
June 18, 2020
Growing the Internet Economy | John Collision on Invest Like the Best with Patrick O’Shaughnessy
Check Out the Invest Like The Best Podcast Episode Page & Show Notes
Key Takeaways
- People in Silicon Valley sometimes forget that there are many massively successful non-tech companies experiencing wonderful growth
- “There are tons of really spectacularly successful companies that have grown as high rates for years and years and years outside of technology” – John Collison
- Domino’s pizza has actually grown more impressively than most tech companies
- “There are tons of really spectacularly successful companies that have grown as high rates for years and years and years outside of technology” – John Collison
- The payments business is all about scale
- “Payments is a business where you make literally pennies on a per transaction basis. And you have to have an enormous number of them to actually be able to operate with any modicum of profitability.” – John Collison
- Stripe is starting to go more remote and hire people outside of San Francisco
- “Most people at Stripe are actually not based in the San Francisco Bay area. Last year, we actually tripled the number of remote engineers in the company.” – John Collision
- A good writing tip: Have someone read your writing and ask them to tell you everything they remember. Then delete everything they can’t remember.
- “If you are operating a technology business, you would be mad not to study all the companies that have come before you” – John Collision
- Google learned about OKRs from Intel
- Facebook learned about advertising engines from Google
- It’s easier to get work done quickly in a small team than a big one. Stripe tries to keep their teams to 5-10 people
- “When launching new things, you really need to start them small and make them earn their way. Make them respond to customer feedback and see if they actually work.” – John Collision
Intro
- John Collison (@collison) is the co-founder of the digital payments company Stripe.
- Host – Patrick O’Shaughnessy (@patrick_oshag)
Books Mentioned
- Softwar: An Intimate Portrait of Larry Ellison and Oracle by Matthew Symonds
- John says this is a good book to read if you’re interested in learning about the history of Oracle
Industrial Conglomerates
- John is fascinated by industrial conglomerates like TransDigm or LVMH
- People in Silicon Valley sometimes forget that there are many massively successful non-tech companies experiencing wonderful growth
- “There are tons of really spectacularly successful companies that have grown as high rates for years and years and years outside of technology” – John Collison
- Domino’s pizza has actually grown more impressively than most tech companies
Crash Course on Payments
- The online payment system is very complex
- There are credit cards, debit cards, checks, AliPay, WeChat, and many more payment options
- It’s difficult to accept money from other countries
- There are credit cards, debit cards, checks, AliPay, WeChat, and many more payment options
- “We’ve been expanding Stripe a lot by not just building this global economic interconnectivity, but actually over time, handling more and more of the tasks that businesses find themselves faced with, but that’s really how we got our start, the fact that it’s really hard to accept payments on the internet” – John Collison
- The payments business is all about scale
- “Payments is a business where you make literally pennies on a per transaction basis. And you have to have an enormous number of them to actually be able to operate with any modicum of profitability.” – John Collison
Thoughts on Stripe
- Stripe’s goal is to increase the GDP of the internet
- The internet economy is actually a small fraction of the overall economy, it’s around 6%
- Stripe is focusing on expanding internally before making outside acquisitions
- “I think if you’re going to have an acquisitive business, certainly in technology, you need to have a plan for integrating them well” – John Collision
- Stripe helps anyone start an online store and sell to people all over the world in just a few minutes
- As a result, more niches are popping up
- “People starting products that they would never have had a big enough audience for that product in Limerick or Ireland, but if they can address a global audience, then there’s actually a pretty big total audience for that product” – John Collision
- As a result, more niches are popping up
- Stripe is starting to go more remote and hire people outside of San Francisco
- “Most people at Stripe are actually not based in the San Francisco Bay area. Last year, we actually tripled the number of remote engineers in the company.” – John Collision
You Need To Move Fast Even As a Big Company
- “You need to be confident that you can really quickly roll out products” – John Collision
- There are two reasons for moving fast:
- You’re competing with startups that are developing and shipping out products quickly
- “Employees find it much more enjoyable to work as a company that’s moving quickly rather than working for IBM” – John Collision
Importance of Good Writing Is Under-Appreciated
- Good, crispy writing is crucial for communicating with your employees
- Speak to your readers
- Don’t dumb things down
- “You are speaking to an intelligent person who is busy, but knows what they’re talking about, knows what they’re doing. And it’s your job to kind of help educate them on this.” – John Collision
- A good writing tip: Have someone read your writing and ask them to tell you everything they remember. Then delete everything they can’t remember.
- Stripe started Stripe Press to share the best practices they’ve learned with millions of people
Business Advice
- When a VC firm invests in you, you get access to people with a ton of valuable insight
- “Our main VC is a Sequoia Capital and I mean, there’s a huge amount of expertise in that firm that you get to kind of unlock when they invest in you” – John Collision
- Every business should strive to place resources in the areas of the highest future returns
- “As a company grows, the outcome for the company really depends on how good a job they do, at pushing resources towards the most productive use of them.” – John Collision
- “If you are operating a technology business, you would be mad not to study all the companies that have come before you” – John Collision
- Google learned about OKRs from Intel
- Facebook learned about advertising engines from Google
- It’s easier to get work done quickly in a small team than a big one. Stripe tries to keep their teams to 5-10 people
- “When launching new things, you really need to start them small and make them earn their way. Make them respond to customer feedback and see if they actually work.” – John Collision
- “Board members need to realize that they work for the shareholders, and they are the boss of the management and not the other way around.” – John Collision
Additional Notes
- “Commerce is very culturally nuanced and a business in Indonesia is not going to buy from an American company who thinks that they can swan in without taking into account the local considerations.” – John Collision
- “It’s really easy to reason about the value of tangible capital like that espresso machine. It’s really hard to reason about the value of intangible capital” – John Collision
- There’s a shortage of software engineers in the world
- That’s why Stripe invested in Lambda School
- No-code will not take over the world anytime soon
- “I don’t think no-code will obviate the need for software programmers, I would hope that it can make many more people able to participate in software creation and kind of smooth the on-ramp, which is right now, there’s like a really sharp, vertical part of that one.” – John Collision
- One of John and Patrick’s first business was selling an offline Wikipedia file for iPhones
- They stripped out tables and images to get the file size down to four gigabytes
- They made a ton of money from it as teenagers
- They stripped out tables and images to get the file size down to four gigabytes