose out. And 0:28:31.520 --> 0:28:36.680 he makes the argument that bubbles provide a societally useful 0:28:36.720 --> 0:28:40.840 function by essentially coordinating effort. And you know, maybe the 0:28:41.160 --> 0:28:43.440 dot com boom is incorrectly understood as a you know, 0:28:43.640 --> 0:28:46.040 pets dot common webvan. It was really like by dollars 0:28:46.040 --> 0:28:47.840 put into it, as you guys probably know, it was 0:28:47.880 --> 0:28:50.600 a telecoms boom, and it was a fiber rollout boom. 0:28:50.640 --> 0:28:53.120 But it led to the US having just amazing fiber 0:28:53.160 --> 0:28:55.320 overcapacity that then led to the steady growth of the 0:28:55.360 --> 0:28:57.800 Internet for the decades that followed. And so that's maybe 0:28:57.800 --> 0:28:59.960 an example of it was a bubble, but it was 0:29:00.040 --> 0:29:02.800 a societally useful bubble because then it alleged to this overcapacity. 0:29:02.880 --> 0:29:05.320 This had lots of positive externalities. And I think you 0:29:05.400 --> 0:29:06.520 make that argument about crypto. 0:29:06.840 --> 0:29:10.000 This that argument made as crypto led to a build 0:29:10.000 --> 0:29:12.800 out of GPUs that led to the AI boom. 0:29:13.160 --> 0:29:15.080 Oh interesting, I wasn't even making that case. You could 0:29:15.080 --> 0:29:17.479 make that argument too though obviously there was a lot 0:29:17.520 --> 0:29:20.479 of GPU spent happening even even before crypto. 0:29:20.560 --> 0:29:20.640 No. 0:29:20.720 --> 0:29:22.200 I was just making the argument that I think the 0:29:22.240 --> 0:29:25.680 speculative side of crypto, you could make the argument pulled 0:29:25.680 --> 0:29:29.120 in attention and resources that was then used to build 0:29:29.200 --> 0:29:31.760 the very boring useful parts of crypto, like you know 0:29:32.200 --> 0:29:35.200 Ethereum two or against table coins or things like that. 0:29:35.680 --> 0:29:37.320 We could talk more about this. Do you want to 0:29:37.320 --> 0:29:39.560 make sure are we talking about the things you don't 0:29:39.560 --> 0:29:40.120 want to talk about? 0:29:40.240 --> 0:29:43.240 Yeah? Great, which we do want to talk about. 0:29:43.960 --> 0:29:48.040 So another money stuff theme that we'll probably do on 0:29:48.040 --> 0:29:51.360 our ad reads is that private markets are the new 0:29:51.360 --> 0:29:55.640 public markets. You guys are among the poster children for that. 0:29:55.720 --> 0:29:59.160 You're the CFO. Tell me about what it's like being private. 0:29:59.400 --> 0:30:01.760 I don't know. I mean, how should I think about, 0:30:01.760 --> 0:30:04.480 like the idea that, like, you're an enormous company and 0:30:04.600 --> 0:30:08.280 you've stayed private and have no enthusiasm as far as 0:30:08.360 --> 0:30:10.480 we know, for going public or even talking about this 0:30:10.960 --> 0:30:12.760 twenty years ago, would you have been able to do that? 0:30:14.520 --> 0:30:17.240 Yeah. We spend a lot of time internally at Stripe 0:30:17.280 --> 0:30:21.160 thinking about the value of the Stripe business. I think 0:30:21.160 --> 0:30:23.000 the external world spends a lot of time thinking about 0:30:23.000 --> 0:30:25.960 the value of the Stripe stock price, which are related 0:30:26.080 --> 0:30:30.600 but different things. We have definitely stayed private longer than 0:30:31.760 --> 0:30:34.160 some people expected. I think we'll continue to stay private 0:30:34.160 --> 0:30:39.000 longer than maybe some people expect. But there's no complex answer. 0:30:39.040 --> 0:30:41.560 It's just a simple answer, which is, we don't think 0:30:41.760 --> 0:30:44.800 companies should sleep walk into going public. We think they 0:30:44.840 --> 0:30:49.440 should be deliberate about it. And why would stripe right 0:30:49.480 --> 0:30:52.720 now and go public. It could be if we wanted 0:30:52.760 --> 0:30:56.240 to sell stock broadly to a retail audience. That's not 0:30:56.320 --> 0:30:57.560 something that we've had that you know, we just the 0:30:57.680 --> 0:31:00.320 business is profitable, you know, we haven't needed to raise 0:31:00.520 --> 0:31:03.400 very large amounts of capital. A traditional reason might be 0:31:03.640 --> 0:31:05.640 return of capital, not just kind of a capital raise 0:31:05.680 --> 0:31:08.320 for running the business, but return of capital to existing shareholders. 0:31:08.400 --> 0:31:10.560 But again that's where you're maybe referencing. The private markets 0:31:10.560 --> 0:31:13.280 have gotten deeper, and you know, in our case, we've 0:31:13.360 --> 0:31:16.840 run two unlimited employee tenders, you know last year and 0:31:17.000 --> 0:31:20.160 this year. You know, Sequoia just an LP tender where 0:31:20.200 --> 0:31:23.400 they gave liquidity to some of their LPs. But liquidity 0:31:23.480 --> 0:31:25.960 is available to people in the private markets, and so 0:31:26.000 --> 0:31:30.520 it's more I think the default spring, where companies, you know, 0:31:30.560 --> 0:31:33.320 as SaaS company would be started and you know, go 0:31:33.320 --> 0:31:35.320 from zero to one hundred million ARRR and then just 0:31:35.440 --> 0:31:38.040 run out and go public. Default is being questioned a 0:31:38.080 --> 0:31:40.239 little bit in Silicon Valley. Obviously, lots of companies are 0:31:40.240 --> 0:31:42.800 still going public, but the default is being questioned, and 0:31:42.840 --> 0:31:48.840 the default is more of a Silicon Valley tech default 0:31:49.480 --> 0:31:52.600 than maybe a broader global default. So like in financial 0:31:52.560 --> 0:31:55.959 stud we know exactly so as Bloomberg employees, you may 0:31:56.000 --> 0:31:57.800 be familiar with it, but Bloomberg is the example that 0:31:57.880 --> 0:32:01.360 everyone cites. But if you just quickly run through financial services, 0:32:01.480 --> 0:32:04.240 you know, take the world's leading market maker, Citadel Securities 0:32:04.240 --> 0:32:07.360 private company, take the world's leading prop trade I'm probably 0:32:07.360 --> 0:32:09.640 offending one of the world's leading in all these cases, 0:32:09.680 --> 0:32:11.640 So don't defend anyone. But if you look at Jane Street, 0:32:11.640 --> 0:32:14.200 you know which it's been reported on a lot these days, 0:32:14.240 --> 0:32:16.000 just how good a business it is. You know, whether 0:32:16.000 --> 0:32:18.240 they're at a ten billion profits run rate or something 0:32:18.280 --> 0:32:21.280 like that, private company Fidelity, when the world's leading brokerages 0:32:21.560 --> 0:32:24.000 private company Goldin Sachs, your former employer. 0:32:24.320 --> 0:32:26.560 I assume that that A big difference is that a 0:32:26.560 --> 0:32:29.920 lot like Chance Street writes very large checks. And the 0:32:29.960 --> 0:32:31.920 Silicon Valley difference is not just that like you have 0:32:32.040 --> 0:32:33.800 vcs you might be hunger to get at whereas like 0:32:33.800 --> 0:32:35.880 said at all thosand but like it's also you have employees 0:32:35.880 --> 0:32:38.200 who are getting paid in equity and they're getting tender 0:32:38.200 --> 0:32:40.320 as every Oh yeah, like is it tender every year 0:32:40.400 --> 0:32:42.040 just as good as publicly traded stock. 0:32:43.000 --> 0:32:44.880 We think the tender every year is in nice solution. 0:32:45.120 --> 0:32:46.920 And there are some things that would be different if 0:32:46.960 --> 0:32:48.440 we're a public company for the better. There's some things 0:32:48.440 --> 0:32:50.480 that'd be different as a public company for the worst. 0:32:50.520 --> 0:32:52.440 And you get into you know, trading windows and who's 0:32:52.480 --> 0:32:55.080 an insider and things like that. But it's thus far 0:32:55.120 --> 0:32:56.840 work quite nicely for a solution. 0:32:57.040 --> 0:32:58.960 So is that the model then? Like tender every year? 0:32:58.960 --> 0:33:00.360 You've only done two, but. 0:33:00.920 --> 0:33:04.040 We don't have forward looking plans to announce, and so 0:33:04.040 --> 0:33:05.800 I come back to it at some stage with you know, 0:33:06.120 --> 0:33:08.120 we could go do something that you don't expect, and 0:33:08.440 --> 0:33:10.720 we're not announcing the plans because genuinely, it's not like 0:33:10.720 --> 0:33:12.760 there's a written down plan at stride that we're going 0:33:12.800 --> 0:33:15.960 to do this, this and then this. We are always 0:33:16.120 --> 0:33:20.360 reevaluating it. But again, up to this point, it has 0:33:20.400 --> 0:33:22.920 made more sense for us to grow as a capital 0:33:22.920 --> 0:33:26.000 efficient private company, then it's made sense for us to 0:33:26.000 --> 0:33:27.160 be a publican sure. 0:33:27.040 --> 0:33:29.560 Like chancer, it just makes money every year and they 0:33:29.560 --> 0:33:31.400 don't need to raise capital and so they just. 0:33:31.360 --> 0:33:33.480 Seems like great business haze and money to people. Right. 0:33:33.600 --> 0:33:35.920 I don't know what the economics that is, literally, but 0:33:35.960 --> 0:33:39.160 they seem extremely good. But like, it does seem possible 0:33:39.160 --> 0:33:41.840 that you could just make cash every year and fund 0:33:41.880 --> 0:33:43.720 the business out of that and pay people out of 0:33:43.720 --> 0:33:44.360 that and never. 0:33:44.200 --> 0:33:45.680 Need to For twenty four, we're trying to make a 0:33:45.680 --> 0:33:47.360 decision for twenty four, and for twenty five, we'll try 0:33:47.400 --> 0:33:49.000 to make a decision for twenty five. So luckily it's 0:33:49.040 --> 0:33:50.920 not the case that you're faced with a you know, 0:33:50.960 --> 0:33:52.360 a fork in the road and you have to make 0:33:52.360 --> 0:33:55.000 some kind of permanent decision. We do constantly re evaluate 0:33:55.040 --> 0:33:55.760 it when. 0:33:55.600 --> 0:33:58.160 I write about this topic. One concern that people have 0:33:58.480 --> 0:34:01.560 is that there are a lot of cool companies, like 0:34:01.600 --> 0:34:05.320 an increasing number of them, like fast growing, profitable companies 0:34:05.720 --> 0:34:08.320 that or sorry, I should say fast growing, not profitable, 0:34:08.640 --> 0:34:12.560 early stage companies, stage companies, high growth companies that don't 0:34:12.560 --> 0:34:15.960 go public, and that deprives like ordinary investors of access 0:34:15.960 --> 0:34:19.239 to those companies, and therefore it should be like made 0:34:19.280 --> 0:34:22.400 easier to go public or whatever. Right, So for you 0:34:23.320 --> 0:34:24.880 do you worry at all about that? From like a 0:34:24.920 --> 0:34:28.160 systemic perspective that you're depriving like American retirement savers of 0:34:28.200 --> 0:34:30.880 access to the stripe. And then two, you're not entirely 0:34:30.920 --> 0:34:34.280 because there are people who are going around selling stripe 0:34:34.280 --> 0:34:36.560 shares in a way that I believe you do not like. 0:34:37.120 --> 0:34:39.720 And I don't know, like there's like a way around 0:34:39.800 --> 0:34:41.560 of the barrier that you've set up. I guess. 0:34:42.160 --> 0:34:42.520 Yeah. 0:34:42.680 --> 0:34:45.719 Look, I do think the debate over who should be 0:34:45.760 --> 0:34:52.040 allowed by private assets is a good debate. And the 0:34:52.080 --> 0:34:54.560 accredited investor rule is it's kind of an odd rule, 0:34:54.560 --> 0:34:56.440 like we're able to take it for granted that it's 0:34:56.440 --> 0:34:59.280 been around for a long time, but basically we define 0:35:00.280 --> 0:35:02.840 investors as rich people, which is, you know, maybe some 0:35:03.080 --> 0:35:04.120 a historic and. 0:35:04.680 --> 0:35:06.600 In like a declining standard of rich where it's now 0:35:06.640 --> 0:35:08.160 like sort of upper middle class people. 0:35:08.239 --> 0:35:10.680 Correct. Yeah, So I think debate on that is a 0:35:10.680 --> 0:35:13.040 good thing. In stripes case, you know, most of the 0:35:13.280 --> 0:35:17.720 non employee ownership is through essentially kind of VC funds, 0:35:18.040 --> 0:35:22.480 and the underlying VC fund ownership the LPs there tend 0:35:22.520 --> 0:35:26.080 to be pension funds, college endowments. People. I think we 0:35:26.080 --> 0:35:28.239 feel quite good about making money for it, and so 0:35:28.560 --> 0:35:30.840 I don't think it's the case that's kind of broader society. 0:35:30.880 --> 0:35:33.440 It doesn't get to benefit from the appreciation. I think 0:35:33.440 --> 0:35:36.080 we feel quite good about the LP base of the 0:35:36.160 --> 0:35:38.399 investors that are behind striving Again, I think that's another 0:35:38.400 --> 0:35:40.440 thing that has allowed us to stay private for as 0:35:40.440 --> 0:35:42.480 long as we have, which is actually the very long 0:35:42.560 --> 0:35:44.040 term vcs. And I think if we had a different 0:35:44.040 --> 0:35:46.560 set of vcs, we would have been less fortunate in 0:35:46.600 --> 0:35:48.720 being able to grow Stripe as a private company because 0:35:48.760 --> 0:35:50.160 maybe they would have felt the need for a win 0:35:50.280 --> 0:35:51.600 or something like that. But I think luckily, you know, 0:35:51.600 --> 0:35:54.320 Siquic Capital is one of the best VC firms that 0:35:54.320 --> 0:35:56.359 there is that don't quite need to prove themselves. 0:35:56.080 --> 0:35:58.200 And they probably count you as a win anyway, say again, 0:35:58.200 --> 0:36:01.479 they probably count you as a win exactly yea, yeah. 0:36:01.640 --> 0:36:03.480 And then on the I don't know what you call them, 0:36:03.520 --> 0:36:06.200 but the firms out there the market. 0:36:05.960 --> 0:36:08.680 I've taught on the podcast about Destiny Tech one hundred, 0:36:08.680 --> 0:36:13.600 which has a private market. I was that fond situation 0:36:13.800 --> 0:36:16.239 with like some Stripe forward contracts, and like there's like 0:36:16.280 --> 0:36:18.839 a general there's like a market for forward contracts, which 0:36:18.880 --> 0:36:21.480 all seem to be not really appreciate this. 0:36:21.480 --> 0:36:28.920 It's not going to end well because generally hyping financial 0:36:28.960 --> 0:36:34.240 assets has a bad history. It worked out badly with SPACs, 0:36:34.280 --> 0:36:38.439 it worked out badly with icos, and it just tends 0:36:38.440 --> 0:36:40.520 to work out badly, which is why it tends to 0:36:40.520 --> 0:36:43.520 be regulated this. You know, financial regulators tried to rein 0:36:43.560 --> 0:36:47.560 in the hyping of private assets, and so again, Stripe 0:36:47.600 --> 0:36:50.920 is not a public company. We do not enable broad 0:36:50.920 --> 0:36:54.959 retail ownership of Stripe stock, and so if people try 0:36:55.040 --> 0:37:01.759 to back into that by having either company stock in 0:37:02.040 --> 0:37:05.080 a vehicle that that is then available to public mark investors, 0:37:05.600 --> 0:37:07.759 we just think it's not a good construct, Like it's 0:37:07.840 --> 0:37:11.600 underdisclosed where people are buying an interest in things based 0:37:11.640 --> 0:37:14.839 on name brand recognition but not based on going over 0:37:14.880 --> 0:37:17.680 the financials or understanding what it actually is. They tend 0:37:17.680 --> 0:37:19.360 to all be very high fees. I mean, it depends 0:37:19.360 --> 0:37:21.400 on the vehicle, but they tend to be fairly distractive 0:37:21.440 --> 0:37:23.719 in that way. And so we don't like it. We 0:37:23.760 --> 0:37:27.719 don't we don't permit it, and I'm personally not a fan. 0:37:28.200 --> 0:37:30.520 Is there much that you can do about it? Like 0:37:30.560 --> 0:37:32.960 in the case of a Destiny Tech for example, that 0:37:33.040 --> 0:37:37.120 says that you know they have Stripe forwards zuchrre Yeah, 0:37:37.280 --> 0:37:38.839 I mean, what can you do? 0:37:38.920 --> 0:37:41.560 We prohibit forward. So we had a bit of a 0:37:41.560 --> 0:37:42.200 about that. 0:37:42.360 --> 0:37:45.520 People do them anyway, can you then avoid them? 0:37:45.520 --> 0:37:48.360 And I don't know where this goes. 0:37:48.480 --> 0:37:51.719 Yeah, because right, I mean, it seems like they're prohibited 0:37:51.760 --> 0:37:52.960 and people do them. 0:37:52.800 --> 0:37:54.880 And yeah, we put it up on the website just 0:37:54.880 --> 0:37:57.240 to make it abundantly clear, so everyone has the same information. 0:37:57.840 --> 0:38:00.520 Instruments they're not allowed. So I don't know this areas 0:38:00.520 --> 0:38:02.520 where people have to read the tea leaves or the 0:38:02.520 --> 0:38:05.120 body language. We tried to make us abundantly clear get 0:38:05.120 --> 0:38:07.880 out there with the semaphore flags. So this people are 0:38:07.920 --> 0:38:08.840 not in any doubt. 0:38:08.840 --> 0:38:11.360 On the topic of going public. It doesn't sound like 0:38:11.360 --> 0:38:13.759 you're in any rush, obviously, you said in June, And 0:38:13.800 --> 0:38:16.279 I thought this was interesting that many companies make the 0:38:16.320 --> 0:38:20.080 decision to go public too early. That you personally see 0:38:20.160 --> 0:38:23.200 tons of opportunities to change and grow the business quite 0:38:23.239 --> 0:38:26.239 a lot, and I think it's interesting that you want 0:38:26.239 --> 0:38:28.920 to stay private to do that, and I think a 0:38:28.920 --> 0:38:31.640 lot of founders would agree with you. But just the 0:38:31.719 --> 0:38:34.560 fact that you know, sort of like going public. You 0:38:34.600 --> 0:38:38.040 see this as this sign of maturity and maybe that 0:38:38.120 --> 0:38:40.320 you're not innovating as much as you would in the privates. 0:38:40.680 --> 0:38:41.000 I don't know. 0:38:41.040 --> 0:38:43.560 It kind of made me think of tech companies like 0:38:43.640 --> 0:38:47.120 offering dividends, Like I remember when Meta started giving out 0:38:47.160 --> 0:38:50.239 dividends earlier this year. Everyone was like, oh, well they're 0:38:50.360 --> 0:38:51.840 old news now they're too mature. 0:38:52.320 --> 0:38:54.439 Well, I think Meta is the wrong example to use 0:38:54.480 --> 0:38:57.160 for that argument. I guess they currently seem to be 0:38:57.320 --> 0:39:00.400 doing extraordinarily well in the AI race. And I'm not 0:39:00.440 --> 0:39:02.720 making the claim that you know, one can as innovate 0:39:02.800 --> 0:39:05.080 as a public company, because that is clearly an absurd 0:39:05.080 --> 0:39:07.360 claim and you would just be kind of constantly slapped 0:39:07.360 --> 0:39:09.520 in the face by counterexamples. And Meta would be the 0:39:09.560 --> 0:39:11.680 perfect one where they just am of the ring glasses 0:39:11.680 --> 0:39:13.880 and those look amazing, and again they're just nailing it 0:39:13.880 --> 0:39:16.440 in the AI race, and so they're basically argument. I 0:39:16.480 --> 0:39:22.160 do think that on the margin, if you are developing 0:39:22.560 --> 0:39:24.560 large number of new products, if you have a fast 0:39:24.560 --> 0:39:27.359 growing business, if you're constantly reinventing how the business works. 0:39:27.400 --> 0:39:30.359 And again in our case, we are transforming Stripe from 0:39:30.360 --> 0:39:32.000 not just being a payment's business to there are all 0:39:32.040 --> 0:39:34.240 these new software lines of business that are much earlier 0:39:34.239 --> 0:39:36.360 that are harder to predict how they grow. Everything like this. 0:39:36.600 --> 0:39:38.560 You know, we're changing out the underlying payment methods. You know, 0:39:38.600 --> 0:39:42.120 we talked about crypto, we didn't talk about around the world. 0:39:42.360 --> 0:39:44.600 There are all these interesting trends happening in new payment 0:39:44.600 --> 0:39:47.600 methods where basically bank transfers and things like UPI and 0:39:47.640 --> 0:39:49.600 picks in Brazil and things like that are becoming much 0:39:49.600 --> 0:39:51.920 more relevant to anyway, the huge amount of change. I 0:39:52.000 --> 0:39:57.319 think on the margin, the public company valuation apparatus is 0:39:59.000 --> 0:40:00.640 you see it how people you know, the quarterly earnings 0:40:00.680 --> 0:40:02.000 and the miss and the beach and everything like that. 0:40:02.440 --> 0:40:07.399 It is optimized for mature, predictable businesses, and indeed people 0:40:07.400 --> 0:40:11.000 talk about kind of business predictability, whereas you know, for 0:40:11.080 --> 0:40:13.120 a business that is still in the you know, in 0:40:13.160 --> 0:40:15.040 the early stages like stripe, and we think about a 0:40:15.040 --> 0:40:16.759 lot of new products on a five or ten year 0:40:16.840 --> 0:40:19.279 time horizon. Again, I think on the margin, there are 0:40:19.320 --> 0:40:21.959 some benefits to doing that as a private company because 0:40:22.000 --> 0:40:24.279 you get to kind of completely retool the business as 0:40:24.280 --> 0:40:27.279 you go without necessarily wondering about, you know, what will 0:40:27.280 --> 0:40:29.399 the reception be for this in you know, the next 0:40:29.480 --> 0:40:30.480 quarter's earnings release. 0:40:30.840 --> 0:40:34.719 I know you're not in any phase of learning an 0:40:34.719 --> 0:40:36.680 IPO but I was a capital markets banker, and I 0:40:36.680 --> 0:40:40.440 know you've had thoughts about like the IPO process. I'm like, 0:40:40.560 --> 0:40:43.239 I don't know if you're doing an IPO, like, what 0:40:43.320 --> 0:40:45.080 would you change about the process. 0:40:45.320 --> 0:40:48.680 I find all the debates about IPO mechanics really uninteresting 0:40:48.800 --> 0:40:50.880 because it just doesn't matter. Like, if you have a 0:40:50.920 --> 0:40:53.520 great business that's valuable for customers that millions of people 0:40:53.640 --> 0:40:56.000 use and makes money as a result, you can do 0:40:56.080 --> 0:40:57.919 whatever you want. Like, you know, I think Facebook would 0:40:57.920 --> 0:41:00.600 say they bought the IPO, but they have likeable business, 0:41:00.640 --> 0:41:03.040 so it doesn't matter and no one remembers it. And 0:41:03.080 --> 0:41:05.319 then you can have like the world's best IPEO plan 0:41:05.360 --> 0:41:06.759 and if the business isn't good, it doesn't matter. And 0:41:06.760 --> 0:41:08.840 so people get into all these debates about direct listing 0:41:09.200 --> 0:41:11.960 versus regular IPO, and then Bill Gurly complains that the 0:41:11.960 --> 0:41:14.640 bankers are taking too many fees, and then it just 0:41:14.680 --> 0:41:17.760 doesn't matter. Like build a great business and you could 0:41:18.239 --> 0:41:21.640 write your prospectus on a cocktail napkin and it'll be fine. 0:41:21.640 --> 0:41:24.680 This is like why Charlie Muker doesn't like financial services business, 0:41:24.800 --> 0:41:27.960 because you're like, like, oh, this is real business. 0:41:28.320 --> 0:41:30.880 It's true, but it's true right. Yeah. And the thing 0:41:31.000 --> 0:41:35.080 is investors are smart. I think people try to do 0:41:35.120 --> 0:41:36.800 too much of a song and a dance with investor 0:41:36.880 --> 0:41:40.520 relations and try to you know, gin things up. And ultimately, 0:41:40.680 --> 0:41:43.080 when you meet professional investors, you know they're really smart 0:41:43.080 --> 0:41:45.160 and they can look through and understand the fundamental dynamics 0:41:45.160 --> 0:41:48.480 of a business. And so the secret to good investor 0:41:48.520 --> 0:41:51.360 relations is have a good business that's growing and is profitable. 0:41:51.520 --> 0:42:11.839 Where people should do that exactly. Yeah, well, oh, you 0:42:11.880 --> 0:42:13.680 have an airport. Do you want to talk about that? 0:42:13.800 --> 0:42:18.720 Is that something? Okay? Why where did that come from? 0:42:19.200 --> 0:42:23.080 Well? I should not be listened to for any rational 0:42:23.239 --> 0:42:24.440 financial investment advisor. 0:42:25.040 --> 0:42:26.560 I don't know. I don't have the pockets. 0:42:27.800 --> 0:42:31.120 Well. No, I'm a pilot and an aviation and I 0:42:31.239 --> 0:42:33.279 grew up interested in US and I've been flying since 0:42:33.280 --> 0:42:35.359 I was a teenager and you know, still really love 0:42:35.400 --> 0:42:37.239 to do it and I'm flying my spare time. And 0:42:37.320 --> 0:42:40.400 so I would say it's not necessarily the most rational 0:42:40.480 --> 0:42:43.040 business interest of mine. But the case the airport, so 0:42:43.360 --> 0:42:46.520 Dublin basically is three airports, Doublin International, which you've been 0:42:46.560 --> 0:42:48.439 to Dublin, that's the one you've been to. I guess 0:42:48.480 --> 0:42:50.200 three if you can't the military airport a bet Donald 0:42:50.239 --> 0:42:52.360 and then Western, which is the general aviation airports. And 0:42:52.400 --> 0:42:54.720 so general aviation is all the stuff that is not airlines. 0:42:54.760 --> 0:42:56.680 So it could be public service flights like search and 0:42:56.680 --> 0:42:59.239 rescuer air ambulance. It could be flight training and you know, 0:42:59.239 --> 0:43:01.640 people getting their licenses. It could be corporate jets, it 0:43:01.640 --> 0:43:04.200 could be all this kind of stuff. And generally speaking, 0:43:04.800 --> 0:43:08.200 the appropriate home for the general aviation stuff is not 0:43:08.280 --> 0:43:11.319 where all the airlines are because they just don't mix 0:43:11.360 --> 0:43:14.520 that well. And so most places will have you know, 0:43:14.520 --> 0:43:17.000 if someone's doing flight training in New York, they'll not 0:43:17.040 --> 0:43:19.120 do it at GfK. They'll do it you know, Westchester 0:43:19.239 --> 0:43:21.799 or something like that. Yeah. Yeah, they really don't make welf. 0:43:22.120 --> 0:43:25.319 And in the case of Dublin's Western Airport, I end 0:43:25.400 --> 0:43:27.000 up buying it back in twenty twenty one, and it 0:43:27.080 --> 0:43:29.279 needed a bunch of investment, and so I bought it 0:43:29.320 --> 0:43:32.000 and we've been investing in giving it the facilities that 0:43:32.120 --> 0:43:35.400 needs around you know, instrument landing capabilities and you know, 0:43:35.560 --> 0:43:38.279 redoing the terminal and the capital stock and things like that, 0:43:38.560 --> 0:43:40.520 and so it's partly I think it's good. I mean 0:43:40.560 --> 0:43:43.320 they are in the US, they're not for profit businesses. 0:43:43.320 --> 0:43:46.600 They don't be government owned and federally funded. Internationally, they 0:43:46.600 --> 0:43:48.279 are like he throws, a for profit business and they 0:43:48.320 --> 0:43:50.640 just make money off landing fees. And so I actually 0:43:50.680 --> 0:43:53.120 think it will, in the fullness of time, be a 0:43:53.160 --> 0:43:55.480 good business once it's kind of come out on the 0:43:55.520 --> 0:43:57.640 right side of the growth curve. But it's also a 0:43:57.640 --> 0:43:58.560 passion product. 0:43:58.280 --> 0:44:01.240 Of min that's awesome. I mean not as an insult, 0:44:01.280 --> 0:44:04.719 but I feel like to enjoy being a pilot, like 0:44:04.800 --> 0:44:06.760 casually you have to be like a little bit crazy, 0:44:07.160 --> 0:44:09.879 Like that seems like an insane proposition, but maybe I'm 0:44:09.920 --> 0:44:10.680 just really risking. 0:44:10.960 --> 0:44:11.680 So no, it just. 0:44:12.280 --> 0:44:16.000 Requires a lot of discipline, you know, checklist discipline, and 0:44:16.520 --> 0:44:19.360 you know recurrent training. I just went through some recurrent training, 0:44:19.440 --> 0:44:23.400 and just I actually find it more interesting because obviously 0:44:23.440 --> 0:44:27.799 aviation safety is generally talked about correctly as one of 0:44:27.880 --> 0:44:33.600 the best examples of process optimization over the last you know, 0:44:33.800 --> 0:44:36.520 five decades, where we have taken a system and just 0:44:36.560 --> 0:44:39.839 improved the crap out of it until it's like so good. 0:44:39.960 --> 0:44:41.960 If they talk out thing go by on Twitter recently, 0:44:42.000 --> 0:44:45.720 where the FA doesn't mandate car seats on airplanes because 0:44:45.760 --> 0:44:48.520 flying is so safe compared to driving that they are 0:44:48.560 --> 0:44:50.920 worries that if they mandated car seats on airplanes, even 0:44:50.960 --> 0:44:53.839 though like you have a tiny benefit, it would lead 0:44:53.880 --> 0:44:56.120 to people choosing not to fly and choose to drive 0:44:56.160 --> 0:44:59.080 instead and get into car accidents and therefore be net 0:44:59.120 --> 0:45:01.880 less safe. Kind of funny that. You know, again, flying 0:45:01.880 --> 0:45:04.520 an airplane feels like in principle it should be like 0:45:04.600 --> 0:45:06.200 kind of hard to do, and driving car on the 0:45:06.200 --> 0:45:09.359 ground should be easy to but permile. Obviously flying wins out. 0:45:09.440 --> 0:45:12.120 And so again you have this decades and decades and 0:45:12.160 --> 0:45:15.080 decades of history where we've taken the lessons of you know, 0:45:15.080 --> 0:45:17.040 they say the rules and regulations, they are written in blood. 0:45:17.080 --> 0:45:19.160 You know, we take the lessons of the previous accidents 0:45:19.200 --> 0:45:22.240 that have happened and then we wrap them into future training. 0:45:22.280 --> 0:45:24.040 And you know, generally, when you do pilot training, you're 0:45:24.080 --> 0:45:27.040 studying a lot of specific accidents that happened and you 0:45:27.080 --> 0:45:29.279 know what the learnings were for them. And so I 0:45:29.280 --> 0:45:33.759 think if you're interested in systems design, engineering, process optimization, 0:45:33.880 --> 0:45:35.239 things like that, lessons. 0:45:35.000 --> 0:45:37.160 From piloting like inform your software engineering. 0:45:38.040 --> 0:45:40.920 I mean, they're pretty separate, but I think the software 0:45:40.960 --> 0:45:44.279 engineering brain tends to be attracted to flying, and you know, 0:45:44.280 --> 0:45:46.280 you got Palo Alto Airport was a little general aviation 0:45:46.360 --> 0:45:49.240 airport in the variance when the busy general aviation airports 0:45:49.239 --> 0:45:53.279 in the entire country. Because I think engineering minds, of 0:45:53.320 --> 0:45:55.799 which there are lots in Palo Alta, tend to enjoy it. 0:45:55.840 --> 0:45:58.399 And again you're mixing you know, a kinesthetic skill and 0:45:58.560 --> 0:46:03.120 meteorology and mechanical understanding of you know, a combustion engine 0:46:03.120 --> 0:46:06.600 and all the attendance systems and you know airspace and 0:46:06.600 --> 0:46:07.239 everything like that. 0:46:07.280 --> 0:46:10.000 So it wasn't like fueled by you being in an 0:46:10.040 --> 0:46:12.319 adrenaline junkie, like I want to go fast and I 0:46:12.360 --> 0:46:13.319 want to fly in the. 0:46:13.280 --> 0:46:16.359 Sky adrenaline Like if you're feeling adrenaline while flying, you're 0:46:16.400 --> 0:46:17.000 doing something wrong. 0:46:17.239 --> 0:46:19.239 You feel it all the time when flying, like, God, 0:46:19.280 --> 0:46:20.279 I hope we stay in the air. 0:46:20.480 --> 0:46:23.000 There was that, you know, you read entroon descentic Superie 0:46:23.000 --> 0:46:25.680 and you know flying in Africa during the base nineteen 0:46:25.719 --> 0:46:28.360 twenties in his case and you know, getting shot down 0:46:28.440 --> 0:46:30.439 and all these kind of things, there clearly. 0:46:30.320 --> 0:46:32.360 Was a that would make you feel something. 0:46:32.480 --> 0:46:34.239 Yeah, that exactly. I think that kind of stuff would 0:46:34.239 --> 0:46:36.319 make you feel something. But again in these days it 0:46:36.320 --> 0:46:40.120 has become much more safety oriented and the cowboy stuff 0:46:40.120 --> 0:46:42.440 has been pulled out. And again they actually describe one 0:46:42.440 --> 0:46:46.480 of the cultural challenges that happened in the aviation industry 0:46:46.560 --> 0:46:49.560 underwent was that we produced all these military pilots in 0:46:49.640 --> 0:46:51.919 you know, the World War Two, in the Vietnam War, 0:46:52.200 --> 0:46:55.799 and those people then went into you know, PanAm cockpits 0:46:56.040 --> 0:46:57.840 and they actually kind of made bad captains in a 0:46:57.840 --> 0:46:59.759 certain way because it was like very much shut up, 0:46:59.760 --> 0:47:03.520 this is my cockpit. And so the CRM Crew Resource Management, 0:47:04.120 --> 0:47:08.360 I guess thing basically was a multi decade efforts to 0:47:08.520 --> 0:47:11.680 get rid of the the captain mindset and get towards 0:47:11.680 --> 0:47:13.560 a collaborative problem solving a. 0:47:14.120 --> 0:47:17.360 Lot of like I'm going on a like seven seven 0:47:17.960 --> 0:47:21.799 the pilot landed fourteens line carriers, Like that's got to 0:47:21.800 --> 0:47:24.160 be the safest possible way to fly, but apparently not, No, 0:47:24.239 --> 0:47:27.560 he's gone rogue, not listening to his second officer or whatever. 0:47:27.960 --> 0:47:31.000 Do European airlines have a different model than the US 0:47:31.080 --> 0:47:34.600 airlines where they take pilots who have two hundred and 0:47:34.640 --> 0:47:36.919 fifty hours only, which the US would consider very low, 0:47:37.080 --> 0:47:38.880 and they put them in the right seat of airliners 0:47:39.000 --> 0:47:41.400 and they have like a really strong safety record. And 0:47:41.440 --> 0:47:43.400 so as you fly around an airliner in Europe, you 0:47:43.440 --> 0:47:45.680 could have someone who only learned to fly a few 0:47:45.760 --> 0:47:47.640 years ago. And the way they do that is a 0:47:47.719 --> 0:47:51.160 huge amount of standardization, a huge amount of process orientation. 0:47:51.520 --> 0:47:54.160 You know, people make fun of Ryanair for the hard landings, 0:47:54.200 --> 0:47:56.439 you know, the Ryanair landing in Europe where they really 0:47:56.440 --> 0:47:58.359 plunk it on the runway. That is one of their 0:47:58.400 --> 0:48:01.520 safety SOPs where they say a positive landing, as it's 0:48:01.560 --> 0:48:03.920 known in the industry, is safer because it reduces the 0:48:04.000 --> 0:48:06.560 risk of hydroplaning if it's wet, and so it reduces 0:48:06.600 --> 0:48:08.160 the like very small risk that you run off the 0:48:08.239 --> 0:48:09.600 end of the runway if the runway is wet. But 0:48:09.640 --> 0:48:11.360 we're just going to every landing, we're gonna plunk it 0:48:11.400 --> 0:48:15.480 on and that's safer. But again it's generally process orientation, 0:48:16.120 --> 0:48:18.520 standards and a lot of that kind of stuff that's 0:48:18.560 --> 0:48:21.680 driven to safety and not excessive piloting skill. And again, 0:48:21.719 --> 0:48:24.759 if you're relying on incredible piloting skill, something has gone 0:48:24.800 --> 0:48:26.560 wrong in your system. Because we should be able to 0:48:26.719 --> 0:48:30.240 have a seven seven seven full of passengers be safe 0:48:30.360 --> 0:48:32.879 even if the pilots are fatigued or something like that. 0:48:33.239 --> 0:48:35.799 That's wild. I did not know that about Ryan Air. 0:48:35.800 --> 0:48:37.480 I feel like they should put that fact out there. 0:48:37.640 --> 0:48:40.520 You know that it's intentional that we're plunking down. 0:48:40.600 --> 0:48:42.400 That's true. Yeah, yeah, because you know it's quite yea 0:48:42.680 --> 0:48:46.040 quite exactly. Yeah, attention to it. 0:48:46.000 --> 0:48:50.200 Being uncomfortable, Well, everyone knows that's true. 0:48:50.280 --> 0:48:52.800 That's true. That time calls and thanks for coming on 0:48:52.840 --> 0:48:55.200 the Money Stuff Podcast. Thank you guys, it's fun. 0:48:55.600 --> 0:48:56.279 Our first guest. 0:48:56.520 --> 0:49:06.000 Yeah, I'm honored, and that was the Money Stuff Podcast. 0:49:06.120 --> 0:49:08.120 I'm Matt Levia and I'm Katie Greifeld. 0:49:08.480 --> 0:49:10.560 You can find my work by subscribing to The money 0:49:10.560 --> 0:49:12.440 Stuff newsletter at Bloomberg. 0:49:12.000 --> 0:49:14.479 Dot com, and you can find me on Bloomberg TV 0:49:14.680 --> 0:49:18.360 every day on Open Interest between nine to eleven am Eastern. 0:49:18.600 --> 0:49:20.279 We'd love to hear from you. You can send an 0:49:20.320 --> 0:49:23.520 email to Moneypod at Bloomberg dot net, ask us a 0:49:23.600 --> 0:49:25.000 question and we might answer it on air. 0:49:25.440 --> 0:49:27.640 You can also subscribe to our show wherever you're listening 0:49:27.680 --> 0:49:29.719 right now and leave us a review. It helps more 0:49:29.719 --> 0:49:30.640 people find the show. 0:49:31.360 --> 0:49:34.120 The Money Stuff Podcast is produced by Anna Maserakus and 0:49:34.200 --> 0:49:37.040 Moses on the special. Thanks this week to Stacey. 0:49:36.760 --> 0:49:39.680 Wom Our theme music was composed by Blake Maples. 0:49:39.960 --> 0:49:42.640 Brandon Francis Newnhim is our executive producer. 0:49:42.400 --> 0:49:44.600 And Stage Bauman is Bloomberg's head of podcasts. 0:49:44.880 --> 0:49:47.239 Thanks for listening to the Money Stuff podcast. We'll be 0:49:47.280 --> 0:49:48.800 back next week with mar Stuff