from zero to hero: Stripe

Patrick and John Collison grew up in a small Irish village of 105 people. Their father was an electronic engineer, while their mother was a microbiologist. The boys' school was a 40-minute drive away, and it was a small one, with just around 20 students in each class. The two brothers didn't like school, but it didn't stop them from succeeding.?

Patrick got first prize in the 41st Young Scientist competition in 2005, when he was 16 years old, for his outstanding work in the Lisp programming language. He had graduated from high school in 2007 and enrolled in MIT based on a SAT he took when he was just 13 years old!?

When John was 15 and Patrick 17, they launched their first startup, Auctomatic, a SaaS platform for big sellers on eBay to track inventory. Their personal experience inspired them to create an easy-to-use internet payment platform. Patrick was juggling multiple side ventures at the time, and was surprised by the difficulty he encountered when receiving internet payments. He told John about the difficulty, who regarded it as a challenge rather than a problem, and thus Stripe was born!?

PayPal was an important milestone in the online payment revolution, but it didn't solve all of the issues. The system was far too restrictive! As a result, consumers had to choose between PayPal and the banks, which no one liked because of their high-cost intermediation.??

The Stripe prototype took six months to complete, but only two weeks to get the first transaction. It was with 280 North, a Y Combinator startup founded by Ross Boucher, who soon became one of Stripe’s first employees. The two brothers used a three-step approach to acquire more customers - focusing on developers, identifying market gaps, and word of mouth.

However, there were still some questions that remained unanswered. They weren't sure how huge the market was or if they could deliver the user experience they wanted at first. They also didn't know if they could properly solve problems like fraud, non-US payments, like Paypal does but in a user-friendly way.??

They realized they were onto something huge and that they could provide the user experience they desired six months later. The company was still bootstrapped, but the founders were starting to realize that as a payment startup they would need institutional credibility that an investor could provide.?

John and Patrick Collison

Stripe was launched in San Francisco in 2010 after the brothers dropped out of college and received funding from Y Combinator. Patrick knew Paul Graham from Lisp and Auctomatic, and when they told him about their new plans, he offered to help.??

In 2011, the two brothers met Elon Musk and Peter Thiel and approached them with a vision of more internet commerce driven by increased connectivity, which had been the initial vision of PayPal but hadn't been realized by its creators. Stripe was so good that it received support from the PayPal founders as well, as unbelievable as it may appear.?

The company grew quickly, thanks to developer word-of-mouth. Stripe inked collaborations with Lyft, Facebook, DoorDash, Deliveroo, Seedrs, Monzo, The Guardian, Boohoo, Salesforce, Shopify, Indiegogo, Asos, and TaskRabbit in a short period of time.

In 2013, Stripe made its first acquisition by buying Kickoff - the same year, it expanded into Europe.?

Stripe was bombarded with unanswered support inquiries as it rapidly grew its customer base in 2014. According to others who worked there at the time, the founders were actively involved. Every employee spent hours handling support tickets instead of doing their actual job. Eventually, the Collisons agreed to hire support vendors and open offices in other time zones. Patrick and his brother have been able to reduce their involvement as a result of an executive staff that has gained their trust and they managed to expand into Australia.?

In 2015, Stripe received the first US$ 100 million funding. With Pinterest, using Stripe to power its payment processing, and Facebook using Shopify, PayPal fell behind in social commerce.

On February 24, 2016, the company launched the Stripe Atlas platform, designed to help entrepreneurs start a business from absolutely anywhere on the planet.

In 2017, Stripe kept acquiring companies and the service was launched in New Zealand. Stripe co-founder John Collison was named the youngest self–made billionaire in the world.

According to Crunchbase data, Stripe has completed nine known acquisitions, ranging from technology around in-store payments to chat, marketing, and identity management. The most recent acquisition was Nigeria-based Paystack, which was acquired in 2020 to expand into the African market.?

Since its investment in Monzo in 2017, Stripe has been the most active private company investor. According to Crunchbase, it has now invested in at least 33 startups and led 15 of those investment rounds.

Their product has changed dramatically over the previous ten years, as they have been able to tackle their two most pressing concerns: simplicity and fraud.?

Today, their product set involves several features:?

• Payments: Stripe’s core platform of well-documented APIs for accepting, managing, and processing financial transactions on a national or international level. Super-easy to use and integrate into any e-commerce environment.
• Connect: helps businesses with building multi-sided marketplaces. It connects them with onboarding marketplace sellers, managing users on the platform, tax support, ensuring that the participants in the marketplace are meeting compliance requirements, international expansion, and so on.
• Radar: combats fraudulent payments through machine learning algorithms. It tracks multiple payment characteristics, like IP address, card types, shipping location, and many more. Businesses can also use Radar’s tools to manually track suspicious transactions.
• Subscriptions: allows businesses to automate their subscription billing processes.
• Sigma: generates stats about businesses to drive decision-making processes.
• Atlas: provides internet companies with the foundation to incorporate and run their businesses for a flat fee. The companies get the incorporation services, a Stripe account, an instant bank account, founder stock issuance, a tax ID number with ongoing tax support, and a list of other services too.
• Terminal: offers physical credit card readers specially designed to work with Stripe. As of 2019, it’s available only in the US.
• Sorbet: open-source type checker for Ruby programming language.

Today, Stripe employs more than 2000 people, and the company has dozens of open positions at every moment. They work with millions of businesses in more than 30 countries, offering “the fastest and the cheapest online” payments.