21. March 2017–
John Collison co-founded Stripe with his older brother Patrick in 2009. With backing from Elon Musk, Peter Thiel and Sequoia Capital, the startup quickly grew to be one of the biggest players in Silicon Valley.
Here's more from John:
John, you are only 26, but are already an old hand at founding companies. You had your first exit with your brother at the age of 17…
Patrick and I didn't really plan to found a startup. We somehow fell into it. We were very interested in technology, and how it changes the world: It was exciting to see that a close proximity to big cities was becoming less important.
What do you mean?
We grew up in the middle of nowhere in Ireland. But we had satellite internet and books on programming, so we started coding. At a certain point we had a startup idea and could implement it even “in the countryside.” The Internet offers you such a huge customer base that we were able to offer our product worldwide. And you immediately see how your work impacts the customers. This is very satisfying. Our startup was acquired very quickly, and this was our first contact point with the startup world.
And then you stuck around.
This [startup] world is somewhat addictive (laughs).
What exactly was your first idea?
We built Auctomatic, a tool for merchants, especially those on Ebay. The idea was to improve inventory management and sales processes. Our experience with this startup later helped us with the idea for Stripe.
What was the hardest part of building an online business?
Many people think it is finding an idea, writing the code or delivering the product to the customers, but it really is something else: When we finally had a product that clients actually wanted, we needed to find a way to turn it into a profitable business. That was really hard. We had to build additional software, get permission from the banks to accept credit card payments and many other things. After having built the product and our website in very little time, this step felt to us like time traveling decades into the past.
And Stripe was born out of this frustration?
Right. It seemed unnecessary that this part was so difficult - accepting payments should have been a standard feature. We could not believe there were no tools to make this easier. That’s why in the early days of Stripe, we were certain someone had already done it and we had simply overlooked them.
Up until now you have always had your brother as cofounder. Is this an advantageous set-up?
That depends on the brother (laughs). When you start a business, there is an insane amount of stress and an insane amount of work to do. We’ve been working together on Stripe intensely since the end of 2009. In this time we had to overcome lots of difficulties, whether it was technology, users or funding issues. You need to be able to trust your co-founder completely, or else everything explodes. If you start a company with someone you don't know well, you are adding additional risk.
Are you and Patrick similar to one another? Or more different?
We come from the same environment, we grew up together, taught ourselves how to code. We always worked together, especially when we were starting our first startup. We would develop something and then go to the users together to ask if it works for them. Later we split up our responsibilities: Patrick takes care of the engineering and I deal more with users.
You two were both young when you had that first very profitable exit. How did that feel? How did you process that success at such a young age?
It snuck up on us. We started small and step by step things became bigger. It never felt like an overnight success, even if it sometimes looks like that from the outside.
Recently Forbes, after looking at the company’s valuation and your share of Stripe, put you on their list of the world’s youngest self-made billionaires. What do you think of that?
Nobody gets into business because of those kind of headlines. Patrick and I don’t like to take the limelight. What matters to us is what we and the people at Stripe do – and what other companies can build using Stripe.
But certainly that is a kind of satisfaction
That depends on how you measure success. A company’s valuation is often used as an indicator of success, but it only gives you an idea of what is expected of the company in the future. Many companies, like Groupon, or pets.com during the first internet boom, were once considered success stories. But that does not mean they survived in the long run.
Looking at your experiences as a founder – do you think differently today than you did a few years ago?
Today I have a clearer idea of what we are doing and where we want to go. Many founders claim to have a concrete vision for their company from day one. But there is no way that is true. What really happens at the beginning is that you have a teeny-tiny bit of insight into a problem and you start working from there. For us that meant starting with the realization that starting a business and taking it international is far too difficult.
As a platform provider, Stripe has a lot of responsibility – the business of many smaller companies depend on you. How do you handle this? And does it slow down Stripe’s development?
Of course this is something we think about. Our approach to development at Stripe is to make small improvements on a regular basis. This allows us to easily test changes, because there are fewer dependencies. We can immediately identify where and why something goes wrong. But our top priority is always the stability of the platform.
You and Patrick studied at Harvard and MIT, respectively, and then headed to Silicon Valley. How important was that for you two?
That is hard to say as we don’t know how it would have been otherwise. We actually just wanted to stay in Silicon Valley for a summer to find new users - expand our base from 10 to 20 and double in size (laughs). But there were two things in the Valley that really helped us: For one, there were many startups interested in testing out our product, which gave us a large pool of potential users. Secondly, in the Valley there is so much technical talent that you can grow a company much faster with. Building everything on our own would have taken much longer.
Could you guys have become successful in Europe?
At that time? Probably not. But the Irish ecosystem has of course grown stronger and there are now some real success stories, like Intercom, the SaaS company.
Several Stripe copycats have sprouted up around the world, also in Germany. Have you ever thought about expanding internationally through acquisitions? Have there been any talks?
We are very open-minded and are speaking with many people. But it doesn't make much sense to expand a payment platform by acquisitions, as each country would end up operating as an individual technical system. That makes everything too complex, also for the users.
Stripe is a real success story. What were the low points during the founding?
Luckily there haven't been any real low points in the history of Stripe. But for a long time we were not even sure if Stripe would work as a business. We heard the word “no” a lot at the beginning. Coming to terms with that was possibly the biggest challenge. You just cannot let yourself be brought down by a no; quite often, you can end up convincing the person across from you.
Is this tenacity something that good founders have in their genes? Or is it something you can learn?
I think you can learn it. Perseverance is one of the most important traits of a successful entrepreneur - which is also why school grades are a better indicator of future success than aptitude tests. Grades show not only how smart you are, but also how enduringly you can wrestle with something.
Thank you for the conversation, John!
This article originally appeared on Gründerszene